June 1, 2008

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Article

Legal

June 1, 2008

Our panel of industry experts covered the gamut of topics in our seventh annual legal roundtable. As the economy dips, firms are adjusting to meet the needs of industry, while also focusing on ways to better serve the large corporate client. The panel also discussed recruiting and mentoring trends for young associates, supporting the state’s startup businesses and the changing role of technology in the legal field. Participants: Seated: Blaine L. Carlton, Ballard, Spahr, Andrews & Ingersoll; Ellen Maycock, Kruse, Landa, Maycock & Ricks; Mona L. Burton, Holland & Hart; Annette W. Jarvis, Ray, Quinney & Nebeker; Edgar Cataxinos, Trask Britt; Jeffrey L. Silvestrini, Cohne, Rappaport & Segal Front Row: R. G. Snow, Clyde, Snow, Sessions & Swenson; Jonathan W. Richards, Workman Nydegger; Alan L. Sullivan, Snell & Wilmer; Lorin C. Barker, Kirton & McConkie; David W. Slaughter, Snow, Christensen & Martineau; V. Lowry Snow, Snow Jensen & Reece; Richard J. Scott, Chapman & Cutler; Peter W. Billings, Fabian & Clendenin; Raymond J. Etcheverry, Parson, Behle & Latimer; Michael P. Zaccheo, Richards, Brandt, Miller & Nelson; Brian J. Babcock, Babcock, Scott & Babcock; Stephen J. Trayner, Strong & Hanni Back Row: Martin Lewis, Utah Business; T. Richard Davis, Callister, Nebeker & McCullough; M. Wayne Western, Thorpe, North & Western; Keven M. Rowe, Jones, Waldo, Holbrook & McDonough; Stephen D. Swindle, Van Cott, Bagley, Cornwall & McCarthy; Randall B. Bateman, Bateman IP Law Group; Kevin R. Pinegar, Durham, Jones & Pinegar; Scott Evans, Christensen & Jensen; Ronald G. Russell, Parr, Waddoups, Brown, Gee & Loveless; Blaine J. Benard, Holme, Roberts & Owen; Steven P. Shurtz, Brinks, Hofer, Gilson & Lione; Ronald G. Moffitt, Stoel Rives The economy is front and center in the news. What are your thoughts about the state, regional and national economies and some of their effects on your firm? JARVIS: I’m a business bankruptcy attorney and I think it’s very clear the economy is going through a recession. We’re feeling the effects in Utah and our section is becoming increasingly busy. We are a counter practice with a corporate group. And it doesn’t mean the deals aren’t being done and litigation isn’t being pursued, but it’s just done with an overlay of bankruptcy or receiverships or workouts. So all of the legal services that are provided by our firm are impacted even when the economy is down. It’s just done with a little bit different focus. BABCOCK: We’re a boutique firm and we specialize in construction. With the market the way it is right now, there’s been a significant change in the landscape. Banks have tightened up financing, developments have been put on hold, some have been abandoned in bankruptcy. A lot of people are now involved in more lien claims, credit issues are tightening up, and in the residential arena you see these big developments where there’s lots out there to be purchased and homes that are on the market, but the banks have tightened up the loans so much that properties just aren’t moving. The economy is making our practices a lot more work as it gets in trouble. RUSSELL: I tend to be somewhat on the other side of that. I do a lot of work for title insurance companies and it is noticeably different now than it was six months ago. There’s a lot more mechanics’ liens filed and pursued than there were six months ago. It seems that when the economy is good, concerns or problems don’t seem to surface as much. When the economy turns, suddenly people are not getting along and you end up with a lot more litigation over things that you probably wouldn’t have litigated about in a good economy. The legal business tends to be a little countercyclical in that when the economy slows down sometimes, some aspects of what we do pick up. SCOTT: One thing that has happened in the municipal finance industry is the issue of credit enhancement. Utah bond issuers, by and large, tend to be very good credits, but still are benefited by credit enhancement. And Ambac and some of the other bond insurers have had downgrades and they’re looking for institutions that can enhance their credit. And so those institutions that have good credit, banks like JP Morgan and Wells Fargo, find themselves in a very favorable position to help out in those markets, and institutions whose credit has slipped or failed, I think are having their difficulties magnified. So it’s a time of turmoil and a time when I think those in capital markets, for better or for worse, have lots of problems to be solved. MOFFITT: M&A work is down, particularly on the national level, and that’s a result of the crisis in the credit markets. They may well be what’s driving the recession to some extent. Valuations of businesses are down perhaps one to one-and-a-half turns over what they were a year ago. It’s affecting capital structures. On a local level, it’s probably not having as much effect because the size of our transactions are smaller. Local banks have always been more conservative in their lending practices and habits. So smaller and mid-cap deals are still being done, albeit there are not as many of