We are pleased to share with you our summer/fall edition of The Column newsletter. This issue focuses on the changing role of lawyers, along with some advice on securing the best talent in a candidate shortage market. We also address the usage of project attorneys, both as a strategic staffing tool and a profit center.

Staff hiring and retention, whether for your direct staff or a team of contract professionals, is a key component to running a successful department. In this edition, we offer some advice on how to view your attorney staff members, recruit the best talent and keep your folks content and "on board."

Additionally, today, most legal departments use project attorneys as part of their strategic staffing models. It is our hope that the newsletter will spark the question as to whether you are utilizing these contingent professionals effectively and profitably.

As always, we welcome any suggestions, comments or questions you would like to share with us so that we may incorporate your thoughts into future editions of the newsletter. Please email us at the following address: column@specialcounsel.com.  We look forward to hearing from you soon.

It has become a well established fact of life that law firms and in-house legal departments have adopted the use of project attorneys for overflow work, litigation support, to help control headcount issues and because of the flexibility it provides. The U.S Bureau of Statistics estimated that in 1995 there were 40,000 project attorneys, up from 10,000 in 1992, with an additional increase of 56 percent expected by the year 2005.

While it is widely known that the use of project attorneys can result in measurable cost savings to an organization, what is not as well understood is that the use of project attorneys is also a hidden source of profit. 

Ethical Rules Governing the Billing for Project Attorney Time

Recently the ABA issued a formal ethics opinion on the issues surrounding billing a client for the use of a project attorney. ABA Op. 00-42, Surcharge to Client for Use of a Contract Lawyer (November 29, 2000).1 This opinion specifically provides that when the services of a contract lawyer are billed as legal services to a client, a lawyer may add a surcharge on the amounts paid to a contract lawyer as long as the fee is "reasonable." The ABA defines a "surcharge" as "…[w]hen the retaining lawyer charges the client more for the services of the contract lawyer than the cost incurred by the retaining lawyer for obtaining those services, either directly or through the contract lawyer’s agency or employer; in other words, a surcharge is profit."

Just like the charge for the time of an associate to a client, which is more than the amount paid to the associate, a retaining lawyer can charge the client more than it is paying to a contract lawyer. In addition, the Opinion states that as long as the amount charged is reasonable, there is no duty to disclose the surcharge to the client when the work of the contract lawyer is supervised or, absent supervision, when the work of the contract lawyer is adopted as the work of the retaining lawyer.

The Hidden Profit Potential of a Project Attorney

There is a huge profit potential available to a law firm or corporate in-house department who is savvy enough to employ project attorneys.

Instead of obtaining the small margin currently recognized on their own associates, due to the high pay rates and fully burdened expense of all the related employment expenses (insurance, FICA, unemployment, etc.), using a project attorney whose hourly cost is far smaller (often times averaging $50-100/hr), the firm can mark up that time with a surcharge to its clients.

Time to Think Outside of the Box

In this era of difficult economic times, firms and corporations need to think not only about how project attorneys can help save them money but also how they can start making them money.

1 See Also ABA Formal Opinion 88-356 (Temporary Lawyers) and ABA Formal Opinion 93-379 (Billing for Professional Fees, Disbursements, and Other Expenses).

2 Be certain to check your local Ethics Office for any additional jurisdictional rulings or opinions as they relate to contract lawyers.

Timothy P. Mahoney, Esq. is the Executive Director for THE ESQUIRE GROUP, A Special Counsel Company, in Minneapolis, MN.

As many of us know, the line between the reality of lawyering in the new millennium and its fictional representation on television and in books is very blurred. Perry Mason, the beloved Atticus Finch from "To Kill a Mockingbird,"1 and films such as "Inherit the Wind"2 depict the lawyers of yester year, who work all hours of the night to deliver justice to their forever grateful and thankful clients. More recently we have seen actors such as Tom Cruise burn the midnight oil as a young associate to climb his way up the law firm ladder in "The Firm."3 These iconical figures are still often looked upon with much respect and fondness; however, as Bob Dylan aptly said: "The Times They Are A-Changin’."4 Today many lawyers, both young and not so young alike, have broken free from the "yester year" model and have served as the impetus for major changes in today’s legal staffing model that are quite literally sweeping the globe.   

I. Yesterday’s Lawyer

Before we can begin to understand the changes that are currently taking place in the legal profession’s hiring and staffing model, we must also understand the traditional legal staffing model that has been utilized in law firms and legal departments for many, many years.

