Category: Law Office Management

Law2020™ The Future Starts Now

The National Law Review is a proud supporter of the ILTA (International Legal Technology Association) and their upcoming 2010 Strategic Unity Conference in Las Vegas August 22-26.  National Law Review guest blogger John Alber of the ILTA and Strategic Technology Partner of  Bryan Cave LLP examines the epic changes going on in the law profession.

Law2020™ The Future Starts Now

We approach temporal landmarks — the turn of a millennium, a century or sometimes even a decade — rather as we approach a precipice like the Grand Canyon, feeling both exhilaration and dread. At the turn of the millennium, we encountered both extremes. These were the end-times, according to some; and the future was about to begin, according to others.

For the law business in the coming decade, this sort of geologic comparison seems especially appropriate. Taking it perhaps a bit too far, the preceding decade was, at least until its waning 18 months, a high plain indeed. That decade marked unprecedented revenue and profit growth, the latter driven by annual price increases that for some firms reached double digits. The year 2007 was, for many in the AmLaw 200, the best year on record.

We all know what happened next. The mortgage crisis hit in 2008, then the credit markets collapsed, and global equities began a months-long decline. The Great Recession rose up like a storm cloud and everything changed, perhaps forever.

Exhilaration or Dread?

Until the recession turns, not much is certain. The law business is as stressed as it has been at any time in the last 50 years. But what will come of that stress? Should we be exhilarated, or full of dread?

Commentators such as Richard Susskind believe the coming decade will be one of dramatic change:

When the storm lifts, the terrain is going to look wildly different . . . Those who think the techniques they must adopt to survive over the next few months will be irrelevant to the future are fundamentally mistaken. They are with us for life.

Implicit in such pronouncements is a certain kind of mortal dread: Some firms will fail. Only those that adapt will succeed. Susskind’s last book did not leave his conclusion implicit, by the way. It was titled The End of Lawyers. Point taken.

At the other end of the spectrum are those curmudgeons, including, apparently, a number of law firms, who think that we have experienced a disruption, not a major shift, and that everything will soon be just peachy again. In a recent Altman Weil survey, for example, 75 percent of corporate chief legal officers (CLOs) reported that, in spite of unprecedented pressure for change, law firms had “little or no interest” in changing the traditional law firm model. Implicit in that position is the assumption that, given enough time, the industry will get back up on its high plain of profitability and continue happily onward.

So, which will it be — exhilaration or dread? What will the coming decade bring? We will begin to answer that question in this article by comparing the legal industry’s current position with that of another industry — the newspaper business. A decade ago, it too stood on a precipice. What happened next is a lesson in the costs of complacency in the face of a rapidly changing marketplace.

Following that object lesson, we will begin addressing the questions that relate to a rapidly changing marketplace. How can we manage profound change and do so not only to cope with the stresses it imposes, but to positively thrive in the coming decade? What skills for lawyers and professional staff will be imperative for the firms that will emerge as leaders? What technologies will be paramount? What will the law firm of 2020 look like and how will it differ from the firm of today? In coming months and years, we will explore these and other critical questions as part of the ILTA’s Law2020 initiative. But before we look forward, let us first look back, in the spirit of Santayana: “Those who cannot remember the past are condemned to repeat it.”

Stop the Presses

John Morton, an observer of the newspaper industry, wrote this in the American Journalism Review in October 1994:

Newspapers are renowned, and sometimes vilified, for their high profits. Even during recessions, when the profits of many other businesses fall sharply or disappear, newspapers usually still post more-than-respectable earnings.

The 1990s bore out that prediction. Newspapers and media companies the world over seemed to manufacture cash. Perhaps foremost among those, at least in the eyes of the investing public, was the Washington Post Company. Warren Buffet, recognizing the cash potential of the media business, first began investing in The Washington Post in the ‘70s. By the mid-‘90s, it had become one of the best in a long series of spectacular Buffet investments, one he often proclaimed a stellar choice.

Newspaper and media company shareholders, board members and executives had every reason to be optimistic as the new millennium approached. The euphoria was bolstered by a history of revenue growth and increasing returns that few other industries could match. What possibly could go wrong?

The first decade of the new century killed that euphoria. Advertising revenue, by far the main source of revenue for newspaper and media companies, peaked in 2000. But as the new decade progressed, those revenues began to oscillate, and then they crashed. By 2009, newspaper advertising revenues had fallen, in real dollars, to 1965 levels, as illustrated in the chart below (source: Columbia Journalism Review).

The cause for this decline was twofold. Changing demographics undercut circulation, as younger and more suburban consumers migrated from print to online media. But the key factor undoing print media was the migration of classified advertising to online outlets. As much as 80 percent of a newspaper’s ad revenue comes from classifieds — new and used car ads, real estate ads, employment ads, and the like. Advertisers in most of those areas have now shifted the bulk of their advertising dollars online. Between 2000 and 2009, nearly 70 percent of classified advertising shifted to online outlets. A good example is auto advertising. The following chart from MarketingCharts.com illustrates the problem. eBay now dominates automotive advertising, and other major sites siphon off still more print advertising revenue.

As a consequence of these steep declines in circulation and ad revenue, the newspaper industry has become an ongoing tale of woe, of death by the proverbial 10,000 cuts. Newsrooms have been double- and triple-decimated, major dailies have perished the world over, and even flagships such as the New York Times have suffered the indignities of the changing marketplace. The shape of a centuries-old industry has shifted dramatically in the blink of a decade.

It is interesting to note that even in the midst of all this woe there were hopeful moments and those who, with almost all evidence to the contrary, seized on that hope. The first waves of staff and other expense cuts in the industry did indeed restore some papers to profitability. But the detrimental impact on editorial content of all those cuts merely exacerbated long term declines in readership.

The Rise of the Realists

The newspaper industry in particular and traditional media in general suffered greatly over the last decade, but there were winners. Some media companies anticipated the coming shift in demand among readers, the fall of circulations and the flight of advertisers. Those few exhibited great flexibility and agility in shifting their businesses into areas such as cable and online outlets where demand was growing. These companies made realistic assessments of market conditions. They sought ways to syndicate content across media formats, and invested in new outlets, even entire new lines of business. Epitomizing such forward-looking businesses are companies like Rupert Murdoch’s News Corporation, which now has stakes in all forms of broadcasting, cable and satellite TV, new media outlets, as well as a small remaining stake in newspapers. Many of the top media companies have moved almost entirely out of the traditional newspaper business.

It is also worth noting the impact of entirely new lines of business on the habits of news consumers and advertising cash flows. What media company has grown the most over the last decade? Google. It is the world’s largest “content mediator” (note well, the term is not “publisher”). Its ability to connect content with consumers enabled it to generate nearly $23 billion in advertising revenue in 2009, an amount roughly equal to the combined newspaper advertising revenue for the top 100 media companies in the world.

All Along the Watchtower

Many signposts in the legal industry point to a coming transformation of significant magnitude, perhaps even one as deep and dramatic as that which befell the newspaper industry. Principal evidence of such change is the pivotal shift of attitudes among the people who are responsible for hiring and paying law firms. In a recent LexisNexis survey, 58 percent of corporate counsel believe that law firms are too profitable.

*Source: http://blog.larrybodine.com/2009/12/articles/current-affairs/58-of-corporate-counsel-say-that-law-firms-are-too-profitable/

That “too profitable” message is not, on its face, terribly nuanced. However, a broader look at the marketplace adds a gloss. Many law department lawyers and CLOs say that they are happy to see firms profit from their activities. But they want firms to maintain or increase profits through innovation and changing the value proposition for their services, not through regular price increases. This reality has prompted one leading law industry consultant, Hildebrandt Baker Robbins, to observe:

The fact is that the extraordinary prosperity of the legal market in the 1998-2007 period was largely driven by one factor — the ability of firms to raise their rates 6-8 percent every year. If, as we believe, the era of such easy year-on-year rate increases is over, then the implications for the economics and structure of law firms are quite serious. (Source: 2010 Client Advisory)

So, large and regular price increases may be a thing of the past. However, what may become the central impetus for a shake up in the legal industry is both deeper and broader than “mere” price resistance. There is emerging now a powerful formalization and organization (using “organize” in the sense it might be used by, say, a union) of the discontent now widespread among clients. That formal response is a collective and highly structured initiative called the Value Challenge, which is engendered by the Association of Corporate Counsel (ACC) — “the world’s largest organization serving the professional and business interests of attorneys who practice in the legal departments of corporations, associations and other private-sector organizations around the globe.”

