Client Salaries Stagnating; Associates Getting Frozen Out; Who’s Making All The Money?

Client, remembering meeting that highly personable, well-established trial lawyer on your recent trip to the law firm? The one with the corner office and custom suit? He’s not in his office today because there is no other new client seeking a law firm to hire and he has no intention of working on your matter. Did you call the team of lawyers you ended up with? Could they answer any of your questions directly or did they need to “check with someone (i.e. senior partner)” before answering your question?

This week’s news reported that in-house counsel salaries over the past two years have frozen yet the companies are requiring those counsel to take on more work. This week’s news reported that one BigLaw firm, Reed Smith cut the pay of first year lawyers, the very crop of talent they expect to make their margins on in two to three years.  I have yet to see a story where any BigLaw or other firm announced hourly fee cuts or even freezes on rates for the coming year to ease the burdens on clients.

What is the irony and similarity in these stories? The people working the hardest have the most to do and are being paid the least amount of money. This inequity can only result in the following: exhaustion, burnout, fatigue, illness, lack of motivation and the overwhelming feeling that there is no way out.

Why do I paint such a bleak picture? Because I have seen too many clients think they are selecting the best counsel only to have the work land back in their lap along with legal bills that are far too high for the value transferred to the company. The law firm always rolls out the A team to land the business. Rarely does the client meet the team let alone meet the person/partner (maybe) who will lead the team. Rarely is the client even told it will take a team of up to ten attorneys, meeting together at least one hour per day, to stay abreast of the legal matter.

How do you put a stop to this? Ask a few questions during the hiring process, assuming you have been given any control over this process, before the legal engagement begins:

1. Who will lead this case from start to finish? What percentage of time do you expect the leader to put in?

2. What is the trial experience of that person? Number of trials as lead lawyer, to a conclusion, the result and the offer and demand headed into trial.

3. How many assistant lawyers or paralegals should be expected to be assigned to this matter and who are they (ask for resumes). Make sure the bill contains only their names and not other strangers. How many meetings and when are they likely to be held to advance the matter?

4. Does the firm bill in minimums? For example, it is highly common to read BigLaw bills where a paralegal bills 8 hours a day for managing the case file. What this means, how many documents are processed and how it advances the legal status of the case is anyone’s guess.

5. What is the overall case plan based on what little is known at the outset? What is the estimated budget for that plan? What variables could affect that budget? How many first and second year lawyers will be part of the plan?

6. What work is expected/required by me, in-house counsel, to advance this legal matter to a conclusion. Estimate the hours and time frame.

What good will it do you to ask these questions? At a minimum, you will approach the matter with your eyes wide open as to what type of hit your annual budget will take and what type of hit your own personal schedule will take to support the matter. Of course, the turnkey firm that can give you personal service, from a trial partner (if it is a dispute) with a reliable budget will beat almost any other offer you hear.

In the end, you will know what you just signed on to if you hire that firm. If you pick the firm where your frat buddy works, or is nearby, or just happened to be the last firm you hired, you get what you deserve. But then again, the choice of outside counsel is not always yours to make or veto. But if costs, efficiencies and results are important, along with morale, and a balanced life, you need to be more vocal about the process. After all, if you’re in-house counsel, it’s your life that will be affected along with the outcome.

Do You Have Your Case Budget Yet?

Clients, can we speak frankly?  Do you have your budget for your most recent piece of legal work yet?  Did you ask for one?  Now is the time to insist on a detailed litigation budget.

The case budget is an essential tool for litigation management.  It forces your lawyer and you to carefully examine what is in dispute, what is required to prove or disprove the allegations and the costs associated with this process.  The best example I’ve heard to analogize to the need for a budget is to compare a house rehab project with a budget and plan and one without.  Under each situation, the rehab job will eventually get done.   But with the budget and plan in hand at the outset, all parties know what it will cost to a reasonable degree of certainty, the right parts are installed at the right time and the outcome usually matches the plan.  The rehab project that is done on an “as you go” basis usually finds that steps were missed, costs are surprisingly high and some essential component is missing or incorrectly installed.

