Pressing Issues Facing Law Firm Leaders
A Roundtable Discussion
Moderated by Richard Hetke
A panel of law firm leaders from firms across the country gathered “virtually” to discuss pressing issues they are confronting as they manage their firms during this turbulent times.
Many thanks to the members of this roundtable:
- Peter Marlette, Managing Partner, Damon Morey LLP
- Thomas Wolfe, President and Managing Partner, Phillips Murrah P.C.
- Michael J. Catalfimo, Director, COO, Carter Conboy
- Thomas W. Brown, Partner, Cosgrave Vergeer Kester LLP
- John Trimble/Richard Blaiklock, Partner, Lewis Wagner LLP
- Richard Blaiklock, Partner, Lewis Wagner LLP
- Richard Hetke, Chief Executive Officer ALFA International. ALFA International is a global network of independent business focused law firms.
1. What have been your biggest challenges as Managing Partner for your firm?
Maintaining the forward momentum that we have been able to have over the last several years. No matter how well your firm is doing, you are expected to continue to outperform the previous year. Keeping the pressure on all to produce and provide our clients with exceptional services has to be coupled with maintaining a positive, enthusiastic and cordial culture. (Peter Marlette – Damon Morey LLP)
The primary challenge has been achieving a balance between providing the support infrastructure attorneys expect and maintaining compensation at acceptable, market levels. Another challenge is working with attorneys that are reaching retirement age and transitioning their practices to other, younger attorneys. There is often resistance. A third issue is finding laterals or mergers that would help the firm grow economically while maintaining our culture. (Tom Wolfe - Phillips Murrah P.C.)
Bringing greater speed, creativity, and innovation to the firm’s strategic planning process, and bridging the gap between the current owners of the firm and the Gen-X and Gen-Y lawyers who eventually need to take their place. We also think about how to increase attorney contributions to firm governance and marketing activities without deceasing billable hours, as well as how we can harmonize the individual wants and needs of the firm’s partners with the firm’s organizational goals and business imperatives. Finally, we’re revising yesterday’s “measure and reward” systems to achieve alignment with today’s strategic goals and operational objectives. (Michael Catalfimo – Carter Conboy)
Problem partners – bad behavior, unproductive, unwilling to consistently support firm policies and strategies. (Thom Brown - Cosgrave Vergeer Kester LLP)
Juggling practicing law with managing firm business; making sure that our firm is always one step ahead of the changing times in the law business; and instilling a never ending sense of urgency in all of the employees of our firm that we must be responsive and extra efficient in these economic times. (John Trimble/Richard Blaiklock – Lewis Wagner LLP)
2. So many law firms now maintain multiple offices. What measures have you taken to insure consistency among your offices?
Utilization of standardized forms, work-flow systems, and office policies and procedures, and centralization of administrative functions and services in the home office. (Michael Catalfimo – Carter Conboy)
3. Do you communicate with Managing Partners of other law firms and seek their insight on some of the challenges you confront?
I communicate regularly with other Managing Partners primarily through our law firm network ALFA International. With only a single member firm in over 145 metropolitan areas throughout the world, we can openly share success stories and problems and seek counsel from other Managing Partners of similar firms. I am much more likely to reach out to a Managing Partner from across the country than I would to a competing firm across the street. (Peter Marlette – Damon Morey LLP)
Yes, and it has been very helpful. Though law firms and lawyers are by their nature competitive, we maintain a good relationship with most of our competition. It’s not unusual at all call or receive a call to discuss a particular issue to get some ideas as to how to handle a situation. We often exchange information concerning certain economic issues, such as compensation structures (not amounts), office lease space terms, etc. (Tom Wolfe - Phillips Murrah P.C.)
Yes. We’re all swimming in unchartered waters today and no one has a monopoly on the right answers. Brainstorming and sharing “best practices” with peers is quite helpful. (Michael Catalfimo – Carter Conboy)
Yes. All of the local Portland managing partners meet quarterly through a program sponsored by our local bar association. Also, because the Portland legal community is small and collegial, I always felt free to call my managing partner colleagues with questions. I also found the ALFA Law Practice management Group program at the ABM a very helpful source of information. (Thom Brown - Cosgrave Vergeer Kester LLP)
Yes, all the time. (John Trimble/Richard Blaiklock – Lewis Wagner LLP)
4. Outsourcing is a major issue in law firm management. To what extent has your firm outsourced some of its functions? What have the results been?