In law firms throughout the U.S. and abroad, the journey from associate to partner can take as many as ten years and require thousands of hours of work per year. In the 1970’s law firms generally demanded approximately 1,700 billable hours of work per year from lawyers. Recently, these same law firms began to demand much more. Some leading law firms expect attorneys to bill 2,300 hours or more of work per year. In order to accomplish this onerous task, associates and partners must work seventy to eighty hour weeks. These long weeks include staying at the office late into the night and on weekends, taking calls or messages on cell phones and mobile devices while spending time with friends and family, and dropping everything to jump into action when that ever important client beckons. Lawyers who wish to rise to the top of the heap in the traditional staffing model strive to stand out amongst other attorneys in the firm. In fact, a story was recently relayed to me regarding one such dedicated senior associate who was quickly approaching partnership. This senior associate, who we will call "Mary Work-Harder," was praised at a recent partners’ meeting because of her dedication and devotion to the firm. This praise was due to the fact that Mary Work-Harder flew out of state for her mother’s funeral on a Wednesday morning and immediately returned to work on Wednesday evening following the funeral and a four hour flight. This loyalty and dedication was very appreciated by the partnership; however, many of us find this definition of commitment to be shocking and outrageous.

Seeking to leave the grueling partnership track behind, many lawyers have left the private practice of law and embarked upon careers with in-house legal departments.  Seeking "greener pastures" these attorneys often believe that this transition will afford them the opportunity to work shorter hours, leave billable hours behind, and become more of a legal generalist as opposed to only specializing in one area of the law. While many attorneys find bliss after joining an in-house legal department, this career transition does not always provide the flexibility and work/life balance that lawyers are seeking. Attorneys who work in-house often report that they work very long hours much like their colleagues in law firms. Additionally, many in-house legal departments require their attorneys to bill and record how they spend their time each day. In a post Sarbanes-Oxley Act legal environment and in a sluggish national economy, many corporate counsels are scratching their heads and saying "What now?" and "Am I ever going to find the work/life balance I am seeking?"

Clearly, both law firm and in-house legal department cultures and staffing practices have led to a mass exodus from the traditional practice of law. Citing high attrition and low morale, leading law firms and legal departments have reassessed their staffing models and learned more about today’s lawyer and how to maximize profits while gaining employee loyalty and dedication.

II. Today’s Lawyer

You know today’s lawyer. She is at the coffee shop with Blackberry in hand and is forever driving her sport utility vehicle to and from soccer practice while chatting away on her cell phone to a major CEO in Hong Kong regarding an upcoming acquisition. The most interesting parts of this description are that
1) today’s lawyer is not eternally tied to her desk until the darkest hours of night and
2) today’s lawyer is committed to a combination of work/life balance and her legal career. While the former trait can be attributed to technological advances, the latter trait cannot.

The latter can only be attributed to the changing legal staffing model that allows lawyers to take their focus off of the partnership track or the ever enticing General Counsel position and design their own personally satisfying career path. Before joining Special Counsel, I practiced law at a very well respected firm and had little exposure to the world of contract attorneys and their role in the legal field. In fact, somewhere along the way I developed a much uninformed opinion that contract attorneys were those who could not find a job or who had less than impressive credentials. I was beyond wrong in this assumption and have seen innumerable attorney candidates enter our doors who not only look like a million dollars on paper but also delivered highly specialized and impressive legal services to our clients.

Meet today’s lawyer—the savvy practitioner who thrives on the flexibility of contract work and who offers law firms and legal departments exceptional work product for a fraction of the cost that is associated with the training and development of junior attorneys. You may be reading this and thinking: "You show me a top-notch attorney who doesn’t want to be a partner at an Am Law 50 firm, and I’ll show you a guy who talks to himself while he is alone in the elevator and cannot hold down a job." You are not alone in your perception; however, it is time to learn more about today’s lawyer and how they can benefit you and your firm or legal department. 

The following case study is an excellent example of today’s lawyer in the temporary legal staffing industry. Sometime ago, Charles came to Special Counsel with a simple request: "Find me something I enjoy and that allows me to have the flexibility to live my life." Charles, a Harvard educated lawyer, came to us with thirteen years of experience and expertise in mergers, acquisitions, divestitures, and other complex business transactions. In addition to an impressive educational background, Charles had served as General Counsel for a major corporation and prided himself on being an excellent negotiator and a hard working attorney. Charles had reached a point where he was ready to lessen his stressors but did not want to sacrifice working in a challenging environment. Needless to say, it was not long before Charles achieved his goal. 

Charles’ story is not unique. In fact, he is only one of many legal professionals who have sought temporary or contract attorney opportunities that allow them to achieve success outside the traditional practice of law. Flexibility is the key to attracting the best lawyers for your law firm or legal department. A recent issue of The American Lawyer magazine applauded the usage of temporary attorneys:

As recently as five years ago, white-shoe firms shunned temporary attorneys out of fear that they would reduce quality. Today they rely heavily on temporary and contract attorneys to meet short- and even mid-term fluctuations in demand. This leads to a much more flexible, productive, and
profitable talent mix.5 

Today’s lawyer seeks a staffing model that applauds pursuits that are not always tied to billable hours and rainmaking and many turn to staffing agencies for placement assistance. Partnering with a reputable staffing company provides today’s law firm or legal department the ability to find experienced talent at a cost that increases profits and improves client satisfaction.   

