DIVERSITY INITIATIVES Savvy Law Firms Take Innovative Approaches ALSO INSIDE. SUCCESSION PLANNING Is Your Firm Prepared?

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1 LEGAL M A N A G E M E N T MAY/JUNE 2010 VOLUME 29 I NUMBER 3 DIVERSITY INITIATIVES Savvy Law Firms Take Innovative Approaches ALSO INSIDE SUCCESSION PLANNING Is Your Firm Prepared? DOING MORE WITH LESS Firms Increase Ratios of Lawyers to Secretaries

2 PRACTICAL NEWS & PERSPECTIVES Great Expectations Survey Reveals Changes in Clients Requests, Overall Structure of Legal Industry According to a recent New York Times article, law schools enrollments are up but what employment climate will attorneys enter upon graduation? It will likely be a different job market than that of just a few years ago. A recent study conducted by lawyer and technology and marketing author Ari Kaplan of Ari Kaplan Advisors indicates that client billing and service expectations have changed in the past few years due to the economy and, as a result, the legal industry itself has changed. Many firms that have had to layoff staff and attorneys are working to do more with less; similarly, clients are asking for more to be done for less money. An overwhelming 92 percent of survey respondents said they believed that client expectations had changed, according to the study, The Evolution of the Legal Profession: A Conversation with the Legal Community s Thought Leaders on the Front Lines of an Industry. Clients, for example, appear to be asking that only employees with certain experience levels work on their projects. More than 75 percent of respondents had heard of instances in which corporate clients would not pay for first-year associates work. Hourly billing also is becoming a less popular choice among law firm clients. Fixed fee arrangements appear to be gaining ground; 13 of the 15 active practitioners interviewed in the survey reported using alternative billing methods, including fixed fee systems. The recession has certainly had an impact on many U.S. firms; however, it can t be blamed completely for the recent changes to the legal industry s business model. More than half of respondents 62 percent said they believed that the market had changed due to accelerated law firm growth in the past and increases in legal fees. Roughly 70 percent of respondents said they believed the economy has historically had an impact on the legal industry but that this time was different. Seventyfour percent believed that the changes that have resulted from the recent difficult economy will be permanent. Did you know that the median number of offers extended for summer 2010 law positions, across employers of all sizes, dropped to just seven in 2009 falling from 10 in 2008 and 15 in At the largest firms (those with more than 700 lawyers), the median number of offers dropped from 18.5 in 2008 to only eight in Source: The National Association for Law Placement s Perspectives on Fall 2009 Law Student Recruiting annual report Quick Stat Approximately 234 million U.S. residents ages 13 and older were using mobile devices by the end of the fourth quarter of Americans also are spending an average of 2.7 hours on the mobile Internet connecting socially, managing their finances and carrying out other tasks. Source: Public relations agency Ruder Finn s Mobile Intent Index survey 6 LEGAL MANAGEMENT MAY/JUNE 2010

3 Backing Benefits Employers Not Ready To Abandon Employee Health Care Plans The recent federal health-care reform law won t inspire most U.S. employers to drop health-care benefits, according to a survey of business executives conducted by Workforce Management and Business Insurance. Starting in 2014, the health-care reform bill will require companies with 50 or more full-time employees to offer health-care coverage or be hit with a $2,000-per-worker annual fine. Although some fear companies may sidestep the cost of providing insurance by instead opting to pay the fine, 52.5 percent of survey respondents said they did not believe it would benefit their companies to cut health-care benefits. About 15 percent expressed mild opposition to the idea of forgoing coverage in favor of the fine. Just 14 percent said that they strongly agreed with paying a fine instead of offering health-care coverage. Large employers were especially opposed to cutting health care. Nearly 65 percent of employers with 25,000 or more workers strongly disagreed with the notion that paying a fine would be a better option than offering an employee health-care plan. Security Challenges Insufficient Technology, Resources Cause Concern Regarding Electronically Stored Information Nearly 63 percent of corporate legal, compliance and IT professionals believe that inadequate technology and resources are the biggest barriers to managing electronically stored information (ESI), according to a recent survey by technology service and software provider Kroll Ontrack. An equal number of respondents believe their organizations manage corporate data well in preparation for, or response to, legal and/or regulatory requirements, according to the study. However, one-third of respondents confirm they either do not have or do not know if they have the appropriate technological tools or archiving platforms to manage the storage and destruction of ESI. The survey also found that litigation hold and automated document retention functionality were key drivers in information management purchasing decisions. The ability to retain documents for business continuity or legal purposes was ranked as the most important factor when utilizing technology to manage data for ESI requests. Respondents also said that they considered early case analytics, automated document destruction and storage optimization to be important factors in utilizing technology to manage data for business continuity or legal purposes. RAISING THE BAR Legal Staffing Plans Employment prospects for legal professionals are looking better in the second quarter of More than 26 percent of lawyers recently said they planned to increase staff levels in the second quarter. Virtually none anticipated declines. Surveyed Firms Full-Time Legal Personnel Staffing Plans for the Second Quarter of 2010: 100% 80% 60% 40% 20% 0% 26% Plan to Increase Personnel 0% Plan to Decrease Personnel 67% No Plans to Alter Number of Personnel 7% Aren t Sure Source: Robert Half Legal Hiring Index published by staffing service Robert Half Legal 8 LEGAL MANAGEMENT MAY/JUNE 2010

