TechnoLawyer: BiglawWorld

Originally published on June 7, 2010 in our free BigLaw newsletter.

My previous column, Large Firms Are From Mars, Female Lawyers Are From Venus, discussed several recently-released studies that highlighted the perceived gender inequities of life in the large firm world — with respect to origination credit, compensation, rainmaking, and general workplace parity. BigLaw readers shared some interesting thoughts on the topic, which I've collected here.

The results of these studies came as no surprise to many female large firm lawyers, some of whom acknowledged the difficulty of balancing work and motherhood, and, on a more basic level, the unique challenge that law firm life presents for women.

However, some readers scoffed at the notion of law firm discontent as a gender-specific phenomenon. "In point of fact," posited one, "all but a handful of male partners at large law firms would have the same complaints. In every large firm, there are a few significant rainmakers who carry more clout than other parties and thus influence the inner circle of managers who make compensation decisions. Partners outside that inner circle — whether male or female — often feel they have not gotten a fair shake in compensation decisions but are discouraged from appealing those decisions either because of intimidation or recognition of the sheer futility of an appeal."

Another reader pointed out that men and women may differ fundamentally with respect to what makes them feel engaged, appreciated, and successful — even when the ultimate reward is the same. Compensation and origination credit are examples of this circuit split between the sexes: a system of shared origination credit, notes one reader, encourages collaboration and may result in a more equitable distribution of the compensation pie.

But, she reported, the women at her firm seemed much more willing to share credit and compensation in ways that "made the pie bigger for everyone." The men at the firm, however, were "more territorial," and tended to focus more on "making their slice of the pie bigger." Asked what, if anything, might make female partners happier and more successful in the law firm environment, she responded with a chuckle. "I think you'd have to redefine 'happiness' or redefine 'success,'" she said. "Either way, something has to give."

One respondent, who weighed in on why women-dominated firms are not more prevalent, suggested that "it's probably not a question of 'if,' just 'when.'" Despite the sense (and the research-based indicia) that women have not managed to gain equal footing at law firms, she noted, "we're a lot farther along then we were twenty years ago."

"I think we need to be patient," she continued. "Many of the younger women in practice now didn't experience the absolute barriers to entry that their predecessors encountered. For better or worse, we grew up in an environment in which we could expect the same access to professional opportunities that our male peers were afforded. Trying to make those opportunities work for us is the next challenge, and it may take another generation for that to happen. There are still too many older men in the partnership ranks who simply don't appreciate the challenges presented by working motherhood."

Several women pointed out that, as a general matter, women tend to take a larger role in childcare and handling parenting duties. "The expectations of many of the men I work with simply don't factor that in," said one. "I'm expected to be a full-time lawyer, and it doesn't occur to them that I'm also a full-time mother."

As a result, noted another reader, "we — as women — may have to spend a few more years gaining confidence about our ability to practice alongside male lawyers as equals. Hopefully, at some point, women will ask themselves why they feel the need to achieve in that environment. Why not be a superstar in the context of a firm where work truly is flexible enough to accommodate your needs as a mother? I can't help but think that, sooner or later, women will conclude that sometimes it takes a village to raise a child because Mommy has to make her hours for the month, but also has to pick her kid up from daycare. I suspect that if I worked in a female-dominated firm, the other villagers would help me figure out how to make it work."

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Answering this question requires digging up some dirt, but we do with the best of intentions. Published first via email newsletter and later here on our blog, BigLaw analyzes the business practices, marketing strategies, and technologies used by the country's biggest law firms in an effort to unearth best and worst practices. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.

Originally published on May 24, 2010 in our free BigLaw newsletter.

Today I wield a wider brush … I'm swooping it through the sensuous goo of Cadmium Yellow, Alizarin Crimson or Ultramarine Blue to create the biggest, brightest, funniest, fiercest damn dragon that I can … you have a masterpiece inside you, too, you know. One unlike any that has ever been created, or ever will be … no one else can paint it. Only you. — Gordon MacKenzie, Orbiting the Giant Hairball: A Corporate Fool's Guide to Surviving with Grace.

Your alarm clock goes off and you groan. I know. Most Americans feel the same way. Too many of my mornings started that way during this recession.

Large firm culture is tough to survive, especially in a down economy. I've heard every "chin up" phrase in the book: "Be grateful you have a job," "Hang in there," "Of course you hate your job — that's why it's called a job." These lousy aphorisms typically come from people who hate their own jobs and have no idea how to address their predicament. Please ignore them.

Even in a law firm filled with stressed out people, poor morale, and the looming threat of layoffs, you can survive and keep your sanity intact. Give these ideas a try and let me know if they help you see a a brighter future beyond the gloomy horizon. They worked for me.

1. Earn Some Beer Money, Maybe Even Vacation Money

Say goodbye to income from a single source and hello to the reality of the new economy. In February, I started a yoga teacher training class. I just graduated and am now using this experience to begin my own business. For the past two years, I've worked on my freelance writing projects, which have paid off in spades with job offers, paid writing gigs, and loads of contacts. Think about what you enjoy doing, and then find a way to use it to make a little extra on the side, and more importantly, expand your social network.

