Who's on First - Anatomy of a Law Firm
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You needed legal representation. You received a recommendation from a colleague and arranged for an initial consultation. You briefed the attorney on your case and liked his/her strategy and proposed timeline. The attorney drew up the contract and you negotiated terms. Congratulations! You have now officially retained legal counsel. But who is really handling your case? What do you mean who’s handling my case? The attorney I met with and hired – we even shook hands on my way out of the office – that attorney, my attorney. Well, maybe.
You needed legal representation. You received a recommendation from a colleague and arranged for an initial consultation. You briefed the attorney on your case and liked his/her strategy and proposed timeline. The attorney drew up the contract and you negotiated terms. Congratulations! You have now officially retained legal counsel. But who is really handling your case? What do you mean who’s handling my case? The attorney I met with and hired – we even shook hands on my way out of the office – that attorney, my attorney. Well, maybe.
Law firms, particularly larger firms can employ legal assistants, law clerks, title examiners, abstractors, searchers, legal secretaries and of course attorneys. Attorneys may be partners, managing partners, associates, junior associates, supervisors, board members and the list goes on. A large law firm is a corporation and each person in that corporation has a role to play in the running of the business.
Only attorneys can represent you but the entire case can be built with your attorney doing little more than “supervising.” If you are a retainer client, it is almost certain that much of your legal work is being done by someone other than your attorney.
Of course it makes sense that a legal secretary would type your documents and that a searcher would do legal research, this is effective and appropriate delegation. However, do you want to pay an inexperienced associate 20 hours of billable time, albeit at lower rates when an experienced attorney could have handled it in 10? To put it simply if the firm charges $300 per hour for Associates and $500 per hour for Senior Attorneys, you would pay $6000 for the Associates work rather than $5000 for the Senior Attorney. What initially seems like a cost savings can actually cost you money by using resources that are not as experienced.
Associates are most often recent law school graduates beginning their corporate law career at the bottom of the feeding chain. All Associates have the same goal, learn from the best and climb the corporate ladder of success to Partner. Senior attorneys will have Associates do legal research, prepare documents and perform non-billable tasks. In larger firms, attorneys may rarely see the inside of a court and will not make key decisions on “their” cases for as much as 10 years. In essence you may be paying for the training of an associate. In firms with a higher billable hourly rate, typically more work goes to the associate.
Even if you have negotiated an alternative billing arrangement (which by the way is a wise move) that is not based on hourly billing, you could be losing on the experience that you hire. If the majority of your legal work is handled by someone other than the attorney you hired, you may be losing the benefit of their expertise. In example, you may hire a firm because one of the Partners specializes in international law. The firm has several associates who do work for all of the partners. One of the Associates is assigned research on your case. The Associate will do a fine job of research but will he or she go in the same direction that someone with an expertise in International Law would have gone?
Furthermore, associates are promoted in large part due to their contribution to the firm profits, i.e., how many hours they bill each year. One consequence of this is that associates look for billing opportunities, not necessarily opportunities to deliver value to the client.
The answer is not as simple as having your attorney do more of the work, but in ensuring that you do not lose expertise, or efficiency when the work is delegated. Associates need tutelage just as medical residents need to work with Attending Physicians before they can work on their own. However, the client should receive the same level of expertise and efficiency no matter how many other team players are involved, and not pay for the time partners spend to mentor or supervise associates.
In answer to this dilemma, some firms outsource legal research to attorneys or other experts. Some attorneys prefer to work at a lower billable rate as a subcontractor for other firms. These attorneys are able to work within their niche and provide a high level of service for a fair price. In this arrangement, a law firm would hire an attorney who specializes in the area of expertise for legal research. The outside attorney would charge much less than the senior attorney in your firm (and often lower than the Associate) but you would not lose the expertise that you hired.
Law firms may also outsource to experts in other cities or countries. We have grown accustomed to services being outsourced to India and this also happens in legal work. However, outsourcing is not simply confined to India for the cost savings but involves hiring expertise. For example, if you have a licensing dispute in China, the firm might outsource to someone in China, which would save time and money. In the same way, perhaps your business and law firm are located in Pennsylvania but a real estate dispute arises in your California office. Your firm might outsource to a real estate expert in California. In hiring established expertise you also gain productivity. If a firm handles twenty real estate cases per day they will be able to resolve a similar case much faster than a firm that handles one such case every six months or so.
There are many ways to gain expertise without the attorney handling every logistical detail. However, it is up to you to communicate, question and monitor so that you will always know who’s on first.
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