Approximately ten years ago we outsourced a number of important IT functions and experienced rather disappointing results. Those functions are now being handled in-house at a slightly higher cost, but with much greater efficiency and responsiveness. Recently we outsourced a number of process driven functions relating to some of the firm’s flat-fee work, and have realized a savings in cost without any offsetting diminution in quality. We continue to review additional outsourcing opportunities on a case-by-case basis. (Michael Catalfimo – Carter Conboy)
At least not beyond things that I don’t understand this question to cover like some marketing support functions. (Thom Brown - Cosgrave Vergeer Kester LLP)
We have outsourced our copying, imaging, filing, and mailroom functions. From a cost standpoint, it is a “wash” for the firm. But from a management standpoint it has been very positive. We have built in certain performance standards in the agreement, and when those performance standards are not met we simply notify the vendor and they deal with the issues (and have done so very well). From a productivity standpoint, the staff – who are the ones who deal with the vendor most closely – appreciate not having to do the work themselves, and they appreciate the vendor’s efforts to satisfy their clients, the staff. (John Trimble/Richard Blaiklock – Lewis Wagner LLP)
5. The new economics of law firm management have spurred changes in hiring practices at many law firms. Has your firm changed its approach to hiring summer clerks, new law school graduates, and lateral partners?
We have maintained our summer program, only with fewer clerks. We want to have a permanent offer for those who do a good job for us. We still find it to be the best way to find good people who will be with us for the long haul. (Peter Marlette – Damon Morey LLP)
We have kept, but reduced the size of, our clerk program. The turnaround for becoming an economic plus to the firm is problematic. We continue to look very carefully at associate profitability and have made cuts in situations that in previous years might have not been addressed. We have also been more aggressive in increasing rates with respect to new associates where possible. Our view of lateral partners has not changed much. We look for new areas of practice, support for existing areas and the ability to bring new clients. (Tom Wolfe - Phillips Murrah P.C.)
Until recently, our hiring practices favored new law school graduates over lateral hires and we did not use a formal summer clerk program. In the last three years, however, we have begun to hire more laterals than new law school graduates, and a new summer clerk program is under consideration. (Michael Catalfimo – Carter Conboy)
There has been no change to how we hire summer clerks and we generally only bring on those who clerked with us. In terms of laterals, we do hire more 2-5 year attorneys, though we have brought on some lateral partners. We are looking to hire some now, in fact, although I believe we will likely now look to an initial “Of Counsel” arrangement. (Thom Brown - Cosgrave Vergeer Kester LLP)
No. Several years ago we made the strategic decision to grow through our summer associate classes rather than from laterals. The only change we have seen is that there are a lot more highly qualified summer associates available in the interviewing process because the traditionally “big firms” are not hiring the number of summer associates as in years past. (John Trimble/Richard Blaiklock – Lewis Wagner LLP)
6. Has your firm implemented alternative working arrangements like part-time positions and work-from-home options?
We have long had alternative work options available and have several attorneys who are part-time, including Associates, Counsel, Non-Equity and even Equity Partners. It has allowed us to keep many talented attorneys who for one reason or another cannot work full time or need to go part-time for a certain period (or years) of time. (Peter Marlette – Damon Morey LLP)
We have always allowed attorneys to go part time, though it is certainly the exception rather than the rule. We have both partners and associates that are part time. We do not have a “work-from-home” option as such, but where needed we have made allowances. Work-from-home can be difficult for everyone since “out of sight out of mind” certainly applies. (Tom Wolfe - Phillips Murrah P.C.)
Yes. We have two attorneys (one an equity partner and one who likely will become a non-equity partner in 2013 or 2014 who work part-time. We have not implemented any formal work at home positions, although some of our attorneys will work from home from time to time. We have some part time support positions. (Thom Brown - Cosgrave Vergeer Kester LLP)
No. However, we have created a few “staff” attorney positions that have fewer demands. (John Trimble – Lewis Wagner LLP)
7. What is your impression of young lawyers versus their older colleagues? Do they approach the work-life balance differently? Are you noticing any work or culture trends?
