How do attorneys walk the line of advertising? Are law students still on the decline? To find out, Springfield Business Journal Editorial Director Eric Olson sat down with managing partners Pat Douglas of Douglas, Haun & Heidemann PC, Robert Palmer of The Law Offices of PalmerOliver PC and Richard Walters of Spencer Fane LLP, as well as shareholder Neil Chanter of Strong-Garner-Bauer PC.
Eric Olson: Describe the legal industry right now in one word.
Richard Walters: Efficiency.
Pat Douglas: Thriving.
Olson: Give me a second word.
Douglas: Specialized.
Neil Chanter: Competitive.
Robert Palmer: Transitioning.
Olson: Are there some types of lawsuits on the rise right now?
Chanter: We get more calls about medical malpractice than any other case. We get calls every single day. For every 100 calls you probably only get one you can actually take, but that’s the trend we’re seeing.
Olson: That has big implications.
Chanter: I think it is potentially a reflection of some of the major health care institutions and, getting way beyond the bounds of my expertise, their employee satisfaction.
Palmer: My firm also deals with catastrophic injury, but primarily in the automotive area. The general trend was actually down in crash readiness cases being filed – air bags, seat belts and brakes not working. Cars have become a lot safer today, and I like to think that my profession has helped contribute to that.
Douglas: What I see is a softening demand for litigation. Our clients are really in the mood for lawsuit avoidance mode. They want to spend money on the front end to avoid lawsuits on the back end.
Olson: What can be done in terms of structure and systems put in place?
Douglas: (Human resources) training, best practices, make sure their documentation is good, employee logs. They’re spending a lot more time in terms of prelitigation.
Olson: Do you think that’s true in terms of small businesses?
Walters: No, I think smaller companies are lagging behind due to the financial cost to keep those documents. Some of them are without that experience or knowledge that those risks are out there. I think it’s an education aspect.
Olson: What’s the difference between large businesses and small businesses?
Walters: In terms of larger firms, I have seen in-house legal assistance grow. They are increasing the number of attorneys in house and reducing the number of firms they utilize. If someone had 10 law firms they used, the list is now four or five. Companies want efficiency out of those firms. They want value with reasonable and steady rates and predictable legal fees.
Walters: It is a new frontier. Law firms will be much more challenged to provide that value.
Chanter: Transaction wise, it’s gone up for you hasn’t it?
Palmer: Transaction wise it has been up.
Olson: In terms of efficiency, what about technology?
Walters: Oh, yes. E-discovery is a monstrous cost component of litigation. We use it for everything. And the efficiency is not only in technology, but the days of a client demanding the law firm’s staff a matter with multiple layers of lawyers is a dinosaur. Companies do not want to pay to help train young associates. They want to see direct contact with someone making key decisions on the case.
Olson: Do you still do research with paper copies or is it all primarily digital?
Palmer: If you’re a dinosaur like me you still print everything out. I’m a lot older than the rest of the guys at this table, so I remember before all this e-stuff, but anyone who is under 40 who has come in the past five or 10 years is so much more comfortable working in the electronic media in terms of research. I’m impressed with how fast they are with this technology compared to me where it is a real chore to learn it.
Walters: We operate on the transaction side almost exclusively paperless. Everything is an email or a text. I may get two pieces of mail a day.
Chanter: Yeah, but the litigation side hasn’t quite caught up yet. You’re still filing and writing your brief for whatever purposes on paper. In Missouri, they are now storing them electronically, but it’s still the original document that was generated. Our office is constantly grappling with the fact that everything is electronic and is going digital, but we’re also dealing with the sort of lawyer DNA paranoia about not saving something. So we save everything in our office and we print it, too.
Olson: What are the challenges and difficulties with bringing on the new generations of attorneys?
Palmer: I’m going to be president of the Springfield Metropolitan Bar Association and it is a huge concern. I know everyone at this table will agree that they’ve never seen so many young people hanging out their shingle. When I was at law school at the University of Missouri, over 90 percent had a job ready with somebody before they took the bar exam and the rest got a job. If you couldn’t get a job you could become a public defender or get a job as a small county prosecutor and that has tremendously changed the education process of young lawyers. We saw law schools under stress and all of a sudden we’ve seen big firms collapse. We’ve seen lawyers going bankrupt, and we never heard of lawyers going bankrupt 30 years ago. It’s a different world.
Olson: Where do you see the industry headed?
Palmer: I think Neil touched on it when he used the word competitive – things are tougher. On my side, it’s when you see these advertising lawyers just swooping up the cases that used to be the bread and butter of good, hardworking people who were lawyers that tried to maximize recovery. That dramatically shrinks the number of lawyers who can handle those cases because they are being swept up.
Walters: I think you’re right and I think outside the United States, accountants, international accounting firms, can essentially practice law and merge with law firms. You’re seeing that in Europe, a lot of large accounting firms are essentially buying law firms. Obviously, that’s prohibited here in the United States, but you’re still seeing the outsourcing of discovery and review to nonlawyers with your LegalZooms and your GoDaddys. These legal services that would traditionally be performed by a lawyer are now being performed by some nonlaw firm entity.
