Tag: Pittsburgh

The Case For Using Contract Attorneys in Pittsburgh

The Current Legal Marketplace

It is no secret that practicing law in the 1990’s has become more challenging than perhaps any other time period. The competitive business climate of Corporate America forced service providers, including law firms, to provide more for less. This economic pressure has caused many law firms to downsize, limit growth, and/or stretch out partnership tracks for many associates. Adding tension to this environment is the growing population of practicing lawyers. Recently, several articles in the Pittsburgh Business Times have observed similar difficulties exist in the Pittsburgh legal marketplace . This article, however, will not focus on the problems illuminated in the other articles, but will suggest an opportunity for law firms to acquire a competitive advantage in the current market place.

Contract Attorneys as Part of the Solution

A partial solution to the competitive demands on Pennsylvania law firms suggested in Pennsylvania Law 1994: the State of the Profession, is that “law firms will need to innovate in order to compete and survive, let alone succeed, in this new environment. The first “Innovative Solution” suggested by this analysis is to use outsourcing to reduce costs. The article states:

Costs will need to be controlled as never before. Staffing ratios must be revisited, benefits packages streamlined, part-time and temporary employment and “outsourcing” explored, with the concomitant reductions in space requirements and, therefore, occupancy costs, through heralded “virtual corporation.”

In fact, one might argue that the solution of “contract attorneys” is no longer an innovation; it is commonplace in most large metropolitan centers across the country with some of the largest law firms and Fortune 500 companies using contract attorneys. Currently there are established contract attorney services in Boston, New York, Philadelphia/Wilmington, Baltimore, Hartford, Northern New Jersey, Washington D.C., Chicago, Milwaukee, New Orleans, Houston, Dallas, San Francisco, and Los Angeles. Pittsburgh now through Legal Network Ltd joins the growing list of metropolitan areas in offering such a solution.

The Benefits of Contract Attorneys

The following is a list of documented benefits realized by organizations which utilize contract attorneys:

Enhances Profitability: The economic benefits of using contract attorneys are easily observable. The costs of contract attorneys, including service fees, is often less expensive than hiring a full-time attorney. They do not carry overhead costs such as taxes, benefits and staff support. In addition, the cost of paying attorneys for nonchargeable hours does not exist because contract attorneys are matched directly with work needs. Furthermore, unlike some associates who respond to competing demands in a law firm, contract attorneys can stay focused on completing assigned projects. Then when the work is completed, the attorney leaves with no hard feelings. The result is that law firms become more profitable and often improve client service by passing on the savings.

Quick Response: With the use of contract attorneys, it is unnecessary to turn down projects when current staffing is insufficient to handle a sudden increase in work. Contract attorney agencies can quickly identify skilled and experienced attorneys to meet staffing needs.

Fill Gaps: The staffing difficulties most firms experience when faced with a maternity leave or illness can be easily solved with contract attorneys.

Leverage Core Competencies of Partners: Attorneys who are experts in their fields sometimes struggle with how to market the their expertise, yet still get the work done. Contract attorneys free up partners’ time to review work-in-progress and concentrate on attracting additional projects. Many times a significant portion of a legal project can be delegated to a contract attorney while the partner performs the more technical aspects of the project.

Professional Concerns of Using Contract Attorneys

Quality: Similar to the national trend, the Pittsburgh legal marketplace has experienced the impact of downsizing and the desire for more free time for all attorneys. As a result, a high number of experienced and specialized attorneys seek temporary assignments as a full-time career. In fact, Pittsburgh has the second highest percentage of attorneys to the general population next to Washington D.C. In many cases these attorneys are specialized sole practitioners or members of small firms who look to contract assignments to fill out their schedules. Finally, the feedback from clients in other cities where contract attorneys have been rigorously tested is very positive.

Conflicts of Interest, Confidentiality of Information and Disclosure to the Client: Importantly, these concerns in the context of temporary attorneys have been addressed by the American Bar Association in Formal Opinion 88-356, Temporary Lawyers. The opinion observes that the use of temporary attorneys is growing and provides guidance on these issues. The opinion notes that:

The use of a lawyer placement agency to obtain temporary lawyer services where the agency’s fee is a proportion of the lawyer’s compensation does not violate the Model Rules or predecessor Model Code as long as the professional independence of the lawyer is maintained without interference by the agency, the total fee paid by each client to the law firm is reasonable, and the arrangement otherwise is in accord with the guidelines in this opinion.

Why Use an Outside Organization to Identify Contract Attorneys?

With the marketplace indicating that contract attorneys play an important strategic role for law firms to increase profitability, the final issue is how to locate contract attorneys. The possibilities are for the law firm to seek contract attorneys on their own or use an organization specialized in the area. The latter method provides several advantages. First, continuous recruitment efforts and computerized database In addition, there are tax reasons for using an agency. The employment status of contract attorneys , has been analyzed by many in the private sector who have concluded that the manner in which law is performed makes it appropriate to categorize contract attorneys as independent contractors. These arguments are enhanced when a law firm uses an agency to find contract attorneys as opposed to ad hoc individual hiring because the agencys allow outside agencies to quickly find experienced and skilled attorneys from a larger candidate pool. Furthermore, agencies pre-screen and categorize applicants based on their skill level. This essentially eliminates the concern that a contract attorney will mold his/her background to a law firm’s advertised position. Agencies have also been successful when there is an immediate demand to locate several attorneys for sudden large projects. Something many law firms would likely be unable to accomplish. In a nutshell, the agency in most cases, will find the more qualified attorney in less time.

In addition, there are tax reasons for using an agency. The employment status of contract attorneys , has been analyzed by many in the private sector who have concluded that the manner in which law is performed makes it appropriate to categorize contract attorneys as independent contractors. These arguments are enhanced when a law firm uses an agency to find contract attorneys as opposed to ad hoc individual hiring because the agency’sattorneys are clearly making themselves available to work for the general public.

Conclusion Contract attorneys and the agencies which supply them are a fast growing tool utilized profitably by many law firms. The trends which have driven the emergence of this field are projected to be long term factors in the legal marketplace in Pittsburgh. Therefore, law firms should expect their use to proliferate. Consequently, the law firm which learns to use contract lawyers most effectively, will clearly have a cost advantage over those which do not.

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.