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Why Paralegals in Traditional Law Firms Won't Stand a Chance in Hell

Paralegals: Listen up. Protect your career now, while you still can.

The Next Normal – Will the Traditional Law Firm Model Survive?

Susan Saltonstall Duncan
Guest Blogger

Susan Saltonstall Duncan

This article is the first in a series to look at the "Next Normal" for law firms. Part 1 focuses on the traditional law firm model and why it is unlikely to remain as it is, Part 2 focuses on lawyer skills and talent management in the future, and Part 3 will address whether and how traditional law firms can adapt to meet these challenges.

If " traditional" encompasses the status quo -- incentives that measure and reward billable hours, a pyramid structure where large numbers of associates are hired, weeded out and then promoted to the partnership by doing really good work and putting in excessive hours, where client matters are each approached in a bespoke manner -- the  answer to the title question is "no."  

Looking ten to twenty years into the future, law firms that adhere to (or stay mired in) traditional models of structure, service delivery, staffing and management, will be eclipsed by more nimble, adaptable organizations that deliver the services and solutions that clients need, more effectively.  While some firms may survive in the traditional mold, we will see many more implode, be acquired or simply close their doors.  Those that survive as "winners" will more aggressively and dramatically change the way they do business.

The Traditional/Current Model

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Many aspects of this traditional model are breaking down.  What was once a "cash cow" for firms -- hiring large number of associates who work and bill 2000 hours per year and who in their third through eighth or tenth year contributed significantly to a firm's profits is no longer a viable model. Most clients today refuse to pay for first or second year associates and many of the lower level work done by associates is now being sent to alternative service providers.

It therefore makes little sense for firms to continue to hire large classes of associates, even if the assumption is that two thirds or more would volunatarily leave or be weeded out by their fifth year, which again, has been common practice until the last several years.

Traditional Partnerships are Elusive

In many firms, the value and meaning of partnership has changed, especially since it no longer carries with it the security of tenure it once did.  As partners are de-equitized or encouraged to leave their firms if they are not producing, and as lateral partners with books of business who command high compensation and guarantees continue to be the growth strategy of choice, loyal, collaborative partnerships are much more difficult to find, build or sustain.  The emphasis is on business generation and profitability; there is little tolerance for even a year or two of low billable hours and certainly of partners who don't or can't bring in new clients.

Because equity partner ranks are shrinking, most firms have seen their category of non-equity partner and counsel grow.  This is creating numerous problems. One is that firms now are still too top heavy – there are large numbers of senior lawyers not originating new business, serving as service lawyers, and often not significantly enhancing the revenue of the firms.  

Another outcome as evidenced in a recent Peer Monitor survey shows that equity partners billable hours exceeded hours of non-equity partners, counsel/of counsel/special counsel by 300 hours/year in 2013.  This reflects that there likely is not enough work to go around and some equity partners are hording work, most likely for compensation credit.  Finally, this bloated layer of senior lawyers between partners and associates creates a log jam for talented associates who aspire to partnership.

How Legal Work is Viewed and Valued has Changed

As evidenced by what clients are and are not willing to pay ever-higher rates for, much of the work traditionally done by law firms has diminished in value.  There will always be a need to justify to key stakeholders that as a GC, you have hired the best, but outside legal spend devoted to "bet-the-company" cases or deals typically represents only 3-5% of the work in-house counsel send out (although it typically represents a much higher proportion of the spend.) The remaining ninety-five percent most often falls into three or four other "buckets."

  • Susskind defines the buckets as: Bespoke, Standardized, Systematized, Packaged and Commoditized.

  • Jeff Carr, GC at FMC Technologies believes that "Not every legal problem requires a brain surgeon. A high percentage of needs are basic blocking and tackling, and many require just a form."  He puts legal work into four buckets:  Advocacy, Counseling, Content and Process and suggests that the value that lawyers bring to the table falls almost exclusively into buckets one and two, where the need for the application of judgment is highest (see prior post on Client Service and Innovation.)

  • Bill Cobb of Cobb Consulting defines it as Bet the Company (4%,) Hired for Experience (16%,) Reputation and Expertise (20%,) Routine/Commoditized (60%.)

  • Nabarro Report GC Value Pyramid (see Value Post 3: Like Law Firms, GCs Must Deliver More Value to Their Clients) includes a four level pyramid with Level 1 focusing on strategic business planning, change management and board influence; Level 2 focusing on complex problem solving, lead negotiater or trial lawyer on major deals/cases, crisis management; Level 3 focusing on risk mitigation, influencing business stakeholders and leading external advisers and Level 4 focusing on getting the job done well and correctly, providing legal solutions and management reporting.

