Legal.

• Position: Industry Outlook

Our panel of industry experts covered an array of topics in our eighth annual legal roundtable. As the economy slows, Utah's law firms are adjusting to meet the needs of their clients, whether a mom and pop store or large corporation. The panel also discussed recruiting and mentoring trends for young associates, the growing popularity of unbundled legal services and the impact of international law.

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Series Sponsor

HOLLAND & HART

THE LAW OUT WEST

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

PARTICIPANTS:

Standing: Martin Lewis, Utah Business magazine; Richard Scott, Chapman & Cutler; Robert Hyde, Kirton & McConkie; Stephen D. Swindle, VanCott Bagley; Brent Lorimer, Workman Nydegger; Todd Shaughnessy, Snell & Wilmer; Blaine Carlton, Ballard Spahr Andrews & Ingersoll; Rand Bateman, Bateman IP Law Group; Edgar Cataxinos, Trask Britt; Wayne Western, Thorpe North & Western; Scott T. Evans, Christensen & Jensen; Kent Scott, Babcock Scott & Babcock; Richard Davis, Callister Nebeker& McCullough; Stephen Owens, Epperson & Owens; Kevin Pinegar, Durham Jones & Pinegar; Paul Hess, Strong & Hanni; David Bennion, Parsons Behle & Latimer; Tom Hardman, Austin Rapp & Hardman; Greg Lindley, Holland & Hart; Jonathan Hafen, Parr Brown Gee & Loveless

Sitting: John Adams, Ray Quinney & Nebeker; David Slaughter, Snow, Christensen & Martineau; Richard Johnson, Stoel Rives; Keven Rowe, Jones Waldo

How is the economy affecting your firms? What changes are you implementing because of today's slowing economy?

JOHNSON: Like probably every firm in town, we [Stoel Rives] are worried about the economy. Things have slowed down. Transactional work is very, very slow. I suspect for most everybody else, though, there are other areas of your firms that are fairly robust--litigation, labor employment, bankruptcy, restructuring. One thing we are doing is deferring incoming associates until February 1 of next year. We are going to provide a stipend and help them get past the Bar, but we are postponing them from coming on. We are also shortening our summer court program to eight weeks, whereas historically it has been 10 to 12 weeks. We are going to be putting a freeze on the administrative salaries and we have a host of other things that are sort of contingency plans as we work our way through this difficult time and decide what we have to do to make sure that we remain strong, vibrant and a profitable law firm.

LORIMER: Like everyone else, the economy has affected us [Workman Nydegger]. We have a national practice with a number of fairly large clients, and those clients have been suffering. It has affected prosecution business a little more than our litigation business. But, we see this as an opportunity. We are attempting now to launch a vertical marketing program. We are using the Internet more than we ever have to launch into specialty markets, discrete sectors of technology, that we believe will allow us to grow the business. We have not cut back on associates, but we are not going out and hiring hundreds of them. We are pretty much moving forward with the plan as we had it before the economic recession.

PINEGAR: I think Brent [Lorimer] makes a good point. I think for our firm [Durham Jones & Pinegar], one of the things the economy has caused us to take a look at is some of our practices internally--billing, collections, recording time promptly--the kinds of things where you tend to get a little lax when things are good and the work is pouring in. But every dollar is precious, so you pay closer attention to some of those things.

We've had to make some changes also. We reduced the number of summer associates and shortened the program that we have. But we found there are opportunities to get good people in a time like this when other firms are laying off, and also opportunities to add new clients who have been paying higher fees. Many clients are finding that they can use a Salt Lake firm at a much more affordable rate and not suffer any quality. So we found some great opportunities in this climate.

K. SCOTT: I practice with a construction law firm [Babcock Scott Babcock], and I'm getting to know the bankruptcy laws more than I ever wanted to. I've seen rates at $875 from these New York attorneys, and I've seen rates at $500 from some of our local attorneys in bankruptcy and they are doing a booming business.

For our clients in the construction industry, I've seen an increase in the number of disputes. We're just really busy when it comes to dispute resolution. The numbers are huge. And now our clients that usually stay out of disputes are involved in disputes. But the ability to pay for the resolution of those disputes, even among the better clients, is dwindling because of their lack of business. So disputes are up even among the more prudent of contractors and the ability is going down to pay for the disputes.

My love is dispute resolution and prevention. I'm seeing a lot of mediating and negotiating rather than lawyers taking things through the traditional dispute resolution process, whether it be in the state and federal courts or by arbitration. I see more creative things happening with lawyers in resolving disputes. As I talk with the construction industry clients, I see a greater need for and want for their attorneys to get involved in dispute prevention--not dispute resolution, but dispute prevention--and to spend a little time on the disputes clause of a contract or make a little investment on the front end for a dispute prevention process. So, I think lawyers are being looked at to be more creative and friendlier in the way that disputes are prevented and are resolved.

HESS: I think Kent [Scott] just answered the questions, "How can we increase our value, the value of the law and the value of lawyers to society?" We can do more to help avoid disputes, to help resolve disputes quickly and to help our clients find other ways to negotiate and avoid litigation. And that goes against what is keeping firms alive right now, but it's very important.

R. SCOTT: In our firm [Chapman & Cutler], we're dealing with the possibility of significant reductions in revenues, but I bet that we are all facing different experiences. Some firms, depending on their practice areas, have already experienced some decline, some are anticipating declines and some may actually have increases. We're anticipating declines, so we did probably what most firms did, which is look at what the overall profitability of the firm is, and take into account whether you have a reduction in revenues. If things decline, at some point you reach a point where it can adversely affect the fabric of the law firm. So you have to protect the law firm, and that causes people to make decisions about what they should do to cut compensation, to reduce staff, to do whatever needs to be done.

And different firms have already done some of that. We read in the newspapers about some of the major firms who have had mass firings and major problems. We went to our associates and discussed with them how they thought we should approach this. We talked about the history of salaries and all sorts of things. I was heartened to hear that their attitude was that they would rather have a decrease in salaries and protect everybody's jobs and to take sort of a broader view of the firm. Everybody's sort of pitching and making a contribution to keep the firm profitable and not throw some people overboard. So that is the approach that we have started on. But I think it's a hard decision, and it's not pleasant to talk about either losing people or reducing people's compensation. And sometimes it's very difficult for people. But I think obviously that is where we are now.

HAFEN: One of the trends that we've seen at our firm [Par Brown] is our lawyers retooling themselves. Where our real estate practice is a little bit slower than it has been and our mergers and acquisitions practice is a little bit...