The Changing Role of Lawyers in Today's Economy

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1 PRACTICAL NEWS & PERSPECTIVES BOOK CLUB ALA s 2009 Compensation and Benefits Survey The Association of Legal Administrators (ALA) 2009 edition of its Compensation and Benefits Survey contains information collected from legal organizations throughout the United States and Canada. This survey focusing on salaries and benefits for legal administrators features data for each position in seven categories: type of organization, number of lawyers, geographic location, supervisory responsibility, experience, education, and state/province, including and excluding metropolitan areas. To purchase this book, available at special discounts for ALA members who did or did not participate in the survey, visit The Compensation and Benefits Survey is the first book listed in the online bookstore s Financial Management section. Weathering the Storm Firms Stay Afloat by Specializing, Adapting to New Business Environment As the recession continues, a law office s success depends on its willingness to alter the legal services it offers, according to a new white paper from legal staffing service Robert Half Legal. The report, Delivering Value-Added Legal Services in Challenging Times, found that, despite the current economy, demand for legal services is growing in practice areas such as bankruptcy, litigation, intellectual property, and environmental law. One area that isn t on the rise: Use of outside counsel. Corporate legal departments are limiting spending on outside counsel and reassessing the allocation of legal work. The report also indicated that firms are altering many of their business processes to meet client requests. As a result, approaches such as alternative billing practices are gaining wider acceptance. Ninety-one percent of lawyers said mentoring and/or coaching were the most effective techniques for improving client service levels; 87 percent cited technology training, and 83 percent felt business development training helped to improve service. Protecting Rights New Service Offers Document Preparation for LGBT Couples, Individuals Members of the lesbian, gay, bisexual, and transgender community now have a new way to prepare crucial documents to protect their basic family and relationship rights: LegalOut.com. The online service, launched last spring by Atlanta attorney Lindalisa Severo, is powered by legal services provider RocketLawyer.com. LegalOut.com which costs $20 a month or $120 a year for unlimited document preparation can help couples and individuals to create documents for estate planning, domestic partnerships, co-parenting agreements, and more. The service also features document storage and sharing, news updates and a referral network of LGBT-friendly lawyers. 6 LEGAL MANAGEMENT SEPTEMBER 2009

2 upfront Since late last year, the recessionary economy and credit crisis has curtailed most law firm merger activity and has caused many firms to adopt a wait and see philosophy about future financial performance. In the face of so much uncertainty about the future, law firms are unwilling to absorb risks inherent with opening new offices or adding new practices. Instead of law firm mergers, we re seeing a lot of activity in the acquisition of laterals, small groups, and very small firms. Altman Weil Principal Bill Brennan, who advises firms on mergers and acquisitions In-House Excision Two-Thirds of U.S. In-House Law Departments Are Under Pressure to Cut Spending A staggering 98 percent of in-house law department executives said that the recessionary economic environment had affected their departments, according to a recent LexisNexis survey conducted by Corporate Counsel magazine. More than 67 percent of respondents said they had felt pressured to cut spending, and 59 percent said they had already experienced reductions in their department budgets. Overall, 97 percent are adjusting their current practices to reduce costs, and nearly six in 10 in-house law department executives are asking their law firms for alternative billing arrangements. In addition, 56 percent of in-house counsel said they had already been forced to reduce spending on outside counsel, while 68 percent are bringing some legal work back in-house. Corporate Connections Financial and practice management systems provider RainMaker Software Inc. recently announced a partnership with wireless productivity solutions provider AIRTIME-Manager that will allow RainMaker to provide law firms with time entry on a wireless device. Expense management companies Billback Systems, LLC and nqueue Inc. have announced the merger of nqueue and the North American operations of Billback Systems to create nqueue Billback, LLC. The new, self-contained company is owned by Australia-based Reckon Ltd. and nqueue Inc. Traveling Coaches, which provides training, application integration, and consulting services to law firms, recently introduced Classroom, an online technology training program designed for smaller law firms. The program s content delivery, scheduling, and progress reporting are powered by software solutions provider Profiscience Partners. Knowledge support service provider Integreon has partnered with Strategic Legal Systems, whose legal intelligence engine was designed to manage massive volumes of legal records, to launch a loan restructuring and recovery system that will help users to manage the loan workout process. MessageSolution which provides digital and file archiving, electronic discovery, compliance and data storage management solutions has formed a partnership with open network storage solutions developer FalconStor to integrate MessageSolution s and file archiving software with FalconStor s Totally Open data protection software. 8 LEGAL MANAGEMENT SEPTEMBER 2009

