Patrick was kindly referring to my August 2007 post called Doom and Gloom in the Legal Profession – It’s Coming which I promised to eat if wrong.  I am sorry I don’t have to eat it for reasons you will see if you review it.

In any event, read Patrick Lamb’s recent post A Brief Look Back.  A Sober Look Forward. for an interesting update from the perspective of a top business litigator (Patrick) who along with his brilliant colleagues at The Valorem Law Group is walking the talk about killing the billable hour.  

A special THANK YOU to Patrick Lamb for his most gracious comments.

Evan R. Chesler is a Presiding Partner at Cravath, Swaine & Moore LLP.  He has offered his thoughts via Forbes in a piece called: Kill The Billable Hour.  There is no suggestion that he is articulating a new policy for the entire firm but he is clear on his own views and given that he is the presiding partner, his words may very well represent some strategic thinking within the firm.  

Here are some excerpts from Evan R. Chesler’s views:

"I bill by the hour… This needs to be fixed. Yes, you read that correctly."

"Clients have long hated the billable hour, and I understand why."

"So what am I proposing? For reasonable periods of time during the life of a lawsuit, say three months at a time, I should… identify the client’s objectives, measure, calculate, build in a contingency and come back with a price. Once the price has been agreed upon, the billable hour should be irrelevant.

PUNCHLINE:   Evan R. Chesler is not the first lawyer to understand this.  Visit the firm founded by awesome litigator Patrick Lamb and you’ll see he and his partners have been living without the billable hour for some time at Valorem.  Are Evan Chesler and Patrick Lamb (and those few who think like them) right?  My money is on YES – the proof will be how sophisticated clients vote with their choice of counsel.

Patrick Lamb

Photograph of Evan Chesler by Fred Marcus Photography as it appeared in the referenced Forbes article.  Image of Patrick Lamb (with hammer and clock) from the Valorem firm’s website.

Read the entire Evan Chesler story here: Kill The Billable Hour and visit Valorem here and Cravath, Swaine & Moore LLP here.

Hat tip to Larry Bodine‘s ListServ for alerting me to the story.

 

Pepe & Hazard has had the courage to decide to freeze its rates for existing clients for 2009 and to go public with that information. 

Managing Partner Al Turco

Managing Partner, Al Turco, said [Pepe & Hazard] is in the process of formulating a 2009 budget to manage its own revenues and expenses.  However you can see the firm’s concern for clients in this statement:

“Our will was to reach out to our clients first. We can manage our own adjustments later”

Firm co-founder Lou Pepe

Firm co-founder and construction law international superstar Lou Pepe demonstrates his sensitivity to the plight of the firm’s many prominent and long standing clients in confirming:

“It’s an economic crisis unlike any we’ve seen before…”

If you are not familiar with Pepe & Hazard, it has national and international prominence that it’s four office locations (including Hartford and Boston) may not make obvious.   In addition to its strength and fine reputation serving businesses and financial institutions, Pepe & Hazard has an unexpectedly broad construction practice mainly representing general contractors, construction managers, and EPC (Engineering Procurement Construction) contractors in a variety of power, infrastructure, heavy industrial, and commercial projects in places from New England to New Orleans, the Middle Atlantic to the Middle East, and Argentina to Australia.

PUNCHLINE:  In these unprecedented economic times, no Managing Partner has enough information to make the right decision.  Making a decision is risky because events can make your choices look bad in hindsight.  Going public with a fee decision is an extremely courageous move because it alerts competitors as well as clients.  Pepe & Hazard’s Managing Partner Al Turco is therefore an exemplar.  He and his firm are putting the interests of their clients ahead of their own and publicly committing to their bold initiative without undo regard to competitors.  There is no seminar for Managing Partners (even my own) that teaches this lesson better than seeing Al Turco “just do it”.

 

PUNCHLINE:  (yes, I’ll start with it) Managing Partners: I don’t think you should downsize now unless you absolutely have to.  It’s a rough world out there – you should have cut the underperformers a long time ago.  BUT, if you HAVE TO, if you MUST, then learn from one of the most successful and business savvy people out there, Guy Kawasaki – read The Art of Laying People Off

Excerpts to tempt you:

6 Share the pain. When people around you are losing their jobs, you can share the pain, too. Cut your pay. In fact, the higher the employee, the bigger the percentage of pay reduction. Take a smaller office. Turn in the company car. Reassign your personal assistant to a revenue-generating position. Fly coach. Stay in motels. Sell the boxseat tickets to the ball game. Give your 30-inch flat-panel display to a programmer who could use it to debug faster. Do something, however symbolic.

