The Legal Intelligencer Blog

Masque of the Red Dewey: Prestigious Firms Plagued by the Economic Shifts They Have Ignored

By Julia Claire Shapiro
Special to the Legal

The pink slip death began with the little people. The layoffs of lower-level associates, midsized firms shuttering, the rescinded offers, the law school debt, the lack of jobs. As the legal elite continued on with their party, the Reaper stood in the corner. A brief hush would fall over the room as he tapped the lesser nobility on the shoulder at regular intervals. Those who remained returned to their revelry. When he tapped Dewey on the shoulder, a murmur rippled through the room.

Some panicked, others rationalized. Above the Law has an entertaining survey of the blame game: lavish guarantees, lack of business, legal market crash and my personal favorite, the East Egg (the pedigreed prestigious pre-merger Dewey plagued by debt) v. West Egg (The scrappy and flashy pre-merger LeBouef that knew how to make green).

A growing segment of the legal industry is acknowledging that they are not immune, that strains of Dewey exist in their own firms. This is how I’m now invited to speak to the the same types of people who thought I was highly eccentric in 2009 when I began warning that the Reaper would come for BigLaw, too, and encouraged them to keep their workforces flexible with per diem attorneys and other flexible work arrangements.

Now, I’ve found that one slide makes law firm conference rooms pause. It contains two tales of horror: (1) Axiom Law’s recent growth — $1M in 2002, $80M in 2011 and on track to make $120M in 2012 and (2) the growing list of similar models that take the trained associates and increasingly Fortune 100 clients of AmLaw Top 50-200 firms. In return for lower legal bills, clients accept a software-based infrastructure and BigLaw alums sometimes working with them on site in place of high-rent offices. Pedigreed attorneys accept comfortable six-figure salaries and 40-hour workweeks in lieu of 80+ hour workweeks, higher salaries and partner potential.

After cross-examination from the room, there is another pause and you can see the silent reactions. “Is this death such a bad thing?” “This is an unfair attack on the belief system I have worshipped and sacrificed for my entire career!” “A mere alarmist, yawn.”

Alternative legal models are not likely to address all large clients’ needs, nor are they the face behind the Reaper’s masque. But their revenues make a statement. The legal climate is changing without the blessings of the legal elite. Even the firms once so sure in their stature and ability to survive the harshest conditions must evolve or die. Whether from client leverage to demand increasingly lower rates, or storied firms declaring bankruptcy under the weight of a dry legal market and lavish guaranteed compensation to partners, to businesses that quickly rotate through executives who are more persuaded by increased profits per share in the next quarter than relationships, the traditional law firm model is dead. And neither I, nor alternative legal models, killed it.

Julia Claire Shapiro co-founded Hire an Esquire, which enables law firms and legal departments to locate, manage and pay contract and per diem attorneys and local counsel with ease online. She also acts as a research analyst and subject matter expert for the legal service industry clients of a national consulting firm. In addition to practicing law and consulting, she has taught legal research and writing as an adjunct in Temple University Beasley School of Law’s International LL.M. Program.

A Legal Resolution: Healthy Lawyers, Clients and Law Practices

By Julia Claire
Special to the Legal

Getting healthy and losing weight are common goals at this time of year. Currently, many lawyers are looking for ways to make their practices, their careers and their lifestyles healthier. Taking any client that walks through the door with a retainer can be the equivalent of a crash diet. The numbers look good initially, but ultimately, this approach results in many hours, headaches and unpaid bills for both lawyer and firm. Like the New Year’s dieter rebounding to a higher weight after an extreme diet and quick weight loss, the lawyer and their practice are worse for their efforts.

Family law particularly suffers from such unsustainable and unhealthy practices. According to Crispino M. Pastore, president of the Main Line Family Law Center, private family law attorneys average the highest number of billable hours in the profession and the lowest collection rate. As a veteran family lawyer who ultimately found the stress and financial toll unsustainable for clients and attorneys, he knows this story well. “The average couple can’t afford a divorce. It’s heartbreaking to see a kid’s college education fund and/or equity in the family home sacrificed to spouses fighting through litigation. All too often, many stressful hours later, attorneys end up with unhappy clients and unpaid bills. It’s discouraging all around.”

As a result, Pastore became involved in divorce mediation, where he found more satisfied clients, a more manageable lifestyle, a 95 percent collection rate and, ultimately, entrepreneurship. He founded the Main Line Family Law Center and created the "Healthy Divorce" Program due to the high volume of demand and referrals he began receiving for mediation and collaborative divorces. It quickly became obvious that this was a solution that many clients preferred, once they knew it was available.

And so do many lawyers. While recruiting attorneys to his practice and speaking with those interested in entering this field, Pastore has found a general consensus amongst these family law attorneys that the hours and lack of client satisfaction are discouraging and stressful while collecting fees is time-consuming and demeaning. Many lawyers want to “take their litigation hats off” to produce better results for their clients. They also want to preserve their own health, sanity and finances. But Pastore warns, “While any divorce matter can be mediated regardless of its particular facts and circumstances, this solution isn’t for all attorneys or clients. Attorneys that take every client that walks through the door won’t be successful. The key is to identify when a non-adversarial solution is right for potential clients and when to refer them to attorneys for a more traditional divorce.”

