Thursday, March 27, 2014

Practice Innovations: Legal Pricing, Professional Development, 360 Reviews, CRMs, Infographics and Legal Education

 The March Issue of  Thomson Reuters Practice Innovations has been released.

The Power of 360-Degree Feedback: One Firm's Experience By Sharon Meit Abrahams, Foley& Lardner LLP, Miami, FL and Merrick Rosenberg, President

and cofounder, Team Builders Plus,Marlton, NJ

The Future of the Law Chain and Evolution of Law School Curriculum By Jeffrey Brandt, Principal, Brandt Professional Services, Ashburn, VA

By Ari Kaplan, Principal, Ari Kaplan Advisors, New York, NY

By Lynn R.Watson, Director of Information Resource Technologies, Hogan Lovells US LLP, Washington, DC

Is CRM a Dying Resource or Is There a Place for it in Today's Law Firms? By Silvia Coulter, Principal, LawVision Group, Boston, MA

LLC, Boston, MA

Wednesday, March 26, 2014

Tandem Law: Non-Attorney Owned Law Firm in DC, Stay Small -- Understand the Client's Business

In the second installment of Mimesis TV, Lee Pacchia interviews Michael McDevitt, the non-attorney CEO and owner of  the Tandem Law Group @tndgrp. McDevitt's interest in owning and being CEO of a law firm arose from his frustration at being a CEO who was a law firm client. He found that law firms  were not responsive to his business needs. He jumped at the opportunity to become a CEO and partial owner of an innovative law firm Tamdem Law Group. McDevitt sees his role  as helping the organization run effectively but he also participates in business development and meetings with new clients.

There has been a fair amount of  legal press covering the emergence of  alternative business structures  for UK law firms  Here in the US, The DC  Bar Ethics Rule 5.4  also allows non-lawyer ownership of law firms. To date it has mostly been used by lobbyist-law firms.

Pacchia's interview with McDevitt explores the unqiue  structural goals (stay small) culture (hire the right kind of lawyers and help them thrive) business development strategy ( referals from existing clients) and fee structures ( hourly, success rates and taking equity interest in the client)

Yet accoding to McDevitt, building the law  firm of the future has a lot in common with small law firms of the past... watch the video...

Tuesday, March 25, 2014

ALM Law Firm Support Staffing Report: Optimizing Staff Ratios & Increased Demand for Analytical Skills

ALM Legal Intelligence just released a white paper Finding the Right Balance: Nonattorney Law Firm Staffing Trends. ‘ (Cover title: Law firm staffing—Finding the Optimal Mix. ")   The survey was conducted during January and February 2014. The report studies the ongoing efforts by law firms to "optimize" support staff functions and ratios.

It appears that law firm pulling back from the relentless focus on shrinking staff and management t is now trying to focus on  staff optimization. Optimization includes upgrading functions and identifying the right mix of talents. Providing lawyer with billing support used to mean clerical help. Today billing support requires staff who can provide analytics. Libraries have shifted from managing books to overseeing competitive intelligence and knowledge manageme nt.

Key findings
  • Large law firms spent 16-6% of overall revenue on non attorney staffing. For 3-4 of respondents staffing is the same or  flat for 2014. (51% flat   22% increase). I guess the good news for the market is that only 25% may be reducing staff. 
  • Library services is the most thinly staffed non attorney staff function. 
  • Legal Support, Marketing, Litigation Support and Library Service are still largely staffed with law firm employees. Office services is the function which is most commonly outsourced. 
  • Legal support/secretarial  is the area that experienced the most widespread reduction in 2013. 69% of firms report reductions in this area. 
  • Marketing and Business Development is the area that saw the most increase. 48% of firm report an increase in  full time part time or contact staff over the past 3 years. 23% expect to increase. in 2014.
  • The technological self sufficiency of young lawyers is having an impact on staffing.
  • Legal Support/secretarial is taking on more timekeeping and client support  functions.
  • Libraries are morphing into centers of competitive intelligence and knowledge management.
  • Amlaw ranked law firms spend a lower proportion staff support to revenue 15.3% 
  • Although outsourcing  has  been trending up,  15% of firms reported that they had returned a function in -house after outsourcing. For the vast majority of firms non attorney functions remain firm owned and on site. 
  • Firms need increasingly sophisticated staff. Billing work used to be clerical now it is analytical. 
  • Shift from print to digital resources means library staff must support managing access, passwords training. Everyone can do their own basic research, librarians perform more complex and specialized research.
  • Cost of Marketing is justified by business expansion, protecting competitive advantage, client retention. 
  • Staff morale can be a competitive advantage for the firm.
  • The prospect of layoffs is the number one factor impacting staff morale. 
Optimal staffing  is not low staffing. Optimal staffing allows  a firm to enhance productivity and profits. Sophisticated clients want to know that the firm has sufficient staff to support their work effectively. Law firms are only as good as their people -- and  non-lawyer support staff are important  for successful business management and client support.

Monday, March 24, 2014

Dewey LeBoeuf Staff Indictments: Time For Law Firms to Have Whistle-blower Programs?

