Hybrid, adjective:
(1) bred from two distinct breeds, varieties, species, or genera;
(2) composite, formed or composed of heterogeneous elements;
(3) composed of elements originally drawn from different languages, as a word;
(4) powered by more than one source of power.
Many lawyers like me started out in the last century as “general practitioners.” Some lawyers practiced in multiple areas. Some partnered with other types of lawyers. Those were hybrid law practices then.
Now, a hybrid law practice might mean a law firm practicing admiralty and tax law; or estate planning, medical malpractice, and family law; or litigators partnered with patent lawyers; or a law firm with physical offices that also offers fully remote communication options. All are hybrids.
The COVID-19 pandemic changed the way lawyers and clients work together, for better and worse. More than half (54 percent) of the lawyers responding to an ABA survey in 2021 were working from home 100 percent of the time. Only 22 percent said they almost never worked at home.
Clients changed the ways in which they work, too. Sixty-two percent of respondents to a survey by Owl Labs would take a pay cut of 10 percent or more just to be able to work remotely. Four percent would quit their jobs if they couldn’t work remotely or in a hybrid manner.
So, too, have attorney-client relationships evolved. In 2018, only 23 percent of consumers were open to working with a lawyer remotely. But by 2021, according to Clio’s 2021 Legal Trends Report, the ability to work remotely with a lawyer had become a key factor for 79 percent of consumers in choosing who to work with. More than two-thirds (67 percent) said they would look for a lawyer offering both remote and in-person options when searching for an attorney.
What We’ve Got Here Is Failure to Communicate. —Strother Martin, as the character Captain, speaking to prisoners in the 1967 movie Cool Hand Luke
Face-to-face meetings seem to have given way. Personal injury attorneys today advertise that all you need to do if you have an accident is text them right from your car. Presuming you’re not too badly injured to do that, they’ll take it from there and do all the rest. It’s so easy!
A hybrid law firm may need to keep track of, and be able to cross-index, store, and retrieve communications received by voice or voice mail, text, email, and attachments to either, as well as from platforms such as Zoom. Deposition transcripts and other evidentiary materials need analysis—time tracking, invoicing, calendaring, conflicts checking—all of it must be integrated, and all of it must be made reliable.
For example, courts almost everywhere now require or allow e-filing. But problems with phone line issues, troubles with an Internet service provider (ISP), or failures of hardware or software will not normally constitute a technical failure such as would excuse an untimely CM/ECF system filing (see, e.g., Taylor v. Berryhill, CIVIL No. 5:17-CR-5215, at *6 (W.D. Ark. Feb. 21, 2018)).
All this brings to mind the words of philanthropist and Microsoft founder Bill Gates:
The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.
Hybrid partnerships in law firms are becoming more popular, according to a Law.com analysis cited by the American Bar Association, particularly at law firms where the “cost of becoming a full equity partner has increased significantly over the last few years.”
Hybrid partners have only partial equity ownership. Part of their income derives from equity and part from a fixed paycheck. Having partial equity partners who make less than half their income from equity helps “maximize the metric of profits per equity partner” (id.).
Creating different levels of equity and partnerdom is “‘a new game that law firms play.’ If every partner who had even a small equity share were considered an equity partner, profits per partner would be lower. Keeping hybrid partners below 50 percent equity allows a firm to move up in the rankings for profits per partner” (id.).
Faux partners, however, do not present the risk to law firm survival that actual partners do. John Morley, professor of law at Yale Law School, concludes that law firms “are fragile because they are owned by their partners, and the partners can freely withdraw.”
Pointing out that no large law firm has ever managed to reorganize its debts in bankruptcy and survive, Morley writes of another paradox: “Many collapsed firms have remained formally profitable up through the days they dissolved” (id.). They often go quickly from apparent health to liquidation, sometimes within even weeks or days, strangely out of proportion to their actual financial distress.
Surely, though, it is not as simple as financial distress. “Many businesses suffer financial problems and many even go bankrupt. But almost none explode like law firms” (id.).
Morely explains that most large businesses are owned by investors, whereas the ABA Model Rules of Professional Conduct require law firm equity to be owned by the firm’s partners, who get paid in shares of the profits. Partner ownership is what makes a law firm fragile because when one partner leaves, “she damages the firm. This causes other partners to leave, which further damages the firm, causing still more partners to leave, and so on” (id.).
Partners are encouraged to follow each other out the door for two reasons. First, because partners are paid in profits rather than salaries or bonuses, if one partner’s withdrawal damages the firm’s profits, “the aggregate pay of the firm’s remaining partners must necessarily and automatically decline,” causing the remaining partners to become more likely to leave, too (id.). Second, partners face significant forms of personal liability that salaried employees do not, including fraudulent transfer, preferential transfer, and unfinished business liabilities.
According to Morley,
Crucially, these liabilities all punish partners in direct proportion to how long they stay at a declining firm. Partners who leave late suffer more than partners who leave early. Fraudulent transfer liability, for example, allows creditors in bankruptcy to claw back the profits a firm pays to its partners in the months leading up to bankruptcy, meaning that a partner who stays until bankruptcy will lose more months of pay than a partner who leaves a year prior.
Id.
Hybrid partners. Hybrid equities. Hybrid law firms. All other things being equal—well, they just aren’t. That’s a paradox.