Firms Under the Microscope

The ACC’s Value Challenge is founded on the premise that year after year of price increases with no increased innovation and efficiency has severed the connection between the value of legal services delivered by most law firms and the price of those services. The Value Challenge is an effort to restore balance between value and cost.

As part of the initiative, the ACC has also kicked off a project of key performance measures. Its Value Index, launched in October 2009, endeavors to compare law firms based on simple post-work assessments by in-house counsel. Participants rate the firms from 1 to 5 with 1 being poor and 5 being excellent — and then indicate whether they would use the firm again. There is a spot for comments, and respondents can choose whether to keep their name and information anonymous. By the end of 2009, the ACC had collected 1,800 evaluations of 600 different law firms. Consumer Reports for law firms has arrived.

The Value Challenge initiative has been accompanied by a number of vocal pronouncements by leading CLOs concerning the need for law firms to change their ways. These CLOs and others are also putting their money where their mouths are. Recent surveys have noted a significant uptick in the number of fee arrangements based on something other than the billable hour. (Sources: Altman Weil, Inc. Report to Legal Management, January 2010; Altman Weil, Inc. 2010 Billing Rates Survey). And some companies have gone still further. For example, in late 2009, Levi Strauss & Co. allocated all of its legal work (except IP work) to a single firm for a flat monthly fee, and other companies are following suit by outsourcing entire legal functions to single firms.

Both as a consequence of the Value Challenge and of the underlying dissatisfaction that necessitated it, the legal market has over the last year and a half seen a significant shift in buying habits. A number of surveys now show a sharp rise in demand for non-hours-based fee structures. (Sources: Altman Weil, Inc. Report to Legal Management, January 2010; Altman Weil, Inc. 2010 Billing Rates Survey). A recent ACC survey reports that four out of five in-house lawyers expressed a desire to increase their spending on alternative fee arrangements (AFAs). Companies have also accelerated already-established trends toward reducing the number of law firms approved to provide services and toward introducing purchasing disciplines (such as RFPs) into the buying process. Law departments have also considerably elevated pressure on rates over the last year, with the result that rate increases have slowed considerably.

Law firm responses to these signals of marketplace change have been very . . . um . . . newspaper-like. They include radical reductions in force at all levels within law firms as well as other aggressive cost-cutting measures. These bar charts from Hildebrandt Baker Robbins capturing metrics from over 100 leading law firms illustrate the extent of those cost-cutting efforts and, at least for the year 2009, the immediate beneficial impact of those cuts on profitability.

What law firms have not done in response to the very clear messages emerging from their customer base is engage in widespread or radical innovation. There are pockets of innovation, and some new business models are emerging. Indeed, these may become the seeds of success for the firms that will thrive over the next decade. But what is striking is how pervasive passivity is as a response to such challenges — passivity remarkably similar to that exhibited by newspapers facing the eradication of their business model.

The Client’s the Thing

Those media companies that survived and even thrived through the first decade of this century did so as a consequence of extraordinary attention to both the preferences and needs of their customers. You could argue that the shift in preferences in the newspaper industry was easy to miss because no one understood new media and its emerging users, but in the law business we have customers who are in no way subtle about expressing their preferences. The ACC Value Challenge is tantamount to clients grabbing us by our lapels, shaking us and saying, “Pay attention to us!” It is hard to imagine that in the wake of such ardent lapel grabbing the law business will simply resume its old path.

It is a very safe prediction to say that those firms that thrive through the next decade will pay extraordinary attention to clients’ preferences and needs. Now, most lawyers will respond to such a pronouncement by saying something like, “I already pay attention to my clients’ needs. That’s what I do every day.” And that is doubtless true for most lawyers. But it misses the point of the Value Challenge. Our clients are telling us that we charge too much for the value of the services we deliver. They are asking us, quite pointedly, to rethink how we structure, price and manage our services.

The firms that will thrive over the next decade are beginning to understand that request and move in that direction. For example, some firms are restructuring the delivery of e-discovery services in order to completely revise existing price and effectiveness models. These firms understand that fulfilling client needs means more than just returning phone calls. It can mean changing your business.

Institutional Agility and Flexibility

The media companies now dominating the media marketplace did not lie back and wait to see what others were doing. Most were extremely aggressive in expanding into online, cable and other new markets both by means of acquisitions and through original creations. They showed great agility in acting on opportunities and great flexibility, especially in terms of how they viewed their core businesses. Those whose view of themselves was defined by what they had always done and who therefore could not adapt with flexibility and agility are now gone, or nearly so.

The “horizontal” structure that characterizes law firms can often be an advantage. Individual lawyers themselves can sometimes act with great flexibility and agility. But the challenge to “rethink how we structure, price and manage our services” is an institutional one, the meeting of which will require institutional agility and flexibility. Abundant business school case studies examine how various corporate businesses responded to marketplace challenges with agility and flexibility. It’s safe to say that there are not so many studies concerning law firms.

The horizontal structure that proves such an advantage in some circumstances does not lend itself to rapid movements in new directions. Perhaps by 2020, there will be some inspiring and instructional case studies of the firms that have managed to overcome the limitations of horizontal structures and answer the new demands of this decade’s legal marketplace. Of course, there will likely be case studies of the firms that failed to overcome such limitations.

Process Improvement and Quality Assurance

The newspaper industry and the law business both have elements of the guild about them. Apprenticeship features strongly in their professional development cultures — whether it is the cub reporter becoming a journeyman journalist or the associate becoming a partner, learning is most often accomplished in very small group settings and through close interpersonal relationships. That is an advantage in both settings, and part of the charm of each.

Those guild-like working relationships continue into the main of legal practice. Most legal projects have been and continue to be managed through small teams that interact without a lot of what lawyers like to call “corporate” hierarchy. In the environment of the last several decades, such relatively informal working relationships have functioned well. The billable hour certainly adds some cushion to such a work environment, which has been fairly tolerant of inefficiencies.

All that changes significantly as legal projects increase in scale and especially when they must be done for a fixed price or in a manner that otherwise shifts considerable risk to the law firm. Inefficiencies become expensive in such a setting. Couple that with increasing demands by clients that firms be able to not just budget but to schedule as well, and law firm work begins to look much more like work in mainstream industry.

The ACC’s President, Fred Krebs, is fond of pointing out that many law firm clients have taken project management, process control and quality assurance to a high art. Can you imagine, he asks, building a transport airplane or a skyscraper using the management and pricing approaches of law firms? It is a rhetorical question, though the follow-up question is not: Why can’t law firms adopt the very same controls that their clients use?

Adoption of client business management techniques has increased in the legal industry. Some firms are very sophisticated in how they manage, for example, advanced technologies. Law firms now regularly appear in rankings of the top IT organizations in the world. And you can bet that those organizations have taken, say, project management to an advanced state, at least within the IT organization.

By 2020, however, we will see a number of firms that have thrown open the doors to their project management offices and applied the techniques that have let them manage IT so well to their own legal services. Indeed, we might expect IT executives to exert leadership influences outside of their traditional domains. They know valuable things. Law firm economics are now shifting so as to provide incentives for recognizing and fully utilizing such skills.

Incentives are also increasing toward the use of process control and quality assurance. We have already seen at least one U.S. firm adopt elements of the Six Sigma discipline. (Source: Value Practice: Use of Tailored Six Sigma Methodologies at Seyfarth Shaw). By 2020, we can expect to see much more of that.

