Law Practice Management
Too Many Lawyers, Too Little Work: More Layoffs Are Likely, Expert Says
Posted Apr 29, 2009 7:30 PM CST
By Martha Neil
Too many lawyers are chasing too little work. And meanwhile a number of law firms are effectively serving as bankers for cash-strapped clients struggling in a difficult economy.
After a "disastrous" fourth quarter in 2008, many law firms can expect an even more worrisome 2009, writes Dan DiPietro in the Am Law Daily. He serves as client head of the law firm group of Citi Private Bank, which is known for the financial surveys it conducts among its more than 600 law firm clients in the United States and United Kingdom.
More law firm layoffs are likely, DiPietro predicts, based on what he hears from law firm leaders about the legal business. Although he wasn't optimistic last year, he is more pessimistic now about the economic outlook for the legal industry than he was in November.
This is the time for change-averse lawyers to make bold decisions to fix a broken business model, he writes. Among his suggestions: consider alternatives to charging clients on a billable-hours basis and tie associate pay to job performance.
"These are times that cry out for boldness and innovation. But the window will not stay open for long," he writes. "Who among you will be the first to act?"
Related coverage:
ABAJournal.com: "Will 2008 Be Law Firms’ Worst Year Since Early 1990s?"
ABAJournal.com: "Hildebrandt: Cut Associate Salaries Now"
ABAJournal.com: "BigLaw ‘Has Changed Forever,’ Says Womble Carlyle, Cutting Pay 10 Percent"
ABAJournal.com: "NYT: It’s Time to Rethink the Legal Profession"

Comments
B. McLeod
Apr 29, 2009 8:09 PM CST
I do not think I would want a job title like “client head.” However, I do respect careful, conservative predictions. In early March, when I predicted March layoffs would exceed January and February totals combined, that was a wild and chancy call (though it proved to be right). Likewise, early this month, when I predicted April layoff totals would be substantially down from March, that was an optimistic shot (but right again). Now, though, you take DiPietro, the expert “client head,” and he’s a lot more conservative. “More law firm layoffs are likely, DiPietro predicts.” That’s at least two, right? Two layoffs (in an undefined, wide open time period), and he’s nailed it! He IS an expert!! And, he has some recommendations, too: “consider alternatives to charging clients on a billable-hours basis and tie associate pay to job performance.” I am in awe, really. Those seem so clearly astute, why has nobody else thought of them before now?? I find myself compelled to ask, “is there somewhere I can send some of my money, so that DiPietro, the expert “client head,” will give me some useful predictions and tips too?
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Barrister
Apr 30, 2009 9:45 AM CST
B. McLeod, I’ve got great news! Because you don’t have a JD, and you’re not a lawyer you have no reason to worry about garnering any of those nefarious labels.
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B. McLeod
Apr 30, 2009 10:22 AM CST
“I have nothing more to say to you…it’s not like you have enough of a clue to understand.” (“Barrister” post to B. McLeod, 16 April).
Unfortunately, “Barrister” is apparently has little regard for keeping its word. Not surprising given its ongoing, lawyer impersonation attempt on this site.
In another of “Barrister’s” posts today, “Barrister” revealed a complete lack of knowledge of federal court registrations. How many real lawyers would not know that lawyers are separately admitted in state and federal courts?
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Barrister
Apr 30, 2009 11:43 AM CST
Comment removed by moderator.
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B. McLeod
Apr 30, 2009 12:00 PM CST
Here’s the exchange at issue (relating to FEDERAL practice):
______________________________________
Posted by Barrister - 4 hours, 55 minutes ago
I have a solution for you B. McLeod…expand your unauthorized practice of law beyond pretending to have a JD on this message board, take a federal case under your “pseud” and they’ll be more than willing to turn over every milk crate of newspaper clippings (oops, client files) you have.
Posted by B. McLeod - 4 hours, 24 minutes ago
No, I think they would just look at my current federal registration card (good ‘til June 30) and tell me to do my own work.