them. But larger national deals have really dried up and they’re just not being done right now. BATEMAN: I guess I can impart a small ray of sunshine to the news. Historically, IP firms shift into litigation mode when the economy goes down. People prosecute patents when the economy is good, they fight over them when the economy is bad. We have not seen a downturn. In fact, I have been holding off hiring in fear of the downturn and we’re swamped with mostly prosecution work, and what I would expect is more litigation work. So small tech companies, who are typically our clients, apparently have a rosy view of at least the long term and we’re still actively pursuing intellectual property today. BILLINGS: The unusual thing I have seen with this downturn is interest rates are low. Usually what drives bankruptcy work is high interest rates. So you’re having a different kind of bankruptcy workout client than we traditionally have. Usually they’re the leverage people. This time it’s the people in the housing industry who have a lot of inventory they can’t get rid of. SULLIVAN: The contrast is interesting. We have offices in Phoenix and Southern California and Las Vegas, and we don’t have the booms that those markets have, but we certainly don’t have the busts either. We just kind of chug along in Salt Lake, and when we’re in the middle of what is clearly a recession, we’re actually doing pretty well. We also have a risk real estate practice. We do a lot of banking work and that’s still pretty good in our market, whereas, some of those areas have dried right up in other larger markets around the West. But litigation just keeps on going. To a certain extent, it is countercyclical and we expect it to increase as time goes on. Are those firms that represent international clients seeing those clients shift in any direction given what’s happening to our national economy? CARLTON: A lot of foreign companies are choosing to locate in this country. We’ve seen some activity in representing companies that are coming from Europe and elsewhere to locate in the United States because of the drop in the value of the dollar. RUSSELL: We represent several Asian Pacific Rim companies in our firm. One thing I’ve noticed is our billing rates in Salt Lake City are still a bargain compared to firms on the West Coast. We’ve had several cases come to us where they partner our firm with a West Coast firm and intend to have us do quite a bit of the work because we’re still a bargain. But it seems like there’s a little shift there, too. Our economy is affecting what they do because they do business with us in our country. And so litigation has picked up in the international market as well. BURTON: Most of our international clients are in the energy business and the price of oil has had a dramatic impact on the work that we do. There’s a lot of alternative energy projects that are coming online and that’s providing quite a bit of work. JARVIS: I represent a large German company. I think one impact that our laws have had on foreign investors is Sarbanes-Oxley, which I think is very needed in our country, and yet it imposes additional requirements on foreign companies if they acquire companies here. We had to devote one person to simply comply with Sarbanes-Oxley for when international clients buy a small company in the United States. And philosophically our securities disclosure laws are so different than in Europe that it in some ways, it is somewhat of a deterrent to invest. I think they’re getting over it and people are understanding now what is needed for Sarbanes-Oxley, but it has impacted foreign investment. R. SNOW: The mortgage fraud business has upped in our shop. But when you track that through, it has international implications because of the offshore firms and companies that bought mortgage-backed securities that are now worthless because of the subprime debacle. Are you representing clients that have adopted a concern in going green or global warming and is that being translated into your legal work? BURTON: We have a Climate Change Practice Group that’s headed up in our Salt Lake office, and a number of our energy clients are utilizing services to adopt formal policies that relate directly to global warming. SCOTT: I’m finding that clients are interested in what a firm’s green practices are. Some will inquire as to whether you’re recycling paper or using bottled water, that sort of thing. We do work for Salt Lake City, and the mayor is asking law firms that do work for the city what their practices are in that regard. SULLIVAN: We’ve been representing the City Creek Reserve in the development of City Creek Center and one of the key inquiries of the planning commission was whether the project would seek or entertain green certification to be an environmentally friendly project. And the desire to get green certification was a key concept behind many of the features that you will see in City Creek Center. ETCHEVERRY: We represent a number of international mining companies and industrial users in Utah, and the burgeoning areas are global warming, carbon sequestration and the buying and selling of carbon credits. I think that many, many law firms across the country