2. Talk to Entrepreneurs and Read About Them

Entrepreneurs are the economy's fountain of youth. They face tough odds, and their businesses go through more ups and downs than large firms yet they keep looking up. A wise yoga teacher once told me, "I'd rather do my own work poorly than do someone else's work well." Every other entrepreneur I've ever met feels that way too. Their energy will get you thinking in new ways about your own role in the world. They'll inspire to take your future into your own hands.

3. Ask for Work You Want

If there's a matter that interests you at your firm, ask to work on it. The worst your assigning partner will say is "no." So what? If you're going to be "stuck" at your job for a while, at least learn what you want to learn. Your firm uses you to get its work done, so why not use it to get the experience you want? Turnabout is fair play.

4. Volunteer and Get Your Firm to Help You

Through work, I got involved with pro-bono projects that enable me put my business skills to work for nonprofits that want to change the world. I teach several classes through Junior Achievement of New York, and took the United Way's nonprofit board training, all sponsored by my employer. My company matches my charitable contribution up to $8,000 a year and I've leveraged this benefit for the good of the organizations I support. The psychic benefits from volunteering help me keep stress at bay.

5. Have a Creative Outlet

No matter how bad work gets, I come home and write every day. My blog is for me, no permission required. It's one area of my life that no one else has a say in, and having a creative vehicle that's solely my own is a gratifying, empowering experience. My writing has made me a seriously happy, confident person. Change your mind, and you change everything.

Conclusion

In short, the world can't afford to have us frustrated and lost and discouraged. It needs us, the very best of us, everyday. Stop wishing for the economy to get better, for your boss to fully appreciate your contributions, or for the government to deliver a bailout that answers your needs. You are the person you've been waiting for to lead yourself out of these dark days and into a better world. Each day is not just an opportunity — it's your responsibility as a well-educated, passionate, creative person to give the best you've got, regardless of circumstances. Be fierce — better days won't just magically appear. You have to build them yourself. A masterpiece is a terrible thing to waste.

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Answering this question requires digging up some dirt, but we do with the best of intentions. Published first via email newsletter and later here on our blog, BigLaw analyzes the business practices, marketing strategies, and technologies used by the country's biggest law firms in an effort to unearth best and worst practices. The BigLaw newsletter is free so don't miss the next issue. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.

Originally published on May 17, 2010 in our free BigLaw newsletter.

Two weeks ago, I received my New York State attorney registration form in the mail. It asks me to certify by June 16th that I've taken the mandatory number of Continuing Legal Education credits in the past two years and solicits my "biennial registration fee" of $350. Of course, those of you toiling away in large law firms can earn all your credits at your firm and even have your firm pick up your registration fee — but that doesn't mean your CLE experience couldn't stand some improvement.

MCLE: GOING THROUGH THE MOTIONS

Requiring lawyers to continue learning is a great idea in theory. But in practice, the mandatory CLE (MCLE) system fails miserably at this mission. MCLE amounts to little more than an expensive hassle (time-wise if not monetarily) in which the educational value gets lost in the mix. New York State may ask me to register my license to practice, but I would rather register my protest … against the current MCLE system.

If you're like most other Biglaw attorneys, you probably choose the CLE classes you attend based on the type and number of CLE credits offered, not the relevance to your practice area. For example, if you're short ethics credits as your certification date approaches, you'll likely attend a class on mediation ethics issues even if you're a tax attorney. The class may be interesting, but it arguably won't help your tax practice.

Even worse, let's say you skipped all your in-house CLE lectures and now have to cram by attending a three-day seminar in some hotel ballroom. Look to your left and look to your right — you'll no doubt see fellow lawyers focusing more on their BlackBerrys than the lectures.

MCLE creates a perverse incentive system.

And it's also tantamount to a regressive tax as those lawyers least able to afford CLE have to pay the most. In New York, CLE providers must offer fee waivers or fee reductions to attorneys who earn less than $50,000 per year, but that's small comfort for those who don't qualify.

THREE SUGGESTED CHANGES

Encouraging attorneys to hone their legal skills and knowledge is a worthy goal. Thus, rather than eliminate MCLE we should instead try to change it from within the system and without so that it actually achieves its purported goal.

1. Practice Area Emphasis

States could require attorneys to obtain CLE credits in their area of practice on a rolling basis. Restricting how lawyers can earn their credits would be more of a hassle than the current MCLE system, but states could reduce the number of credits required.

2. Level the Learning Field

States could also increase their registration fees, but set aside most of the funds in private accounts for each lawyer to use on MCLE courses. Large firms that offer in-house CLE would not be eligible to receive any funds. Thus, the haves and have nots in the legal profession would effectively pay about the same for MCLE.

3. Post Mortems

Not every change has to come from the outside. Taking a page from hospitals, large firms that offer their own in-house CLE could use these programs to conduct post mortems on the firm's recently concluded casework. For example, lecturers could share best practice and mistakes, which vendor they chose for an eDiscovery job, an interesting court opinion that helped win an oral argument, etc. These post mortems would have the added benefit of giving junior associates public speaking experience.