Expanding the Service Platform

As the decade continues and some law firms adopt staffing, project management, process control and quality assurance innovations from mainstream industry, we might expect them to expand their service offerings beyond traditional legal services. Indeed, we have already seen some of this as firms reposition IT services and, more recently, e-discovery services as stand-alone service organizations.

We have already seen and can expect to see more of the “cost center” phenomenon that was especially evident in industry through the 1970s and 1980s. Back then, many businesses sought to convert cost centers within their companies into revenue generating entities. Most efforts folded under their own weight because companies underestimated the resource and financial commitments necessary to turn an internal service organization into one that stands on its own.

But then there were the exceptions. Foremost among those is what used to be known as Andersen Consulting and is now known as Accenture. It grew out of an internal IT consulting service and, after splitting with Arthur Andersen and Company in 1989, has grown to become one of the largest consulting organizations in the world.

By 2020, we may well see a significant percentage of law firm revenues coming from nontraditional realms such as IT consulting, strategic consulting, e-discovery and due diligence services as well as other areas. Indeed, some firms are already very active in these areas.

By the time of the split, Andersen Consulting’s per partner profitability far outstripped that of Andersen proper. Indeed, that was a factor in the split (as well as the liability that arose from Andersen’s audit activities). We see some firm e-discovery consulting arms already moving toward extraordinary profitability while, at the same time, radically lowering the cost of e-discovery and otherwise much improving service levels for clients. This is also true in other areas, such as legislative consulting.

Firms that manage to create such entities either within or alongside their organizations will be in a much better position to endure an environment of increased downward pressure on rates. Indeed, over the next decade, one might predict the demise of firms that, like some since-lapsed newspapers, could not diversify their revenue sources. Those perished papers clawed ever deeper into expenses trying to maintain historic levels of profitability, without ever touching their 100-year-old business model. It is not at all difficult to imagine a similar picture in our industry.

The Telescope and the Crystal Ball

We can go much further than we have here in raising our hand to our forehead and squinting at the horizon in an attempt to identify productive paths to the future. ILTA’s Law2020 initiative will continue this effort, but we can also be hopeful that through the proven “power of the crowd” that is inherent in ILTA’s peer-to-peer model, Law2020 will bring to the task both a “telescope” of foreseeable events and a crystal ball to portend the future. The content in this issue of Peer to Peer will amplify these explorations in various ways. And the Law2020 sessions at ILTA’s annual conference in August will continue the effort. But expect much more in the years to come. Whether standing on a precipice or climbing out of a valley, we will look with clear vision at the path that lies ahead.

This article was orignially published in the June issue of Peer-to-Peer , the quarterly magazine of ILTA, and is republished here with permission.

——————————————————————————–
Endnotes

[1] Note how limiting the term “reader” is. Newspapers cultivate “readership,” which brings to mind a paper spread out on the kitchen table, an image that has become — almost — an anachronism.

[2] See for example, these articles by CLOs: Drive Better Alignment in Legal Services
Mark Chandler, Senior Vice President, General Counsel & Secretary, Cisco Systems, Inc. (April 2008); Value-Based Staffing Practices: Focus on Communications Skills and Tools At AmerisourceBergen Corporation, John Chou, Senior Vice President, General Counsel & Secretary, AmerisourceBergen Corporation (March 2010);Yes, ‘Small Law’ Can: Alternative Fee/Value-Based Arrangements at Wolverine World Wide, Inc.
Ken Grady, General Counsel and Secretary for Wolverine World Wide, Inc. (January 2010); Achieving Alignment Inside and Out: Portfolio of Legal Services on Flat Fee and Disciplined Internal Planning Process, Christopher Reynolds, Group Vice President and General Counsel for Toyota Motor Sales, USA, Inc. (September 2009); Creating Value By Selecting Strategic Practice Area Providers – Practices at GE Canada, Bruce Futterer, Vice President, General Counsel and Secretary, General Electric Canada (July 2009); ACC Value Challenge: The Driving Force Behind Value and Change, Jeffrey Carr, Vice President, General Counsel and Secretary for FMC, Technologies (February 2009); ACC’s Value Challenge: Re-Connecting Legal Costs to their Value, Laura Stein, Senior Vice President and General Counsel for The Clorox Company and ACC 2008 Board Chair, (October 2008)
© 2010 International Legal Technology Association

Authored by:

John Alber is the Strategic Technology Partner at Bryan Cave LLP. John leads the firm’s award-winning client technology group, which develops innovative web-based, client-facing decision support, training and client communication tools. The group has also become widely known for developing leading-edge internal decision support, knowledge management and client intelligence systems for Bryan Cave.  John has written and spoken widely on legal technology subjects and received a number of technology awards, both in the legal field and in information technology generally. Among other awards, he was named American Lawyer Media’s first ever ‘Champion of Technology’ in 2004, and recognized as one of the ‘Top 25 CTOs’ by Infoworld in 2007. John can be reached at:  314-259-2144 / www.BryanCave.com

Are You Calling, E-mailing or Texting Employees While They Drive? You May Want to Reconsider.

National Law Review Guest Blogger David Carr discusses the every day issue of communicating with employees while they’re driving with a colorful fact pattern.  

A recent court decision involving particularly bizarre circumstances may signal a warning of importance to employers about not so bizarre business practices.  Prudent employers will take heed. 

At first blush, the case of Buchanan v. Vowell appears to have no bearing on any significant employment law issue.  Jerry Buchanan, the plaintiff, brought suit as a pedestrian who was hit by a car operated by the defendant, Candice Vowell.  However, Buchanan also sued Candice Vowell’s mother, Shannon Vowell.  (Other facts involve the Vowells’ consumption of alcohol and Shannon Vowell’s employment with Brad’s Gold Club.)  The key facts generated the question of whether Shannon Vowell possessed liability for the unfortunate accident that occurred when Candice Vowell struck Buchanan with her vehicle after leaving Brad’s Gold Club.  Brad’s Gold Club also found itself a defendant in the resulting lawsuit.  However, the importance of this case arises not from the potential liability of Brad’s Gold Club.  Presumably, most employers know about the dangers of serving alcohol to an employee and the attendant liability that arises if an intoxicated employee leaves an employer party or event and injures someone.  If this proposition constituted all the case stood for, no novel issue exists. 

Instead, what makes this case important and novel is the question of the liability of Shannon Vowell.  The issue in question revolves around whether Shannon Vowell possessed liability for the injuries suffered by virtue of Candice Vowell’s striking Buchanan with her car.  How could liability exist? 

It turns out Shannon and Candice Vowell consumed alcohol together at Brad’s Gold Club and Shannon Vowell determined that, upon leaving, rather than call a cab or have Candice Vowell ride as a passenger in Shannon Vowell’s car, the two would traverse the streets of Indianapolis in two vehicles with Candice Vowell leading and Shannon Vowell following.  At the time of the accident, Shannon Vowell was following Candice Vowell in a separate vehicle, and was engaging Candice Vowell in a conversation on a cell phone.  Under these facts, could Shannon Vowell be found liable?   

Buchanan alleged that, at the time of the accident, Shannon Vowell knew Candice Vowell was operating her vehicle while intoxicated and knew, or should have known, that talking on her cell phone would further impair or distract Candice Vowell, making her even more dangerous to other persons using the streets.  Buchanan further alleged that Shannon Vowell “negligently made the affirmative, conscious effort to call Candice Vowell, distracting her from maintaining a proper lookout.” 

In determining Shannon Vowell’s liability, the court looked at the Restatement (Second) of Torts § 324(a) which provides “one who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of a third party or his things, is subject to liability to the third person for physical harm resulting from his failure to exercise a reasonable care to protect his undertaking, if (a) his failure to exercise  reasonable care increases the risk of such harm or (b) he has undertaken a duty to perform a duty owed by the other to the third person or (c) the harm is suffered because of reliance of the other or the third person upon the undertaking.” 

