Month: February 2018

Pittsburgh’s Use of Contract Attorneys: A Journal From Legal Network Ltd.

During the last seven years, most metropolitan localities in the United States have experienced an explosive growth in the use of contract or interim attorneys. In the last two years, the Pittsburgh legal community has begun to experience a similar growth in the use of contract attorneys. This article will provide a number of examples of how contract attorneys have been successfully used by Pittsburgh law firms and in-house counsel in the last year.

DOCUMENT PRODUCTION & DOCUMENT REVIEW

In the practice of law, there are instances when a large number of documents need to be handled, analyzed and compiled. These labor intensive projects are costly but necessary part of areas such as complex litigation and large transactions. For instance, Todd & Silverberg, a local law firm, recently economically staffed up for a large litigation project with the use of contract attorneys to assist them in their trial preparation. According to Cindy Chambers, Office Administrator at Todd & Silverberg, “the use of contract attorneys enabled us to find the right people to fit our needs. We were looking for a certain background and we were able to find contract attorneys who matched our required qualifications.” Chambers added, “based on the positive experience, we anticipate using contract attorneys again.”

In addition to staffing up with the right candidate, there is a substantial cost savings involved with the use of contract attorneys. According to an in-house attorney at a local company, “we use a law firm in Pittsburgh for some of our litigation needs and value the expertise they provide. We have found we can realize substantial savings by hiring a team of contract attorneys through Legal Network to work with the firm and unbundle the labor intensive portion of the litigation from the strategic piece.”

HANDLING PEAK WORK PERIODS

Law firms and in-house counsel all experience periods when the work load exceeds the number of available attorneys. In those situations, contract attorneys have allowed some Pittsburgh legal organizations to better manage those peak periods. According to Keith Cameron, Executive Director at Houston Harbaugh, P.C., “in the case of a medium-sized firm, you get surges of work and it makes no sense to staff up yourself. By using a contract attorney agency, we were able to find qualified attorneys quickly, and reduced the pressure on our attorneys’ time to a manageable level.” Cameron cited a recent example where “we had a project that needed immediate attention and no one in the firm had the time to commit. We found a qualified contract attorney to do the work and were able to free-up our staff for other projects.” Cameron pointed out, “the contract attorney with oversight by our full-time attorney helped us to finish the project on time with a high quality work product.”

Peak work periods also affect smaller legal organizations. According to David Tyree Esq., “with a two-person firm there are periods where we have more work than we can handle, and it is helpful to get someone in quickly who is well suited for our needs.” Tyree explained, “recently when such a project came up, I was able to locate an attorney through a local agency for 20-25 hours a week.” Tyree has been impressed with the attorney’s services and has continued to use him to handle work overflow while assessing whether there is enough business to warrant making a full-time offer.

IMMEDIATE EXPERTISE

There are also instances where law firms and in-house counsel face projects which can not be serviced through the organization’s own attorneys. One example of this experience occurred at Rothman Gordon, P.C. where an impending project required an attorney with both a specialized background and an out-of-state bar license. Recognizing the need, the firm sought the services of Legal Network Ltd. and was pleased with the result. David Charnock, Office Administrator at Rothman Gordon, P.C. explained “Pittsburgh firms traditionally cannot warehouse lawyers, so there is a need not only for temporary attorneys, but for qualified temporary attorneys. The name of the game is to service a client in a timely manner with quality service.” Charnock added, “our experience with contract attorneys met both of those objectives.”

Old Republic Insurance Co. (“Old Republic”) also looked for specialized contract attorneys to work on several projects which in-house attorney did not have time to address. Instead of sending the work out to a law firm, Old Republic engaged a local contract attorney organization. According to Martin Bertocchi, Associate Counsel, “it would have been too expensive to use an outside law firm because of the time they would require to get up to speed on the intricacies of his business.” However, Bertocchi found a contract attorney agency to locate an attorney with the necessary insurance defense skills specific to Old Republic. Bertocchi was extremely pleased with the final outcome explaining “the attorney, because of her specialized skills, was able to familiarize herself with the intricacies of [Old Republic’s] business quickly at a cost that was less than the basic paralegal charge from most outside law firms I employ.”