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Answering this question requires digging up some dirt, but we do with the best of intentions. Published first via email newsletter and later here on our blog, BigLaw analyzes the business practices, marketing strategies, and technologies used by the country's biggest law firms in an effort to unearth best and worst practices. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.

Originally published on May 3, 2010 in our free BigLaw newsletter.

One-third of female partners regularly bullied by colleagues? An absence of women in the top money-making ranks at nearly 75% of top firms? Take a moment to consider the significance of these findings, which paint a grim picture of the position currently occupied by women in large law firms. Is it really possible that despite the likes of Hillary Clinton and Sonia Sotomayor, women remain unable to gain a significant foothold in the nation's most lucrative firms? That's what an increasing body of evidence suggests.

Unveailed last week at the ABA's Summit for Women In-House Counsel, the "Survey of Women Partners on Law Firm Compensation" paints a disheartening picture of the obstacles faced by women in the legal profession. Of the nearly 700 participating large firm female partners, "fifty-five percent of respondents said they were they were occasionally or frequently denied their 'fair share' of origination credit;" two-thirds "said they were uncomfortable with appealing their compensation decisions, and 30 percent said they were subjected to intimidation, threats and bullying when they did express disagreement," according to the Legal Intelligencer.

Similarly, another report, released in mid-April by the Project for Attorney Retention, shows that fourteen top law firms failed to promote any women to their partnership ranks in 2009. And an October 2009 study by the National Association for Women Lawyers showed that nearly half of major US law firms had no women among their top rainmakers. The same study revealed that another third of top firms had only one top female rainmaker, while 72 per cent of firms said that none of their top five rainmakers were women.

You Can't Bring Home the Bacon and Fry It Up in a Pan

The revelations contained in these studies come as no surprise to many women. For example, says Allison (a senior associate at a large firm in Manhattan), "work-life balance" remains an elusive pursuit for female Biglaw lawyers, and "work" is often the part of the equation that suffers. "I've worked my butt off for my entire career, and now I'm close to partnership" she laments. "But when I went back to the firm after my son was born, I felt like I wasn't doing a good job at anything. I wasn't there for my son the way I wanted to be, and motherhood invariably — and reasonably — encroached on my work life."

The "solution," she thought, was to take advantage of her firm's part-time program, which seemed tailor-made for a new mother. "It was," she declares, "no solution at all. I billed just as many hours, and was just as available to my colleagues and clients, as I had been before. The only difference was that I was paid less." The partners at Allison's firm seemed oblivious to her part-time status, and when, on occasion, she reminded them, "they were generally peevish at the notion that an associate might not be available 24/7." Going part-time, said Allison, felt like a career move that pushed her further away from the goals she had worked so hard to achieve. "During that time," she says, "the last thing on my mind was 'rainmaking.' I don't care what anyone says: you can't do it all."

Is the situation any better for women who are not mothers? "Hardly!" laughs Dana, a mid-level associate at another large firm. "I still have family obligations, even if they don't revolve around a husband or children," she explains. "And I still have personal needs. But if you're not married with children, any time you spend away from the office is viewed with real disdain." Moreover, she says, "do I feel intimidated by male partners who yell and have tantrums? Yes. Do I work with any female partners who act that way? No. Everyone has a story about the bitchy, Devil-Wears-Prada partner who makes other women miserable. But I've found that male colleagues are much more likely to be abrasive and volatile, especially to younger women who work as their subordinates."

Allison and Dana are just two of the many women who find the large law firm environment inhospitable — and their concerns with work-life balance are not the only reasons for their discontent. In addition to juggling full lives along with even fuller workloads, they say that they struggle with male colleagues who do not view them as intellectual peers, subtle (and sometimes not-so-subtle) sexual harassment, and social opportunities that remain gender segregated. "What inevitably happens," says Dana, "is that my male colleagues are out golfing or going to sporting events with the other 'boys' from the office, and I just can't compete on that level. Those are bonding opportunities that have very real professional consequences."

No Men Allowed?

Why aren't there more firms that are run by women? "Obviously," says Erica (an associate at a top firm in Philadelphia), a firm can't refuse to hire men. But I dream of going to a boutique firm that is managed by women." And, she explains, "it's not all about work-life balance or motherhood, though those are important considerations. It's about the ways in which men and women work differently. Women solve problems differently; they collaborate in different ways. They tend to be a little more supportive and a little less critical in evaluations, and focus more on growth and improvement than on aggressive, bottom-line judgments."

A female partner at a large New York firm who asked not to be named, agreed. "These are, of course, generalizations," she said, "but honestly: I think that women thrive in female-only environments. There is a greater tendency to focus on collaboration, nurturing relationships, and balancing demands holistically. That's not to say that there isn't competition and cattiness, but I've seen all-female teams turn out truly pristine work product without the anxiety and drama produced when male partners work with female associates."

Why hasn't a stronger "female boutique movement" emerged — women abandoning the world of Biglaw to create kinder, gentler (but still formidable) law firms. What do you think? We hope to gather your thoughts, and report on the crowd's wisdom about this complex topic. Contact me and tell me what you think.