The trial court chose to dismiss Shannon Vowell as a defendant.  The Court of Appeals reversed and found that Shannon Vowell had acted in a negligent fashion by communicating with Candice Vowell on her cell phone when she knew that Candice Vowell was driving a car.  The Court concluded that Shannon Vowell, as an individual, may have breached her duty of reasonable care “by calling and distracting a person she knew was operating a vehicle . . . .” 

Perhaps you now see the potential significance of this case.  One suspects that every day supervisors call, e-mail or even text “mobile” employees in the act of driving.  It certainly appears an avenue now opens for employers to be liable for any action that occurs while the employee attempts to drive and text or talk via cell phone with the employer.  While such a ruling would require an extension of the precise holding of Buchanan v. Vowell due to the added element of consumption of alcohol, it does not appear to be a difficult stretch.  Wise employers will consider this case and set specific standards and protocols for when employees should and should not use their cell phones and text in the course of operating a company vehicle or carrying out company duties.

© 2003-2010, Ice Miller LLP

About the Author:

David J. Carr is a partner in the Labor and Employment Law practice group of Ice Miller LLP, focusing his practice in the areas of litigation of employment contracts involving trade secrets, confidential information and covenants against competition, complex wage and hour law issues, employment discrimination, and personnel policies. Mr. Carr is a veteran labor negotiator and has handled numerous labor arbitrations, union avoidance and other collective bargaining matters in both the public and private sectors. He also has substantial experience representing employers in wrongful discharge lawsuits and employment discrimination investigations, including sexual harassment situations.

  • 317-236-5840
  • david.carr@icemiller.com
  • www.icemiller.com

    • Outgoing ABA President Carolyn Lamm Discusses Next Steps to Achieving a More Diverse Legal Profession

    The Business of Law Guest Blogger this week at the National Law Review is Vera Djordjevich of Vault Inc. with an interview of outgoing ABA President Carolyn Lamm Discussing the  Next Steps to Achieving a More Diverse Legal Profession. 

     On July 30, 2010, Vault and the Minority Corporate Counsel Association (MCCA) held their 5th Annual Legal Diversity Career Fair at the Renaissance Hotel in Washington, D.C. More than 1,000 law students and lateral associates registered for the event, where hiring partners and recruiters from some 30 law firms, government agencies and corporate law departments were on hand to meet with candidates, review their resumes, offer advice and answer questions.

    The event kicked off with a special breakfast where Brian Dalton, Vault’s managing editor, unveiled the company’s 2011 Law Firm Diversity Rankings, the result of Vault’s annual Law Firm Associate Survey. Vault also honored the Top 20 law firms—led by this year’s overall winner, Carlton Fields—who were the most highly rated by their own associates for their commitment to hiring, retaining and promoting diverse attorneys.

    The event’s lunch featured Carolyn Lamm, outgoing president of the American Bar Association and a partner at White & Case, as the keynote speaker. Recently named one of “Washington’s Most Influential Women Lawyers” by The National Law Journal, Ms. Lamm has, during her tenure as ABA president, established a Presidential Commission on Diversity as well as a Commission on the Impact of the Economic Crisis on the Profession and Legal Needs. On August 10, 2010, Ms. Lamm turns over the helm to President-Elect Stephen Zack, a partner at Boies, Schiller and Flexner and the first Hispanic American to serve as ABA president. 

    Before her address, Ms. Lamm sat down with me to discuss the state of diversity in law firms, highlight some of the ABA’s goals and initiatives, and forecast what a truly diverse profession will look like.

    VAULT:  How would you characterize the state of diversity in the legal profession today? 

    In a word: evolving. In 2009, the ABA conducted an extensive national assessment of the state of diversity in the legal profession, including hearings held around the United States—with practitioners, academics, corporate counsel—whose results were synthesized into a report, “Diversity in the Legal Profession: The Next Steps.” We found that, although our profession today is more diverse and inclusive, and has made significant advances, many obstacles to free and equal professional success remain. For example:

    • While women make up just over half of the U.S. population and half of the entering classes in law schools, they represent one third of the lawyer population, about 18 percent of law firm equity partners and 20 to 25 percent of the judiciary.  
    • Racial and ethnic minorities make up approximately one third of the U.S. population, but they represent only 10 percent of the lawyer population, less than 16 percent of judges and 6 percent of equity partners.

    These numbers do not nearly reflect the diverse range of talent in our profession. Our lack of diversity runs counter to the promise of fairness and equality that is our profession’s bedrock, depriving the community of a bench that reflects the community and of legal advice that is a product of diverse views.

    VAULT:  What are the principal challenges to increasing diversity at law firms?

    First, through what are known as “pipeline programs,” we need to get more racial and ethnic minorities into law school. We must do all we can to encourage young people of all backgrounds that a career in the law can be fulfilling, and that we welcome them to the profession. Through educational and scholarship programs, we must make it easier for qualified people of diverse backgrounds to pursue legal careers.

    Then, once people enter the profession, we must work on retention. An ABA report from the Commission on Women in the Profession, titled “Visible Invisibility: Women of Color in Law Firms,” revealed startling realities about the experiences of women of color, including anecdotal evidence that nearly half of women of color have been subjected to demeaning comments or other types of harassment while working at a private law firm (compared with only 2 percent of white men reporting the same experiences). A substantial number also report being passed over for desirable work assignments, being excluded from networking opportunities, and having received at least one unfair performance evaluation. These and other disparities allow us to better understand why women of color have a nearly 100 percent attrition rate from law firms at the end of eight years.

    Another challenge facing law firms—especially those that have been addressing diversity issues for a while now—is to evolve from the traditional idea of diversity to understand and embrace inclusion. Diversity basically speaks to the numbers: proactively doing things to increase the numbers of diverse persons in the firm. While that is absolutely essential, it’s not enough. We now must focus on building inclusive work environments that demonstrate that we value diverse perspectives and understand how they benefit the organization overall.

    VAULT:  Has the current state of the economy further exacerbated these difficulties? 

    Yes. The ABA’s “The Next Steps” report found that the “recession is drying up monies for diversity initiatives and creating downsizing and cutbacks that may disproportionately and negatively affect lawyer diversity—thereby undoing the gains of past decades.”

    The American Lawyer’s annual report on diversity confirmed the anecdotes that have been voiced throughout the legal community. Its 2010 Diversity Scorecard reported that for the first time in 10 years the proportion of lawyers of color has decreased, based on a survey of the country’s 200 largest firms. While big firms lost 6 percent of their attorneys between 2008 and 2009, they lost 9 percent of their minority lawyers. Some experts fear that this could be the start of a new downward trend, given a climate of slower law firm hiring, fewer African-American and  Mexican-American law students, and law firm layoffs.

    VAULT:  Where are you seeing the most improvements?

    Both the quantity and quality of pipeline diversity programs have improved in recent years. The ABA, in collaboration with the Law School Admission Council, has an online Pipeline Diversity Directory. In the past year, the number of entries in the directory has almost doubled and it now includes over 400 programs across the country that work to improve diversity in the educational pipeline to our profession, such as the judicial clerkship program.

    Collaboration is another area of noted improvement. More firms, bar associations, law schools, corporate law departments and other groups are pooling their resources and building partnerships to address diversity and inclusion. 

    VAULT:  Tell us about some of the ABA’s diversity initiatives and goals.

    Nearly all entities throughout the ABA work to foster greater diversity in the legal profession. The ABA’s Center for Racial and Ethnic Diversity is a centralized resource for many of these activities. Within the Diversity Center, there are three groups that each addresses a distinct area:  

    In addition, the Commission on Women in the Profession works to secure the full and equal participation of women in the ABA, the legal profession and the justice system. The Commission on Mental and Physical Disability Law addresses disability-related public policy, disability law, and the professional needs of lawyers and law students with disabilities. The Commission on Sexual Orientation and Gender Identity seeks to secure for lesbian, gay, bisexual, and transgender persons full and equal access to and participation in the ABA, the legal profession and the justice system.