Requiring a budget from a lawyer is not asking for rocket science.  The lawyer will resist the effort, will delay or ignore the request and fill the budget with assumptions and disclaimers.  But think of it this way, if a doctor can create an annual budget for his research to cure cancer, or a scientist can prepare a budget for the cost to launch the shuttle on its next trip, then a lawyer should be able to calculate the costs to bring the litigated matter to a conclusion.  A lawyer familiar enough with the litigation process, and the billing process should be able to estimate the costs in a matter.

Plus, no one says a budget is set in stone.  Of course, a case changes course due to other parties, court rulings, the court calendar, and the behavior of one’s opponent.  But these events occur in all cases and should be taken into account in a budget.

Creating the budget should not be the end of the process though.  It is essential on at least a quarterly basis to compare the actual bills to the budget to determine if the case is following its predetermined course or is off-track.  This short review should tell the client if the case is progressing as anticipated and at the cost projected.

Clients, you have a right to know what the litigation is going to cost.  Lawyers have the knowledge and ability to complete this task.  You should insist on a detailed budget that itemizes the activities expected to be undertaken, the attorneys (by name and rate) who are expected to perform the activities, and allow for a category on the budget that covers case reporting and correspondence.  Whether you use a form your company designed or use the ABA Billing Codes, or allow the lawyer to explain the activities and cost in his own form, it behooves the client to insist on a budget before proceeding with any activity.

 

How Many Lawyers Has Your Firm Driven To The Great Legal Tragedy?

Lawyer suicide: the final option.  Robert Ambrogi called the suicide death of a highly respected lawyer The Economy’s Most Tragic Consequence. The ABA Journal featured the story as A Death in the Office. Law.com followed with a blog piece about another lawyer’s suicide in Wisconsin this past month.  While GP Solo author Mary Robinson writes this month that “”we are not tough enough on the depressed due to the great pain they inflict on people around them” and “the great harm they cause to clients.”

The public disdains lawyers, often eager to tell the latest malicious joke about them.  Clients hope to avoid the lawyers and their bills regardless of how dedicated a team of lawyers worked on the client’s matter.  Law firms want more hours and clients from their lawyers not less hours or happy employees.  But “they”, the group of lawyers who are ill with depression, have no one to protect them.  That is the great legal tragedy.

Is Lawyer Depression And Suicide Really A Problem?

A “1990 Johns Hopkins University study found lawyers were nearly four times as likely to suffer from depression as the average person.  Other studies have shown that lawyers are two to six times more likely to be clinically depressed than people in other lines of work.”  Mark Hansen, The Less Final Option.  Suicide rates among lawyers have risen dramatically.  The Illinois Lawyers Assistance Program reports a 9.2 percent increase of clients with psychological issues over last year, and a 363 percent increase since 2001-2002.  Id. Tennessee had nine lawyer suicides in an 18 month period between 2005 and 2006.  Id. Other state bars report averaging one lawyer suicide a month.  Id.

What Is The Cause?

The comments that followed Robert Ambrogi’s blog (The Economy’s Most Tragic Consequence)  blamed the suicide on big law, rainmaking and billable hours.  A few comments noted the reality of depression on the sufferer and its possible role in the lawyer’s decision to kill himself.  The ABA Journal and Ambrogi blamed the economy causing layoffs of rainmakers.  The lawyer’s history indicated he had struggled with depression in years past.

I submit that those persons seeking to explain the suicides and rampant depression among lawyers need to better understand the pressures that blew the lid off the boiling pot.  Of course, we cannot go back and ask the victims what was the precipitating event or the last straw.  And not every lawyer that bills long hours or is pressured to bring in clients is depressed and contemplating suicide.  But we can glean some interesting information from the daily news.

Lawyers can fall out of society’s norm and into depression in multiple ways, the job pressures being only one factor.  Relationships, happiness, lifestyle, genetic makeup or financial troubles are other stressors.  This blog focuses on the law firm environment; other blogs will address the other factors down the road.

What Is A Firm Supposed To Do With A Depressed Lawyer?

