The Estrin Report

Kudos to the DOJ for Acknowledging Paralegal Participation

Halleleujah!  Rarely do law firms or corporations acknowledge contribution of paralegals when a major case is won.  Paralegals may work until midnight for months giving up weekends, holidays and birthdays but how often do we see their names mentioned when attorneys take bows over a major win?  Going against tradition, the DOJ issued a press release today about a major win that also acknowledged the work and contribution of two of their paralegals.

A federal jury has found four former General Re Corporation Executives and one former American International Group Inc. executive guilty, following a five-week long trial. The Hartford, Conn. jury returned a verdict of guilty on all charges against all defendants contained in a 16-count superseding indictment stemming from a fraudulent scheme to manipulate AIG's financial statements.

At trial, the government presented evidence that the defendants engaged in a scheme to falsely inflate AIG's reported loss reserves, a key indicator of financial health. Evidence presented at trial established that when the investigation was disclosed to investors by AIG and through various media outlets between Feb. 14 and March 14, 2005, shares of AIG stock dropped from $73.12 to $61.92

"These convictions continue the string of successes in our crackdown on corporate fraud and our effort to restore integrity to our financial markets," said Acting Deputy Attorney General Craig Morford, chairman of the President's Corporate Fraud Task Force.

Sarah Marberg and Amy Konarski get national and public recognition for their contribution to the win of this case.  Kudos to The Justice Department not only for fighting corporate fraud but also for the realistic and humane public acknowledgement about a very real team effort.

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New Magazine for Paralegals

A new and exciting magazine for paralegals will launch in June, 2008.  KNOW, The Magazine for Paralegals is an outside-the-box, informative magazine balancing workstyle and life balance for paralegals.

Designed for paralegals in today's highly competitive market, the publication offers tools, tactics and strategies for a successful worklife and lifestyle balance.  Written by leaders in the field, just a few of the upcoming stories include:

• Famous TV Stars: What Fans Don't Know About These Former Paralegals
• Work Less, Earn More: Can You Ditch the 24/7 Stressful Routine?
• The 10 Most Influential Paralegals in the Country
• Trends Guaranteed to Change the Paralegal Profession
• Diversity's Little Secret:  Are Caucasian Paralegals Doing Enough to Support African-American Paralegals?
• Paralegals Succeeding Against All the Odds
• Your Network is Your Net Worth
• Wedding Cake Blues: When You Marry Your Job
• Navigating a Male-Dominated Industry
• New Case Law That Affects Your Career
• Why Litigation Support Managers in BigLaw Can Earn Up to $200k Per Year
• Can the IP Field Sustain Its Phenomenal Paralegal Growth?

The magazine will feature regular columns such as:

• TechKNOW - Technology Paralegals Need
• KNOW News is Good News - Happenings in the Paralegal Field
• Offbeat Things Paralegals Do To Succeed
• Advice from The Career Guru
• The KNOW List:  Books, Publications, Resources
• The Stress Doc Talks- Putting Passion Back Into Your Job
• American Paralegal in London
• e-Discovery for Paralegals
• KNOW More!  Investigative Techniques for Paralegals
• Corporate, IP, Investigative, Litigation, Personal Injury, BigFirm, SmallFirm, In-House, Technology, Compliance and much more!

To subscribe, please go to:  www.knowparalegal.com.

The Billable Hour: Albatross for Paralegals As Well

Practically every day, in one legal publication or another, you're going to read about how the billable hour will eventually meet its demise.  Whether this occurs in the next 10-20 years is questionable.  What we do know, is that CorporateAmerica is pushing back hard against inflated hourly rates including paralegal rates that can go as high as $250.00 per hour or more.

When news broke last fall that a few New York City lawyers had reached the US $1,000-an-hour mark (that’s US $16.67 a minute), a partner at a major firm in the city warned that the profession may have hit the “vomit point” with clients.

He was right: although the skyrocketing rates lawyers charge have been something of a joke for decades, several large U.S. corporations are no longer laughing. Some clients, it seems, are less willing to accept “open-ended, indefinite and unknowable liabilities when they walk into litigation,” says Lorne Sossin, a law professor at the University of Toronto. Now, to cash in on this discontent, a handful of boutique firms are beginning to offer alternatives to the billable hour, the industry standard since the ’60s.

An article in today's Maclean's, a Canadian national weekly. stated that charging by the hour—or in six-minute blocks—was originally meant to improve transparency. The problem, says Hugh Totten, a member with Valorem (latin for “value”), a new Chicago-based law firm that offers clients contingency fees (payable only if the result is favourable) and fixed fees, is that the billable hour “creates an incentive for endless litigation and for a complete lack of efficiency.”

This critical refrain isn’t new. In a 2002 report, the American Bar Association’s commission on billable hours blamed hourly quotas for driving young lawyers from the profession (an estimated 45 per cent of lawyers quit law by their third year), and for leaving little time for pro bono work. The commission identified several alternatives. While many private law firms provide options to favoured clients, most lawyers still work on the clock (91 per cent of legal work in Canada is based on billable hours). When asked how quickly firms are shifting from that model, Richard Stock, founding partner of Vancouver-based legal strategist Catalyst Consulting and frequent Paralegal SuperConference speaker, laughs: “Global warming is faster.”