    This year I appointed a Presidential Commission on Diversity, which produced the “Next Steps” monograph. The report gives recommendations for next steps to increase diversity in the different sectors of the legal profession, recognizing the different challenges within each one: law firms and corporations, the judiciary and government, law schools and the academy, and bar associations. The commission is working with the ABA’s existing efforts to provide practical resources and guidance for women lawyers, lawyers of color, disabled lawyers, and lawyers of differing sexual orientations and gender identities to help pierce the glass ceiling. Central to the commission’s efforts is a series of distance-learning CLE programs to help diverse lawyers advance their legal careers. The programs are available on the ABA website as podcasts.

    VAULT:  What do you think about the reporting of diversity metrics and rankings, such as the Vault/MCCA Diversity Survey and Vault’s Diversity Rankings, as a means of encouraging law firms to step up their commitment to hiring, retaining and promoting diverse attorneys?

    It can be an effective tool if it is used properly and in conjunction with other tools and incentives, and if it is transparently done. If reporting on diversity metrics or rankings is used only to prod and push law firms to engage in diversity  efforts, those efforts will not be sustainable. But we must know the statistics in order to know where we are and where to devote resources in order to move forward. If we can help more firms understand the value diversity brings to every aspect of their operations, metrics and rankings will become a welcome opportunity to showcase how well they are doing with hiring, retention and promotion of diverse attorneys.

    VAULT:  How do diversity-focused events like this career fair help advance diversity objectives?

    So much of hiring involves networking and word-of-mouth referrals—hardly just help wanted ads. In such a difficult job market, it is great to bring excellent candidates together with organizations that want to hire from diverse candidate pools. It’s important for employees and employers to get out there, network and explore career options—face to face whenever possible. Events such as these are especially useful when employers are hiring out of a regular recruiting schedule. But even if such leads don’t lead directly to job placements, they form the basis of career exploration and ideas that can, and do, produce results.

    VAULT:  What will success look like? 

    A diverse profession that reflects our community. A diverse legal profession is more just, productive and intelligent, because diversity often leads to better questions, analyses, processes and solutions. We are committed to see a Supreme Court that reflects our population and a profession in which each lawyer, no matter what their gender, racial or ethnic background, sexual orientation or disability, has the opportunity to achieve all they are capable of.

    The only way we will see success is if our profession is a true reflection of our communities—even if it’s one person in one position at a time.

    © 2010 Vault.com Inc.

    About the Author:

    Senior Law Editor, Vault.com

    Vera Djordjevich is senior law editor at Vault.com, where one of her areas of focus is diversity in the legal profession. She oversees the research and publication of information about law firm diversity initiatives and metrics for the Vault/MCCA Law Firm Diversity Database. She also edits Vault.com’s content related to law practice in the UK and co-authors Vault’s law blog, which provides career news, advice and intelligence to the legal community.   publicity@vault.com 212-366-4212 www.vault.com

    Companies with in-house marketing departments handle a growing variety of projects these days. At some point, though, the workload often becomes overbearing. So, when is a good time to consider an outside firm to outsource work to?

    When corporate budgets are tight, and time and resources are limited – that’s really the perfect time to contract work out. Here’s why:

    1. MARKETING AND COMMUNICATION PLANS – An agency will help develop sophisticated marketing and communication plans for businesses that define and promote sales and marketing opportunities for the company, increasing ROI. Plans provide reports that map out results. They take into account an important aspect that is most often overlooked in companies — strategic marketing — and plan for the implementation and integration of marketing tactics.

    2. TARGET AUDIENCE – Agencies can help enhance the definition of a company’s target audience because they look at businesses from an outside perspective. While a company may know an audience already through a metric such as sales reports, an agency can go in-depth to research and define not only who they are, but also how better to target them with results that work, creating a higher ROI.

    3. NETWORKED IN THE COMMUNITY – Most likely, a local agency will be well-networked in the community, an added benefit for their clients. Agencies should be familiar with local news and media, for public relations and advertising purposes, and know what tactics work best for each part of your communication strategy. They also work with a variety of community vendors, which leads to the next point…

    4. PRICING AND RESOURCES – Outside agencies may be able to negotiate better pricing on service and materials (such as stock photos and printing services) than in-house marketing departments. They have established relationships with a wide array of vendors which allows for price shopping and high quality.

    5. CREATIVITY can be greater when a company’s marketing team works in tandem with an agency. In fact, most companies believe that the quality of work is much better. In-house marketing departments can often get too comfortable with products – losing their creative appeal. Outside agencies will have a fresh outlook and new ideas. They can also act as a catalyst for change by offering a different perspective on a myriad of issues.

    6. WORK HIRED UNDER CONTRACT will be accompanied by a legally-binding agreement ensuring that roles and responsibilities are defined, ideas are well-crafted, and costs are calculated in the appropriate areas – which can be difficult for internal departments to determine.

    © 2010 Furia Rubel Communications, Inc. All rights reserved.

    From Guest Blogger Laura Powers of Furia Rubel Communications, Inc. Laura Powers is a marketing strategist with a history of developing award-winning campaigns that create continuity of brand, Web, print and promotion. Laura understands how design and image components fit within comprehensive marketing programs – building brands and their affinities. Laura regularly manages a broad range of marketing and promotion collateral including interactive websites, annual reports, company catalogs, product and service brochures, capabilities, brand identity and correlating pieces, ongoing quarterly newsletters and e-marketing newsletters. 215-340-0480 www.furiarubel.com

    International Legal Technology Association (ILTA) Legal Technology Conference in Las Vegas August 22-26

    The National Law Review suggests you look into attending the International Legal Technology Association (ILTA) Legal Technology Conference – Strategic Unity in Las Vegas August 22-26 Aria Resort http://conference.iltanet.org/

    Diversity: a Core Value and a Strategic Investment

    This Week’s National Law Review  Business of Law Guest Blogger is Vera Djordjevich, Senior Law Editor of Vault.com.  Vera explains why diversity in the legal profession benefits everyone.

    As the latest “Jobs & JDs” report from NALP makes clear, today’s lawyers face a challenging job market. Widespread layoffs, reduced summer programs and other recruitment-related cutbacks raise particular concern for those tracking diversity in the legal profession. Even before the recession, progress in this area, particularly at the law firm partnership level, had been slow; now, many worry that the economic fallout will have a disproportionate impact on attorneys of color and other under-represented minority groups.

    It may be commonplace for employers to voice their support of a diverse workplace, but making diversity a reality rather than simply a refrain requires work, planning and, to some extent, money. When there’s less cash to go around, budgets for programs that ostensibly represent only a company’s conscience rather than its fiscal responsibility may be the first to shrink. However, diversity is not simply an ethical imperative, it is also a strategic endeavor. A company or law firm with a long-term strategy needs a well-rounded and able workforce to preserve and grow its business. The cultivation of talent, diverse in experience, culture and outlook, represents an investment in a firm’s future. It is not a distraction from, but a contribution to, a law firm’s fiscal health.

    Moreover, if you look at both the tools that promote diversity and the effects that a diverse staff has on a work environment, it’s clear that they provide broad benefits to the business as a whole.

    1.       Retention and development tools benefit all associates

    Naturally, law firms need to be strategic and focused in their spending. But some of the most successful measures when it comes to diversity require little, if any, extra spending — mentoring, monitoring the progress of attorneys, and ensuring they have equal access to significant opportunities and clients in order to move forward in their careers.

    The real hurdles may be less financial than philosophical. The legal profession is famously slow to institute significant structural change and law firms in particular hew to traditional systems of hiring, advancement and compensation. But the inherent limitations in the up-or-out pyramid model, lockstep salary system and trial-by-fire training are coming to the surface as more legal professionals consider alternative frameworks for compensation, assignment, advancement and development — frameworks that are merit-based, but focused more on evaluating than judging, developing than criticizing.