At a law firm, it could be that the root of unhappiness is due to the lack of rainmaking skills, or low hours/low profitability, or a firm that outgrew its workload and pink slips started appearing around the firm.  But illness, particularly depression, virtually guarantees that a lawyer cannot survive the demands of the law firm given the nature of the professional code of conduct, the cost of treating depression and the lawyer’s depression’s financial impact on the firm.

Depression is experienced by virtually everyone at some point in their lives.  Depression  can be of short term duration due to recovery from an illness, a tragedy involving a close friend or family, or a relationship or lifestyle issue.  Depression can also be of long-term duration due to an imbalance of chemicals in the brain requiring medicine and ongoing treatment over a period of time.

Regardless of duration, “lawyers who suffer from depression become overwhelmed by seemingly routine legal or administrative tasks; sometimes they literally are unable to bring themselves to look at files, to return phone calls, or to open mail.”  Mary Robinson, GPSOLO, October/November 2009, p. 33.  Depression can inhibit the lawyer’s ability to exert any rainmaking skills, to bill hours, to maintain a caseload or any timely contact with clients.

Law Firm Options

Regardless of the law firm size or whether the lawyer is a partner, an associate or in-house counsel, the ABA Model Rules of Professional Conduct Rule 5.1 impose a duty on partners and supervising lawyers to do something.  For all we know, this duty drove the decisions of the law firms that let lawyers go because of depression.

Rule 5.1, parts (a) and (b) impose on partners and supervising lawyers to oversee the conduct of lawyers within the firm or organization.  This Rule has broad sweeping language that could impose a duty (but not vicarious liability) on the partners to do almost anything when it learns that a lawyer has a medical problem.

Some BigLaw firms have employee assistance programs and help the employee work through their problems.  Others terminate the employee upon first notice of a problem having no desire to “carry him” or “supervise and oversee his work let alone one’s own caseload.  In short, the lawyer is viewed as a liability.  Some firms think clients will pull files should they learn of the illness so the firm’s act first and terminate the lawyer.  While other firms think their duty under Rule 5.1 (or its similar rule in their jurisdiction) is to conduct a full medical and psychological armchair investigation, despite having no medical training and the plethora of laws implemented at the federal and state level to protect an individual’s medical privacy.  One author maintains that the ADA does not offer refuge to the depressed lawyer and accommodations need not be made for the lawyer.  GPSOLO, p. 11.

The decision to fire the lawyer upon notice of depression is troubling.  This action assumes that no amount of time or treatment or oversight could solve what might be a temporary problem.  The consequences can be harsh though if a lawyer in the midst of depression must now struggle with a job loss.

The decision to conduct an armchair medical investigation is even more troubling because of the number of laws it treads upon and the lack of training by lawyers to conduct such a witch hunt.  Yet the Model Rules provide no guidance as to the extent to which a firm must proceed to ensure the client’s work is being performed timely and competently.  Must the firm get a doctor’s report (and violate HIPPA)?  Must the firm require the employee to see a psychiatrist?  Should the firm be privy to the results of the exam?

It strains credulity to believe the Model Rules contemplated a full blown medical analysis by lawyers in a firm thereby violating every law on employee privacy that one can think of.  Yet Rule 5.1 is not restrict in breadth or depth and can be used to destroy any lawyer’s career directly (through firing) or indirectly (leaking the medical information to the legal community).

Did Rule 5.1 Have Anything To Do With The Recent Tragedies?

It is not for me to say whether the recent suicides by the lawyers and judges were pushed by their firm’s carrying out Rule 5.1 in its harshest form and terminating them or whether inadequate billable hours, small caseload size or poor rainmaking skills was the final straw or something completely unrelated to the workplace.  But one can say that this Rule 5.1 overly broad statement of duty hands a law firm a convenient way to discard the very serious problem of a lawyer at risk rather than encourage the law firm to find a solution to help the lawyer.  Certainly any lawyer aware of the Rules would be loathe to disclose to his firm or friends his depression and its depth if the potential consequences are investigation or termination.  Keeping the problem silent also is not an acceptable answer.

Many people function on many types of jobs with anti-depressant treatment, just like many people function with other disabling illnesses that require daily medication: heart disease, cancer and diabetes to name a few.  The compassion shown in addressing those cases should be extended to lawyers before another one is pushed to the edge of the abyss.