In-House Interrogatory

Asked: Our weekly question to the In-House community

In-house legal departments are getting fed up with paying outside counsel for soft costs like food and photocopying fees, The Wall Street Journal reported this week.

In-house counsel are pushing back against law firms charging them for legal research, photocopying and word processing costs according to a study cited in the article.

Companies’ legal departments argue that these costs are included in law firm overhead and therefore should not be charged to them.

So, here’s our question for you:

Should companies be charged for soft costs like catered lunches and photocopying by outside counsel?

Leave a comment below or email me.

Need to Know:

Judge dismisses employment numbers lawsuit

It’s not looking good for law school students suing their alma maters for misrepresenting post-graduation employment numbers.

Since employment for law school graduates started to slide with the downturn of the economy, a number of class-action suits have popped up around the country as students claim schools skewed graduates’ employment numbers to attract new students.

The latest setback for these kinds of cases came last week when a federal judge in Michigan dismissed a case brought against the Thomas M. Cooley Law School by 12 graduates. The judge rejected claims of fraud, saying the employment numbers were confusing and unclear but not fraudulent. The judge also said the school did not violate the Michigan Consumer Protection Act, since the act doesn’t protect the purchase of an education.

A similar case was dismissed in New York in March, but there are 12 other fraud class-action suits against law schools pending across the country.

The news comes in the wake of new employment numbers for law schools released last month. The statistics were divided by the type of employment for the first time this year. Nationwide, 83 percent found employment, but only 55 percent were permanent jobs that required bar admission. (At both Maryland law schools, around 47 percent found permanent jobs with bar admission required.)

No money, mo problems

Looks like more bad news this week for law school graduates.

Starting salaries for the class of 2011 are down across the board. Mean starting salaries for first-year associates fell 6.5 percent, according to numbers from the National Association for Law Placement.

The class of 2010 was paid a mean salary of $84,111, while the class of 2011′s mean salary was $78,653, according to the data. Mean salaries fell 15 percent compared to the class of 2009, which reported a mean salary of $93,454.

The median salary fell from $63,00 to $60,000 between 2010 and 2011,  according to the data.

Last month, we wrote about law school graduate employment numbers falling across the country, including for law school grads in Maryland. Fewer than half of the state’s law school graduates from the class of 2011 have full-time, permanent jobs, according to American Bar Association data released in June. Both Maryland law schools, the University of Baltimore School of Law and the University of Maryland Francis King Carey School of Law, had numbers that fell below the national average of 55 percent.

Then there’s that Boston law firm that advertised a first-year associate position with $10,000 salary.

So, per this week’s news, not only are fewer recent law school grads finding jobs, those who have, are getting paid less. But, hey, at least it’s Friday?

Clock ticks on billable hours

To bill (per hour) or not to bill (per hour)?

That. Is the question.

In today’s shaky economy law firms are talking about (and implementing) alternative payment methods to the traditional billable hour as corporations and other clients are less able to afford the hourly fees.

The Washington Post reports that firms are using flat fees or contingency fees, which is when a firm and its client agree on a price and the firm picks up the difference if it ends up costing more.

A survey of 200 of the country’s biggest firms found 92 percent of firm leaders had used flat fees at least once and 82 percent had used contingency fees, according to The Post.

However, according to the Wall Street Journal, the billable hour is by no means dead among the richest of the rich. The Journal reports that the most expensive lawyers are charging even more per hour, with the top 25 percent of hourly billers charging 4.9 percent more compared to 2010. The average rate is $873 per hour.

On the other end of the spectrum, however, the lowest billers are only charging a 1.3 percent more than last year at an average rate of $204 an hour.

Law blog roundup: Ben Matlock offers the best defense

Still wish you were on vacation? Most of your co-workers out for week? Here’s some “work” you can do to pass the time:

Is Big Law dead?

A few years ago I was chatting with a local attorney whom I’d gotten to know in my technology reporting days. He and a few colleagues were leaving their big law firm to start a Baltimore office of another firm.

His entrepreneurial ambitions intrigued me, as did his reasons for wanting to strike out on his own — pressure to bill hours, a desire to work more closely and strategically with smaller clients. They seemed fairly universal, not just unique to the practice of law (at least if you substitute in “pressure to close sales” for “pressure to bill hours”).

A recent article at Slate breaks down the legal business model in post-economic meltdown terms and paints a pretty stark portrait of a model “in which the nation’s largest law firms turn the top law students into billable-hour-crazed associates and, sometimes, partners.”

Continue reading

A legal job opening. Really.

Since most of the legal employment-related news has been bad lately, what with all the layoffs and deferrments, I figured I’d share an e-mail I received recently about a job opening to add to the few but proud that are hiring.

The Homeless Persons Representation Project Inc. in Baltimore is looking for a director for its Pro Bono Program, which has seen the ranks of volunteers quadruple since 2007. HPRP runs a community-based intake program at local shelters and soup kitchens; specialized task forces that focus on legal issues affecting the state’s homeless population; and systemic advocacy projects where solutions to homelessness are pursued.

The organization is looking to expand its Pro Bono Program in Baltimore during the next three years. For more details, click here

With big firms shedding lawyers left and right, do you think the legal services field could be the route to go in these economic times?