    While many of these new models are discussed specifically in the context of improving retention among minority and women attorneys, the truth is these approaches should help all lawyers succeed. Consider these examples:

    • Effective frameworks based on core competencies
    • Solid, practical training programs
    • High-quality mentoring, in which mentoring is treated as a valuable contribution to the firm rather than a pro-forma obligation
    • Regular and substantive feedback regarding performance and expectations, rather than cursory annual reviews that take associates by surprise and offer little guidance
    • Recognition that there can be more than one effective approach to a given task

    These are tools that benefit all associates and, by extension, the firm itself. Having a cadre of confident, well-trained and high-performing lawyers should be every law firm’s goal.

     2.       Everyone shares the benefits of an inclusive culture

    This Friday, Vault and MCCA will be holding their fifth annual Legal Diversity Career Fair, giving diverse law student and lateral candidates and legal employers an opportunity to meet. As a prelude to the fair, Vault will be hosting a special breakfast to announce its 2011 Law Firm Diversity Rankings and honor the law firms who were the most highly rated by their own associates for their commitment to hiring, retaining and promoting diverse attorneys.

    It seems no coincidence that the law firms that receive high marks for their commitment to diversity in our annual Law Firm Associate Survey include many of the same firms that are rated highest for firm culture and professional development. Of the top 20 firms in overall diversity this year, more than half were also ranked among the best in firm culture and for formal training and/or informal training and mentoring.

    As an associate at one of the top-ranking firms noted in response to our survey: “The firm makes a conscious effort to recruit attorneys from diverse backgrounds and experiences, and it makes for noticeably better, more well-rounded case teams. I am continually amazed and impressed by the experiences my colleagues bring to the table.”

    A law firm that keeps minority and women lawyers challenged, engaged and optimistic about their careers likely offers a welcoming environment and professional development opportunities to all of its attorneys. Having a wide range of backgrounds, perspectives and insights represented among employees not only makes for a livelier, more interesting workplace, but it also produces better results.

    © 2010 Vault.com Inc.

    Vera Djordjevich Senior Law Editor, Vault.com

    Vera Djordjevich is senior law editor at Vault.com, where one of her areas of focus is diversity in the legal profession. She oversees the research and publication of information about law firm diversity initiatives and metrics for the Vault/MCCA Law Firm Diversity Database. She also edits Vault.com’s content related to law practice in the UK and co-authors Vault’s law blog, which provides career news, advice and intelligence to the legal community. Prior to joining Vault, Ms. Djordjevich was an editor at American Lawyer Media and practiced law in a small litigation firm in New York. She has a law degree from New York University School of Law and a bachelor’s degree from Stanford University.

    How to Motivate Attorneys to Market

    National Law Review Business of Law Guest Blogger Deborah Knupp of Akina Corporation provides some very helpful and specific tips on how to motivate attorneys to market.

    The Essence of Motivation 

    Consider that what lies at the heart of many motivational techniques is often a proverbial “carrot” or a “stick”, externally presented by a person of authority in an effort to coerce behavior to a desired outcome.  The “carrot – stick” continuum often manifests within law firms through monetary rewards (or not), primo assignments (or not), invitation to partnership (or not) and a measure of “protection” that ebbs and flows with the rising (or falling) tides of the marketplace.  The biggest challenge for sustained motivation and momentum with the “carrot – stick” continuum is that it relies largely on managers to consistently keep the motivators present and to be consistent in the reward or consequence when behavior does or doesn’t align with expectations.  In essence, “carrot – stick” is a highly management-dependent motivational technique.

    A more effective motivation technique is one that emphasizes reflective, intrinsic motivators and places accountability for sustained motivation and momentum on the individual.  With this approach, a manager’s job is to create a set of conditions whereby a person can be at their best and sustain energy and momentum to meet (or exceed) expectations.  Self-motivation, as it is often referred, is generally the result of three things:

    1)     Effective training whereby the individual knows what to do

    2)     Effective coaching whereby the individual knows how to do what is being asked or expected

    3)     Regular encouragement that reinforces behavior, course corrects mistakes and supports progress in pursuit of the ultimate result

    So the short answer to the big question, “How do you motivate attorneys to market?” lies within these three truths – training, coaching, and encouragement.  Further, motivation to market begins with changing the marketing mindset from “marketing is a cheesy, arm-twisting, manipulative, unsavory, self-interested set of activities” to “marketing is about 1) building authentic relationships and 2) solving problems that should be solved even if it means temporarily suspending self-interest.”   Or as my six-year old most recently said to me, “Mommy, you help people know how to be nice, make friends and share.”

    Training – The What’s

    Let’s begin with training.  There are four key things attorneys should know before they embark upon a marketing effort:

    1)     They need to know their target markets.  Target markets can consist of industries, types of business situations, specific buyer types or even specific company targets or contacts. Target markets should be selected based upon strengths, natural skills and genuine interest.

    2)     They need to have an authentic reason to market.  If an attorney doesn’t have a good reason to pick up the phone and call, then the attorney should wait to call until there is an authentic reason.  Attorneys should ask themselves – “If I was the person I’m about to call, why would I be interested in hearing from me?”  Authentic reasons generally fall into one of three “IN” baskets – Invitations, Introductions, Information.

    3)     They need to have a message.  If an attorney wants to be memorable, they need to be message ready with a Quick Pitch. A Quick Pitch answers the question, “what do you do?” with a response that answers the question, “the problem I solve for whom is ______”.  People care about what we can do for them or others (not just the job title or practice group).

    4)     They need to choose marketing activities that are rooted in joy.  For some, they would rather impale themselves with a sharp object than go to a networking event.  For others, writing or speaking is the equivalent to watching paint dry.  Attorneys need to choose marketing activities that are most likely to lead to authentic relationship building and position them as problem-solvers.  For some, this is networking and helping people make connections.  For others, this is becoming a subject matter expert, writing or speaking on thought leadership or advancing in a leadership position for a professional association.

    Coaching – The How’s

    Once an attorney knows what to do, there are four key things that provide the “how” for execution:

    1)     Prioritize prep/planning/strategy.  Effective preparation suggests that we honor another’s time by caring enough to have a game plan designed to get to a clear destination.  Key elements of preparation are having an objective for why we want to meet, preparing key messages to convey interest and value, know the discovery questions we will ask to deepen understanding and relationships and anticipate outcomes with potential definitive next steps.  Preparation helps attorneys control the variables they can in an uncertain market place.

    2)     Utilize the Platinum Rule when asking questions.  The Platinum Rule says do unto others as they would have done unto themselves or in more basic terms serve another’s interest first and your interests will be satisfied over time.  The Platinum Rule gives attorneys a posture of service over self-interest.  The best way to demonstrate credibility is to ask questions that demonstrate care and interest in another.

    3)     Utilize time-boxed follow-up to stay connected.  Time-boxed follow-up is the opportunity to set definitive next steps in the moment.  It’s saying “I’ll call you next Friday to set up lunch” or “I’ll reach back out to you in 6 months if we don’t connect again before then” versus leaving next steps open-ended or saying “we should do this again some time.”  Definitive next steps give us the chance to demonstrate that we are our word.

    4)     Know how business really closes.  There is no magic phrase or silver bullet to close business.  There are however, 6 qualifiers that can be like silver bullets to close business.  Business will generally close if there is 1) a legitimate problem, for which we have 2) a good fit solution and there is 3) a sense of urgency attached to the timeline to make decisions.  We must 4) have access to the decision makers and their decision-making criteria, 5) expectations must be in alignment for the level of effort it will take to initiate a relationship or work with us and 6) there must be a budget that fits with our fee structure.  When the prospect’s interests align with our 6 qualifiers, business has a way of closing itself. 