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Answering this question requires digging up some dirt, but we do with the best of intentions. Published first via email newsletter and later here on our blog, BigLaw analyzes the business practices, marketing strategies, and technologies used by the country's biggest law firms in an effort to unearth best and worst practices. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.

Originally published on April 19, 2010 in our free BigLaw newsletter.

We perform certain rituals in life without questioning why or thinking about how they came about. Exhibit A — summer associate programs. From an outsider's perspective, summer programs seem nonsensical. Law firms hire untested law students and then shower them with cash and other perks for doing basically nothing. Over the past few years, firms have toned down summer programs from their gluttonous peak in the early 2000s, but it's time to change them wholesale … or perhaps even let them go.

The Rationales for Summer Associate Programs Fail the Laugh Test

Depending on who you believe, summer associate programs originated for one of two reasons.

1. Evaluation

Law firms instituted summer programs to evaluate law students before they joined on a full-time basis. But this explanation doesn't square with the fact that until recently the full-time offer rate was almost always 100% regardless of performance. Summering law students just had to avoid doing something epically stupid like jumping naked into the Hudson River.

2. Training

Another explanation suggests that the programs were originally developed to mentor and groom budding attorneys for practice. But if grooming summer associates for real life practice was truly the goal, why have firms typically given summer associates fluffy make-work assignments instead of staffing them on real deals and cases? And unless you count senior associates offering advice on which cut to order for lunch at the local steakhouse, summers don't receive much mentoring from their firms either.

And So Do the Justifications for Their Excesses

Even if summer associate programs were implemented with noble intentions, it doesn't explain why the programs became — and to a large extent remain — such hedonistic bacchanals. Accordingly, two justifications emerged to explain the glut.

The first is that spoiling summers is necessary marketing and a small price to pay for attracting top talent. The reasoning goes that top law students, ostensibly in receipt of multiple summer offers but unable to distinguish among the firms, are more likely to summer at firms that ply them with expensive meals, theater tickets and rivers of top-shelf alcohol. But any top law student worth his or her salt chooses firms based on prestige, practice areas, and personality fit, not gifts.

The second justification is that summer excess signals to clients that the firms are healthy, wealthy, and able to woo the best law students. But again, the reality is that clients only care about summer associates in so far as they won't tolerate being billed for their time.

Time for a New Breed Of Summer Programs

Having gutted the rationales for summer associate programs, should law firms continue these programs? Yes, but only if they're transformed into apprenticeships that provide real job training.

Law students are hyper aware that even if they receive offers to join firms for the summer, those offers may not translate into jobs after graduation. And even if they do receive full-time offers, once they join, their job security is tenuous. This "rank-and-yank" mentality among large law firms is the new normal.

Law students want summer programs that build their practical skills so that in the event that they don't receive offers, they can use those skills to secure jobs elsewhere. It also benefits firms to implement training programs that actually prepare students to hit the ground running once they return after graduation.

Law firms don't have to eliminate all the perks of the summer associate program as long as they remember that teaching a man or woman to fish is more valuable than treating them to the escolar at Le Bernardin.

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Answering this question requires digging up some dirt, but we do with the best of intentions. Published first via email newsletter and later here on our blog, BigLaw analyzes the business practices, marketing strategies, and technologies used by the country's biggest law firms in an effort to unearth best and worst practices. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.

Originally published on April 12, 2010 in our free BigLaw newsletter.

Last year at the LegalTech conference in New York, Andrew Adkins, founder and director of the University of Florida Levin College of Law's Legal Technology Institute Legal Technology Institute, "roamed the exhibit floor for two days talking with vendors about the legal technology industry in general and asking exhibitors and conference attendees their thoughts about the near future and how technology will impact the profession." He performed the same exercise two months later at ABA TECHSHOW. He found that lawyers and legal vendors had just as many questions for him. Thus was born the 2010 Perfect Practice Legal Technology Institute Study (PP-LTI Study).

Legal vendors told Adkins that they wanted to know (1) what percentage of the legal profession uses practice management systems, (2) what barriers existed to their implementation, and (3) whether the legal profession had "reached a plateau" in adopting them. From this departure point, Adkins along with Perfect Practice and several other sponsors developed a survey, and distributed it to more than 25,000 randomly-selected lawyers, legal administrators, paralegals, and law firm IT personnel. The survey, however, did not stop there. Adkins also wanted to learn more about the legal profession's use of other technologies.

Larger Firms Lead the Way With Dual Monitors, Security

The PP-LTI Study yielded some surprising results. For example, Adkins found that small law firms by and large have failed to embrace even relatively simple technologies that address core concerns or promote important values such as efficiency, and client confidentiality.

For example, dual monitors "significantly increases efficiency," especially for those who copy and paste text between documents or use multiple applications. More than 66% of respondents, however, reported using only one monitor, and only 18% of this group indicated that they planned to add a second one within 12 months.

Large firm users were more likely to have adopted this technology, with 40% reporting that they used more than one monitor. Nonetheless, Adkins notes that neither cost nor complex integration concerns should restrict the adoption of dual monitors in smaller firms. "With costs of an extra monitor less than $200, law firms and legal departments should explore this benefit of increased productivity (and billable time)."

