Month: May 2019

Popular Legal Network staffing firm moves into management consulting

“It’s not my grandfather’s law firm anymore,” a law firm partner recently joked to Karl Schieneman, managing director of Legal Network.

Legal Network had just helped that firm — whose identity it cannot disclose — staff a short-term project and obtain space fully equipped with computers and a high-speed modem, a capacity the firm didn’t have. It did so in a matter of days.

Until recently, Legal Network has primarily been a provider of temporary lawyers, helping law firms manage and staff short-term projects. It’s been a sorely needed service as a sluggish economy has law firms fighting to keep overhead low by keeping permanent employees at a minimum.

But now Legal Network, which was formed in 1995, is branching into a whole new area, launching a consulting practice to help firms manage their own businesses more effectively.

Schieneman believes the time is ripe for such a service as fluctuations in the economy, advances in technology and increased competition for clients have all conspired to force lawyers to think like business people. It’s a role they’re not trained for and one many are uncomfortable taking on.

“Lawyers are not taught business or management principles in law school,” said Jim Jarrell, who was just brought in to head Legal Network’s new consulting practice.

“Lawyers are generally not encouraged to develop business knowledge,” he said. “This lack of exposure has definite consequences. Law firms often miss opportunities to build and maintain their client base by failing to fully understand business processes.”

Formerly general counsel of Columbia Gas Transmission Corp., Jarrell had revamped that company’s legal department, saving it more than 12 percent in legal costs by, among other things, carefully selecting outside law firms, choosing those that operated most efficiently.

Jarrell also streamlined the company’s in-house legal department, involving his legal staff in the company’s business so that lawyers were not seen as impediments to business, but rather as active participants in the shaping and building of the business.

This is the crux of Legal Network’s consulting service: to teach lawyers that they need to understand the intricacies of their clients’ businesses. The consulting practice also will help law firms operate more efficiently, helping them maximize profits and generally operate in a way that will give them a much-needed edge in an increasingly competitive legal marketplace.

“Clients will, given the choice, choose firms that demonstrate an understanding of business,” said Schieneman, 37, a University of Pittsburgh Law School graduate who also holds a master’s degree in industrial relations from Carnegie Mellon University.

As consultants, Legal Network won’t be just foisting a business model on law firms but will be working within a law firm’s corporate culture.

“A distinguishing feature of our consulting division,” Schieneman said, “will be to offer focused and specific advice for regional clients as opposed to leveraging similar solutions to a large number of customers.”

Even when its business primarily was legal staffing, Legal Network enjoyed a first-rate reputation in the Pittsburgh legal community, representing 23 of the city’s top 25 law firms.

“Legal Network has a very innovative approach to the problem of obtaining lawyers for particular projects,” said Fred Egler Jr. , president of the Allegheny County Bar Association, which has endorsed Legal Network as a provider of temporary legal help.

“They understand economics,” he said, “and the difference between throwing large numbers of people at a project as opposed to structuring a project in a way that benefits the client and the lawyers.”

Even before it formally launched its consulting practice, Legal Network had already begun advising law firms on economic matters. Among other things, Legal Network developed software known as StaffRite, a program that enables law firms to measure the economics of using temporary workers vs. hiring additional permanent staff.

“It ties into my CMU geek-side that has been a bit undernourished,” Schieneman jokes.

Legal Network knows how to manage its own business: It’s been ranked No. 204 on the Inc. 500, a list of fast-growing companies compiled by Inc. magazine that ranks firms that are “notable as exemplars of financial fitness in a fitful economy.”

While many companies are laying off personnel or filing for bankruptcy, Legal Network is thriving.

“If we closed our doors today,” Schieneman jokes, “we’d still have had our best year ever.”

Local Job Market Offers Hope

Employment is available for new lawyers and seasoned professionals thanks to an upward swing in the local legal field. According to Lynne Berkowitz, a partner with Berkowitz & Associates located in Shadyside, as long as a new lawyer is willing to learn and work hard, jobs will come her or his way. “Firms are continuing to use their own resources to recruit new associates like through a summer internship,” she said. “There is also a trend to hire more laterals and people with more experience.”

“There’s a need for people to walk right in and do the job and spend less time training,” continued Berkowitz who has been a partner with her firm for 13 years. Karl Schieneman, director of The Legal Network, agrees with Berkowitz’s assessment. “The use of contract attorneys for law firms is a way to bring in an experienced attorney to match a project,” he continued. “It eliminates the overhead of trying to find work for people. Also, when the staff is at an all-time low, firms can bring in people on a contract basis. It’s a substantial trend we’re seeing in Pittsburgh.”
According to an article that appeared in the April edition of the National Law Journal, many employers routinely farm out systematic tasks such as document review to armies of temps. Today, lawyer temping may be the hottest segment of the staffing industry. Analysts peg the market at $300 million to $500 million a year, with an annual growth rate of 25%-40%.