see that as an area where there’s going to be a booming practice. WESTERN: There’s millions of dollars being spent in various types of renewable energy that will be exciting in the years to come in terms of carbon sequestration and so forth. Utah is in the forefront of a lot of this research, and I think that we will all be very, very satisfied. The University of Utah and BYU and other institutions in the state are at the forefront of a lot of the research that’s going on. What creative or innovative things are your firms doing to offer support to startup businesses? SHURTZ: Our firm is in the intellectual property area and this is an area that we particularly feel a need to help because so many times the main asset of these small startup companies is their intellectual property. So we want to serve them, protect that IP in the best way possible and help them formulate their business strategies in a way that will maximize downstream what they’re investing in now. JARVIS: We recently acquired a venture capital group, and they work a lot with startup companies to make sure they have funding. I think that’s critical for startup companies. I agree that a lot of our startup companies here in Utah focus on IP. We have an IP Litigation Group that works with a lot of startup companies protecting their IP assets. In some cases, because these companies are struggling with their own financing, we’ve worked with them in considering alternative billing practices on issues so that they’re able to afford legal services to pursue and defend their IP. MOFFITT: Stoel Rives has a large alternative energy and biofuels practice. The interesting thing is that alternative energy and biofuels companies fall into two groups. We have the startup incubator groups, and those groups need help with accessing financial markets. I think they also need help with advice and mentoring on going from a small company to a larger company, and that covers the gamut from financing to corporate governance issues. On the side of large energy projects that are involved with project finance, their clients are looking for real expertise in the areas to bring efficiencies to their practice, particularly in the legal spin, and helping them to grow projects. I think you’ve got to have both kinds of lawyers. You’ve got to have lawyers that are able to work with small clients and help them along and you have to have a group of lawyers on the other side who are very sophisticated and can walk into a boardroom and say, “These are precisely the kinds of things we need to be aware of in moving a large capital project along.” RICHARDS: Workman Nydegger is an IP firm also and I echo the comments of my colleagues in that area; the entrepreneurial spirit in Utah is alive and well. We counsel with clients, large, small, local and national that come in on a daily basis, on their developments and protecting their intellectual properties. The Governor and the Office of Economic Development has had some great initiatives in this area and we’re glad to be part of it. Do you find that the state’s two law schools are able to produce graduates that fit your needs or does your firm have to go outside of this market to find the necessary skill and talent? BILLINGS: I think the law schools here certainly are producing fine graduates, but like a lot of firms, we also search outside the state because we like to have a balance and we think it’s helpful in servicing clients to have a broad background of different educational institutions. RUSSELL: I agree. We find that our local law schools produce as fine of lawyers as any place, and they do provide a great pool of new clerks and associates each year that we interview and take in. But our market is unique in that there are plenty of people who want to live in Salt Lake because it’s a great place to live and be and our economy is stronger than most of the country. So as a result, there are applicants that we receive from great law schools from throughout the country, and it is nice to have the option to add some diversity and bring in different skill sets. CATAXINOS: With regard to the quality of graduates, we have seen no difference between the local Utah-based graduates, whether they be lateral hires or whether they be outside hires, and from law schools from other states. SHURTZ: I can shed a little bit different light on that. I think it’s kind of going the other way around. Our main office is in Chicago and I’ve interviewed quite a few young graduates coming out of the law school here and recommended that they would like to go and work in our Chicago office. And the caliber of the graduates coming out of here, I think, rival those that we’re seeing from a lot of the other law schools. What is it about Utah that is appealing to the quality graduate and the candidate for an associate’s position? RUSSELL: Several things. One, we have generally a lower cost of living still in comparison to other comparable cities. Salaries in Salt Lake, not just in the legal market but in all markets, have risen dramatically over the last several years. The quality of life, though, is unparalleled. And law students who are looking to start their practices, I think, find the