Also surprising were lackluster numbers with respect to the adoption of technologies that address concerns about client confidentiality and security. "While attorneys always voice concerns, we often find that they don't take advantage of technologies that can help them achieve these goals." Only 53% of respondents reported using metadata clean-up software, and only 25% said they used encryption.

Again, large firms were significantly more likely to have embraced these measures. Of the respondents who reported using metadata cleanup software, 78.2% were large firm users, while small firms lagged behind at 21.8%. Similarly, large firm practitioners were about twice as likely as their small firm counterparts to use encryption software.

Adkins Amazed by Document and Practice Management Numbers

The PP-LTI Study also revealed a surprising result about the profession's approach to document management. "It still amazes me," writes Adkins, "that law firms and legal departments have not implemented document management." A similar study, conducted in 2000, indicated that less than 50% of legal professionals did not use a document management system. A decade later, Adkins noted a marked lack of movement toward the embrace of this technology. More than half of respondents — 52% — said that they did not use a document management system. However, adoption rates were significantly higher at large firms where 80% of attorneys reported using a document management system.

With respect to the study's raison d'etre — practice management systems — Adkins found additional surprises. In 2000, only about 25% of legal professionals reported using a case management system. While Adkins "thought that number would have doubled in ten years," the 2010 survey indicated that only 32.7% of respondents were using case, matter, or practice management software. Large firms lead the way although small firms are not far behind.

Survey respondents reported several barriers to the use of a practice management system: 37% of those surveyed said that their "current method works and is not worth changing." Cost was a big concern for 34% of respondents. And, among users and non-users alike, survey respondents identified both the "total cost" and "integration into the firm or law department" as problems.

The PP-LTI Study found that lawyers who were already using a practice management system were significantly less likely to identify cost as an issue, which "seems to indicate that those firms and legal departments using a CMS understand that there is an acceptable cost for using technology," writes Adkins.

Conclusion

The PP-LTI Study provides comprehensive data on the usage of many other technologies, including SaaS, word processing, litigation support programs, and paperless workflow technologies. It also analyzes specific features of practice management system functionality such as its integration with other programs in common usage. Finally, the survey's results address the legal profession's approach to outsourcing, future technology purchases, and the allocation of technology resources within law firms and legal departments. The PP-LTI Study costs $395. You can download an executive summary and review the survey questions used for free.

Read our companion article, New Study Paints Unflattering Portrait of Small Firms.

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Answering this question requires digging up some dirt, but we do with the best of intentions. Published first via email newsletter and later here on our blog, BigLaw analyzes the business practices, marketing strategies, and technologies used by the country's biggest law firms in an effort to unearth best and worst practices. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.

Originally published on March 29, 2010 in our free BigLaw newsletter.

Corporate law departments and U.K. law firms have embraced legal process outsourcing (LPO), but its reception among U.S. law firms has been decidedly chillier. However, pressure from clients to do more with less has enabled LPO providers to make significant inroads.

I recently sat down to discuss LPO with Jonathan Goldstein, a former large firm lawyer and the current Vice President and Managing Director of Legal Services for Mumbai-based Pangea3, among the world's largest LPO providers. Approximately 20% of Pangea's clientele consists of U.S. firms — a fourfold increase since 2006 when he joined the company.

LPO Is a Fairly Recent Development. If You Had to Pinpoint a Reason for This Phenomenon (Besides the Various Ethics Opinions Permitting Outsourcing), What Would It Be?

Business is global. Companies benefit from outsourcing in every other aspect of their business. Legal was the only part of companies' sales general and administrative spend that consistently went unmanaged and seemed to grow year after year with abandon. Companies finally came to grips with the fact that they could use outsourcing to manage legal expenses the same way they used it to manage other SG&A expenses. LPO has taken off as a result of companies coming around. Law firms are just starting to have that "a ha" moment with outsourcing ... and in many cases only at the urging of clients.

What Reasons Do Your Law Firm Clients Give for Hiring LPO Providers?

Cost savings is the initial attraction. Everybody gets that India is cheaper. But what people are looking for is a high quality product delivered at a price that saves them money. The billable hour model is so maligned because the incentives are all wrong. Because we work mostly on a fixed-fee basis, our dual incentive is to work efficiently and well. People go offshore because they want solid work done at a predictable price. Mere cost savings is often not enough if the quality isn't there.

Speaking of Cost Savings, Just How Much Are We Talking About?

Our clients tell us that they experience a 30-90% savings over what it would cost them to consume these services domestically. And beyond simple cost savings, LPO providers that primarily operate on a flat-fee basis provide certainty to clients. For example, in a document review, once we determine the scope, we can fix the price of the engagement going in. The advantage to the law firm is that if the client has set a litigation budget and the document review bill is suddenly lower, it leaves a lot more cash to spend on substantive tasks performed by the law firm.

When Does It Pay Not To Outsource Legal Services?

