Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, February 6, 1994 TAG: 9402040290
SECTION: BUSINESS PAGE: F-1 EDITION: METRO
SOURCE: BY ALAN J. HEAVENS KNIGHT-RIDDER NEWSPAPERS
DATELINE: LENGTH: Long
Corporations, downsizing after the heady 1980s, must handle more work with smaller legal staffs. Traditionally, in the legal profession, the answer to staff shortages was to hire new lawyers, an option that is no longer financially viable, or seek costly part-time help from outside law firms, usually whenever the firms could spare the personnel.
Bob Murphy Jr. and his two partners have come up with another answer: contract lawyers. Their firm, Assigned Counsel Inc., of the Philadelphia suburb of Wayne, Pa., provides part-time temporary lawyers to reinforce corporate law staffs in these leaner and meaner times.
Unlike lawyers from outside firms, who often work for several clients at once, Assigned Counsel's lawyers work only for the firm that contracts for their services, for anywhere from a couple of days to six months or longer. Then they leave.
Another advantage, Murphy said, is that the 600 lawyers in its data base are paid through Assigned Counsel under Form 1099 contract-employee provisions, relieving the company that hires them of bookkeeping work involved in a traditional W-2 form, as well as providing benefits and Social Security taxes. Hourly rates range from $35 to $100, depending on the job and level of expertise required. The cost of malpractice coverage usually is borne by the firm employing the temporary help.
The lawyers in Assigned Counsel's database are not newcomers, Murphy emphasized. Some, in fact, have 20 to 25 years of experience, and their fields of expertise are varied. They are lawyers who, because of changes in the economy, are not permanently employed; dual-career lawyers; retirees; lawyers who want to go out on their own and are trying to increase billings; law teachers; and those who have left the workplace temporarily to raise families.
The idea for Assigned Counsel was suggested to Murphy in the 1980s by Joel Adams, the founder and CEO of Devon Consulting, which has provided temporary software engineers and computer professionals to Fortune 500 companies since 1982. Adams, a partner in Assigned Counsel, and Murphy were undergrads together at Wesleyan University in Connecticut.
Murphy is a former vice president and associate counsel of Fidelity Mutual Life Insurance. The third partner and Murphy's Penn law school buddy, Samuel Frederick, is a general counsel to area computer and electronics firms. They put Adams' idea on the back burner till 1992, because law firms traditionally wanted only mature, developed lawyers and corporations liked only full-time people.
By spring of 1992, they were warming to the idea.
"We initially didn't know whether this idea made sense," Murphy said. But when they saw the level of corporate downsizing and law firms laying off associates or going out of business, they thought it might be sensible. "Sam and I had seen work pile up because of downsizing and agreed that it might be interesting to have part-time lawyers."
They brought in Adams and, in Murphy's words, they reviewed the kinds of issues a contract or part-time lawyer service would encounter.
In the fall of 1992, they placed a newspaper ad for temporary lawyers and received 150 responses.
In slightly more than a year in business, they've added 600 lawyers to their database and have signed on Cigna Corp., DuPont Co., SmithKline Beecham, the West Co., Bank of Delaware, Century Financial Services, Hercules Inc. and Smith, Katzenstein & Furlow as major clients.
There are about 10 firms nationwide that focus on contract project matters for lawyers or that are managed by lawyers. Assigned Counsel is the only such firm in the Philadelphia area, Murphy said.
Frederick believes there are 10,000 contract lawyers nationwide, "with aggregate 1993 national gross receipts exceeding $40 million." A 1988 major-market survey found only 1,300 contract lawyers at work, he said.
Previously, the only lawyer-placement services were bar association setups and the traditional executive-search firms.
"We advertise fairly regularly to refresh the pool" of lawyers, Murphy said. Additional sources include referrals from employees and potential clients.
"Some general counsels receive a half-dozen resumes a month or hear from friends who want to increase their experience," he said. Assigned Counsel taps into this source.
From the resume on, the lawyer becomes part of the database. There is a "first-level screening" to determine skills and experience. Nothing is done until a client says, "I'm looking for someone who has the following attributes . . . "
"We spend a good deal of time talking with our clients," Murphy said. "Our background" - 40 years of legal experience - "helps us determine their needs and the tasks that need to be addressed."
Contract lawyers are not a new idea. Law firms long have used "of counsels," lawyers employed to assist in the preparation or management of a case who are not members of the firm.
"What Assigned Counsel has done has organized an oral process within a law firm into a contract," Murphy said. "It's a new twist to an old process."
Assigned Counsel lawyers usually provide "relief to the overflow involved in corporate legal matters," Murphy said. They provide technical expertise in reviewing contracts and screen the tons of paper involved in all legal matters, reviewing and assembling loan agreements and closing documents, "extra eyes and minds on litigation matters."
SmithKline Beecham, for example, has used contract lawyers to handle work in licensing new drugs, Murphy said.
Murphy and Frederick believe that there is a trend to part-time temporary help in all work situations, not just the legal profession. They point to the July 12 Fortune survey of chief executives, which showed no real increase in employment in the next three to five years, except for contract part-time services.
Murphy said the number of part-time contract workers nationwide had gone from one million to eight million in the last few years.
Assigned Counsel's partners see benefits to both worker and employer in theirs and similar arrangements:
"For the employer, there are substantial savings because of the absence of benefits and dedicated overhead, when you consider the cost of tools needed for a full-time hire," Murphy said. "The contract lawyer is receiving more than a fair and nice hourly net salary, and the company is saving money. And there's no sacrifice in quality, because contract lawyers often have more experience than outside counsels."
\ VIRGINIA LAWYERS\ \ Practicing: There are 19,436 active lawyers in Virginia\ \ Licensed: There are 29,985 people in the state licensed to practice law. The difference includes retired lawyers and judges, associates and active lawyers who practice primarily in other states.\ \ Source Virginia State Bar
by CNB