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CEO Roundtable: Law

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What are the current trends in business law? Springfield Business Journal Editorial Director Eric Olson sat down with Deborah Dodge, a shareholder at Hall Ansley PC; Michael Miller, managing member of Lowther Johnson Attorneys at Law LLC; and Bryan Wade, a partner at Husch Blackwell LLP. They talked e-discovery, alternative billings and the impact of technology.

Eric Olson: Characterize the current state of law in one word.
Bryan Wade: Adapting. Technology is affecting how we practice law.
Deborah Dodge: Active. Because of technology, everything moves faster, and we are probably more efficient. The more positive word is, we are civil, despite everything – in our community in particular.
Michael Miller: Robust. There seems to be a lot of legal work.

Olson: What types of lawsuits are most active currently?
Miller: It seems there is an increase in business litigation – which could be dissolution of entities, or disputes between partners, or disputes between companies, maybe one employee going to another company. Also, lack of payments from one business to another.
Wade: It seems to me that employment disputes have increased over the past five to 10 years, much more so than what they were. The standard for successfully bringing in an employment claim has lessened. I think it costs less from a plaintiff’s perspective to bring the claim.

Olson: Is it easier now to file a suit?
Wade: There are other alternative dispute resolution forms, like the Mayor’s Commission, and it seems there are a number of employees taking advantage of that. That makes it tough for businesses, specially small businesses, to manage those issues.
Miller: Before the increase of technology and access to info, maybe employees didn’t know their rights. Now, with immediate access to information, they can find a similar lawsuit relative to their circumstances or maybe government supplements of information that says, “this is permissible,” or “this is not permissible,” and they can find out if they are right or wrong or can bring an action against the employer. Now they can type it in Google and see that, oh, this violates X, Y, Z actions and now I’m going to bring a lawsuit and get instructions on how to do that. And they use that to their benefit.

Olson: Do you think this is a reflection of society in some way?
Dodge: I attribute the increase in employment law cases to social media and that employers, in particular, supervisors, have this uncanny ability to be inappropriate with employees. We find a lot of issues that arise are, frankly, out of the supervisor or small-business owner feeling that he or she can be inappropriate and get away with it. With the ability to record and keep information, I think there is a way to say that there was not a “he said” or “she said” event.

Olson: What are the common ways managers and business owners are overstepping their bounds and drawing lawsuits from staff members?
Dodge: Choice words being placed on bathroom stalls that are pointed out and not removed, pictures taken of body parts and sent, it’s pretty much anything you can imagine that would meet that inappropriate line. We have an upswing in retaliation claims where an employee wants to follow the rules and where there’s a (midlevel) manager who is not following the rules. The employee reports that, and the employee gets fired.
Wade: Social media does change the way we communicate, and the workplace, the longer hours. Sometimes the lines get blurred if they’re on or off work, so it can create lots of circumstances that can be confusing to both the employee and supervisors.
Miller: It’s that use of media that you wouldn’t have said face-to-face, and that’s what leads to the way people take the meaning. And the supervisor says, “I didn’t mean it that way,” and the employee said, “Well, I took it that way.” It could be a very innocent thing that becomes much more than that because of the way people interpret it.

Olson: Do you use e-discovery?
Dodge: I think as long as we’ve had the ability to have a PDF file. The biggest issue we see with e-discovery is the cost factor. There are some computer programs that require certain software. So then it becomes who is going to hire who, and how are we going to have this info produced, and is this worthwhile?
Wade: I think we all communicate by email or some other computerized form, so now it’s in every case. The issue is, if you have to get into the metadata aspect of it, which is really the only time that kind of issue comes up, if you are representing a company, you want to be forthright and provide those emails. There is sometimes a question if a certain communication existed or not, and then you get into the expense of what the next step is. The federal courts have a pretty good protocol for dealing with that. The state courts are coming along.

Olson: What are the pros and cons of electronically stored information in the discovery process?
Miller: It’s rare not to have someone ask for e-discovery. But, as Debbie mentioned, what is the cost benefit analysis? And how much will the court require it to be produced? If it’s a $20,000 lawsuit, would it be worth the expense? Obviously not. But, if it’s a larger lawsuit, then it makes sense to get that information. I think the courts understand that, and I think they do their best to balance out cost versus benefit, and the burden it places on the parties. But, in federal court, it’s a requirement to produce whatever you can.

Olson: Have you experimented with alternative billing?
Miller: Our firm has used a variety of billing methods, depending upon the type of work. We do many types of law, estate matters, landlord actions, preparation of certain documents on a flat-fee-type basis, because we have a certain idea of how much that will cost, and clients like certainty. Often, they know they don’t want an estimate, they want to pay a certain amount. Some people need it for budgetary purposes. Hourly billing is still our primary model. We do have some flat-fee situations, and all of our injury-based workers’ compensation plaintiff cases are based on a contingency fee.
Wade: Alternative billing is certainly something we consider, but the majority of the work is hourly.

