New Paradigm Law Firm Professional Office Consulting Bob Badger

Traditional Law Firm Partners Associates Paralegals Paralegals Paralegals Staff Staff Staff Staff Pyramid

Associate-Driven Profits In Big Traditional Firm 2500 hours x $140/hour rate = $350,000/year (revenue/associate) Firm cost/associate = $150,000 yr Margin/associate = $200,000 Every additional associate on a case = $200,000/year ( in bottom line profit)

Impact On Law Firms Of Associate-Driven Profits Inexperienced new associates added 1998 Latham: 150 (20% of the entire firm) Cravath 76 (22% of the firm) Sullivan & Cromwell 99 (21% of the firm) Result of these profit-driven policies 90% of all associates are terminated between 3-9 years and, just when they finally have experience, are replaced with completely inexperienced new associates 1/5th of all lawyers in the large pyramid firms thus have no experience

The Resulting Pyramid Structure Is Detrimental To Quality The important work is driven to these inexperienced associates That is where the margins/profits are Large staffs resulting from profit motive fragment the knowledge of case Experienced senior trial lawyers are insulated from the case by layers of inexperienced associates Because profits come from hours billed, there is no incentive to use technology to increase efficiency

How Can Quality Be Improved? Create incentives for assigning important work to experienced trial lawyers Create incentives for training associates Create incentives for extensive use of technology

How Can These Quality- Based Incentives Be Created? Use result-based, non-hourly, billing Law firm profits are then based on expertise, experience and results, not merely hours expended

New Paradigm Law Firm through Technology Partners Partners Associates Paralegals Staff

Partners They do the Work 1. Partner have sole contact with clients. 2. Partners type there own letters and pleadings. 3. Partners do their own research. 4. Partners do their own depositions. 5. Partners go to trial alone or with one associate or paralegal.

Associates Learn to be partners 1. They work in the background with the mentor partner. 2. They assist the partner in a learning mode. 3. They may go to trial with the partner to assist and learn.

Paralegals 1. They are fewer in number and have a much lesser role that in the traditional law firm. 2. They work for the partner directly.

Staff No Librarian. All research is done on line. The Administrator purchases everything on line. There is no file room as all paperwork is scanned into the server. Filings and outside deliveries are reduced by , e-filings. Outside couriers are used when required.

Staff continued With the partners, associates and paralegals doing there own typing, the ratio of of time keepers to secretaries can be kept to 8 to 1. Most traditional law firm have a ratio of 2 to 1.

Cost Personnel cost is the highest part of operation the law firm. The new paradigm significantly reduces the operating cost of the law firm and thus makes the potential profits to the partners very high. Through careful analysis of the hours spent on many complex litigation cases, the firm can accurately predict the cost of litigation.

Cost continued This allows the new pyridine law firm to offer fixed pricing for complex litigation, and still provide a high profit margin to the partners. If the client prevails in the complex litigation the firm receives a large bonus. This new concept is very appealing to many large corporations.

Concepts Technology is used to the fullest extent. All depositions, documents, letters, e- mails, drawings, photographs, videos and visuals are stored in a complex data base which is brought to the trial in a laptop computer. All written material is OCR and indexed.

Concepts continued When possible all letters and pleadings generated by the firm, are made from templates or forms. This allows the client to be kept current on the case with minimum time and effort of the firm.

Concepts continued Dates and notes are made and indexed on all documents and evidence. This data can be retrieved instantly, printed, displayed for the jury. Originals are kept for the duration on the trial in case there were a error made during scanning.

Concepts continued All original documents are returned to the client after the trial. All scanned documents are treated as originals by the court and are archived on CD-ROM should there be an appeal. All contact with the client is made by e- mail. Phone calls are recorded and transcribed into the data base.

Concepts continued Clients work very closely with the Partner, which improves the client/attorney relationship. Clients like knowing what complex litigation is going to cost before the case begins. Litigation cost 50 to 75 % of what the cost are with traditional law firm.

Problems Why dont more firms practice in this manner? Traditional law firms have many associates and partners who dont type or believe in the use of technology. Every person in the firm must have complete confidence in technology and use it to the fullest extent.

Opportunities With most of todays graduating attorneys being computer literate and exposed to technology, they have the opportunity to start a new paradigm firm.

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