    Encouragement

    One of the big reasons attorneys lack motivation (or sustained motivation) to market results is the lack of seeing tangible results (i.e. new business, new clients, etc.) quickly.  As important as training and coaching are to equip attorneys, one of the largest success factors for motivation is regular, ongoing encouragement.  Encouragement to celebrate when things are going well and encouragement to restore hope when it is difficult to see progress.  Encouragement comes from what gets measured and what gets communicated.  While it is appropriate to measure revenue results, measuring progress is vital to sustain momentum.  Such progress might be advances in relationships and access to new opportunities.  Lastly, regular verbal checkpoints, spot coaching and verbal recognition are some of the most powerful ways to encourage through communication.

    Be nice, make friends and share.  The motivation comes from within.

    Deborah Knupp has worked globally with CEOs, executives, managing partners and attorneys as a coach and business executive for over 20 years. She has helped these leaders align their people systems and business objectives to create cultures based on the principles of accountability, integrity and authentic relationship building. Her work has focused on making the work environment a place where employees “want” to be; where clients “want” to buy; and, where leaders “want” to serve a bigger purpose in their communities and families. www.Akina.biz

    As first appeared in the January/February 2010 edition of the “Administrators Advantage” the newsletter of the Chicago Chapter of Association of Legal Administrators. 

    COPYRIGHT © 2010 AKINA CORPORATION The Essence of Motivation

     

    Save the Date – ABA Annual Meeting August 5th – 10th

    ABA (American Bar Association) Annual Meeting in San Francisco, CA Law Practice Management Section  are meeting August 4-7 at the Hilton Union Square / Business Law Section is meeting August 6-9 at San Francisco,  Fairmont / Intercontinental Mark Hopkins http://new.abanet.org/annual/pages/default.aspx

    Surviving the Economy: Dancing in the Economic Storm

    “Life isn’t about waiting for the storm to pass… It’s about learning to dance in the rain.”
    Vivian Greene

    Americans remain apprehensive about the economy, their job prospects and their incomes, even as a recovery is taking shape. We as a country are going through a financial crisis, which is testing us in many ways. Although, individually, we are being and will be affected to different degrees and in various ways, as a country, we are learning how to deal with these challenging times.

    It is natural for us to be concerned about our future when we see the economy struggling and people getting laid off and lacking basic necessities. Anger is building in many sectors of society. Like many others, you may be feeling pain, fear, anxiety, betrayal, anger and even hate towards those you believe are responsible for what has happened. However, these emotions will not help you deal with the situation effectively.

    Each of us desires the kind of comfort that will keep us steady in times of crisis, regardless of the circumstances. The process of remaining steady in challenging times begins with our outlook. It is important to remember that during difficult moments, we are not powerless. Rather, the contrary is true. We have the power to overcome many of the challenges we face. All too often, we feel so overwhelmed by negative possibilities that we fail to see opportunities before us.

    Linkedin Logo Neon It is imperative to maintain an optimistic attitude and arm yourself with practical tools for survival. Since the job market is harder to penetrate now, making it even more competitive, you must be flexible regarding such issues as the type of employer, industry and compensation. Experience and education are more vital than ever. Professional networking sites such as LinkedIn have become an excellent venue for reaching a vast pool of potential employers and should be considered an important resource when looking for jobs. Statistically, over 75% of jobs are found as a result of networking.

    It also is essential to know what is going on in the job market and, specifically, the legal industry. This year, small and midsize law firms have been busier than larger ones. Some of these firms are litigation boutiques whose business has increased as a result of litigation related to failed companies and financial institutions or disgruntled investors. Securities and white-collar litigation also has begun to improve. Labor and employment litigation has increased since more companies have implemented layoffs. IP litigation also has remained a strong practice area in most markets. Bankruptcy and reorganization practices have thrived as a result of the economic impact on companies. Additionally, many smaller firms are busier because corporate clients have sought (or demanded) lower fees. Undoubtedly, this trend is likely to continue in the foreseeable future.

    Employers of all sizes are taking longer to make hiring decisions. Consequently, finding a job has become a much slower process. It is an employers’ market because they can afford to be more particular about which candidates they interview and hire given that they have a much larger pool of applicants to consider. Therefore, do not assume you have been rejected simply because you have not heard from a prospective employer in a few weeks.

    It is a tough job market out there – probably one you never thought you would encounter in your lifetime. Opportunities are scarce in this economic climate and this is the new reality. Multiple job offers are likely a thing of the past, at least for the time being. If you already have a job, remember that anyone in this economy could be the next person let go. Even if you are a star who has great training, experience and skills, and has formed alliances at work, you could be one step away from a job search.

    With that said… now is the time to outdress, outspeak and outsmart your competition. And most importantly… it’s time to learn to dance!

    Contributed by Guest Blogger Rodney L. Abstone II of  Chicago Legal Search, Ltd.

    ©2010 Chicago Legal Search, Ltd. All Rights Reserved.

    How Law Firms Can Leverage Their Relationships With Alumni (Including Those Not Leaving of Their Own Accord) and Why It Matters

    From Guest Blogger Kate Neville of Neville Career Consulting, LLC – why keeping good relations with firm Alumni is important: 

    A. Challenges of the New Economy

    In 2009, more people were laid off by more firms than had been reported for all previous years combined.1 Letting attorneys go in significant numbers is not something large law firms have had a great deal of experience with until recently. Standard practice in most large law firms had been to retain attorneys until a partnership decision was made. These firms did so in part because they feared the reputational stigma attached to firing one of their own; as one blog explains, the “vast majority” of prospective lawyers “turned up their noses at firms…[that] laid people off.”2

    How quickly times have changed. Despite the novelty of big firms having to let their attorneys go, it still comes as a surprise how poorly some large law firms have handled the process of layoffs over the past year. To be fair, firms made these decisions under great stress and uncertainty, when the risk of total firm collapse existed and in fact happened to some, which certainly influenced the choices they made.  Many firms insist that they have only let attorneys go for performance rather than economic reasons, even when it strains credulity. It is difficult to believe that a firm suddenly realized, all at once, that dozens of its attorneys had sub-par performance, particularly when some of those lawyers were recently made junior partners, or when those attorneys were in their first or starting their second year of practice.

    Most analysts (and other attorneys in private conversation) recognize that these lawyers would never be let go in a stronger economy as long as they made money for employers. To their credit, some firms forced to make layoffs have stated this explicitly and expressed regret at having to say goodbye to respected colleagues.  Even at firms that have been up front about the economic necessity of layoffs, however, stories abound of attorneys being given almost no notice, little or no severance, and no assistance in securing a new position.  Departing associates have told of working closely with a partner for years, only to receive an email message in farewell.  In a few cases, attorneys have been shut out of the firm’s computer system while they were being given the news, and others have been immediately escorted out of the building with their personal items forwarded separately by messenger. Such jarring departures, while common in investment banking and internet start-ups, had been unheard of for members of the bar in good standing whose only misdeed was that they were caught in a down legal economy.

    Certainly, not all firms have handled things so poorly. Indeed, some have worked to create a “soft landing” for their attorneys who have been laid off. These efforts have typically included providing career counseling and outplacement services, offering appropriate severance packages, making office space available, and keeping attorneys’ phone lines and email accounts active.

    By far, the most helpful — and loyalty engendering– thing a firm can do for its former attorneys is to make calls on their behalf and provide contacts who are knowledgeable about opportunities for the individual now looking. In the past, once it was decided that a senior associate was not going to be made partner, almost all large firms made an effort to place the individual in a position with a client or somewhere one of the firm’s partners was well known. While some individual attorneys have asked for and received this type of help in the past year, the courtesy has not been extended as a matter of practice to attorneys told that they no longer have a position with their firm.

    There is of course no public data on which firms did what in the process of letting go of attorneys, so it is impossible to calculate how things were handled by the field as a whole.  Nevertheless, it remains clear that in the face of hard times and increasing financial pressures, it is in a firm’s interest to avoid unnecessarily aggressive, and arguably self defeating, approaches to downsizing their workforce.