DISCLAIMER: this blog does not now,  and never has had any connection to Dewey LeBoeuf. The last time I wrote a post about the colllapse of Dewey LeBoeuf some people thought I had worked at Dewey. Last week a reader asked me to settle a bet about my blog name. Did it refer to Melville Dewey or the fictional law firm "Dewey Cheatem and Howe?" Dewey Cheatem & Howe has been used by humorists from The Three Stooges to The Car Talk  Magliazzi Brothers, as a parody of the most negative stereotype of lawyers as scheming scam artists....

In recent  weeks the space between Dewey LeBoeuf and "Dewey Cheatem and Howe" was narrowed with the filing of a 106 count indictment of Dewey LeBoeuf’s former senior leadership team. I am reminded of country singer Kinky Friedman’s line that "it is only one small step from the limousine to the gutter."

Zach Warren Follows Dewey Leaders (c. ALM)
The Indictment in "The People of the State of New York against "Steven Davis, Stephen DeCarmine, Joel Sanders and Zachary Warren" is in the running to be the most depressing and appalling read of 2014. The stars of this document are the Managing Partner, The Executive Director and the Chief Financial men who were foolish enough to leave a trail of damning emails. But the indictment wasn't limited to people in "the C Suite."

The emails cited in the indictment suggest the insidious way in which Dewey LeBoeuf’s leaders turned staff into accomplices in "cooking the books". An email from Sanders the CFO asks an employee to "find another clueless auditor for next year:" There are references to the CFO offering to take employee C to lunch to reassure him because "he is hearing and seeing too much." Employee C asked Employee N for backdated checks. The sinister web appears to have threaded its way into many corners of the finance department. The section entitled "overt acts"  introduces employees  A,B, C, D, E , F and N who testified about various aspects of the fraudulent activities which they observed or participated in. Additional staff members are subjects of a related  SEC indictment. 

The NY State indictment alleges that staff were asked to "make adjustments" to business records, reclassify disbursement payments, reclassify " of counsel" payments, reverse disbursement write-offs. charge firm costs to clients, miscode credit card expenses, reclassify salaried partner expenses, .produce back-dated checks, apply loan repayments as revenue. The "grand scheme" was designed to hide the true financial condition of the firm from the partners, the firms auditors and investors. Were staff really supposed to second guess the decisions of the managing partner, executive director and CFO? Are staff supposed to discern the line of demarcation in gray space where "sharp lawyering" and "creative accounting"  techniques morph into fraud?

Count One Hundred and Six: Conspiracy : Is Your Staff Bonus a Deal with the Devil?

Dewey’s Managing Partner, Executive Director and the Chief Financial Officer are charged with 105 counts of grand larceny and falsifying business records. At count 106 the name Zachary Warren appears. Warren was a 28 year old client relations manager. He is charged with the crime of "conspiracy in the 5th degree ."  A recent New York Times article "A Dragnet at Dewey Snares a Minnow" details the plight of Zach Warren. After graduating from Stanford University, he applied for a job as a paralegal at the pre-merger LeBoeuf Lamb firm but was offered a job doing client collections. He was then promoted to a role as Client relations manager where he fell into the orbit of the "two Steve’s" shenanigans. After leaving Dewey LeBoeuf in 2009 he went to Georgetown Law School, was admitted to the bar and clerked for 2 federal judges. He has a job offer from DC law firm Williams and Connelly. And now he has been indicted for trusting the leadership at Dewey LeBoeuf. A bit of a "curve ball" at the start of an otherwise promising career.

As Bruce MacEwan pointed out in his keynote at the 2013 PLL Summit : "the law firm world is still highly stratified. There are lawyers and non-lawyers." The lawyers give the orders…. Staff follow them. Is someone in the  New York County DA’s Office actually confused about the pecking order in law firms? Certainly there have been cases where a staff member "goes rogue" on their own and commits fraud without the knowledge of firm leadership – but that is not what happened at Dewey. .

A Colossal Failure of Culture

Since 2007 law firms have thinned both lawyer and staff ranks with layoffs, outsourcing, onshoring and automation.  While these activities may be both necessary and great for the bottom line,  firms should consider how the chronic state of uncertainty may be fraying the threads of common culture. Not only may staff be losing touch with firm culture i.e. not recognizing when they are being asked to do something which is unethical, but staff may become more likely to keep their heads down and be compliant if they witness inappropriate behavior.  Will staff feel they are risking their own jobs by questioning the judgment of their boss?

In organizations with a strong culture there are cues about the ethical boundaries. The firms of Dewey Ballantine and LeBouef Lamb had undergone the cultural trauma of "a merger of equals." In the wake of a merger, staff are working under enormous stress and uncertainty: new bosses, new processes, new technologies, new  rules. Suddenly no one is sure what the cultural norms are. To make things worse, the Dewey LeBoeuf  merger occurred in October 2007 right as whole legal marketplace was tumbling into  the seismic upheavals of the Great Recession.

Are Whistle-blowing Programs the Solution?

The ABA rules require a lawyer to report unethical behavior, but what about staff? Will Dewey LeBoeuf be a wake up call which prompts firms to create a clearly defined and safe protocol allowing staff to report questionable activities to an ethics partner or the firms general counsel?