4 Cutting Costs Consulting Group Offers Financial Management Tips As firms continue to face client and business needs with smaller workforces, many are re-examining budget and trying to cut costs. To help law firms determine who and what drive costs and what ways costs can be reduced Huron Consulting Group compiled the following cost measurement guidance: Discovery Management: Discovery is the single largest legal cost facing many companies in a given matter. Managing electronically stored information requires a comprehensive strategy. Cost Management: Organizations must develop financial strategies to manage costs in an ever-changing legal environment. A comprehensive plan should integrate people, processes and technology with stated goals and key performance indicators. Outside Counsel Management: Outside counsel often amounts to a significant cost for corporate legal departments. Simply negotiating lower rates will not address systematic issues. Companies should look at several key issues, such as sourcing, staffing mix, value and pricing. In-House Resource Management: Companies must move their lawyers away from a silo mentality and instead integrate the total workforce, clearly defining roles and responsibilities for attorneys and non-attorneys at all levels. Technology and Process Management: Technology and process management should be used at every level and not only as an administrative tool. In order to succeed in implementing these types of strategic tools, companies need user buy-in, which can be done by building new processes into daily work life. BY THE NUMB3RS Prompted by cloud computing enhancements and other recent technological developments, many companies are reducing their technology hardware assets and turning to ownership of hardware by third parties. By 2012, 20 percent of businesses are expected to have no ownership of technologyrelated assets. Source: Gartner s Top Predictions for IT Organizations and Users, 2010 and Beyond: A New Balance, from information technology research and advisory company Gartner Inc. Exceptional Resource New Book Covers All Areas of Law Firm Management Written by legal management professionals for legal management professionals, Best Practices in Legal Management: A Comprehensive Guide is precisely that. The nearly 500-page book features contributions from more than 85 professionals who are members, business partners and friends of the New York City Chapter of the Association of Legal Administrators (ALA). Recently published by the New York State Bar Association, this book covers all areas of law firm management, including strategic planning, business development, practice management, human resources, finance, disaster recovery, technology, space planning and more. It contains forms and templates (all on a USB flash drive that accompanies the book) that can be adapted for use in your firm, an extensive list of resources organized by subject area and humorous vignettes and cartoons based on real events. With its easy-to-read format, this book is an invaluable resource for administrators at law firms of all sizes and required reading for anyone preparing for the Certified Legal Manager (CLM) SM examination. The book is available now in the ALA Bookstore bookstore at a discounted rate of only $139 for members of the Association. 10 LEGAL MANAGEMENT MAY/JUNE 2010