The work that goes offshore must be repeatable and scalable. Here's an example. One of the things Pangea gets asked to work on occasionally is a single plaintiff employment case. That's not a great case to offshore because it takes too much ramp up time. But if that same case were to evolve into a massive wage and hour litigation, that's when it would make sense to get us involved. We mostly deal in the hundreds of thousands and millions of pages. We typically don't do anything for projects that involve thousands of pages. In the latter case, what you really need is the on-demand, as-needed availability of a law firm.

Many of the Country's Oldest, Largest and Most Prestigious Law Firms Have Operated the Same Way for a Hundred Years, Which Has More or Less Worked. Why Should They Now Change?

Historically, law firms used to have all the power and the in-house departments used to cower. But now, LPO providers talk directly to the corporate clients, and they don't need much convincing because they already experience the benefits of outsourcing in all other aspects of their businesses. Law firms are being told by their clients that they have to use outsourcing. Clients have the pen. Clients sign the checks. If outsourcing is something you're thinking about and not taking action on, you're going to be left behind. LPO is not some fad, like lava lamps or sideburns. It's not going away.

What Are the Three Most Important Things Law Firms Should Look for When Choosing an LPO Provider?

First, select a provider with a proven track record of success. Make sure they have good, solid references with Fortune 500 companies and national firms that look and feel like your clients and your firm. Quality clientele indicates that the provider knows how to price matters correctly and deliver.

Second, select a provider with a large team of US-admitted lawyers who have been through the ringer and understand how law firms work.

Third, select an organization that has a good cultural fit with your firm. Make sure that you can have a real conversation with the provider, and that you don't feel like you're having a talk with a space alien.

If You're a Managing Partner at a Law Firm, What Questions Should You Ask Prospective LPO Providers?

First, law firms should ask, "have you worked with us before?" You would not believe how often partners are unaware that we have worked with others at their firm. You should also ask about relevant experience and whether you have clients in common, and assess whether there's a cultural fit.

Scalability is also important. You want to work with a provider that has enough heft to do the work and has enough managerial talent to scale with you as your engagement and the provider's other clients demand more.

Factors that may preclude use of a particular provider include whether the matter requires non-English language needs or whether it involves civil law jurisdictions. Prospective clients have also asked us about supervisory ratios, turnover, IT and physical security, business processes, and insurance.

Three Popular Locations to Outsource Legal Work Are South Africa, India, and the Philippines. Does It Make a Difference Where the Work Is Performed in Terms of Lawyer Quality, Work Product, and Cost to the Law Firm?

Yes. The Philippines has a real scalability problem with its workforce. Many of the lawyers who are performing the work there are moonlighting because the number of available lawyers there is so low. The Philippine domestic legal marketplace consumes nearly all the available Philippine lawyer talent, so you wind up competing with domestic work.

Many London firms have been working with providers in South Africa, but it's largely an IP market. It's an immature market for the provision of litigation and corporate work.

In India, there are one million lawyers with 100,000 in Mumbai alone, which explains why we have set up shop there. The offshore work in India is top of the market work, so you don't compete with domestic demand the way you do in the Philippines and South Africa.

What Steps Should a Law Firm Take to Prevent Against the Unauthorized Practice of Law When Engaging a LPO Provider? Do Providers Have Internal Procedures to Protect Against This Problem?

Good ones do. Any solid provider will be guided by the August 2008 ABA opinions and the individual state bar association ethics opinions on legal outsourcing. Providers should never deliver their work product to the end consumer of that work product if that person is not a lawyer. Providers should be at privity with an admitted lawyer in the jurisdiction and should deliver their work under that lawyer's supervision and direction. The supervision should be meaningful and consistent, but need not be constant. There are providers that deliver work directly to non-lawyers, which is a disaster waiting to happen.

What About Confidentiality?

In terms of confidentiality, there should be non-use, non-compete, non-solicit, and non-disclosure agreements in place between the provider's employees and the provider, between the provider's employees and you (the law firm), and between the provider's employees and the (corporate) client, should the client wish.

Any Other Advice?

Be wary of providers using people who do not speak English, who are not lawyers, or who are not even employees of the organization. If a prospective provider won't let you meet the people who will do the work, it's a huge red flag.

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Published first via email newsletter and later here on our blog, BigLaw goes deep undercover inside some of the country's biggest law firms. But we don't just dish up the dirt. We also mine it for best and worst practices and other nuggets of knowledge. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.

Originally published on March 22, 2010 in our free BigLaw newsletter.

The economic downturn left a lot of casualties in its wake. Legal staff, associates, summer programs, car service, art budgets, breakfast, lunches and dinners … even entire law firms. But, despite the considerable ink spilled reporting on layoffs, deferrals, and cost-cutting at the nation's law firms, chatter about the uncomfortable matter of partner reductions remains relatively hushed. Until now.

Law Firms (Quietly) Begin Purging Partners

Recently, a report released by consultants at Hildebrandt Baker Robbins and the Private Bank division of Citigroup made it official: law firms are "overpartnered."

"During 2010," the report concludes, "many firms are likely to begin addressing this issue using a variety of tools including sharper compensation differentiations, early retirement packages, and 'tough love' conversations. We expect to see a general paring back of the ranks of income partners across the market, as well as a weeding out of marginal equity partners."