And whether in dieting or law, there are unique solutions for success across the board. Ask your friends that have ideological stances on the health and weight-loss merits of a vegan or paleo lifestyle, just not at the same time in the same room. Mediation isn’t a panacea for the legal profession or family law. This is just one example of how lawyers are finding success for themselves and better solutions for their clients by casting off an ill-fitting and stressful status quo. With stress increasingly linked to disease, illness and weight gain, solutions that are less stressful for lawyers and clients can also help out with that other New Year’s resolution.

Julia Claire is co-founder of Hire an Esquire, which enables law firms and legal departments to locate, manage and pay local and contract counsel with ease online. In addition to practicing law she has taught legal research and writing as an adjunct in Temple University Beasley School of Law’s International LLM Program and currently sits on the Advisory Board of Shpoonkle.

Why Building and Enforcing Stigmas Hurts the Entire Independent Attorney Movement

By Julia Claire
Special to the Legal

Once, firms marketed their “collegiality” to law students and laterals. A culture of staking out territory on a rigid bell curve wouldn’t attract top talent. As the legal economy has become more desperate, some are adopting a “gunner” mentality to make a newly emerging career option appear attractive: The independent (indie) attorney, which I will define as “a lawyer who works on a project basis untethered to one firm.”

An aspirational campaign attempts to put indie attorneys into two categories: “contract” and “freelance.” According to the blog of one freelance organization, they must distinguish themselves from contract attorneys; this term is associated with “attorneys who have not be able to get hired law firms [sic].”

An ABA article frames freelance law as an option for those who have the means to be full time-moms and very selective about the types of legal work they take, but nonetheless wish to keep their legal skills sharp. Under a heading of “No Scrubs,” it explains that contract attorneys are “cheaper attorneys” for “low-rate document review and appearances” which only require “a body with a law degree.”

Another freelance organization explains that contract attorneys work for an agency and freelance lawyers work for themselves. Beware! Confusing the two undermines freelance lawyers because “contract attorneys are treated as second-class citizens both in terms of law firm atmosphere, mentoring opportunities, and the perception of their resume for future jobs.” 

Setting aside the inaccuracy of these statements and why attorneys choose certain indie options at various points in their careers and lives, branding a scarlet “C” hurts self-proclaimed “freelance lawyers” — and the entire indie attorney movement. Marketing a software service (not an agency) to law firms that helps a wide spectrum of indie attorneys directly connect and contract with law firms and legal departments, the term freelance lawyer was met by blank stares or silence. “Contract attorney” was quickly understood to describe all types of indie attorneys — regardless of the type of work or the nature of their contract with the firm. This should be one of many incentives for all indie attorneys to work together to promote solutions to help our peers and our profession. Because, sometimes, a little bit of stigma can rub off on the very hands that created it.

Julia Claire is a co-founder of Hire an Esquire which enables law firms and legal departments to locate, manage, and pay local and contract counsel with ease online. In addition to practicing law, she has taught legal writing as an adjunct professor in Temple Law's International LLM Program and as an online lecturer at Quimbee.com.

November Rain: Business Vignettes From a Lawyer Who Has Peeked Into Hundreds of Offices

By Julia Claire
Special to The Legal

In my law firm days, the lawyers and I snickered at the HBS management “tips” on the elevator “captivate” screens. Was the nation’s premier business school getting their material from kindergarten and Office Space? Now, managing business development and operations for Hire an Esquire — which helps law practices locate, manage and pay contract and local counsel — I
interface with an average of 10-20 law practices a day from solos to national firms. Equally simple advice seems to distinguish the thriving practice from the veteran lawyer still chasing $75 dollars in court.

From cold, introduced, conference, follow-up and customer satisfaction calls to coffee, in-person and virtual meetings, I have spoken with hundreds of key decision makers in both thriving and struggling practices. Patterns emerged differentiating the two, which taught three key lessons:

1) Dale Carnegie Was Right:

Many solos, founding or equity partners, and office administrators were friendly and personable — even when I was cold calling and they weren’t interested in Hire an Esquire. Quick chats with these decision makers generally revealed a bustling practice. They didn’t remind me that I was a “sales call,” although a certain kind of attorney did.

These attorneys expressed disappointment that I wasn’t a client or a referral and then volunteered that they didn’t have enough work, let alone anything to outsource. A few partners who begrudgingly took my call upon insistence of a client seemed equally desperate for business. Their tone made it clear that they were too busy to talk to me, but their words said that they didn’t have enough work for their full-time attorneys. Local counsel arrangements were reserved for law firms that would potentially reciprocate or send referrals. Like the many other people they come into contact with daily, I was also a potential source of recommendations and business. How many other prospective clients and recommendations did they regularly repel?

2) Work Smart and Delegate:

Talented support staff can impact revenues as significantly as associates. There is a wealth of business and tech savvy tucked away in law offices. I observed office administrators and paralegals proactively seeking out successful technology and business strategies to cut costs and increase business. Simultaneously, they deftly managed distractions and minor issues, freeing attorneys to focus on billable work.

