Legal.

• Position: Industry Outlook

The legal industry was impacted as strongly by the recession as any other industry. The downturn has crushed the careers of many recent law school graduates, and local firms are searching for ways to keep the talent pipeline flowing. In this roundtable, legal insiders also tackle the burden of regulations, creative ways to help cash-poor startups and challenges within the judiciary.

We'd like to give a special thank you to Stephen Owens, of Epperson & Owens and past president of the Utah Bar Association, for moderating the discussion, and to Holland & Hart for hosting the event.

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PARTICIPANTS:

Back Row:

Bill Fillmore, Fillmore Spencer; Eric Maxfield, Holland & Hart; Tom Bennett, Ballard Spahr; Scott Evans, Christensen & Jensen;John Adams, Ray Quinney & Nebeker; Keven Rowe, Jones Waldo;Hal J. Pos, Parsons Behle & Latimer;Kevin Pinegar, Durham Jones & Pinegar;T. Richard Davis, Callister Nebeker & McCullough

Front Row:

Stephen Swindle, Van Cott, Bagley; Christian Clinger, Institute of Advanced Mediation & Problem Solving; Kyle Grimshaw, Austin Rapp & Hardman; Willis Orton, Kirton & McConkie;Peter Billings, Fabian Law; Lyndon Ricks, Kruse Landa Maycock & Ricks; Rick Johnson, Stoel Rives; Catherine Larson, Strong & Hanni;Jeff Silvestrini, Cohn, Rappaport & Segal; Ken Tillou, Parr Brown Gee & Loveless

Seated:

Greg Lindley, Holland & Hart; Sally McMinimee, Prince Yeates;Richard Scott, Chapman & Cutler;Stephen Owens, Epperson & Owens; Bob Babcock, Babcock, Scott & Babcock

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What areas of law are on the upswing and what are on the decline? What new areas are you focusing on and what may be gone for good?

PINEGAR: We are seeing, gratefully, an uptick in corporate mergers and acquisitions. And IP, especially litigation.

BABCOCK: We work a lot for construction industry clients and they are getting beat up pretty good. And their work has dropped off some, as the industry has been very tough for them for a few years and probably will be for many more.

I have coined what I call the "10 hour" case. After getting the case, after about 10 hours of review, we say, "I'm not sure there's much at the end of this rainbow. It may not be worthwhile."

ROWE: In the real estate development industry in Utah, there's a lot of good things on the horizon that I see. We've been involved in a lot of new projects. The problem with it is that there's been so much of a downturn that there's a lot of people that are struggling to stay in business. So they have work in the future, but they don't know how they are going to be able to stay in business for long enough to be able to do those projects.

We've been involved in some great new projects here in the state on the real estate side. It's just surviving the last few years and being in a position to execute it--that's the challenge to a lot of businesses in the state right now.

POS: With the strong commodity prices, mining continues to be a very strong industry, both here domestically and internationally. Utah is starting to see a lot of renewable energy projects. We've been involved in several wind projects here in Utah. But in general, renewable energy is a growth area in the legal market nationally.

Are you doing something creative with your legal fees to deal with that situation if they are cash poor?

ROWE: I have some construction clients that I don't bill. I've just been talking to them and trying to help them through some of their issues. They've been great clients of the firm for a long time, and I've kind of become their pro bono counselor to help them through some of their issues.

CLINGER: We are seeing a dramatic increase in mediation. Our clients want quick, timely resolution to their cases. Also, we're seeing an increase in pre litigation mediation where clients do not want to have their cases drawn out in public. They want to have a discreet way to have a case resolved through mediation.

SWINDLE: We have seen an increase of emerging young companies--somebody with a good idea, maybe with a good product, or with IP that they want to exploit but are cash poor. We have offered some of these young companies advice on a fixed fee basis relating to formation, intellectual property protection, licensing agreements--any number of things they may need to get started--in an effort to exploit their ideas or their products on a flat fee basis, which, to them, doesn't break the bank and to us hopefully cements a relationship with a potential client.

GRIMSHAW: My field is IP, and I can't remember the last time I actually had a billable hour project. Every project I've had in the last two years, the client says, "This is what it's going to cost." And it's up to us to get it done and to tell them up front if I can do it for that price and if not, well, ultimately he has to go somewhere else. But if I can, the risk is on me.

SCOTT: A lot of the work I do is finance related, primarily municipal finance. Generally, fees are based on a variety of factors, including the size and complexity of the financing, and that's traditional in that area of law.

BENNETT: We also do a fair amount of public finance, and that has typically been on a fixed fee basis and continues to be that way. We've experimented with a lot of different things, at least with our real estate clients, in terms of trying to give them some breathing room at the front end and some certainty. We have done some fixed fee work on the real estate side, and we have done some work at discounted rates with a cap on our budget--that we'll go this far and then re-evaluate and decide whether the client wants to go forward.

We've seen some return on that from work done for larger clients in the past two years. We have large national clients come to us and say, one, "We'll only work with you if you will cap your rates at what they were last year:' and, two, "We're going to really crank in the budget"

We've tried to be as cooperative as we could, and we're now seeing a little bit of loosening up with those national clients. They are now getting a little more back to the way they were before. And because they've cut back on their legal staffs, we find that our work for some of those is actually growing because they cannot handle as much in-house as they were able to before.

POS: What we've seen in the last couple of years is an increase in volume-based discounts. Clients seem to be very interested in that; the more work they bring, the expectation is that there will be a discount. And we're starting to see more clients sticking to budgets.

TILLOU: We also are using volume discounts on certain larger institutional clients. The other thing that we have done on a...