In the past weeks, several articles in the legal press have focused on the subject of "partner purges. This coverage and the Hildebrandt report gives voice to an issue long discussed behind closed doors. Although some firms have embraced transparency in their quest to reduce the associate ranks (while others have been criticized for "stealth layoffs"), information about the plight of partners remains scarce.

The reluctance of partners to discuss the phenomenon, whether with respect to their own fates or those of their colleagues, is understandable. Nonetheless, we found two partners willing to tackle the issue head on provided we not disclose their identities.

"I'm secure about my own position," said one equity partner at a large Connecticut firm, "but I take part in hiring decisions and sit on my firm's executive compensation committee. Do I think that partners can realistically expect to escape this recession unscathed? Of course not. Do I think that some partners should be shielded from the consequences of their own failure — or inability — to perform? Frankly: no. But it's such a sensitive issue that no one is willing to discuss it outside of the firm."

Another partner, who works at a large national firm notes that firms have been addressing the "overpartnering" phenomenon discreetly for quite some time. "Firms are trying to serve a number of masters," he says. "Clients prefer to have partners work on their cases, but they're demanding lower rates and overall bills. At the same time, firms have substantially reduced leverage, and when leverage goes down, there's just less money to go around … and the partners with a good book of business and a stable of clients will go elsewhere if they're not paid enough."

As one way of maintaining (or perhaps manipulating) the firm ecosystem, he says, many have been quietly throwing partners out, de-equitizing, or shifting them to Of Counsel positions to preserve the pie for other members.

Not surprisingly, says the partner, whether "purging" or "culling" partners is ultimately good or bad, depends on the particulars. "If the firm is really bleeding, it might not be such a bad thing," he said. "And getting rid of weak performers is classic 'survival of the fittest.' But if too many partners are let go, it can be very traumatic to the practice group or the firm as a whole — like cutting off an arm to save the body."

New Business Models Needed, Not Just Fewer Partners

What the partners interviewed for this column hope to see happen next has less to do with the bottom line and more to do with the channels of communication. "I think we need to open up the topic for discussion," said the partner at the national firm.

The Connecticut partner agrees. "We're facing the prospect of painful contraction in the legal profession," he observed. "How firms will balance commodity versus specialty work, whether certain partners would be better off at boutique or smaller-market firms, and how to operate efficiently in this environment are all issues worth discussing. I'd like to see more partners talk honestly about how we, as a profession, can put out heads together and figure out how to provide legal services, make money, and work in the environments that we're each temperamentally and intellectually best suited for. Those are some pretty big challenges, and we need all the mental capital we can devote to exploring them."

With that, BigLaw readers, we open the floor to you. Whether you're an equity or income partner, "retired" partner, Of Counsel, or aspiring partner, please reply with your thoughts on this issue. Or if you'd prefer anonymity contact me directly.

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Published first via email newsletter and later here on our blog, BigLaw goes deep undercover inside some of the country's biggest law firms. But we don't just dish up the dirt. We also mine it for best and worst practices and other nuggets of knowledge. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.

Originally published on March 8, 2010 in our free BigLaw newsletter.

Hailed by law firms and cursed by their clients, the billable hour remains the lifeblood of the legal profession. With primacy comes the risk of abuse. Risk? Actually, fact. Padding hours is a dirty little secret of the large firm world. How does it occur? Can it be stopped? Let's take a look.

Falsifying billable time occurs in several ways. On a micro level, attorneys can work slowly on assignments to rack up time or they can pad their time entries with extra hours. And on a macro level, while no law firms pad their attorneys' hours outright (or at least have been caught), most have fee arrangements and attorney compensation and advancement policies that don't exactly discourage their associates from overbilling. Addressing this problem requires more than just eliminating the billable hour fee arrangement.

Bill Padding Under the Traditional BigLaw Model

In the traditional model, the billable hour fee arrangement works in tandem with firm's compensation practices to create the perfect storm of perverse incentives to overbill. Take, for example, a typical law firm that pays its lawyers bonuses based on billable hours. The promise of bigger bonuses entices attorneys to inflate their hours, and the lure of higher revenue motives the firm to accept the bloated time records at face value and pass them onto clients unchecked.

Paying lockstep compensation doesn't thwart overbilling either since attorney evaluations, class advancement, raises, and job security remain tied to billables. Internal rankings for possible future partners also use this metric. Yet worst of all, neither the firm nor its attorneys have any incentive to tackle the hour-padding problem since the client is the only that pays for it — both literally and figuratively.

Merit Based Compensation Won't Solve the Problem

Though the traditional model still dominates, fixed-fee arrangements and merit-based compensation for attorneys have grown increasingly popular over the past few years. Unfortunately, these new models in their current incarnations have had little impact on the bill-padding phenomenon.

For example, firms that have migrated to merit-based compensation such as Howrey and Foley & Lardner continue to consider billable hours when determining associate compensation, which means that associates still have incentive to inflate their hours.

Fixed-fee arrangements provide the proper incentives for law firms to work efficiently and control client cost. But as long as attorney compensation and evaluations remain tied to billable hours, individual attorneys still have reason to embellish their diaries. As a result, flat fees simply shift the hour-padding burden from clients (who no longer receive bloated bills) to the firms themselves, which lose man-hours because of inefficient lawyers while paying them higher bonuses for their fabricated time.