III. The "Win-Win" Solution

Many law firms and legal departments have discovered an affordable alternative to the traditional law firm staffing model by making temporary attorneys a part of their team. This partnership is a "win-win" solution for today’s lawyer who seeks more work/life balance and today’s law firm or legal department that seeks top-notch lawyers that maximize revenues and provide the highest quality legal services.

Megan Stamey, Esq. is the Business Development Director in Special Counsel’s Atlanta Office.

The impending "war for talent" has arrived. For the last few years, we have been warned by the Department of Labor, economists, politicians and the like that a candidate shortage was forthcoming. We are now here. Employers are currently in serious competition to attract, bring on board and retain the best and brightest workforce for their organizations. 

Why the shortage? Baby Boomers, the largest generation of workers in recent
history, have begun to retire, leaving talent drainage in the overall workforce. Subsequent generations are less populous and do not have the same number of employees to fill the shoes of the departing workers. Furthermore, Generation "X" and Generation "Y" employees are often fulfilling non-traditional roles and are less interested in leadership positions than the previous two generations. The "X" and "Y" Generation workforces by and large are more interested in work-life balances than their predecessor generations. So, the question is, who is going to fill those leadership roles?

The current talent pool is and will continue to be unable to meet the requirements or expectations of most employers. Aside from the retiring Baby Boomers, other reasons have been cited that have contributed to the dearth of qualified workers. For example, questions have arisen whether our education system is adequately preparing our young workers to compete in a global environment.  

Immigration is another factor contributing to the labor shortage. Over the last several years, employment visa availability has been cut drastically. Furthermore, post 9/11, the rigorous immigration processes that have been put into place have served as a deterrent for potential candidates to even apply. 

So, what is the solution? It was thought in recent years that global outsourcing could be a viable answer to combating our current labor shortage. However, outsourcing is not the complete answer to the problem. The advancing economies in both India and China, where the majority of outsourcing has been performed, has stirred up competition for quality labor in those countries as well.   

Right now the best answer is to be creative in your own recruiting and retention strategies in order to find and keep the best talent. You must proactively pursue qualified candidates through networking, referrals and the use of trusted recruiters. It is also imperative to take a strategic approach to recruiting by looking long term and not just at the "here and now." What talent do you anticipate needing in the next 6, 12, 18 and 24 months? Start your process of seeking talent in advance of the actual need. Seeking the right candidate can prove to be a time-consuming process. It may take some patience but you must give your organization enough time to proactively seek out qualified candidates.

Additionally, allow your outside recruiters to become an integral part of your strategic staffing team. Good recruiters are an invaluable resource for finding talent in the marketplace and keeping their finger on the pulse of the employment landscape. They can also assist in branding your organization. Allowing your recruiters "inside" to understand the strategies, goals and inner workings of your organization, will enable them to be better "salespeople" on your behalf. Remember that recruiting is selling. Top performers who have the capability to make a significant contribution to an organization must be proactively identified, approached and attracted to your organization. A good recruiter can help your firm "get noticed."

Be creative in who you actually hire. Consider hiring mature, experienced workers who are retired or semi-retired to handled projected shortages. Not only are these folks extremely valuable for their years of expertise and often transferable skills, they are extremely loyal and motivated employees. Furthermore, they could serve as terrific training resources for younger members of your team. They are often exceptional mentors. 

If you have not already done so, you must also begin to consider part-time talent. There is a population of extremely talented workers who need a flexible schedule, often due to family commitments. Many of these talented individuals would consider returning to the workforce if the flexibility was afforded to them.

Retention is equally, if not more, important since the resources to hire new staff are costly from both a dollar and time management perspective. You must offer competitive compensation and benefits, creative perks, appreciation and respect for contributions by your staff, as well as educational opportunities to enhance personal and professional growth. Peer mentorship programs are another benefit that costs little but have a tremendous impact. Flexibility is also key. As mentioned above, the "X" and "Y" Generations are focused on quality of life issues. It is therefore imperative for employers to recognize this and provide opportunities for work-life balance. Stability is also important. Employees and prospective employees want to work for well-established, stable environments that provide opportunity for career growth.

The candidate shortage is here to stay for quite some time. Employers must be prepared in their efforts to compete for the best qualified talent in the marketplace. Creativity in hiring and retention plans will be pivotal to your success in winning the candidate game. Utilizing networking and referral efforts, along with the help of recruiters as your strategic hiring partners, will better position you for winning the war for talent.