“The use of temporary employment is a strong trend. It’s the fastest growing (trend) at 35%-40% a year,” explained Schieneman who, in addition to being director of The Legal Network, has also been a practicing contract attorney in Pittsburgh since 1995. At small firms, the trend is more dramatic, especially when the market for new lawyers is soft, and where the small firms pay new hires by the hour. This employment practice lets them try out lawyers and to adjust their labor costs and their needs. The temp attorney trend is partly reflected in the National Law Journal’s 1998 survey of the nation’s 250 biggest firms. Eleven respondents listed 5% of their attorneys as temps. At three firms, they exceeded 10% of the total.

“Things go in cycles,” explained Berkowitz. “The better the economy, the better the chance to find a job. We tell kids to focus on what they love. “While the hiring of contract law is on the uprise, areas such as litigation, corporate law, securities, labor, environmental law, intellectual property, and employment law are the hottest areas for lawyers in all stages of practice to find employment. “I think the Pittsburgh legal market has picked up in the last 18 months. In the past two years, hiring has picked up,” said Nora Barry Fischer, an administrative partner at Pietragallo, Bosick and Gordon, a law firm located in downtown Pittsburgh.

“It was difficult for people to find jobs but now the job market has become bigger and better. Local law firms are expanding and younger people have an advantage because younger attorneys are more in tune to computerized research,” she continued.

Fischer believes another reason jobs are proving to be more plentiful for young people is because they are learning to do more with their law degree.

“People have discovered that with a law degree you can do other things,” she revealed. “People are leaving law firms and starting their own businesses. When we hire, we like people to know something about litigation because they will spend a lot of time [litigating] and doing research.”

According to John T. Rago, Associate Dean of Duquesne’s Law School, in the late Œ80s and early Œ90s, hiring practices had come close to an all-time low. Summer associate classes, which once held 25 aspiring lawyers, dropped drastically to ten students per class. Despite the statistics, Rago believes that hiring is on the upward spiral.
“Between 1993, 1994 and now, a number of firms said they had an upward swing in hiring in environmental, litigation, and labor,” he explained. “A lot of people don’t hire people directly out of law school; some hire the best and brightest students. Starting salaries run the gamut and lateral employment is on the increase.”

Rago also said that Allegheny County is unique because 25 or 30 decent-sized law firms have four or five full-time lawyers or fewer. Allegheny County is second for lawyers per capita only to Washington D.C.

“More and more students are able to migrate to other parts of the county 38% of the entering class is from out of the state,” continued Rago. “We encourage students that law schools don’t want to train people in one genre.”
Rago also went on to say that a lot of lateral hiring is occurring because firms don’t want to train new lawyers directly out of law school.

“Hiring laterals brings in business and that’s something that lawyers with three to five years experience can do,” he insisted.

“A person fresh out of law school can not do that, but they are energetic and ready to do the work. I’m optimistic that law will continue to be strong and there will be entry-level jobs for people to get into. Some firms are top heavy with partners and some are not,” Rago continued. “You have to make the decision based on the individual firm. I think everything in this business is in cycles and when they are too lean, don’t be too sad and when times are happy don’t be too happy. We have to prepare our students for that.”

Schieneman believes that the trend of hiring contract attorneys will continue to flourish and temping will be one of types of employment that new lawyers may choose.

“The use of temporary employment is a strong trend. It’s a way to bring in an experienced attorney to do one project as opposed to several lawyers doing it,” explained Schieneman. “The Pittsburgh marketplace is stable to declining and law is a service industry and contract work allows them to better control their costs.”
Mark Nowalk, a partner at Thorpe, Reed and Armstrong and head of the firm’s recruiting committee, revealed that his firm has hired laterals in every department.

“We look to fill any needs that we have in specialty areas. We hire both laterally and through our summer program. Salaries have risen for people out of law school and that makes it competitive.”
The competitive salaries combined with various levels of experience have given new hires the edge needed to further their careers.

Mary Austin, a member of Eckert, Seamans, and Mellot, has noticed a lot of trends in her nine years with the firm.
“People seem to be carrying different titles for whatever reason. You see more contract and part-time lawyers and that includes men and women,” she said. “Most of the larger firms are hiring people out of law school and summer programs.”

According to a Wall Street Journal article published May 19, 1997, clients don’t want associates reviewing documents with the meter going at $150 an hour. When a temp can do it for less than a third of that amount, the firm has revenue of about $3 million in its first year.