Alternative service providers have proliferated to provide many content, routinized and commoditized services. These alternative service providers now offer many services that traditional firms have considered their bread and butter, e.g., research and discovery, contracts, NDAs, and patent prosecution.

Traditional Roles and Hierarchy are No Longer As Effective

There is less room at the top of the partnership and the criteria for being a profitable and successful partner have changed. The amount and type of work that clients now send out directly to alternative service providers has accelerated.  Technology and automation have disrupted and in some instances replaced work that was previously done manually.  This inevitably changes the roles and responsibilities of those employed by law firms.

In his most recent book, "Tomorrow's Lawyers," Richard Susskind suggests that lawyers will fill many different roles in the future including:

  • Expert trusted adviser
  • Enhanced practitioner
  • Legal knowledge engineer
  • Legal technologist
  • Legal hybrid
  • Legal process analyst
  • Legal project manager
  • Online Dispute Resolution practitioner
  • Legal management consultant
  • Legal risk manager
  • Technical specialists: patent agents, economic analysts, etc.


In addition to new roles for lawyers, legal service providers of the future will employ many others types of professionals.  In addition to some of those included in the list above, like process improvement and project management, others becoming more commonplace today include pricing specialists, sales professionals and client service/account managers.

So back to the initial question: will the traditional model be viable in the future? Is it the best structure?  What might an organization that retains some of the traditional values and structure of a law firm partnership but adapts to the changing landscape look like going forward? Perhaps it will look something like this:

New Law Firm Model 2

Law firms need to take a new look at what it is clients need from their firms, how they will modify or redesign their organizations to deliver those needs as effectively and efficiently as they can in order to meet their profitability goals, what type of organizational structure and culture they will need to balance their financial goals with the type of place in which they like and want to work, who and how they hire, train and reward, what business they are in or should be in, and what kind of leadership and governance structure they need to hold it all together.

About our guest blogger:

Prior to her position with Squire Sanders, Susan was the founder and president of RainMaking Oasis, LLC, a business development and management consulting firm that helped lawyers and law firms create, execute, and evaluate effective strategic and business development initiatives.  She has been working with law firms since 1980, providing consulting services for over twenty-three of those years and to more than 100 law firms, other professional service entities and thousands of individual lawyers. 

She became one of the first in-house law firm marketing directors in the country in 1984 and is a founding member of the Legal Marketing Association.  Prior to forming her consulting businesses, she worked in two national law firms – Pepper Hamilton and the Washington office of Cadwalader –  where she assisted in organizing efforts in client and practice development, communications and public relations, governance and planning, attorney recruitment, performance evaluation and training and paralegal management. 

Readers who read this Estrin Report also viewed:

The Paralegal Knowledge Institute - Creative training for experience paralegals

OLP - Organization of Legal Professionals - Legal technology training for lawyers, LitSupport and paralegals

The International Paralegal Association - Bringing paralegals from all over the world together.

 

 

 

 


I'm Not a Dinosaur. I'm Just Big for My Age.

DinosaurDoes anyone over 50 feel like a dinosaur? We didn't grow up with computers. We did invent them, that's true. I'm hearing more and more about technology moving so fast that by the time you learn one thing, it's old, gone and done with.

So, 60 years of age is the new 40. Does that mean 20 years were lost or is it 20 years hasn't happened yet. What are you doing besides exercise, eating healthy and Botox to erase those years? And why, if 60 is 40, do you look like your grandma?

Let's take this social media thing. You're definitely a dinosaur if you're not social mediaing it. So, I'm twittering, I'm linking, I'm facing, I'm blogging, I am pinning (although with what, god only knows) but I'm no closer to anyone than before. Where are my friends?

I have almost 7,000 followers on LinkedIn. That doesn't count some of the groups I own where there's 9,400; 8,700, 2,000, 1500 and I don't know what else. I send eBooks, I retweet, I'm friends with people I'll never meet. In fact, I've never met any of them.

Let's see. Straighten me out here. You set up LinkedIn to do business. It's the career/business network. You're supposed to look professional and get business or job offers. But it's not polite to talk about your business, you can't advertise and you sure as heck can't solicit anyone. You are a dinosaur if you don't have your profile on it with your airbrushed, digitized, photo shopped, natural picture.