same. ROWE: We’ve hired an associate from California to move to Utah because the cost of the big metropolitan areas has gotten so high that his expectation of being able to raise a family and have a home of his own was impossible. So he relocated to Utah. BARKER: We’ve been able to recruit some people from the East Coast, New York City and Los Angeles because they see their chances there of ever becoming an equity owner of their firm almost non-existent or very small. I think in most firms in Salt Lake, you’re going to be a shareholder if things go reasonably well. SULLIVAN: The other thing that’s happening right now is that lawyers are being laid off in big markets. There are dozens and dozens of people who thought they had a job starting in September who do not have a job. This is especially a good time for law firms who have some capacity and who are interested in hiring good people. ETCHEVERRY: We run a very large clerk program and if they come here and spend a summer with us, what they determine is that the level of practice in Salt Lake City is very sophisticated. The nature of the litigation here is every bit as difficult and as challenging as you find anywhere in the country. They learn that they can have the kind of practice here that they might think they could only have in one of the larger cities. SLAUGHTER: I know our firm has a reputation for balance. We combine a sophistication of practice with a healthy work environment and we find that there are a lot of younger attorneys, especially those who have had work experience outside of the state, who are pleasantly surprised when they come to Utah and understand that our workday is generally limited. We have a life outside of the office other than a commute and we can accomplish good things and do good work and still have time to do the things that we really enjoy doing. I’ve noticed that the issues that drove us to succeed and to become good lawyers are not always the same driving motivators of young lawyers. Have any of you noticed that in your recruiting efforts and how do you address that? BATEMAN: Most of the younger people that we interview don’t want to bill 2,000 plus hours a year, and they just say, “No, we’re not going to do that.” So we adopted a flex pay system that lets people set, within reason, their own work parameters. And we have some people who like to work a lot and make a lot of money and other people who say, “You know what, I would rather go spend three days in Moab. See you.” They’ll work hard when they’re here, but it’s understood they’re not going to be billing 2,000 hours a year, they’re going to be billing 1,650 and enjoy that. They will make a healthy living, but have the flexibility and the time to do other things they want to do. SWINDLE: I’m not so sure. I see the people we’ve hired in the last two or three years that are as much driven by what might have motivated you or me now. I think there is a swing for young people that are working very hard, they want a lifestyle and they want flexibility, but I really see these people working very, very hard, wanting to be successful as lawyers, wanting to make contributions to the community. I think they’re working as hard as I did when I was a younger lawyer. BILLINGS: I’m just thinking, my father used to complain about my generation and here we are sitting here complaining about the generation that follows! I think there is some truth that Salt Lake is a little bit self-selective. People who want to work 2,400 hours a year are generally not going to come to Salt Lake City. A lot of them are here because they like the outdoors. Not that people don’t work hard, but they don’t work the killer hours that you sometimes see in Washington, New York and Los Angeles. SILVESTRINI: I have also noticed an issue about retention, that unless you provide some flexibility and some other perks beyond compensation and working long hours, then it’s tough to retain people. SLAUGHTER: I don’t think there’s any question that we would all have a hard time attracting young talent at the pay cycles that we all were attracted to when we pledged our separate firms. That’s a sign of the economy. And I think that a lot of the younger attorneys are facing a challenge that most of us did not face, and that’s the repayment of fairly sizable student loans. We met some time ago and discussed some of those challenges and discussed the fact that there are a lot of students from Ivy League schools and others that we would like to attract to Utah and simply can’t afford it because they have graduated with a mortgage-and-a-half. I think that we still have a great level of practice here in the state. I think that as Ron indicated, salaries have increased. I think we’re all able to attract really good talent and I think that the work ethic among young attorneys by and large in Utah is remarkable. They’re hard working, I think that they’re smart, and I think they understand an awful lot more than what I understood as a brand new lawyer. I’m really quite awed, in large measure, by the quality of people who we have, younger people especially, we have working in our local environment. How are we doing with recruiting women to the firms? JARVIS: I think