The article also said that law school graduation rates have stayed high, while the growth of law partnerships has slowed in the 1990s. Combine that with the exodus from big firms of people fed up with the profit-maximizing grind, you end up with a lot of incredibly talented people on the temp market.

In addition to seeing employees carrying several titles, Austin has also noticed a lot of employee movement. “Each year you have attorneys moving to different firms and now you have people who have worked at different firms. Employers are looking for excellence and hard workers,” Austin predicted. “There seems to be an amount of willingness and some firms are more flexible than they used to be. If someone has the skills, then [the firm is] more flexible.”

“There’s a lot more movement on all levels and I think it’s based on economy. When demand is greater than supply, then the market is favorable and the firms can be more demanding and rigid over what they want, ” she continued. “Firms are also trying to be more diverse. I think that new graduates are finding jobs in both smaller firms and larger firms depending on what the firm needs.”

Berkowitz disagrees. She feels that over saturation of the market combined with contract hiring makes finding a job a hard task. “It’s harder now,” she insisted. “You have to have done better in law school and undergrad. There has been an excess number of attorneys turned out than there are positions to fill,” she said. Although he strongly condones contract lawyers, Schieneman is quick to say that people are still making partner in firms, no matter how hard the road is to that goal. “If the market isn’t growing and people are making partners already, you are dividing a shrinking pie. People know that they can do other things and still practice law,” he said. There are people still making partner, but you have to be good at drawing business and not just at law.

“I hope that the new generation of lawyers will become successful,” continued Schieneman. “I think people should understand that it’s not easy to make partner and if you enjoy practicing law, then partnering doesn’t have to be a goal.” Although partnering may not be a goal of all students coming out of law school, many do hope to be given a full-time job in a respected firm. They also hope to be able to advance in the firm and strengthen their career by working hard and remaining dedicated to the firm. Fischer feels that even though finding full-time employment at a firm may be a dream of new lawyers, she warned that part-time employment may be an option. “Part-time employment is another trend,” she said. “We see the benefit of it in our firm. There are people in our firm who have gone part-time. We get [the benefit] of people’s expertise and training, and we see it as a win-win situation.”
Michael Lynch, a partner at Kirkpatrick & Lockhart, agrees with Fischer but cites that Pittsburgh was not always the hottest city in which to find legal jobs.

“When I first got out of law school, most people looked at finding jobs in New York, Washington D.C. and Los Angeles. In the late Œ80s people became more interested in cities like Pittsburgh because of families,” shared Lynch who is also chairman of the firm’s Pittsburgh hiring committee. Since becoming a partner with Kirkpatrick & Lockhart in 1986, Lynch has seen a number of employment trend changes and developments. Lynch asserted that law firms don’t just gravitate towards hiring people who have earned a law degree, but they tend to hire people who possess a well-rounded education.

“At our firm we hire lateral candidates but most are hired out of law school and some are hired through the summer program,” explained Lynch, who has been chairman of the firm’s Pittsburgh hiring committee for the past 2-_ years. “We are very open to lateral candidates, but we do like to bring in law students. We also like to bring in people who have a history of strong academics and who are very articulate and who have good analytical skills.”
“For those who are already out, in addition to having the same qualities [as new hires], we look for someone who specializes in certain areas, and someone who has spent a few years learning the specific area so they can hit the ground running in that area,” he continued.

“Recently, there’s been significantly more lateral movement in the firms,” surmised Lisa Pupo Lenihan, former managing partner and founder of Burns White and Hickton, a Pittsburgh-based firm. “When I first got out of law school and started [in the profession] you got with one firm and you stayed there,” she recalled. “Now, there’s more movement and it’s easier for lawyers to find jobs.”

Lenihan, like many other lawyers, feels that the hiring of contract lawyers is a hot trend right now. “There’s a much heavier concentration on bringing in business,” she said. “When I first started, you worked for six or seven years and then you became partner. Now, people are looking at your skills and at what type of business you can bring to the table.” “I think people are still making partner, but they have to work harder at it. I think that lawyers are finding jobs in both smaller and larger firms, but the larger firms are hiring more,” continued Lenihan who helped to start the firm in 1987. In addition to noticing the rapid movement of lawyers from firm to firm compared to earlier years, Lenihan has also noticed changes in the hot areas where prospective employees are finding jobs.
Although her firm mainly deals with litigation, she also sees employment law as a growing area right now along with litigation.

Whether they have been in the legal profession for two years or 25 years, most lawyers agree that hiring trends in law are constantly changing and those changes bring about different needs for employers. In addition to leaving employers with a bevy of demands, the ever-changing market places a burden on law schools, who must try to predict changes and how to produce well-educated individuals to meet the needs of the legal community.