Report: Law firms must change with the tim

As Seen In Long Island Business News
by Bernadette Starzee
Published: April 11, 2011

Law firms that do not keep pace with changing demands in the marketplace will have difficulty competing, according to a new report adopted and released by the New York State Bar Association.

The “Report on the Task Force on the Future of the Legal Profession” recommends the restructuring of law firms in the areas of billing practices, work-life balance, training for new attorneys and technology. In the wake of some of the worst economic years in recently memory, the state bar association convened the task force, made up of law firm managing partners, law school professors and deans, technology experts and work-life balance consultants, last June.

A chief finding was that law firms should consider expanding their use of alternative fee arrangements.

“Clients are seeking more efficient services, predictable fees and increased responsiveness to their needs,” the report stated. “The hourly billing model has been strongly criticized by clients and commentators, leading to a shift away from hourly billing to AFAs.”

The task force predicted that the use of AFAs would continue to expand over the next decade.

Moritt Hock & Hamroff in Garden City has considered new billing practices in cases when clients requested it, but when they presented fixed or incentive-based fee structures, the clients were more comfortable with the hourly billing structure.

“The most important aspect is setting budgets upfront and managing client expectations,” said Marc Hamroff, managing partner of the firm. “Most billing problems occur when attorneys do not communicate well with the clients regarding how fees are accumulating or the anticipation of what fees will be down the road.”

If law firms are to use AFAs, “they must develop a methodology to address unanticipated events that may occur, with different plateaus of expenses,” said Howard Fensterman, managing partner of Abrams Fensterman in Lake Success, in response to the report. “Whatever the model, both sides must understand the agreement upfront, and the interests of both sides must be aligned.”

Work-life balance was another major area of focus in the report, which stressed that many attorneys are seeking a better integration of their work and personal lives. Increased use of mobile devices has created the expectation that attorneys are on call around the clock, which cuts into their personal time.

“Technology has been helpful in managing work/life balance, because it allows attorneys to work remotely,” Hamroff said. “But it also has attorneys on call and answerable to clients at all times. We have to figure out a way to use technology as a resource and not an albatross.”

Law firms should make other attorneys within a firm available to handle client matters while an attorney is on vacation, the report suggested.

The task force also recommended rethinking the way new lawyers are educated to develop more “practice-ready” law school graduates. It also suggested that the state bar association examine potential licensing reforms.

Finally, with advances in technology, the task force recommended studying the ethical and risk management concerns associated with social networking, third-party hosted solutions, virtual law firms and other new technologies.