the expectation for women in the profession has changed in a good direction. I think my generation of women felt like we had to choose between having a career and a family and it was not possible to do both. Women entering the profession now see that they should be able to both succeed in our profession and have a family, and I think law firms are accommodating that. Our firm has adopted a reduced time policy which has been very successful in recruiting and retaining women. We also work to mentor the women in our firm. We’ve worked very hard to make sure that we foster the development towards partnership of women and help them learn how to develop in business because sometimes business often is harder for women. And we’re seeing the results of that. I think the increase over the last five years of women in our firm is dramatic and we’re keeping those women. We also have been working on the number of minorities in our firm. In the past we have worked with the Minority Bar Association to us identify minority candidates that might fill our needs. BURTON: Back in the early 1970s, Holland & Hart adopted policies that made it easier for women to succeed. We’re one of the AmLaw 200 firms, and 25 percent of our partners are women, and that’s one of the highest percentages of any AmLaw 200 firms in the country. Over half of our associates are women. We do have a lot of flexibility for attorneys who need the flexibility so that they can pay the necessary attention to their families. And we have found that that allows us to retain women at a higher percentage than other firms of our size in the country. We also do a lot to mentoring, and we pay a lot of attention to recruiting a diverse workforce. MAYCOCK: We’re a small firm, and I think we recognized a long time ago that if we were going to have women, we needed to offer flexibility. The young women that we’re recruiting insist on it. They are not signing on for a straight line career of too many hours where they’re not going to be able to go to their children’s functions or not being able to cut back when children are small. And I don’t really think offering that flexibility hurts the firm in any way. MOFFITT: It’s important to note that it’s not just law firms that are responding to clients, it’s a fact of life. In many law schools, women are the majority of law students, and if you are looking for the best and the brightest talent you’re going to have to adopt policies as a law firm that’s going to attract women who do have different time commitments, different feelings about what they want to accomplish in their professional practices. Do you see a need for mentoring young associates? Have your firms adopted a formal policy for how that’s accomplished? TRAYNER: We see a critical need to mentor young lawyers. When I became a young associate at Strong & Hanni I had to try three jury trials a year to stay on track to become a partner. There aren’t many associates who would get that type of trial experience today. So we’ve had to adopt a program; for instance, in the trial practice we never have a shareholder go to trial without taking an associate who can carry the laboring oar on jury instructions and handling witnesses. It isn’t enough to just put them in the back room and let them draft away and research away. They need to learn the profession, the craft of being a lawyer. SLAUGHTER: I don’t think there’s any other way than by mentoring younger attorneys that we can instill in them the particular qualities of professionalism and civility. I think we see an awful lot of nastiness in the profession that is the direct result of the failure of more seasoned examples in the professional development of younger attorneys as they grow in their intellectual abilities and in their courtroom skills. Gentlemanliness in our profession seems to be lost in large measure with the growth of our profession in this community and the demise or retirement of many who have been pillars of the community and who have taught the rest of us, hopefully, how to be civil and professional in our practices. SILVESTRINI: I think that one of the most important things to the prospective attorneys we hire is the mentoring. There’s some energy in working together with new people and sharing. I know when I first started out I was very defensive dealing with more experienced lawyers thinking that I was going to be overreached. And a lot of times I think that breeds incivility. I think if we could reach out to help some of those people that we would have a better Bar. MOFFITT: The fact of the matter is that mentoring is good business. The only way you can appropriately staff matters with lawyers who are billing at appropriate rates and keeping your legal spending as efficient as possible is to train younger lawyers to do appropriate kinds of work at lower billing rates. So ultimately I think it’s in the client’s best interest, as well as the law firm’s best interest, to teach lawyers how to do good legal work, and do it as soon as they can with very little supervision. BATEMAN: I think one of the important things with mentoring is helping attorneys understand how small our legal community still is. Some of them practiced in L.A. or