Rule 8.3  of the ABA Model Rules of Professional Conduct  requires lawyers to report misconduct of another lawyer but most staff are not lawyers. I could not locate any rule requiring lawyers to create mechanisms such as a Whistle-blower program to facilitate staff reporting of misconduct within the law firm environment. Law firms have gotten bigger and it has gotten harder for lawyers to have direct knowledge of misconduct being orchestrated down the hall but executed by staff in the back office.

The indictment of Zach Warren should be a wake-up call for staff and for law firm leaders. Staff need to do a"gut check" and seek a second opinion from Human Resources or the firm’s ethics partner if they have any suspicion that they are being asked to do anything illegal or unethical. The price of  just "going along"  is too high. I am sure there's little comfort in knowing your former boss is walking ahead of you in handcuffs. Just ask Zack Warren.  
Related: Dewey Leboeuf and The Due Diligence Imperative

Thursday, March 13, 2014

Mimesis Law Launches Legal Web TV Programming: Dewey Indictment A Warning to Struggling Law Firms

Lee Pacchia formerly of Bloomberg TV launched a new web based TV program  "Mimesis Law" which focuses on the the business and practice of law.  He plans to partner with law firms, law schools and other legal service providers to create new streams of web video content.

Lee kicks off  with an interview with  consultant Kent Zimmermann of the Zeughauser Group. Zimmerman discusses the  indictment of several Dewey & LeBoeuf  leaders, the reasons for the Dewey collapse and the implications of the collapse and indictment for other firms.. Other topics include revenue results for 2013, changes in the competitive legal landscape and the spectacular performance of some  regional firms.

The program has all the high production quality of the Bloomberg interviews.  Pacchia  is  lawyer and has  interviewed a wide swath of law firm partners, academics and consultants at his last gig,  He has a command of the issues and moves the discussion along.. Invest a few minutes and come away with some insights.

I am looking forward to the next installment. Good Luck Lee!

Thursday, March 6, 2014

ALM Goes Glossy...New look, new content, new subscription model!

Earlier this week readers were introduced to a whole new website. It is clean, contemporary, graphic and well… glossy. In January ALM rolled out 18 redesigned websites for its regional and national publications. ALM’s content has always outshined it’s technology and finally they seem to have developed a slick new “eye-candy” platform which enhances the content and makes it more accessible.

One major content change is the pivot away from a jurisdictional emphasis to a substantive practice focus. Content from the regional and local jurisdictional publications will be selected by the editorial team for inclusion on the new platform. For the first time content from all the ALM resources are brought  together in a single platform– including selected content from the more exotic “Legal Intelligence” and “Rival Edge” platforms.
Contributor Network – a la Huffington Post

ALM is developing a new Huffington Post type stable of commentators with its contributor network. So far they have about 160 contributors including practitioners and law professors who will write articles commenting on important issues in their area of expertise.

 The Layout  The top navigation bar provides access to the main content sections:

Practice The launch includes 5 topical practice sections, Intellectual Property, Corporate and Securities, Labor and Employment, Appellate, Class Actions and Product Liability will include content curated by ALM editors. Each area will include 8 to 10 stories a day..

 Industry  This section will focus on stories involving law firm management, finance, major cases, law schools. lateral moves, who’s getting what clients…. This also includes my favorite section here is called “The Hot Seat”  which provides a daily dose of lawyers behaving badly.

Insights – Will expose data and provide graphics from the ALM Legal Intelligence  reports and surveys  and from the  Rival Edge product.  They will not provide the full reports but will selectively expose data an summaries of reports which is a terrific cross selling strategy  highlighting the lesser known legal intelligence products.

Resources – Includes links to other ALM resources such as Rival Edge, Minority Law Report, CLE center which require separate subscriptions. The legal dictionary is free so I tried it. Today’s headline grabbing word “upskirting” had not yet made it into the dictionary.

There's Also an App. There is also a new App which is available in iTunes store. The app scales the content to any sized device and makes downloaded documents available for reading offline.

 New Subscription Models

ALM is offering 30-day free trials to the site and three subscription packages (paid annually):

Basic: Two practice areas or digital access to two publications for $49.99 per month.

Plus: Three practice areas or digital access to three publications for $79.99 per month.

Elite: All-access subscription for every practice area and digital access to all publications for $99.99 per month

The large law firm pricing model has not yet been determined.

What’s Next? Natalie Gorman the Editor in Chief expects the platform to continue to evolve.  “We’re very excited about the new site. We’re also eager to improve and expand what we offer through it. We’ll definitely be growing the Contributor Network, we will add new practice areas, we will have new columnists on the site, and we’ve got a number of new features that we’ll debut over the course of the coming year, some of which are already in development. We intend for the site to evolve rapidly and frequently

 My two cents

.How about “Sector” coverage? I agree with the new focus on substantive practice issues, ALM should consider expanding to sector coverage since firms have recently started to focus on business sector expertise.

 Law Journal Press – Please tell me that the Law Journal Press Treatise collection is in the queue  to get a dramatic modern tech makeover like!