Those paralegals in firms requiring 1800 billable hours per year are just as vulnerable to doing whatever they can to rack up hours as are associates.  The only problem is, there is no partnership carrot and most times, no upward movement on any career ladder.

Experts anticipate that the current economic downturn will lead to further belt-tightening and could force more companies to reassess deals with their lawyers. “The days of just writing cheques are coming to an end,” says Jay Shepherd, whose Boston firm, Shepherd Law Group, banned billable hours last year and doubled its 2006 revenue. “There is no other business that we don’t know the price of something before we buy it. Imagine getting on an airplane and being told they’re going to charge you by the minute. It’s crazy. Nobody would do it.”

In setting flat fees for work, however, paralegals will need to know how to complete assignments within the budgeted time.  Think about how you can bring the idea of flat fees to your firm:  start finding out how long it takes to summarize a deposition per hour (you can usually go somewhere between 12-25 pages per hour); review documents for attorney-client work product; form a corporation.  It may be a way to assist in better profits that in turn result in higher salaries (one would hope).

If paralegals can't reach partnership, don't move up a ladder but are required to bill the same as a 3-5 year associate, where do the boundaries kick in?  Anyone out there in a firm offering flat fees for paralegal work?  Let's hear how it's going.

Oops! There Go the Paralegal Jobs?

Finally, a firm that is honest about what it's doing.  Only, I'm not so sure this is good news for paralegals.  It may be good news for graduate students in India and for clients opting for lower cost legal fees.  It seems like you can have one or the other but never both.

Howrey has opened an office in India.  "It's not outsourcing," insists Robert Ruyak, managing partner and CEO of Howrey, describing his firm's new office in India. Of course, it's not lawyering, either, since an American firm practicing in India would violate Indian law. Instead, it's a new attempt by a U.S. law firm to cut costs by creating an office in India to handle document management in litigation, IP and arbitration matters pending around the world. Howrey is the first Am Law 200 firm to open an office in India to handle client work.

Like many U.S. businesses, Howrey hopes to take advantage of the growing class of well-trained -- and comparatively low-paid -- young Indian professionals. And Ruyak believes he can persuade reluctant clients, who will choose where their work is done, to embrace the venture. The question is whether they will do so.

We've written here many times about the threat of U.S. paralegal jobs being taken away by its counterparts in India.  Our attitude has been that outsourcing is here, it's not going away and it's time that paralegals take a hard, cold look at what's happening in the field.  However, it's our belief that if played properly, paralegals in the U.S. will only upgrade their assignment level.  Howrey has actually hired paralegals based in India as direct-hires to save costs.  This does not mean hiring American paralegals and sending them to India, folks.  This means hiring people from India, not necessarily trained paralegals, either.

It's just like if you had people working at home or in another location," says Ruyak. Much of Howrey's work is document-intensive litigation, intellectual property and international arbitration. And already, much of the firm's document management work is done by more than 200 employees, most non-lawyers, who work in an office in Falls Church, Va. It's not a huge leap, Ruyak hopes, to extend that work to India, where a paralegal would earn $20,000 to $25,000 per year, as opposed to $40,000 to $50,000 in the United States.

Come on, fella.  Just like if we had people working at home or in another location?  At $25k per year less?  Huh.  I don't think so.  Just be honest with the message.  It's really o.k.  Paralegals will deal with the situation just like 20 years ago when firms outsourced to the Philippines. 

However, paralegals need to come to the realization that outsourcing to India (or in-sourcing as the case may be), is here and not going away.  When asked, most paralegals will tell you that outsourcing does not affect them for whatever reason.  There needs to be a huge wake-up call to the community.

When BigFirms start to hire paralegals from other countries as the firm's permanent employees (not through an outsourcing company), the handwriting is on the wall.  Our advice? Get thyself crossed-trained and out of lower level document management assignments.  That work is going to cheaper labor and that cheaper labor is probably not you.

Ruyak concedes that clients "don't want to use outsourcing." But this, he repeats, will be different. "We will have our own people working on this. It's training, it's control, maintaining the security, the quality of the results." He adds that clients will have the choice of whether to use the Indian office to cut costs or to have their work done in the U.S.  Let's see:  $300,000 for the project or $30,000 for the same project.  Hmmmm.......I wonder what they'll choose.

Howrey partner Amit Saluja, an Indian-American corporate attorney hired last year from Hogan & Hartson, will be shuttling between his current office in Washington, D.C., and the new one in India to help hire and supervise new employees. The firm plans to hire recent graduates from Indian universities and top Indian students out of American colleges and graduate programs, who would train at the Virginia facility before returning home to India.

The office in India is just the first step in Howrey's long-term goal of expanding its support services worldwide. The firm hopes to eventually create similar offices in Europe and Asia. So far, though, it's just an experiment. (Meaning, if it falls on its face, no one has to take responsibility, it was only an "experiment".)  "We'll have to see how it goes," says Ruyak.