    B. The Business Rationale: Why It Matters

    As one large firm associate noted in early 2009,

    I remember back in 2003, one of my colleagues was laid off from our firm, and they provided him with six months’ salary and hired a professional career consultant/placement agent to help him land safely.…This firm did all the right things, including telling him that it was purely for economic reasons and not performance related. The rewards to the firm were obvious — he joined the in-house legal team of a Fortune 50 corporation, and still looks back fondly at our former firm despite being laid off.3

    The absence of far-sighted strategies on the part of some large firms in letting attorneys go exists, of course, in large part because firms are under pressure to save money—the driving force behind the layoffs in the first place. Economic conditions have changed drastically since 2003 — firms no longer feel flush, there is no reassurance that business will increase in the near future, and fewer Fortune 50 corporations are hiring.

    It seems that, in their rush to adapt to changing economic conditions, decision makers at some firms may have lost their long-term perspective. In some cases, administrators in charge of marketing and business development have made the case internally for substantive severance packages in order to maintain goodwill among departing attorneys only to be turned down by managing partners or others on the management committee.

    The question remains at what cost firms make these decisions. Eventually the downturn will end. Law firm alumni will find jobs somewhere, very possibly with potential clients, and firms will get back into hiring mode. Consequently, it makes economic sense for firms to handle layoffs sensitively and to do as much as they can for outgoing employees in the midst of tough economic times.

    When firms insist on claiming performance issues and treat their former employees so poorly, it not only poisons the relationship with the individual but also can quickly ruin the firm’s reputation with that individual’s former colleagues, clients, and fellow alumni. These procedures and processes — or the lack thereof — also mean that a firm assumes the risk of driving away future candidates and causing prospective clients to question the firm’s judgment, placing its future in jeopardy. It is difficult to see a rationale for some of the problematic things firms have done.

    Accounting firms and management consulting firms have for many years invested in maintaining good relations with their former employees. They have, of course, not done so out of the goodness of their hearts but rather because it has proven to be good business. Through measures such as developing alumni networks to keep in touch and developing programs that attract alumni to remain engaged with their former employers, these companies regularly develop future business contacts and promote loyalty and goodwill that can help attract top candidates and clients in the future. The business argument that has persuaded business leaders across industries to maintain good relationships with their former employees follows.

    First, attorneys already have a lifetime affiliation with a firm for which they have worked because the firm is always on their resume. When asked, as will be the case in almost any new position, alumni will of course speak more highly of the firm if their departure is handled well. The reverse is also true.

    Second, the market will improve at some point, and firms will again compete for talent.  It is much less expensive to rehire people who have already been trained by the firm than to invest the huge sums that firms have traditionally put into their recruiting programs or paying recruiters to hire laterals.  Alienated former employees will not want to return and, even if they do, are not likely to perform at their best. In addition, any negative information about a firm will impact future law student candidates who often listen closely to the experience their school’s alumni have had with a firm. These recruiting circles are small.

    Third, especially in a tough economy, it is critical to leverage relationships for business development. A firm has no way of knowing where its former attorneys will end up; and, if they happen to land in a large potential client’s office, their opinion of the firm matters a great deal. Conversely, if attorneys retain a positive view of their experience there, the firm could have much to gain.

    Law firms have an opportunity to learn from corporate America and recognize that it is always good business to create a web of connections and to invest in developing positive relationships among people. Over the past year, only a limited number of law firms have seemed to understand that it is in their interest to help their attorneys land well.

    C. What: Programming For Big Impact With Little Dollars

    The lack of foresight many firms have demonstrated in how they let attorneys go is not only due to pressure to save money but is also explained in part by the legal field’s record of lagging behind other industries in developing and leveraging alumni networks.  Some law firms have taken the lead in developing such programs in recent years, but making the case for a law firm to develop procedures to maintain goodwill with their attorneys on their departure and going forward will likely be an uphill climb in the current economy. Virtually all businesses are concerned about how to do more with less, so law firm leaders are likely to question what can be done when most are already having to make budget cuts.

    Even though law firms lack the infrastructure that other industries have created, measures to maintain good alumni relations do not need to be cost-intensive. At their core, successful networks are a combination of strong communications, networking, and follow-up. As other industries have learned, such programming is all about relationships; and, while it may be nice to have money to support them, hosting receptions and other costly events is not the only option.

    In fact, inviting alumni to a law firm social event may not be the most effective route to maintaining good relations with attorneys who have been asked to leave. In one example, associates who had been laid off received their firm’s alumni end-of-the-year newsletter, which included an invitation to the firm’s holiday party. To its credit, the firm was making clear it considered these former employees to be just like other alumni of the firm, but several of the laid-off attorneys expressed incredulity that the firm that fired them now wanted to celebrate the end of the year with them. Further, the firm seemed to lack sensitivity when the letter it sent went on to tout how successful the firm had been that year — one in which it also laid off 55 attorneys, all of whom were receiving this news.4

    Other kinds of interaction could prove to be both more productive as well as less expensive than formal events. Particularly when administrators within a firm have seen their responsibilities expand because fewer people are left to do the work, the measures a firm is most likely to adopt are those that will not require much additional work. A few lowcost examples of steps to maintain good relations with law firm alumni follow.

    First, the loyalty-engendering practice mentioned above — of partners giving departing attorneys contact information for those who are knowledgeable about the individual’s field and making calls on an attorney’s behalf — costs nothing but a little time. Particularly since it has now become standard practice solely to confirm dates of employment, law firms willing to reach out on an individual’s behalf, give candid recommendations, or at the very least provide an objective reason for the departure, will stand out among their competitors.

    Second, a firm can piggyback the steps it takes to develop alumni networks onto other initiatives already being undertaken. These can include incorporating alumni into client seminars and events, offering discounted continuing legal education (CLE) programs to keep bar memberships current, and inviting alumni to program events already planned as part of women’s or diversity initiatives or of particular practice areas.

    Third, a firm can inexpensively create an alumni directory, keeping email addresses and other contact information updated so that individual alumni can reach out independently to one another. Maintaining such a directory provides a fair-value exchange for the firm, which gets up-to-date employment information and business leads.

    Fourth, disseminating job postings has been a low-cost item that many attorneys have appreciated in firms that have begun this practice. The firm’s clients are often happy to have applications from alumni, and posting positions of which a firm’s individual attorneys are aware helps build their personal networks as well.

    Finally, in headier economic times a number of firms developed a component of their websites specifically dedicated to alumni of the firm, but creating a firm-specific alumni group on Linked In and Facebook can achieve similar results at lower cost. Content is typically driven by determining what information alumni want, which has included career programs (webinars, conference calls, or in-person) and allowing alumni to opt in to different newsletters that practice areas put out with practice/industry-related news.

    The future hiring model for large law firms remains up in the air, and the rise in the use of contract attorneys may change these equations so that law firms make money without modifying the way they let their attorneys go. The return on investing in continuing relationships will be great for firms that still want to compete for top talent and loyal clients.

    For those firms that want to compete but might have handled layoffs in ways that were less than productive last year, future success will largely depend upon senior management creating a culture that recognizes the value of strong relationships and leverages opportunities to maintain them.

    1 “The Year in Law Firm Layoffs – 2009,” LawShucks. According to the blog LawShucks and as cited in the ABA Journal on January 8, 2010, 4,633 lawyers were laid off at 138 large firms.

    2 Ibid.

    3 Anonymous posting to Above The Law, February 5, 2009.

    4 As posted on Above The Law, December 8, 2009.

    © 2007-2010 Neville Career Consulting, LLC

    Posted by: Kate Neville

    Kate Neville, Esq., a Harvard Law graduate, is founder of Neville Career Consulting, LLC, which provides guidance to attorneys considering a job change or career transition, whether within the practice of law or to another field.She began her career practicing law at Simpson Thacher & Bartlett and as an in-house attorney for New York City government before shifting to positions in management consulting and policy analysis. After serving as an advisor in Georgetown Law’s Office of Career Services, Kate decided to use her experience to help practicing attorneys identify the full…

    202-997-9854