Posted by Barrister - 2 hours, 3 minutes ago
Federal registration card? Is that anything like an ACTUAL license to practice law? (states regulate their OWN bar membership and grant said license to successful candidates)
______________________________________
It is too clear that “Barrister” was ignorant of federal registration, simply.
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Barrister
Apr 30, 2009 12:14 PM CST
Comment removed by moderator.
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B. McLeod
Apr 30, 2009 12:32 PM CST
We’ll see. I would think whoever really owns the computer facilities you are using would be concerned over your use of their facilities to nationally publish allegations (without evidence) that a specific, named ABA member is criminally practicing law without a license. If you would, just print this thread off and hand it to them as my request that they take the necessary steps to preserve the electronic information on their servers related to your use of their system.
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JAG CWP
Apr 30, 2009 7:15 PM CST
In Ohio, an Ohio “active” licensed lawyer may practice in any Ohio court. Out of state attorney registered with the respective UDC’s or CCA-6 may practice in those Fed courts located in Ohio.
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B. McLeod
Apr 30, 2009 10:11 PM CST
Is it not the case, however, that in addition to showing the Ohio license, you still have to apply for federal admission in fact need two federally-admitted sponsors for your application, whether you are in US District Court for the Northern or Southern District of Ohio, the main difference between the two being the format of the application form and the fact that the fee for admission is $10 higher (i.e., $200 rather than $190) in one of them?
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Rick Fein
Apr 30, 2009 11:02 PM CST
There is plenty of work to go around. The problem is that clients are not initiating cases that may be very worthy in a normal economy, but not in this awful economy. But, if the legal profession would simply make every use of technology, cost reduction, honest billing practices, and rid itself of those attorneys who grossly overbill for questionable work, I am confident that clients will come back, because there are many cases waiting out there, and all they need is a better cost/benefit determination.
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Rick Fein
Apr 30, 2009 11:12 PM CST
One more thing. I think clients are now more attuned to the fact that lawyers have been getting away for years with the widely accepted use of “rounding up.” For example, a one minute email is billed at a minimum of 6 minutes, or in some cases 10, or even 15 minutes. So, let’s say you are a $400 an hour attorney, and you bill $40 for 6 minutes of work that actually took only 1 minute. You have now transformed yourself into a $2,400 an hour attorney. I know this is accepted practice but whether it is hurting the legal community or not is another issue.
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B. McLeod
Apr 30, 2009 11:26 PM CST
“Rounding up” has a minor impact compared to “multi-tasking,” “surcharging” and “value billing.”
It is easy to see how the greed-warped billing system has brought us where we are.
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Rick Fein
May 1, 2009 2:41 PM CST
It’s not greed, it’s simply the way business has been conducted. If you want to accuse every single lawyer in the country of “greed” then go ahead. But I think in this day and age,. there’s no real reason why clients cannot be billed for actual time spent, down to the minute, or even the second. If $400 an hour is not good enough for the attorney, then raise the fees, but don’t manipulate the bill to try to show you’ve worked more than the actual time you spent.
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B. McLeod
May 1, 2009 8:18 PM CST
Maybe. Not everybody uses these creative techniques. But, I’ve been assured “Multi-tasking” (i.e., billing all six clients who theoretically benefitted concurrently from .1 in activity for that same .1) IS “billing for the actual time spent.” Likewise with the “value billing” (in which, every time the lawyer recycles and updates a brief from an old case, he/she bills the new client for the time used to originally create the brief, and all the cumulative updates since). “Surcharges” of course (i.e., tacking the firm’s __% markup on to everything purchased for and billed through to the client) has nothing to do with billing for time spent by the lawyer. I understand that some of my colleagues endorse these methods, and maybe they know better than I do. But I still think it’s “greed,” and I reiterate that “rounding up” seems minor compared to the inflationary impact of these other techniques.
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