So you peek in to see how many people viewed your profile today. But you're not supposed to ask them what they thought or could you help them find something. Then there's the posting. You can post about an article that you haven't written (I write a lot) because to mention an article about yourself is tacky. Absolutely, positively no self-promotion allowed. You get written up nationally but it's egotistical to talk about it. You have to wait for one of your friends to talk about it for you and I just told you about the nebulous 7,000.

For the posting portion of the program, you're just supposed to think of witty things 24/7 or deliver a post of an article you don't care about so people notice you. I'm getting noticed, all right. I just can't reach out to them.

Same with Facing it. I think people are reeeallly stretching it here with stuff to write about. I feel sorry for some of these little kids whose parents post their pictures every single day. Problem is, I am not going to expose my family (I've been cyberstalked viciously by a paralegal down in Atlanta who is obsessed with me) so I'm not going to go through that again. Honestly. I don't know what to talk about on Facebook. I never learned that small talk stuff.

There's only so many times you can talk about the 105 degree heat, my weight loss of 115 lbs or comment on someone's cute puppy. I refuse to talk about driving to work and the delay I had getting my Starbucks. Does that make me less approachable? Or does it make me more like a real human being. And, just what is it that I'm supposed to do with 7,000 LI followers? Particularly under the politically correct guidelines and no-no's. For that matter, how do you know when anyone reads anything you posted on LinkedIn?  

It's the great unknown. Are there readers out there? If so, give us a holler....Hello! <wave wave> we're over here! Am I the kid who noticed the Emperor wasn't wearing any clothes? Does this make me a dinosaur or does it make me realistic? Dinosaurs are somehow hard to miss. And no one wants to tell you that you're just totally inept.

If you've read this post, help me out here. Signal to me. Post to my blog. Send me an IN email. Write here, put something in the LI groups I own and cultivated: KNOW, OLP, Legal Vendors, Paralegal Mgrs, Vitual Paralegal, Paralegal Group, eDiscovery Paralegal. I may have left one or two out.

Being a dinosaur doesn't have to be that bad. Really, it doesn't. It kind of has a cache all its own. No one wants to be labeled a dinosaur. I don't care how many Godzilla movies are made. All dinosaurs want is just a little acknowledgement that they're still here, still pokin' along and still kickin'. I am still kickin, aren't I?


Cliches: The Name of the Game

MP900427662[1]Have you taken my class, Brave New Writer: Leadership Through Corporate Storytelling?

If so, you know how adverse I am to cliches. When I see certain ones, I just tell myself to keep walking past those open windows.

Phrases such as: As you know; if you have any questions, hit the nail on the head; attached please find; tip of the iceberg; avoid like the plague; catch-22; not in my wheelhouse. Well, you get the picture. (Oh, sorry about that one.)

Cliches are tired. They're boring. They cause you to skip right past them frantically searching for the meaning of the paragraph. Cliches sound like we have no independent thinking - as if we can't cope unless we borrow from someone else. That's ok if we're adolescents and trying out anything and everything (oh, lord, there I go again) until something fits.

Yesterday, I came across Gary Kinder's blog, "Write to the Point" titled, Barking Up the Wrong Tree. I thought at least he could come up with a different name for his blog, what with his writing about cliches and all. Just a little more proof that the world isn't perfect.

At any rate, (oops, there I go again), he makes good points. A cliche, says Kinder, is clever (that's why everybody started repeating it, and that is how it became a cliche). But hearing them over and over again doesn't mean we recognize them as cliches. Who would have thought that "Please don't hesitate to call me" at the end of your email is a cliche?

If you absolutely must use cliches, at least don't mix them up. Kinder tells the following story: "A defendant's lawyer once complained to the judge that the plaintiff wanted "the whole nine balls of wax." Another lawyer told the judge he was, "beating his head against a dead horse."

A judge, after discussing a complicated matter with both counsel, announced they would "take the bull by the horns and let the chips fall where they may." Holy cow.

Kinder cites his all-time favorite cliche which has now become mine. An associate, who was running to court alongside a late and ill-prepared partner, turned to her and panted, "How are you going to get out of this one?" Without breaking stride, the partner said, "I'm just gonna shoot from the seat of my pants."

I leave you with that scene, inside a quiet office, Starbucks in hand.

Career tip: Employers today are seeking the hybrid paralegal - one that is crossed-trained in multiple skills such as litigation paralegal/litigation support technician. How do you get that training? Continuing legal education.  Good ole CLE. Check out www.paralegalknowledge.com.