Even the practices of charismatic lawyers suffered from poor organization and delegation. Although they frequently had more business than they could handle (hence why I was in their offices) they still wasted time on details their admin was capable of performing: the most basic decisions, managing the firm Hire an Esquire account, non-substantive communication with clients and filing. Files covered their desks and window ledges; frequent interruptions and unfinished or overdue tasks plagued their office. Rainmaking skills that could have resulted in a profitable practice and more leisure time were thwarted by micromanagement.

3) Technology is Your Friend:

Firms that marketed to the general public with clean, simple and sleek websites were busier than those with heavy homepage text and boxy frames. Law firms providing services to the general public that frequently popped up as Google ads were sufficiently busy and in need of extra attorney power that sometimes the office administrators excitedly called me back the same day that I sent an introductory e-mail.

By November, I used these initially unintentional discoveries to selectively target firms that were sufficiently busy to need our service. Requests for more information about Hire an Esquire jumped to ~30 percent from ~5 percent of decision makers contacted. Of those not interested, firms that stated that they were busy but preferred other systems to handle frequent work overflow went from ~12 percent to ~60 percent.

Lawyers know there are infinite exceptions to rules. Volume sales strategies require gross over-generalizations and practice management is a highly personal choice based upon equally personal values and factors. Still, I couldn’t help but repurpose the grueling hours I spent in “sales” for the benefit of my fellow attorney–entrepreneurs that wish to begin - or expand - a law practice.

*Top photo courtesy of the Zartorialist under the Creative Commons License http://www.flickr.com/photos/acousticskyy/4021374505/sizes/m/in/photostream/

Julia Claire is a co-founder of Hire an Esquire, which enables law firms and legal departments to locate, manage and pay local and contract counsel with ease online. In addition to practicing law, she has taught legal writing as an adjunct professor in Temple Law’s International LLM Program and as an online lecturer at Quimbee.com

Back to School for the Legal Industry?

By Julia Claire
Special to the Legal

In the "good old days," late summer meant bright-eyed law students with stacks of books and eager, freshly suited young associates ready to play lawyer. When the New York Times or the Wall Street Journal took an interest in the legal industry, it was to glamorize large firm salary wars for top grads in terms that would make F. Scott Fitzgerald blush. In six years, much has changed.

Now, law books are downloaded ... by fewer customers. Law school enrollment has dropped 11.5 percent. And will likely drop further as publicity of poor job prospects and Enron-style accounting of employment statistics by law schools reaches a crescendo.

Big Law has cut hiring programs. With a glut of experienced lawyers seeking work, smaller firms have little incentive to invest in the inexperienced. Current headlines echo back to Steinbeck, chronicling a world of lawyers who are unemployed, working in factory conditions and suing their law schools.

Even lawyers on the top floors of high-rent skyscrapers can hear the chopping of the cherry trees as The Economist details the rise of alternative legal models, which employ lawyers trained by the very firms from which they are luring clients. These trends have created a generation of lawyers -- trained with a theoretical education dependent upon unofficial client-financed apprenticeships -- with scarce training opportunities.

Until the stream of new lawyers slows to a trickle, experienced lawyers retire, and the legal education community finally implements a long overdue practical curriculum to preserve their profitable business, we have the question:

What is to be done? Will there be a 'lost generation of lawyers'?

A profession built on ambiguity and "multi-factor" tests has had an ironically singular solution to career preparation: find a job. Out of necessity, many new lawyers are employing a multi-pronged approach. In 2009, the percentage of law school grads immediately going solo increased to 5.5 percent from 3.5 percent. Freshly barred attorneys are using technology to run practices with low overhead and billing rates.

In the best cases,  pro bono work and mentoring fills the significant training gaps, with experienced attorneys swapping practical knowledge and Twitter tips with their younger counterparts. Under- and otherwise employed lawyers are also finding benefits in pro bono work. They gain an opportunity to help others in bad economic situations, while also acquiring experience and a sense of purpose from a degree that could symbolize defeat.

New lawyers are now forced to network and make their own opportunities. This resourcefulness is an important skill for all lawyers -- one that much of the industry previously considered scrappy. Shielding new lawyers from clients and maximizing their billable hours was considered more genteel. With attorneys forced to think entrepreneurially and new legal concepts appearing monthly on site ranging from the Google-backed Law Pivot to the controversial Shpoonkle, few can deny that innovation and entrepreneurship are finally finding their way into a stubbornly static and gated industry.

I'm not claiming that bliss is around the corner for the legal industry, nor that some of the concern from the old guard surrounding these shifts is unwarranted. I'm merely suggesting that those of us who could comprise a lost generation of lawyers have few choices but to follow the advice of FDR: "Do something. If it works, do more of it. If it doesn't, do something else."

Julia Claire, Esq. is a co-founder of Hire an Esquire, which enables law firms and legal departments to locate, manage, and pay freelance attorneys with ease online. In addition to practicing law, she has taught legal writing as an adjunct professor in Temple University Beasley School of Law's International LLM Program and as an online lecturer at Quimbee.com. She can be reached at [email protected].