8 Don’t ask for pity. Sometimes managers go to great lengths to show the person they’re laying off (or firing) how hard it is on them. Th is reminds me of the old definition of chutzpah: A boy murders his parents and then asks the court for leniency because he’s an orphan. The person who suffers is the one being terminated, not the manager.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Read all of the Top Ten Predictions from the Futurist for 2009 and on – possibly most relevant to the legal profession are:

 

 5. There may not be world law in the foreseeable future, but the world’s legal systems will be networked. The Global Legal Information Network (GLIN), a database of local and national laws for more than 50 participating countries, will grow to include more than 100 counties by 2010. The database will lay the groundwork for a more universal understanding of the diversity of laws between nations and will create new opportunities for peace and international partnership. -Joseph N. Pelton, "Toward a Global Rule of Law: A Practical Step Toward World Peace," Nov-Dec 2007, p. 25


6. Professional knowledge will become obsolete almost as quickly as it’s acquired. An individual’s professional knowledge is becoming outdated at a much faster rate than ever before. Most professions will require continuous instruction and retraining. Rapid changes in the job market and work-related technologies will necessitate job education for almost every worker. At any given moment, a substantial portion of the labor force will be in job retraining programs. -Marvin J. Cetron and Owen Davies, "Trends Shaping Tomorrow’s World, Part Two," May-June 2008, p 41  

PUNCHLINE:  I have no idea if these (and the other eight) are correct but perhaps they are useful catalysts for thought as you plan.

 

 

Negotiating is a question of power. The Chicago tribune reported today that:


Layoffs at Chicago law firms have sent a shudder through the commercial real estate market.

 

The article, Cutbacks at firms worry landlords, quotes Bill Rogers, managing director of commercial real estate firm Jones Lang LaSalle:

 

"I do have a sense that you may see some landlords get a little more aggressive and push rates down"

The articles continues:

That is likely to push firms into the real estate market. Sonnenschein, whose lease in Sears Tower doesn’t expire until 2014, has retained Jones Lang LaSalle to test the market on a possible move. 

PUNCHLINE:  Managing Partners – you may not want to participate in the negotiation yourself for tactical reason but think about your timing for raising the prospect of more favorable terms with your landlord and perhaps some other folks on your payables list.

 

"[Law] Firms in financial ‘intensive care’ told to merge, divest or restructure as cash dwindles from accounts"

OK, this is a UK story but so what!  What reason do we have to believe that law firms around the world will not encounter similar challenges (perhaps they already are but are keeping it between themselves and their bankers).

This is from today’s TheLawyer.com:

Banks are emerging as key players in reshaping the legal market, stepping in to ­convince cash-strapped firms of the need to merge, sell off or restructure their businesses.


Around 500 firms have been referred to the so-called intensive care units (ICU) of their banks because they are facing financial difficulties. It is understood that 21 of the UK’s top 150 firms are being treated in Barclays’ ICU, which is known as ‘business banking support’, although the bank refused to confirm this number.


Read the full story here: Banks force troubled law firms to rethink structures


PUNCHLINE:  Managing Partners – maybe you had better have a candid chat with your banker before they surprise you with an ambulance and dictating the terms of your Intensive Care.

http://vimeo.com/moogaloop.swf?clip_id=1700732&server=vimeo.com&show_title=1&show_byline=1&show_portrait=0&color=&fullscreen=1

EepyBird’s Sticky Note experiment from Eepybird on Vimeo.

 

HUGE THANK YOU to lawyer and creativity genius, Matthew Homann of the [non billable] hour and his ingenious LexThink

I am passing this forward for my good friend, Kirk T. Hartley, of the Chicago litigation boutique, Butler Rubin Saltarelli & Boyd LLP. 

He cares a lot about voting rights!

Kirk asked me to direct you American Lawyers who care about voting rights to his post Offtopic – Lawyers and Voters’ Rights 2008 – Get Involved at GlobalTort