New York where you’re not going to be before the same judge for the next 10 years most likely, you’re not going to be sitting across the table from the same attorney for a long time and so they’ll engage in tactics which just aren’t kosher here. I’ve had some young associates who were just being ridiculous with opposing counsel and I just had to turn them and say, “Right now they are asking for an extension. The day will come, I guarantee you, where you will be on the opposite side of that situation.” If you develop a good ethos and a good practice and if you’re cordial to your other professionals, when you need that break, it will be given to you and you’ll earn respect. We’re seeing the large corporate client utilize executive teams that work with outside legal counsel. What kinds of things are you doing to integrate your legal services with outside counsel in the large corporate client? MOFFITT: I meet with most of my large corporate clients at least twice a year to talk about what their legal spend is and to talk about how we can partner with them, how we can do some things, how other things can be done better in-house, how we can find efficiencies that will benefit them. The other thing that we do internally is to talk to young lawyers and older lawyers about how clients view legal product. And I say to lawyers, “You know, believe it or not, if you hand a stack of papers this big to the client, the client has already valued that to some extent and they know what they’re willing to pay or what they’re comfortable paying for that stack of papers.” The key is to align yourself so that you understand what the client’s expectations are because ultimately they’ll either be happy with their legal spend or they won’t be. ROWE: In the legal profession, we need to recognize we’re a service industry and we best serve our business clients by addressing their needs. If we understand that our aim is to further their business success and be a part of that process as opposed to having our own world, then we’re more successful and we actually accomplish what our profession should be, which is furthering their business needs. DAVIS: Our largest client is, and always has been, Zions Bank. Zions Bank for many years had an in-house section and we initially looked at that with a little bit of fear and trembling that much of our work was going to be captured by in-house people. It took a change of attitude for us to understand that they may be our best friends, in that we can provide for them a much broader base of service that they could not do for themselves. SULLIVAN: It strikes me that one of the things we have never really focused on is mentoring young people on how to deal with the corporate client. There’s a lot of variation among clients, but what it comes down to is an understanding of the needs of the client, and also the needs the particular individual with whom you interface, whether it be a general counsel or associate general counsel, and understanding that that person has many constituencies within the organization, and then making sure that you answer those needs and in an efficient way that advances the representation. CARLTON: At Ballard Spahr we recently went through a strategic planning process to try to better serve our clients’ needs, and one of the things that came out of that is that we’re actually asking clients to evaluate our performance by having people who may not be part of the firm actually meet with the client and ask for a very candid evaluation of where our service fits and how we can improve our services. That’s very important because oftentimes we do the practice of law in a certain way, not realizing that maybe the client really has other needs that we aren’t addressing. Does hourly rate primarily drive the revenue in your firms? Or are you seeing business clients looking for alternative ways of budgeting and asking you to accommodate? ZACCHEO: There have been some in-roads in flat rates and other more creative solutions, but we’re still primarily earning our revenue on an hourly rate basis. And frankly, we’ve found that clients are so used to it that they’re as reluctant to move on to something else as we are. ETCHEVERRY: I think it works sometimes on particular transactions or when you have a finite project that you can work on, but in the main stream, whenever we have those discussions with clients it always comes back generally to the billable hour because as Mike said, that’s what they’re used to. They never quite understand if we’re looking for some upside in the transaction and I think they’re nervous about that. The vast majority of work being done is still being done by the billable hour. RUSSELL: I think what clients are most concerned about is value and not being surprised. There are opportunities for some transactions or some litigation matters where you can use a flat fee or a contingent fee, but I think that we’ll be continuing hourly billing for a long time. The key is to communicate with the client, let them know what to expect and then stay within their expectations. CATAXINOS: In TraskBritt’s litigation practice, communication has been the real key. We haven’t seen any movement towards any type of