3 RAISING THE BAR Law Firms Trim Summer Associate Class Sizes Most of the largest private New York law offices shrank their incoming summer associate class sizes. Firms that cut staff in the past year made some of the biggest summer associate reductions. Amount by which the summer associate class declined for key firms: 70% 60% 50% 40% 30% 20% 10% 0% 68% Latham & Watkins 60% Shearman & Sterling 54% Fried, Frank, Harris, Shriver & Jacobson 49% Jones Day, Simpson Thacher & Bartlett 48% White & Case 47% Clifford Chance, Kaye Scholer Source: The annual New York Law Journal survey of summer class size at New York s 25 largest law offices Paying Paralegals Survey: Billable Hours, Overtime Down Overall compensation for paralegals in U.S. law firms and corporate law departments decreased slightly in the past year, according to a recent survey tracking compensation, billing rates, and billable hours for paralegals. The study from Incisive Legal Intelligence and the International Paralegal Management Association, which promotes the development, professional standing, and visibility of paralegal management professionals also found decreases in paralegal billable hours and overtime, but indicated there had been small increases in base salaries over the year. In addition, the 2009 edition of the Annual Compensation Survey for Paralegals/ Legal Assistants and Managers indicated that paralegals working in law firms had received somewhat higher base compensation increases than their law department peers. Within law firms, the highest paid paralegals were litigation support/technology managers, who had median annual base compensation of $121,012 nationally. The average billing rate for most paralegal positions exceeded $175 per hour. Learn more at Did you know that 72 percent of legal professionals interviewed recently during the LegalTech West Coast 2009 show said they felt that discovery, in the context of large-scale or complex litigation, is being managed differently than it was a year ago. Roughly 78 percent said the overall approach to discovery management was changing because technology is being used more; 68 percent cited a growing emphasis on cost management. Source: Kroll Ontrack survey 10 LEGAL MANAGEMENT SEPTEMBER 2009

4 Tightening Up Companies Work to Close the Discovery Readiness Gap Despite the fact that 77 percent of recently surveyed corporate counsel see readiness for legal discovery as one of their organizations most important functions, 44 percent also say their enterprises had not established any internal e-discovery processes or technology. However, some corporate legal departments are starting to implement e-discovery processes and technology, according to a recent report from e-discovery service and document process management provider Océ Business Services. The survey, The Discovery-Ready Enterprise III: Taking Steps to be Proactively Prepared, found that 26 percent of in-house and law firm attorneys were implementing a discovery readiness assessment analysis, and 26 percent were working to create an internal e-discovery team. Other steps companies reported taking include hiring an outside vendor (14 percent) and hiring a law firm (11 percent) to consult with about implementing e-discovery processes and technology. See the accompanying charts for other important results of this research. 12 LEGAL MANAGEMENT SEPTEMBER 2009

5 Career Challenge New Survey Highlights Workplace Barriers for LGBT Employees Lesbian, gay, bisexual, and transgender (LGBT) employees face workplace barriers that limit career advancement and restrict potential contributions to organizational success, according to a report from nonprofit membership organization Catalyst. The study, Building LGBT-Inclusive Workplaces: Engaging Organizations and Individuals in Change, found that a lack of awareness, which may cause other employees to rely on stereotypes, can lead to hostile work environments for LGBT employees. These work environments could include discriminatory behaviors such as inappropriate humor or derogatory language, exclusion from important relationships and advancement opportunities, and a lack of role models. The workplace seemed to pose more acceptance challenges for LGBT women, according to the Catalyst survey. About 70 percent of LGBT women reported that their managers had evaluated their performances fairly, compared to 80 percent of LGBT men. However, the study also found that concerted efforts to create LGBT-inclusive workplaces using techniques such as diversity training, employee networks, and mentoring programs can help to raise awareness and result in better workplace relationships, improved perceptions about workplace fairness, and increased career satisfaction and organizational commitment for LGBT employees. Learn more at SEPTEMBER

6 upfront Rapid Reductions Employers Are Cutting Back on Health Care, Other Benefits U.S. employers are cutting back on benefits such as health care, business travel, and relocation expense reimbursements, according to the Society for Human Resource Management s (SHRM) 2009 Employee Benefits Survey Report. Sixty percent of HR professionals say the recession has caused their organizations to scale back or hold steady on benefit offerings. Health care and welfare benefits showed a relatively small decrease. However, more companies are offering mental health coverage benefits in 2009 than Organizations continue to offer family-friendly benefits for same-sex and opposite-sex domestic partners. Overall, 16 percent of HR professionals reported that their companies offered some form of domestic partner benefits beyond health care. The research also showed that companies continue to recognize the importance of financial and compensationrelated benefits. More companies offered a defined contribution retirement plan benefit in percent than in 2008, when only 84 percent of organizations offered such a plan. HR professionals also said that fewer companies were offering noncash, companywide performance awards and community volunteer program benefits. For more information, visit Quick Stat A majority of employees 86 percent say they re concerned about how prepared their organizations are to deal with information risk, and 29 percent of employees say they haven t been briefed by an IT manager or legal department representative about the role plays in lawsuits and e-discovery events. Source: Information risk management (IRM) software provider Recommind BY THE NUMB3RS The number of telecommuters in the U.S. increased 39 percent from 2006 to 2008, growing from 12.4 million to 17.2 million. Questioning Change Chief Legal Officers Think Firms Aren t Serious About Developing New Business Models The way corporate law departments deliver legal services is changing because of the economy but some feel the new methods will be only temporary. A quarter of the respondents in Altman Weil Inc. s 2009 Chief Legal Officer Survey which asked CLOs to rate how much pressure corporations are putting on firms to change the value proposition in legal service delivery said the pressure to make significant changes was high. However, when asked how serious law firms are about changing their delivery models, only 5 percent of CLOs assessed firms as highly serious. Another 20 percent gave firms credit for some level of effort, but 75 percent reported seeing little or no interest in change. The survey also found that corporate law departments planned to reduce their use of outside counsel in the next 12 months, and that 27 percent of corporate law departments had already reduced their in-house lawyer staff this year. Learn more at Source: Not-for-profit professional association WorldatWork 16 LEGAL MANAGEMENT SEPTEMBER 2009

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