Though my colleges may have a different view, I don’t think that much has changed overall. Years ago some young attorneys worked long hours and weekends and basically did what they needed to do to become a partner. And some didn’t. I don’t see much of a difference. We have some very hard working young attorneys that are extremely motivated. And we have some that aren’t. I think it always has been that way and always will be that way. (Tom Wolfe - Phillips Murrah P.C.)
Gen X and Gen Y attorneys approach work-life balance issues in a qualitatively different way than most of their older colleagues and this difference is definitely driving both work and culture trends in the firm. The key point of divergence—and conflict—has to do, of course, with time: Older attorneys sacrificed significant personal time in the early years of their career in the hope they would be rewarded later with financial success and professional stature, while their younger colleagues are generally unwilling to trade their personal time unless the return on that investment is relatively certain, and is realized relatively quickly. Bridging the gap between these two approaches to work-life balance is one of the most significant challenges facing law firm managers today. (Michael Catalfimo – Carter Conboy)
Young lawyers approach the work-life balance differently than their baby boomer counterparts. There are a number of reasons for this, I think: two-earner families, lifestyle choices, willingness to move jobs, etc. Our younger lawyers demand more than their baby boomer counterparts in terms of mentoring, collaborative work relationships, feedback, work-life balance and most, although not all, tend to limit the professional activities (bar association involvement, for example). (Thom Brown - Cosgrave Vergeer Kester LLP)
Younger lawyers (30-ish and younger) do not seem to have a good grasp of what it takes to develop a book of business, nor the importance of having a book of business. This generation of lawyers may miss the boat if they do not wake up to the reality that getting business is a critical component of advancement in a law firm. They seem less willing to get involved in bar association and community activities despite the resources we make available to them. They work hard at their legal work but are less committed to marketing and business development. (John Trimble/Richard Blaiklock – Lewis Wagner LLP)
8. Do your firms have well-structured programs to instruct young lawyers on developing business for the firm and representing the firm in the community?
We have a transactional and litigation associate practice group meetings where a lot of emphasis is placed on business development. In addition, we have partner associate lunch meetings from time to time to discuss business development. We further encourage associates to provide representation on a pro bono basis and in response to requests from courts in connection with indigent defendants. (Tom Wolfe - Phillips Murrah P.C.)
We utilize a variety of educational tools to teach associates how to market, develop business and represent the firm in the community, but we have not yet incorporated these tools into a structured program. (Michael Catalfimo – Carter Conboy)
We try and are continuing to work harder on creating such programs. (Tom Brown - Cosgrave Vergeer Kester LLP)
We have a marketing director who works on individual marketing plans with each lawyer; the supervising partner meets quarterly with the associate and the marketing director to discuss marketing efforts and to come up with a quarterly “to do list”; and, we have retained a sales training expert to work with our associates and younger partners one-on-one. We also provide them with very generous personal accounts to use for bar memberships, travel, sponsorships, and entertainment. (John Trimble – Lewis Wagner LLP)
9. Does your firm have a well-defined Marketing Department? If so, do your lawyers consistently use the resources of the department?
We have a two-person Marketing Department who are constantly working with our attorneys to help them develop new business. (Peter Marlette – Damon Morey LLP)
We do have a marketing/business development department. The benefits to the firm have been tremendous. However, it has taken time for attorneys to become used to thinking in terms of marketing opportunities and how to incorporate that kind of thinking into an everyday practice. (Tom Wolfe - Phillips Murrah P.C.)
We have an in-house marketing professional whose services are consistently used by some of the firm’s lawyers, but not all. (Michael Catalfimo – Carter Conboy)
Yes. Most do, although the department is small and access is limited. We are presently looking at expanding the department. (Thom Brown - Cosgrave Vergeer Kester LLP)
Yes. We have a nearly full-time marketing director. The director is available as a resource to all attorneys. We involve our marketing director with individual attorneys, and as part of our various internal management committees that may benefit from our marketing director’s expertise. Marketing is also part of our strategic plan, so we try to be continually focused on improving what we do and measuring results. (John Trimble/Richard Blaiklock – Lewis Wagner LLP)
10. How successful has your firm been in boosting diversity at all levels of the office? Does your firm have diversity officers or a diversity committee?