flat fee, it’s still the billable hour. What we’re seeing is a letter request for work where the expected range is stated, and then not to exceed a certain amount. So I think that goes hand in hand with not being surprised and trying to meet and control budgetary constraints in general. DAVIS: About a third of our practice is estate planning, and that is almost exclusively flat fee. The other area in which there has been some in-roads is certain businesses or clients would like to see a retainer so they negotiate in advance either a six-month or a one-year retainer that they can call as much as they need and then we’re going to review that at the end of six months. What kinds of challenges or trends have you seen change in the last few years with technology? SLAUGHTER: We can no longer save drafts in e-mail. I think there’s a growing expectation of almost instantaneous communication and it puts a real pressure on the attorneys to get things done quickly and be more reactive to the clients’ expectations. I love and hate e-mail, yet I don’t know how we would live without it in my practice, and I think that’s probably true for most of us. I think there are great advantages to being able to communicate with your clients real-time and to help establish those relationships is critical to practice. By the same token, I hope not many of us have experienced the “I really didn’t mean to send that” experience, which is a serious downside with e-mail. And we’re only a hasty e-mail address and push of the send button away from sending something to somebody who really has no business learning of it. So it’s a two-edged sword. I think we benefit greatly from it and it also opens all sorts of risks that require a bit of care. I would appreciate it if Outlook would add just one microsecond to its program and have a pop-up that says, “Do you really want to send this to this individual?” BURTON: My view of technology is that it brings a great benefit and a great burden. It allows you to work from anywhere, that’s the plus side. The downside is you’re now expected to work from anywhere. And you have to learn how to balance that, you have to have boundaries. RUSSELL: It’s become very apparent over the last 10 years that our clients expect our technology to be on par with theirs. And so I think early on as we were all getting technologically savvy, we were reluctant to invest in technology. But we’ve certainly come to the realization that we need to make regular large investments in our technology to keep our network running, to be able to have the capacity to communicate with our clients the way that they want to interact with us. One of the downsides of technology, though, that often comes to light in litigation, is that e-mail is perceived to be like a conversation, as a less formal way of communicating. But it’s always those e-mails that come back to haunt someone. They don’t think that someone is going to see it or they don’t send it very thoughtfully. So we need to remind our clients to be careful about what they put in e-mails and other electronic forms of communication. BATEMAN: We represent a lot of small tech companies, people who are very into technology. They think if an e-mail is sent, the response must be received within an hour. And one of the biggest challenges is training clients that sometimes I’m in conferences. And if I’ve been in a conference for the last hour, I have not had time to read your e-mail and the other e-mails that I received while I was in that conference, read the one-page document that you had attached to it and give you my legal advice on it. BARKER: One of the challenges we’ve had is we have a new job in our firm that didn’t exist 10 years ago and now we have five guys doing it, a whole group of IT people. We’re spending a lot of salaried money on technology and we just wonder if we’re spending it right. We actually hired some consultants out of San Francisco to come in and review our whole IT system and they told us to hire even more people. But we’re struggling with communication because you’ve got these computer guys over here and lawyers here, and marrying those two interests sometimes is very difficult for us. Are any of you working with corporate clients who have requested or required access to their file via the Internet? SHURTZ: We use an online docket system so our clients can go online and see any of their cases real-time. If we get an office action and post it on the docket, they can see it posted that day. And it’s been a real benefit because now clients don’t necessarily need to call us, they can run their own reports. MOFFITT: I have a couple of clients who have requested seamless access to e-mail, and we can accommodate that. What I hate about e-mail most are a couple of things: One, it never conveys tone very well so it can be a real problem in communications with opposing counsel where they’re not able to see facial expressions or assess tone. The other trap for e-mail is that we can get in the habit of simply what I call playing tag. You’re it, you send back an e-mail, you wait for one to come, and you never stop and say, “What I really need to do is get on the phone and ask some additional questions and