Besides satisfying the need for immediate expertise, contract attorneys have proven to be very profitable for law firms. For instance, Keith Cameron noted “Houston Harbaugh had one project where a contract attorney was plugged into an on-going operation to fill a surge of work. The contract attorney, benefiting from 25 years of related experience, has handled the matter extremely efficiently and correspondingly has been extremely profitable for us.”

STAFFING DISCRETE PROJECTS

Often there are a number of related burdensome projects which can be removed from a permanent attorney, bundled into a project, and outsourced to a contract attorney. This strategy has been implemented at a Pittsburgh-based Fortune 100 company. A number of similar environmental projects were packaged and assigned to one temporary attorney. According to the in-house counsel at this company, “by outsourcing through Legal Network, we identified a qualified environmental attorney interested in handling all of these projects on a part-time basis. Our goal is to gain efficiencies from having one attorney handle these similar projects to free in-house attorneys’ time to focus on other issues.”

MATERNITY LEAVE & OTHER ABSENCES

Almost every legal organization faces unplanned instances where members of their full-time staff become unavailable. Situations such as maternity leaves, disability, leaves of absence and other related temporary circumstances can put a strain on a legal organization’s ability to service all of its current projects. A local law firm recently faced a maternity leave in one of its practice areas. They contacted a contract attorney agency to find an experienced and qualified attorney to assist for a three and a half month period. At the conclusion of the assignment, the law firm had met their client’s needs without any disruption and gave the attorney an opportunity to utilize her maternity leave without undue pressure for a precipitous return.

TEMP-TO-PERM PLACEMENT

Contract attorneys often receive offers of permanent employment after having impressed a client with their professional ability. One local example of this occurred at Nils H. Ljungman & Associates. Nils Ljungman explained, “I like to see how a candidate will perform in my organization before I make a patent attorney a full-time offer. Employing an attorney for a short period under this arrangement has worked out very well for me.”

However, local experience has also illustrated that some employment situations are not always appropriate for a temp-to-perm contract attorney. One of the area’s largest law firms, which asked to remain anonymous, attempted to use a temp-to-perm arrangement with disappointing results. The law firm found that it proved difficult to attract contract attorneys who had (i) impeccable academic qualifications, (ii) impressive work experiences, and (iii) a willingness to join the firm full-time as a contract attorney. It was finally observed that attorneys with these credentials are usually already employed full-time and do not wish to work on a contract basis.

Engaging a qualified contract attorney agency can often eliminate most of the frustrations noted above. The use of an agency familiar with the local market and law firms should be able to properly understand what the organization needs and set appropriate expectations with the contract attorneys.

CONCLUSION

As recent as the December 1996 edition of the ABA Journal, the use of contract attorneys was reported to be an effective delegation tool. The article stated that in the information age, law firms can’t afford to be isolated citadels jealously guarding clients. Rather, they should adapt to the freer movement of people and information in order to better serve clients through alliances and networks.

The use of contract attorneys is also a development which mirrors an evolution in the American workforce. Locally, contract attorneys are now being successfully used by many organizations to enhance efficiency and profitability. Based on the documented success in Pittsburgh and the growth nationally, contract attorneys will probably be used with increasingly frequency in the Pittsburgh marketplace.

Lawyers For Rent

How Legal Networks Ltd. is helping free-lance lawyers and local businesses by providing technical, niche-oriented legal service projects that bring the two together cheaply

By Daniel Bates

When the former Ben Franklin Technology Center of Western Pennsylvania faced massive mismanagement and a government investigation into other improprieties, the government leapt into action.

It fired the top management and all but closed the local state-funded program that was supposed to spur economic development by funding the commercialization of new technology.

But then the completely revamped center, now called Innovation Works, found itself with a rather odd and cumbersome legacy: more than 400 funding contracts with local technology developers, in which the recipients promised to pay royalties to the center if and when the technologies became revenue generators. The problem was, few had ever paid royalties. Worse, nobody had monitored or enforced the agreements.

Enter Innovation Worksı corporate counsel, Klett Leiber Rooney & Schorling. According to Doug Goodall, director of Innovation Works, the law firm acknowledged that someone needed to review all of those contracts to make an assessment of who might owe what.

