Technology advances lead firms to cut support staff

Non-lawyer labor costs are 40 percent of expenses

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In the wake of recent support-staff reductions at Duane Morris, K&L Gates and other large firms, consultants and recruiters said more such cuts are expected as firms seek to increase profits and shifts in technology gradually phase out the need for traditional clerical functions.

"I'm surprised that anybody's surprised," Thomas S. Clay, a principal with Altman Weil, said, adding, "You're going to continue to see it as firms look in a slow-growth or no-growth economy" to save money.

Non-lawyer labor costs are often the first costs firms look at when considering reductions, according to Mr. Clay.

Non-lawyer staffing costs account for, on average, around 40 percent of most large firms' expenses, he said.

"By far and away the biggest savings area is people," Mr. Clay said.

The second-largest expense for firms, he added, is space. So for those firms not locked into long-term leases in huge offices, reducing the number of bodies could eventually translate to savings on that front as well.

As Glenn D. Blumenfeld of Tactix Real Estate Advisors in Philadelphia said in an earlier story about firms revamping their office spaces: Many firms' offices today are "a sea of empty secretarial stations that are really spaces to store empty filing boxes."

Add to that the fact that technological advances have rendered many traditional duties of law firm support staff nearly obsolete and it's little wonder why firms might look to reduce that expense, according to Mr. Clay.

"I was giving a speech about the need to move further and further toward fewer and fewer support staff and one attorney said, 'Yes, but who's going to do my filing?' Well, nobody," he said. "What lawyers have gotten used to are a lot of trappings."

Boston-based legal consultant Jeff Coburn agreed, saying the leverage ratio of lawyers to support staff at large firms that was at one time roughly 1-to-1 has changed over the years so that, in many instances, two, three or even four attorneys might share a single secretary.

Mr. Coburn said technology has simply made it unnecessary for firms to pay people to draft and file documents, call meetings or take notes. And younger attorneys have little use for those functions anyway.

"Technology changed everything," Philadelphia-based legal staff recruiter Peggy Kruza added. "The young associates, being as techy as they are, are more inclined to do their own work and are not as comfortable delegating as some of the older partners are."

So, as today's generation of young lawyers eventually replace the more senior lawyers, the old support-staff model will become increasingly outmoded, Mr. Coburn said.

"The ratio of nonprofessionals to professionals is going to continue to go down," he said.

"It's all part of law firms becoming businesses."

But Mr. Coburn added that while the recent spate of large law firm staff reductions are part of a trend, each firm's reasoning for making those cuts is unique.

Duane Morris confirmed this month it had eliminated 17 secretary and paralegal positions across its 25 offices. Spokesman Joshua Peck said the firm made the move in an attempt "to get our ratios back in line with our previous levels."

"Our numbers had gotten out of alignment due to our hiring of lateral attorneys -- some 42 partners and counsel in the last two years alone," Mr. Peck said in an emailed statement. "Many of those brought legal assistants with them, and the ratio has been compounded by very low turnover in our legal assistant ranks.

In August, it was reported that K&L Gates was closing its document services department in Washington, D.C., and Seattle, resulting in the elimination of 24 to 30 support positions and the relocation of the department's headquarters to its Pittsburgh office.

And in January, Blank Rome offered voluntary separation packages to its entire legal secretarial pool in an effort to trim its ranks as the firm restructured the way attorneys and support staff work together.

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Zack Needles: zneedles@alm.com or 1-215-557-2493. Read more articles like this at www.thelegalintelligencer.com.


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