Stay tuned.

New Niche for e-Discovery: Special Masters

I'm telling you, when a field pops, it really pops.  Apparently, the increased use of electronic discovery has resulted in a new set of practitioners: e-discovery special masters.
According to The Daily Record, a special master is an officer of the court appointed to help with its proceedings, and may perform functions such as taking testimony or advising the court as a neutral expert.

“Essentially, you represent the judge and the court as an independent in evaluating technological disputes and electronic discovery issues,” explained Peter S. Vogel, chair of the Electronic Discovery and Document Retention Team and co-chair of the Internet and Computer Technology Practice Group at Gardere Wynne Sewell in Dallas.

Vogel, a partner at the firm, has worked on more than 20 cases with some form of an e-discovery special master. The role varies, explained Judge Shira Scheindlin, a U.S. District Court judge in the Southern District of New York and the author of several seminal opinions on e-discovery, including Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004).

Courts can appoint an electronic discovery special master “for a narrow dispute, such as a privilege review, or a broader task like supervising all discovery,” she said.

Special e-discovery masters have become prevalent because over the last few years, “the level of technical detail simply outgrew what judges and counsel could comprehend,” explained Craig Ball, a trial lawyer and technologist in Austin, Texas, who has served as a special master in approximately two dozen cases. “When neither the attorneys nor the court felt able to ask the right questions or understand the answers, that created the need for a technical special master,” he said.

While some tasks an e-discovery special master might take on are strictly technical, others require legal knowledge and expertise. A special master must “speak fluent litigator and fluent geek,” Ball said. “I couldn’t do what I do without both extensive trial experience and the training and background that qualifies me as a certified computer forensic examiner.”

The actual work performed can vary greatly depending on the case. “Sometimes I am a neutral examiner who sees both sides’ secret and privileged data to ensure that each side is getting what it is entitled to receive without compromising their opponent’s legitimate privacy and privilege issues,” Ball explained.

Alternatively, he said, “I may be a neutral expert advising the court when other experts can’t seem to find common ground.”  On a hands-on level, that means Ball may perform a forensic examination into a party’s electronically stored information, or he may help develop and implement search strategies to remedy a failed e-discovery effort.

And the use of e-discovery special masters will only continue to increase, Ball predicts.
“The demand for the service outstrips the ranks of experienced, technically adept lawyers.” Ball — who charges $500 per hour ($250 per hour for travel plus expenses) and assesses a $5,000 engagement fee credited toward the first 10 hours — said it’s possible to make a living as an electronic discovery special master.

“I made more as a trial lawyer, but enjoyed it less,” he said. “I charge a handsome hourly rate and am fortunate to have nearly all the work I can handle.”

So, listen-up everybody:  if you are a litigation support expert; an e-discovery expert; a paralegal with exceptional e-discovery skills, it only stands to reason that Special Masters are going to need assistance.  Start recommending a new position to accommodate them: e-discovery special masterette.  Or, Junior Master..... or ParaMaster.  Ok, so I'm not good at the name game but all kidding aside: don't overlook this opportunity to start assisting in this arena.  E-Discovery is not only exploding in terms of volume but in new positions with nice dollars attached to it if you're good.  Listen to your career instincts:  if you're savvy enough to spot and interpret the trends, now is the time to ride the horse in the direction its going.

Paralegal Falsely Posing As Lawyer Wins 50 Cases

Now here's an interesting situation:  Brian Valery, a paralegal working for Anderson, Kill, a pretty large firm in Washington, D.C. ups and decides he's going to tell his colleagues and supervisors that he's going to law school.  After a time, he decides he's going to let them know he passed the bar.  Impressed with his work and obviously in good with the partners, the firm hires Valery as an associate. 

All is going well for about two years.  So good, in fact, that Valery wins 50 cases for the firm. Come to find out, not only did Valery not pass the bar, he never even earned a law degree. Now, a New York judge has sentenced Valery to five years of probation.  He must also return the $225,000 he earned from insurance-litigation firm Anderson Kill & Olick and serve 100 hours community service, the New York Post reported Thursday.

If this weren't so serious, it might be funny.  Does that mean that you don't really need a law degree, that being a paralegal is sufficient?  I mean, 50 wins in two years is pretty darn impressive!  For every attorney who has ever put down a paralegal, take that!  And that!  We don't even know if Valery received paralegal training and certainly, asking him won't produce an acceptable answer.

It seems to me that the assignment level at which Valery performed as an "attorney " was actually that of a paralegal (since he had no law school degree).  Yet he was paid the salary of a staff attorney. The firm really ought to be looking at its job descriptions for attorneys.  Are its attorneys working at dummied down levels?  Should their work really be assigned to paralegals?  And, of course, should those paralegals be paid salaries at the staff attorney level?  How does the client feel to know that its cases were won by a paralegal?  Should they have to pay full fees for like-cases won by real attorneys in the firm?  Hmmmm.....Interesting questions.