5 upfront Metadata Security As Smartphone Usage Increases, So Do Safety Concerns More than 90 percent of firms with 51 or more attorneys have metadata tools in place for their desktops yet only 3 percent have protection for documents sent or forwarded via from a mobile device, according to a recent survey from metadata removal service provider 3BView. The Mobile Device Usage and Document Security survey found that smartphone use is increasing: 98 percent of respondents said they used smartphones as their primary business mobile devices. Sixty-seven percent of respondents reported reviewing documents on their mobile devices; 50 percent do so daily or weekly. A quarter of the respondents also edit documents on their mobile devices. However, mobile device usage isn t the only thing that s grown; along with it, firms concerns about metadata leakage have also increased. Sixty percent of respondents said they viewed the risk of metadata leakage through documents sent or forwarded through a mobile device as medium to high. Key trends like alternative fee arrangements, project management, strategy development along with the right blend of process, organization and technology execution and sophisticated performance benchmarking are creating a need for legal organizations to integrate technology into their strategic operations. Dan Safran, Executive Vice President, Legal Solutions, for business and technology consulting firm Project Leadership Associates, speaking to InsideLegal.com. Corporate Connections Legal strategic advisory and consulting service providers Altman Weil Inc. and Project Leadership Associates Inc. recently signed a formal strategic alliance agreement. A joint task force is developing new market offerings that leverage each firm s expertise, including pricing strategies, project management and post-merger integration. BigHand has acquired digital dictation technology provider nflow Software Ltd. Litigation support solution provider Esquire Solutions has formed an exclusive partnership with Unlimited Languages, which provides multilingual translation and interpretation services, to provide Esquire Solutions clients with language interpreters who can handle specialized legal terminology. Information management and e-discovery solutions provider StoredIQ has partnered with storage and data management solutions provider NetApp. StoredIQ is integrating NetApp storage into its intelligent information management platform. Space- and asset-management solutions provider National Office Systems (NOS) has announced a strategic partnership with integrated storage and filing solutions provider Systematics Inc. The new entity will operate under the name of National Office Systems, New England, Inc. (NOSNE), d/b/a SYSTEMATICS. Intelligent information provider Thomson Reuters has acquired Round Table Group, which provides expert witness consulting services to litigators via a network of more than 100,000 experts. 12 LEGAL MANAGEMENT may/june 2010

6 Sharing Success InsideLegal.com Events at ABA TECHSHOW Offer Tips, Best Practices to Attendees Working with the Legal Media Panel ABA TECHSHOW 2010 attendees found out what content today s legal publishers is looking for and how to best submit it during the event s Working with the Legal Media session, presented by InsideLegal.com. Featuring panelists John Delavan, Editor-in-Chief of the Association of Legal Administrators flagship magazines Legal Management and ALA News; Robert Yates, Executive Editor of Chicago Lawyer and Chicago Daily Law Bulletin; Reginald Davis, Assistant Managing Editor of the ABA Journal; and Joy White, editor of Law Practice and Law Practice Today, the panel discussion took place the day before the show s official start. Jobst Elster, legal industry public relations expert and Vice President of InsideLegal.com, moderated the event. In addition to providing an overview of each publication, the participants also discussed their preferences for receiving vendor news, each publication s content guidelines and their social media efforts IgniteLaw Event More than 150 attendees came to the IgniteLaw event, which was held on the evening prior to the ABA TECHSHOW s start and produced by Matt Homann of LexThink and JoAnna Forshee of InsideLegal.com. Sixteen speakers including a legal journalist, trial consultant, legal technology vendor experts, technologists and bloggers were given six minutes each to address topics relating to the future of the legal profession. Homann began the session by touching on a clients are relevant again theme. Other speakers covered topics including legal technology, legal media coverage and the ethics of attorney advertising. Rocket Matter s Larry Port, for example, spoke about the importance of software development for law firms. He also described his company s practice of tracking progress by holding short, standing-room-only meetings during which staff members were asked to relate what they had done yesterday and today, and what obstacles they faced tomorrow. Although all of the speakers posed engaging, interesting points, the six-minute plea for better practice management education given by Tom Mighell, the voice behind legal research blog was a session standout. Attorney and technology and marketing author Ari Kaplan TECHSHOW s 2010 keynote speaker also provided one of the event s most thought-provoking discussions. Using examples that compared playing Wii bowling with his daughter to law firm marketing, Kaplan encouraged firms to change their perspectives, stay focused and allow room to make mistakes. The final two presenters IP and technology attorney Doug Sorocco and attorney Ernie Svenson (also known as Ernie the Attorney) shared thoughts on how small firms can remain competitive when facing off against large firms and how the increase in electronic communication can help firms move toward paperless environments. 1. Reginald Davis, Assistant Managing Editor of the ABA Journal, and Joy White, Editor of Law Practice and Law Practice Today, were among the media panel participants. 2. Panelists John Delavan, Editor-in-Chief of Legal Management and ALA News, and Robert Yates, Executive Editor of Chicago Lawyer and Chicago Daily Law Bulletin, pondered a question. 3. Another IgniteLaw presenter, Attorney Ernie Svenson stressed the feasibility of moving to a paper-free office environment. 4. The Working with the Legal Media panel got started with individual introductions. 5. Rocket Matter s Larry Port discussed the importance of legal software development during the IgniteLaw events. 6. Vice President of InsideLegal.com Jobst Elster served as moderator of the Working with the Legal Media panel. 14 LEGAL MANAGEMENT MAY/JUNE 2010