We have a diversity committee at our firm whose task is to organize our efforts and seek out diverse candidates at all levels of employment. Unfortunately, Oklahoma is not particularly diverse so the our efforts don’t always show up in the numbers. We go out of state to interview attorneys as well. However, the competition in the larger markets has made success difficult. (Tom Wolfe - Phillips Murrah P.C.)
Despite consistent efforts, we have failed to boost diversity at all levels of our office. (Michael Catalfimo – Carter Conboy)
Not very, both because Portland is not a diverse market and because we have not had a great track record in keeping female litigators. (Thom Brown - Cosgrave Vergeer Kester LLP)
Our firm was founded on principles of diversity, and our growth and makeup over the years is indicative of the value we place on diversity. To recognize diversity, we are one of only a few law firms in the city that closes on Martin Luther King Day each year. We have also participated each year for the last 25 years in a minority law clerk recruiting program. We are diverse at all employment levels of our firm, and diversity is always an issue in our hiring decisions. We also support diversity initiatives in our bar associations and community for which we have won national, state, and local recognition. (John Trimble/Richard Blaiklock – Lewis Wagner LLP)
11. Does your firm have internal policies relating to lawyers’ and support staff use of the internet and various social media?
Yes. Every attorney and staff member must sign the policy. (Peter Marlette – Damon Morey LLP)
We don’t. Good idea though! (Tom Wolfe - Phillips Murrah P.C.)
We have an internal policy regarding internet usage which has some application to social media. We have yet to develop, however, a policy which directly governs the use of social media by lawyers and support staff. (Michael Catalfimo – Carter Conboy)
Yes. We have a very detailed policies. (Thom Brown - Cosgrave Vergeer Kester LLP)
We have policies that are discussed, but not committed to writing. Our marketing and business development program encourages creative use of social media. (John Trimble/Richard Blaiklock – Lewis Wagner LLP)
12. The lawyer-client relationship is ever-changing. Are there any current trends in the areas of alternative fee arrangements, in-housing of more legal work, allocation of work by clients among multiple outside firms? Other new developments?
This is a subject that is discussed from time to time, but absent a specific situation, such as a client request, we continue to operate on an as usual basis—hourly, contingency and, in rare instances, flat fee. We do associate with other firms, but not on a regular basis except as local counsel. (Tom Wolfe - Phillips Murrah P.C.)
Alternative fee arrangements are being requested (or demanded) by institutional clients with increasing frequency. There remains a great deal of inconsistency, however, regarding the form and content of these arrangements. Additionally, approved counsel lists are being pared down by corporate legal departments and in some industries there appears to be a renewed interest in the national counsel model. In the financial services industry, clients are auditing their law firms with increasing frequency in an effort to insulate themselves from liability claims secondary to law firm misfeasance or malfeasance. (Michael Catalfimo – Carter Conboy)
We have seen an increasing interest in our clients in alternative fee arrangements, particularly flat fees. We have also seen one of our large clients allocate work among multiple firms in Portland. For another large client we saw it sending some work in 2011 to its in-house legal department as a way to cut outside legal fees. Many of our clients – particularly our insurance company clients – have either refused to allow rate increases over the last 4-5 years, or allowed very minimal increases, and several insurers in the Portland market continue to look to captive counsel rather than outside counsel for more and more work. (Thom Brown - Cosgrave Vergeer Kester LLP)
We have seen a trend in which the business world has flattened hourly rates for “commodity” legal work, and commodity work is being pushed down to smaller firms and in-house legal departments. This has made our mix of practice more complex and challenging (a good thing), but it has eliminated some training ground for young lawyers.
We have also seen significantly greater interest by clients in thoughtful litigation management and greater usage by clients of performance metrics for law firms. This trend has required us to take a closer look at our own internal metrics so that we stay ahead of our competitors. (John Trimble/Richard Blaiklock – Lewis Wagner LLP)