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April 1, 2013 Focus: Law

Change is the new normal for area's law firms

Photo | James Steidl, shutterstock.com
Stanley A. Twardy, Jr., managing partner, Day Pitney LLC
Michael A. Cantor, managing partner, Cantor Colburn LLP
Robert B. Cox, partner and member of the management team, Halloran & Sage LLP
By Susan McDonald

The 2008 economic crisis and ensuing Great Recession left many industries facing a new normal, and the legal profession is no exception. The need to become more efficient and provide clients with cost-effective services is one of several trends affecting some of Connecticut's largest law firms.

"The business of law has changed dramatically since 2008," said Stanley A. Twardy, Jr., managing partner at Day Pitney LLC. "Fee pressures on us continue five years later and have caused firms of all sizes to look at the product they deliver to their clients and how they deliver it."

Those pressures have prompted many firms to move away from the long-held practice of billing clients by the hour and toward alternative fee arrangements. These include contingent fees in which the firm gets a percentage of the amount recovered in a lawsuit or settlement, other success-based fee arrangements, and even flat fees for some types of matters.

"We've become incredibly flexible in how we bill," said Michael A. Cantor, managing partner at Cantor Colburn LLP. "We're definitely being asked to do more for less and value has become the great buzzword."

Cost-conscious clients are also being more selective about which firms they hire, according to Murtha Cullina LLP managing partner Elizabeth J. Stewart. Rather than using a single firm for all their needs, many corporate clients now spread their business among a number of law practices based on their individual strengths, she said. "Those changes are here to stay and they have forced all of us to manage our firms more efficiently and be more careful about how we staff things so we don't lose money."

The need to provide value-driven services is also prompting many firms to invest more in technology, not only to help their internal operations run more efficiently but also to meet the changing communication preferences of their clients. This is particularly important for organizations like Cantor Colburn, which handles exclusively intellectual property law, because so many of its clients are technology-oriented companies.

Even general law firms are seeing a surge in intellectual property work, said Robert B. Cox, a partner and member of the management team at Halloran & Sage LLP. "I think the protection of patents and any type of intellectual property will continue to increase," he said. "More incubator companies are coming out with different concepts and ideas. Technology is certainly paving the way for that, so it becomes much more important that anything new and innovative get the maximum amount of protection that can be obtained under the law. It's a growth area both in terms of protecting a new idea and also defending it if someone tries to encroach on it."

While business relating to construction and real estate development has waned in recent years, the health care segment is heating up thanks to confusion over the Affordable Care Act, consolidation within the industry and new regulations. "That's typically a pretty good recipe for the involvement of lawyers," Cox said.

Globalization is another trend cited by several sources, noting that large clients in Connecticut and elsewhere are conducting business and even opening offices outside the United States. International issues of another kind have caused headaches for Cantor Colburn as competitors have sprung up in India and China, where they can offer significantly reduced rates, although it quickly becomes clear to most clients that the quality of the service is also lower, Cantor said.

Cyber security has emerged as another growth area, said Stewart, prompting Murtha Cullina to develop a practice in that area. Day Pitney has also enhanced its services in that arena, helping clients deal with data privacy issues and ensure that their employees are not improperly disclosing information or exposing their employers to risk through their use of social media and the Internet.

Social media is also becoming a factor in ensuring that defendants receive their Sixth Amendment right to a fair trial. While jurors are free to talk about a trial after it has concluded and a verdict has been reached, some reveal that they or someone else engaged in improper activity during the proceedings. "For example, a juror might go on Twitter, Facebook or a blog and say, 'The government didn't tell us this, but I Googled and found this information,'" Twardy said. Because jurors must consider only information presented at trial and are not allowed to conduct independent research, such an admission could be cause for appeal. The increasing tendency of jurors to use social media to search for information and talk to friends and strangers about their trial experience now requires judges to expand their jury instructions to warn against this type of misconduct as well as using social media to communicate inappropriately with fellow jurors during the course of a trial.

While there appears to be a national trend toward self-empowerment as consumers turn to technology tools like Legalzoom and Cybersettle rather than hiring an attorney for some needs, large firms are not being affected, Stewart said. "Five or six years ago, we thought Legalzoom and some of the other do-it-yourself products might have an impact on a few of our practices that serve individuals like trusts and estates, but we haven't really seen that. Most of our clients are larger, more sophisticated companies who wouldn't use those resources, although I expect some solo practitioners may be affected by them."

A representative for Legalzoom declined to say whether the company's business is growing, but statistics from the Connecticut Judicial Branch reveal that pro se litigation — cases in which individuals represent themselves without the help of an attorney — have increased significantly. The number of self-represented parties in civil cases, for example, jumped from 12,388 in 2005 to a high of 27,271 in 2009.

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