Greater Des Moines law firms carry an umbrella
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When the economy dipped last year, the folks at Belin law firm decided they wanted a measure of its impact on their business.
“We tracked hourly billings and revenues versus historic averages,” said Mark Weinhardt, president of Belin Lamson McCormick Zumbach Flynn P.C.
There was good news in the numbers.
“The amount of work and revenue have not suffered in the slightest,” Weinhardt said. “Our shop feels busy; our people have plenty to do.”
You could hang that quotation next to the heads of many Greater Des Moines law firms. The recession that has forced layoffs, pay freezes and other cost-cutting measures at large national law firms seems to be sparing the local legal community.
Though some local firms are taking simple steps to cut costs, such as eliminating paid lunches and, according to one attorney, “no longer paying someone to water the plants,” many are hiring and experiencing what is something of a truism in the profession – when times are good, they are very good, and when times are bad, they are still good, maybe just a little less so.
Weinhardt echoed other attorneys in saying that the bad national economy also works to their advantage by bringing in talent that Greater Des Moines might normally lose to larger national firms.
Belin will add two Harvard Law School graduates over the course of this year and next. Robert Douglas, president at Davis, Brown, Koehn, Shors & Roberts P.C., said his firm has hired six new lawyers this year, including one who seemed destined for a larger stage.
“What’s happened to the big firms has been an opportunity for us,” Weinhardt said. Belin’s 37 lawyers probably could staff a single division of firms, such as Minneapolis-based Faegre & Benson LLP, that have an international presence.
But that doesn’t mean that the local offices of large national firms are having a lousy time.
Faegre & Benson, one of the 100 largest firms in the country, laid off nearly 60 staff members in its Minneapolis headquarters, but the Des Moines office, which was established in 1990, did not have any job cuts.
In fact, the Des Moines office, which originally had three lawyers, has grown to 20, and the firm is hiring locally, said Des Moines partner Andrew Anderson.
“As of Oct. 1, we’ll have 21,” he said.
The firm is watching costs, as any responsible business should be during a down economy, he said.
“We’re like any other business that’s had to reduce expenses and look for ways to increase revenues,” Anderson said. “Everyone is going to take the opportunity to become more lean and efficient and better at what they do.
“If you aren’t doing those things, then you probably aren’t too good of a business person. We feel positive about our position.”
Dorsey & Whitney LLP, another national firm based in Minneapolis, also cut positions this year, but not at its downtown Des Moines office, said local managing partner David Claypool.
“We’re busy. We’re having a good year, but we recognize that there’s an impact on our clients and the people we work with,” he said.
Good times or bad, the national firms have to contend with local pride in their recruitment efforts.
Douglas said Davis Brown does not want to establish a reputation as an “up and out” firm, one that hires young lawyers and encourages them to find the door when they are eligible to become a shareholder.
The firm does not use layoffs as a way to cut costs, he said.
In fact, Davis Brown, which hires on average four to six lawyers a year, hopes to retain attorneys who will leave the firm only when they are ready to leave the profession.
“We hire people on the basis that we hope they’ll work out and they’ll become shareholders,” said Douglas, who has been with Davis Brown for 26 years.
The firm, with a staff of 73 attorneys, does not have a mandatory retirement age. Job security is a key selling point in attracting young lawyers.
Young lawyers who enter the profession believing that it is a quick path to riches might be disappointed in Douglas’ belief that it is a mistake to pursue business growth for the sake of becoming larger and adding revenue streams.
“The legal profession should be something more than a business,” he said. “I tell people that you can make a comfortable living as a lawyer, but you’ll never get rich.
“If you become a lawyer to make money, then you are doing it for all the wrong reasons.”
Though the economy has not resulted in hardships at Davis Brown, it has led the firm to re-examine its billing practices, and it has brought in business that might have gone to national firms with steep hourly billing rates.
Douglas noted that clients are paying close attention to their legal bills. One result of that scrutiny could be a change from billing clients by the hour to a type of net billing that is based on the job.
Having an established fee would allow the firm to manage a case as it sees fit to stay within budget.
“There is a fear that you don’t want to under-quote,” Douglas said. “Yet construction estimators do a job at a fixed price and manage how they get it done. If law firms did that, clients wouldn’t question hourly rates, the number of partners assigned to a case at higher rates and so forth.”
As it stands, Davis Brown charges a fixed rate for title opinions and residential foreclosures.
William Brown, a partner at Brown, Winick, Graves, Gross, Baskerville and Schoenebaum PLC, which his father helped found in the 1950s, said that his firm has looked at alternative forms of billing and noted that billing by the hour became more common in the last 20 years or so as firms wanted to quantify their work.
He agreed with Douglas that clients are paying closer attention to billing practices, and he can understand their concern given the current economic situation.
BrownWinick has adjusted its rates in some cases for clients who have suffered loss of salaries and incomes during the recession.
Otherwise, the firm has taken minor steps to control costs. For example, it no longer pays someone to “water the plants,” Brown said.
BrownWinick closed its West Des Moines office last year, but did so mostly out of a desire to bring its staff under one roof in the Ruan Center. As a result, the firm terminated an inter-office runner.
Still, length of service is the firm’s calling card.
Of BrownWinick’s 59 lawyers, 22 have been with the firm from 10 to 45 years, and 12 have been there for more than 20 years. Three paralegals have a combined 120 years of tenure. Two lawyers have left the firm twice only to return.
“In my mind, that speaks well about our working environment,” Brown said.
Paralegal Kathy Ruble has been with BrownWinick for 40 years. She works for six lawyers and does corporate work for “anyone who needs it,” she said.
But, her chief assignment is working with Bruce Graves, one of the firm’s founders and the only one still on the job. Like many local firms, BrownWinick promotes a family-like atmosphere, with trips to baseball games and Adventureland Park, Ruble said.
“We used to have company picnics, but we just got too big,” she said.
As with the larger firms, the economy is having little effect on some smaller firms in Greater Des Moines, other than changing the nature of the work.
Brad Schroeder of Hartung & Schroeder LLP in downtown Des Moines, said the firm has added two lawyers in the last two years. It is seeing a spike in business litigations and family law cases, primarily because of financial pressures created by the sour economy.
And the work is changing at Belin, as well, Weinhardt said.
“We are seeing a change in the mix,” he said. “Some of it is quite cyclical.
“Pick a meltdown; we’re in it to one degree or another.”