The Solution to Bill Padding Has Its Own Perils

It's tough to imagine a world in which law firms don't use the billable hour either as a fee structure or a yardstick for evaluating and paying associates. But a legal world free of the billable hour is precisely what we need to eradicate the hour-padding problem and all of its moral and financial hazards.

If firms adopt both flat fees (or similar alternative fee arrangements) and true merit-based compensation systems that emphasize work product quality, client service, and other factors long used in the corporate world instead of relying on billable hours, attorneys will have virtually no incentive to overstate their time and firms will work efficiently on projects and send clients predictable invoices.

However, law firms that adopt such a system must resist directly pegging compensation to "efficiency," as emphasizing fast work may create the reverse incentive among attorneys — "underbilling" by cutting corners, which could result in loss of clients for reasons having nothing to do with sticker shock not to mention greater risk of malpractice claims and bad publicity.

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Published first via email newsletter and later here on our blog, BigLaw goes deep undercover inside some of the country's biggest law firms. But we don't just dish up the dirt. We also mine it for best and worst practices and other nuggets of knowledge. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.

Originally published on March 1, 2010 in our free BigLaw newsletter.

When disasters like the earthquakes in Haiti and Chile strike, many lawyers want to offer assistance, but don't know how to put their skills to use. Given the complex problems that exist in the developing world, writing a mean summary judgment motion may not seem like a particularly transferable skill. Since 2001, the New York City Bar Association's Cyrus R. Vance Center for International Justice has offered lawyers in New York and around the country an opportunity to get involved in pro bono work on international legal issues.

The Vance Center, which is named for former United States Secretary of State (and New York City Bar president) Cyrus R. Vance, seeks to "give continuing substance to [Vance's] conviction that lawyers have an ethical obligation to play an active role in the promotion of peace, democracy, and social justice." Explains Elise Colomer Grimaldi, an Associate Director at the Center and the Director of its Latin America Program and Clearinghouse, the Vance Center "tries to engage lawyers, in the U.S. and abroad, in human rights work," in order to expand access to justice in young democracies and developing economies. Law firms, Colomer Grimaldi says, are an essential part of the Center's work.

The Center's efforts focus on human rights issues in Latin America and Africa. But, while the Center's partners in the private bar include law firms with practices in these regions, a foreign presence is not prerequisite to any firm's involvement. Rather, Colomer Grimaldi explains, one of the primary assets that law firms bring to the table is knowledge.

"Law firms have a lot to offer in the form of 'know-how' — in terms of legal issues, but perhaps more importantly, with respect to the variety of technical issues involved in implementing a pro bono program, and the nuts and bolts of getting pro bono work done," says Colomer Grimaldi. "Law firms and practitioners here in the U.S. may not have experience working on the actual legal problems that affect Latin America and Africa, but they have a great deal of experience running pro bono cases and programs — from knowing how to use FOIA requests effectively in certain kinds of litigation to understanding how to create groups of lawyers who can work with non-governmental organizations or other human rights advocates."

"The 'transfer of knowledge,' from law firms is invaluable," she adds. "The ability of U.S. lawyers to share that knowledge — about how pro bono programs are structured, how to create opportunities for pro bono work outside of typical business relationships, and how to get young lawyers engaged in pro bono work — is tremendously important to the lawyers we work with in Latin America and Africa." In 2008, the Center and its partners (in the private bar and in Latin America) introduced the Pro Bono Declaration for the Americas, which represented the "first collaborative effort in the Americas to articulate the professional responsibility of lawyers to promote access to justice and provide pro bono legal assistance to those in need."

Law firms bring another important asset to the table: reputation. "U.S. law firms bring clout and credibility to projects and pro bono efforts elsewhere," Colomer Grimaldi explains. "Because U.S. firms are seen as the 'law firm of the 21st century,' they confer legitimacy on their foreign counterparts, which want to be perceived as having the same best practices, and the same value to contribute to social justice efforts."

Some may wonder whether pro bono work and helping to build pro bono networks in other countries is a luxury limited to large firms with ample resources? Not at all, according to Colomer Grimaldi. The Center relies on firms of all sizes for research, "knowledge transfer," and for the assistance they can offer in the virtual realm, through VanceNet, its "Web-facilitated network of lawyers, scholars and advocates working to enhance access to justice and public interest law in their countries and regions."

Through VanceNet, she says, lawyers from small to midsize firms can contribute in a variety of ways, from providing "specific expertise to talking to their foreign counterparts about how to balance the need to make a profit with their legal and social responsibilities to the community." In other words, the Vance Center helps even the most local practitioners find a way to act globally.

How to Receive BigLaw
Many large firms have good reputations for their work and bad reputations as places to work. Why? Published first via email newsletter and later here on our blog, BigLaw goes deep undercover inside some of the country's biggest law firms. But we don't just dish up the dirt. We also mine it for best and worst practices and other nuggets of knowledge. The BigLaw newsletter is free so don't miss the next issue. Please subscribe now.