That someone needed not only legal expertise in the area of contracts but also a technical understanding of technology transfer and development ‹ as well as the time to commit to such an enormous and unusual project. This wasnıt something Klett Leiber wanted to tackle ‹ nor could this government program afford to pay its hourly rates for the project.

This was a job for Legal Network Ltd.

Legal Network Ltd. is, in effect, a temporary services firm that gives companies access to a database of more than 2,000 attorneys who either work as sole practitioners or have been downsized out of their corporate counsel jobs and decided to free-lance their services. Clients pay between $50 and $100 an hour to rent an attorney, who is hired on an hourly or project basis. The firm then pays each attorney an hourly rate, but only for number of hours worked.

This alternative form of practice gives attorneys the freedom to pick and choose assignments without having to hustle new clients themselves. In fact, many on file are sole practitioners who use the service to fill in the gaps during slow periods. As Karl Schieneman, managing director of this 5-year-old firm, notes, the attorneys best suited for this kind of work are ³not the rainmakers in law firms.² Rather, they often are the ones with the best technical expertise who are good with document review, research and other sometimes tedious legal work.

For clients such as InnovationWorks, the service gives them access to a large pool of attorneys with often highly technical niche expertise, without having to pay the much higher prices of a large law firm with lots of overhead expenses.

Michael Betts, a Blawnox-based sole practitioner who specializes in commercial corporate litigation, often turns to Legal Network to help fill the legal ranks in particularly large projects.

³It works very well for me because Iım able to manage my overhead a lot better than if I had to hire other lawyers,² Betts says. ³I use the services when I have a major or more complex matter that requires more than one lawyer, or if things have to be done in a certain timeframe. A lot of those projects are cases where I need a lot of document review or research.²

Legal Network Ltd. is the brainchild of Schieneman, an attorney who earned a masterıs degree from Carnegie Mellon Universityıs Graduate School of Industrial Administration in 1992 and a law degree from the University of Pittsburgh. His partners in the firm are Brad Franz, an attorney with Houston Harbaugh, and Lawrence Kolarik, a national accounts manager for ADP.

Schieneman came up with the idea while working as an associate-on-contract with Pittsburgh law firm Marcus & Shapira. He had been hired on contract specifically to help with a large lawsuit against Phar-Mor during its sizable financial scandal.

³No. 1, it got me through the door without having to go through a difficult hiring process,² Schieneman says, ³and my performance is what opened up new doors.² The idea of being hired on contract to work on a project, he says, ³appealed to my background of being a businessman and a lawyer.²

While continuing to work for Marcus & Shapira, he formed Legal Network in 1995, and by 1996 was breaking even. In 1997, the firm experienced 200-plus percent growth in revenue over the previous year.

³I thought we were catching the national trend at that point,² Schieneman says. ³After all, itıs the fastest-growing segment of the professional services industry. Itıs a $500 million industry that is growing at a rate of 30 to 40 percent.²

At the same time, he found it more and more difficult to manage on the side. So he ³took the leap.²

Today, the firm employs three full-time people and maintains an active database of more than 2,000 lawyers. Active lawyers, he says, likely will earn between $60,000 and $100,000 a year, annualized. Schieneman says the firmıs revenue this past year was expected to climb to between $1.5 million and $2 million, although he would not be more specific.

³But thereıs no overhead involved here,² Schieneman says, except for the small office space his firm occupies in the Regional Enterprise Tower in downtown Pittsburgh.

Back at Innovation Works, Doug Goodall says he liked Legal Network because it has ³a cadre of specialists who are available on a free-lance basis.²

For its contract project, Innovation Works hired attorney Patricia Koehler, whose background was in technology transfer and development, through Legal Network. She set up shop full-time in the organizationıs offices, offered an initial assessment of the scope of the problem, then set out to scrutinize every one of more than 400 contracts that had been established over the past 10 years.

As a result of her work, Innovation Works has secured a commitment from the funded companies to pay back nearly $600,000 in royalties, and Goodall expects that number to increase as the organization moves forward in its effort.

³It not only was a legal issue but a technology issue,² Goodall says. ³And [Koehler] did a masterful job for us.²

So masterful, in fact, that, when the Legal Network contract between Koehler and Innovation Works ended, the organization secured her services directly for future projects.

Says Schieneman of his success: ³Itıs a fun business when youıre helping lawyers and helping businesses solve their problems.²