Olson: Hourly billing has caught some criticism with claims of driving up the cost of suits and maybe that method isn’t justified for the return the client gets hourly.
Dodge: The practice of law is fluid. We don’t know what a co-defendant or opposing side is going to do. We can’t control that, and I don’t know that you can punish your lawyer for having to react, respond and appropriately defend your position. It becomes problematic, especially in litigation, to ever offer something other than an hourly rate or contingency fee.
Miller: The first question, after we look at the case, is how much is this going to cost? I can take my hourly rate and give you an estimation of how much it will be based on how the case goes, but you never know what the other side is going to do. If they roll over, it could be cheap. But, if they show up prepared and want to push it, and if the attorney wants to do discovery, take a deposition and do a bunch of other things, all of a sudden the cost goes up. I think the key is good communication with the client and making sure they understand what is going on in their case so they can understand the cost and any increase.

Olson: What would a blended billing model look like?
Wade: A blended model is where you staff a case and there will be lawyers staffed on that project with that experience, who may have a higher rate and some with a lower rate. The blended model would be taking the higher-rate model and moving it down, and taking the lower-rate model and moving it up to blend that into one rate that makes the client happy. It’s a compromise. Then the alternative-fee billing comes up and one of the complaints the client makes is that, if they establish a flat fee or a cost for a particular project, they leave the law firm to staff it. So, if we are going to get a certain amount of money, we will staff it in the way we think it appropriate. Many times, the client doesn’t want you to staff it. They want to pick the lawyer who will work on the case, and so they would prefer to pay the hourly rate and get a bill every month and see who did the work and what they did and keep track of their project.

Olson: What about legal process outsourcing? I understand this to be contracting for legal or paralegal work. Could it be in-state or foreign?
Wade: It’s more prevalent on the East or West coasts, Chicago. But there are certain times where you see contract attorneys hired to do e-discovery matters, or paralegal staff to come onto a large project – whether it is corporate or complex litigations. It’s a vehicle to hold down legal costs if it’s a repeat project – for example, large documents to be reviewed for information. That’s very repetitive and doesn’t require a lot of supervision. You could potentially outsource that.

Olson: Do you see more merger and acquisition activity coming?
Miller: Fifteen, 20 years ago, there were larger firms coming in, people buying smaller firms, but I don’t see any large firms coming in to town to buy up smaller firms now. I don’t see firms merging that are local. That could easily change as certain firms age and don’t have a succession plan and may feel they should merge in order to continue.
Wade: Our firm joined with Milwaukee last year. Regional-size firms of 150-plus are looking for opportunities, but I don’t see that here.
Dodge: I think there historically have been some satellite offices that have disappeared. I think the beauty of the large firm is that they offer different departments. We have sophisticated businesses in Springfield, we have large businesses in Springfield, and they sometimes need sophisticated legal services that I’m not smart enough to provide. But it’s nice to be able to pick up the phone and talk to someone who does, and be able to help them with that.

Olson: Do you find attorneys are becoming more focused in their practice? Is that a way for younger attorneys to plan their career? Should they hone in on a specialization?
Wade: That would be very good advice to follow. The days of the generalist are probably going away. Our clients are much more sophisticated. They know that one particular lawyer won’t have all the answers for every particular situation that might come up.
Miller: I think it’s exceptionally hard to be a general practitioner. There are so many areas of law, and so much information out here. We all have a broad range of experience in many different areas sitting in this room, but we all have specialized areas of practice – not 13 or 14, three or four. A good attorney can pick up the phone and call another attorney in his firm who specializes in that certain area who will represent his client well. It’s hard to provide a skilled service in all areas of law.
Dodge: We are barred ethically to say we specialize in a particular area of practice unless we have some kind of certification in that area. So our office, because we are a small firm, we focus our practice in medical practice.

Olson: What are some of the best practices to recruit and keep the good attorneys?
Wade: A lot of the attorneys coming out of law school have a lot more debt than previously. That’s a big concern. We feel increasing pressure to pay more because of their situation, but that in turn increases the costs in providing services to our clients. It’s a pressure, but it’s a fact of life.
Miller: We use our culture as a main selling point for us. We try to get law students as clerks to clerk for us in the summer, to experience how we interact, to show there is more to practice than instant money when you get out of law school. We bring them in, show them our culture and that they are in a place they will want to work. The money will come if you prove yourself.
Dodge: We find that the folks we hire are folks who believe in equal access to justice. They have a philosophical similarity to those already with us. They want to serve the poor, and those without access to lawyers.

Interview excerpts by Features Editor Hanna Smith, hsmith@sbj.net, and Publisher Jennifer Jackson, jjackson@sbj.net.

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