Olson: What is wrong with direct solicitation?
Chanter: There is a rule in Missouri that a law firm or lawyer cannot send a direct solicitation to a client within 30 days. It’s a violation of the ethical rule. Sometimes it is an organization that is funneling people toward a particular law firm without the lawyer doing it directly. Then there’s past the 30 days. We see clients who will bring in stacks of mail of direct solicitation with law firms that have nothing to do with this individual. It’s offensive and one of the things that continues to create a bad name for attorneys.
Palmer: I could tell you some horror stories, but I’ll stick to one. My son was in a car accident and, thank God he wasn’t hurt, but my son ended up getting about 20 letters. I thought it was so amusing on day 31 that the letters just filled the mailbox. Apparently, they had a runner go to the police station and look at the police report.
Chanter: There are shadow organizations pretending to be vested in a particular cause, like trucking safety, that will scour for highway patrol reports for trucking cases. When a truck wreck occurs, they will contact the victim – direct solicitation under the guise of societal safety. It is almost impossible to prove the link, but they are funneling cases to the attorney who is closely related to that organization.
Olson: How can the bar or the industry police that?
Chanter: If you have a situation you find unethical, you are required to contact the ethics commission. We had a situation where a client who was in a truck wreck, well within the 30 days, was direct solicited by an out-of-state organization. So, we sent it to the ethics commission. The grey area is to define 30 days. Is it date received or date postmarked?
Palmer: If we take the next step, there are two, broad types of lawyer TV advertising. The type I find the public service type is if you have this situation you really should go see a lawyer, and then there are the others. It’s not nearly as bad in Missouri, but I’ve worked in Arkansas, go look at their ads. I am eating a meal and hear the screech of tires coming from the TV and turn around to see a woman in a pool of blood and her hand come out with a handful of money and the ad says, “If this happens to you, you deserve this money.” My God that was horrible.
Chanter: I think I’m biased because I grew up in the U.K., where there is no lawyer advertising. I’m coming from that environment to the advertising world here where it’s the fabric of the nation, that right to freedom of speech. I don’t think there is anything that can be done about ads. If I could give any public message, it would be to thoroughly research your attorney, regardless of whether they have been on TV.
Palmer: They have a disclaimer saying, “Don’t hire a lawyer solely based on advertising.” I would say never hire a lawyer based on advertising. Ever.
Olson: Billing by the hour has become less standard in recent years. Are any of you experimenting with alternative billing?
Chanter: Yes.
Walters: Yes. I’m a very big advocate in terms of what they call alternative fee arrangements. I think in the transactional practice, the billable hour rate is going to be a dinosaur because companies who live and die on legal budgets have to know a pretty reasonable, finite amount about what they are going to pay. So, my business is primarily on a fixed fee basis paid at the front. Frankly, it is freeing to the lawyer and the client.
Douglas: Absolutely. There’s no doubt that clients hate billing by the hour. They hate being billed for every little thing. For me, if I don’t capture every little thing, I lose my whole day. I’ve been adding more clients who want to go with a fixed fee on the front end instead of paying by the hour. The thing you have to watch is how you draft your engagement letter so it’s not an all-you-can-eat buffet.
Olson: Is the evolution affecting attorney pay, especially for young lawyers who aren’t joining large firms?
Palmer: Associate pay is going up because you’ve seen a 20 percent drop in law school enrollment. When you find those students with the criteria, personality and skills you expect, those individuals really have a lot of bargaining power.
Chanter: Have you seen a change in the work ethic of the new lawyers?
Walters: Oh, yes. The new lawyers are less concerned about money. They want to make good money, but they are more concerned about having a balanced life.
Olson: How much of your work are you doing through virtual offices outside of your brick and mortar building?
Chanter: We are a hands-on and physically centered practice. We certainly have the technology to do so when it’s needed, but that’s not our model. If I remove myself from my world, given the technology today I can’t imagine why you couldn’t do 80 percent remotely. I think sole proprietorships especially can do most of their work from home.
Walters: I travel a lot, so operating remote is the same as being in my office. All I need is a laptop and phone, and I’m good to go.
Palmer: Do you let people practice from home?
Walters: Yes, I do, but typically not on a full-time basis.
Palmer: Like maternity leave?
Walker: Yeah or people wanting to phase back in from an absence or take a Friday off. It’s pretty common for most firms.
Chanter: My wife invokes the car rule that when I get home I have to leave my phone in the car and it really is therapeutic. I’m totally In an effort to keep balance with my kids and my family that was one of the things we came up with.
Olson: What tips do you have for striking that balance?
Douglas: I grew up with an attorney as a father who was at work all the time and I resented the heck out of it. I grew up saying, “I am not going to be like that.” But despite my beliefs, I’ve slowly become that guy and I deeply regret that. You’ll never regret more time with your kids. There are other attorneys who can do the work you do. You’re not indispensable, but you are indispensible to your family.
Interview excerpts by Features Editor Emily Letterman, eletterman@sbj.net, and editorial assistant Barrett Young, sbj@sbj.net.