get feedback instantly so I can feel like my role as a counselor here as opposed to simply responding to a string of e-mails.” We now are under new electronic discovery requirements. How has that changed your relationship with your clients in terms of advice that you give them and the cost of litigation? BILLINGS: Preserving IP and electronic discovery is now the first thing, unfortunately, you have to talk about when you have new litigation. And for some clients who haven’t been through it before it’s a shock and disbelief that they have to go through this. I think the Bar and the courts are working their way through trying to come up with more reasonable limits. A few years ago, the court adopted the standards regulating professionalism and civility. Do you feel like those standards have helped the profession? MAYCOCK: The Supreme Court has just created a Professionalism Counseling Board as of the 1st of April. I’m a member of the board, and this is a place where you can report your colleagues if they violate the standards. So far I don’t think we’ve had any reports in April, but we’re ready. BATEMAN: I think this goes back to our earlier discussion on mentoring. Rules promulgated by the Supreme Court are important, but nothing has the impact of a senior attorney explaining to a younger attorney, “This is acceptable, this is good, this is what’s expected. This is unacceptable, this is bad and if you keep down this course you will regret it.” How are your clients responding to our adherence to those rules? SLAUGHTER: The clients are still being trained in the process. What they like is for us to be dragons at times, and we have to explain that that’s fine, but we have to sort of file our teeth and turn off the flames. There’s an age long philosophical battle and debate over whether you can legislate right and wrong, whether you can make rules that will encourage or even force people to do the right thing. I think that the answer to that, based on experience, is no, you can’t. The best way to make people good people is to give them examples and encourage them to understand that that’s simply the best way to do business. SULLIVAN: I think the reason why the rules are necessary is that as law firms get larger, they are more driven by profit motives. Associates are more incentivised to bill more and more hours and they don’t have effective natural relationships. I agree with Dave that morays are always more authentic if they are part of the unspoken, unwritten culture of the legal community that are internalized. But we live in a different world now and I think that we need those rules written down somewhere in as detailed a fashion as they are precisely because we don’t have mentoring relationships for everybody. ETCHEVERRY: Particularly in the federal courts and the magistrates, they simply will not tolerate that kind of conduct anymore. All of the federal judges say they don’t even want to see the kind of high-pitched language that you see in papers, let alone have anybody come in front of them where they’re being uncivil to one another in the courtroom. SILVESTRINI: I’m going to be the contrarian a little bit because I think judges have a tendency to tell us that in seminars, but they don’t do it as much when we get into the hearings. I think that the rules are helpful for each of us and to be able to point out to stubborn counsel that they’re there. But I think generally most of us have been civil anyway and the rules probably conform the behavior of a few and then there are the rest who aren’t governed by those rules anyway, and will use them as a weapon against those of us who try to abide by them. RUSSELL: We need to make sure and educate our clients that it’s much better for them if we are civil because we can resolve their disputes, we can do their legal business in kind of a more orderly fashion. Civility is good business. Not just for us as professionals in dealing with one another, but we generally advance our client’s interest better that way. Do any of you represent firms that have a formal policy promoting and facilitating pro bono? How effective are those policies and what are the benefits? SULLIVAN: We have an objective as a firm in terms of pro bono hours. For as long as I’ve been with the firm we give attornies credit for what we call pro bono. It has to be approved, it has to be true pro bono work for indigent or that kind of service. But both associates and partners get credit for it as if it were regular billing work. BURTON: We actually have a requirement for pro bono work of 100 hours a year for our associates as well as our partners. And if you don’t meet it as an associate, you may be held back on the partnership track. And if you don’t meet it as a partner it will be taken into account in your compensation. BENARD: We’re a national firm and we have a commitment, to devote 3 percent of our total hours to pro bono work. Pro bono work is also treated as billable hours so that associates, in particular, are encouraged to do pro bono work just as though it’s billable time. And we do have some clients, we do a lot of public sector type work with governmental entities.
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