Ch1

							                                                                             CHAPTER                   1
THE LEGAL TEAM, LAW PRACTICES,
AND LAW FIRM GOVERNANCE




KEY POINTS
   The legal team consists of attorneys, administrators, law clerks, librarians, legal assistants,
    secretaries, clerks, specialists, and other parties such as expert witnesses and investigators.
   There are many types or classes of attorneys including: partner/shareholder, managing partner,
    associate attorney, lateral hire, nonequity partner, staff attorney, contract attorney, and ―of counsel.‖
   Legal assistants are a distinguishable group of persons who assist attorneys in the delivery of legal
    services. Through formal education, training, and experience, legal assistants have knowledge and
    expertise regarding the legal system, and substantive and procedural law, which qualifies them to do
    work of a legal nature under the supervision of an attorney.
   Types of legal assistants include: freelance or contract, independent legal assistant/legal technician,
    managing legal assistant, or a standard legal assistant/paralegal.
   Types of law practices include: corporate, government, legal services/aid offices, and private.
   Types of private practices include: sole practitioner offices, small law firms (or boutique firms),
    medium-size firms, large firms, and megafirms.
   Legal forms that private law firms can take include: sole proprietorship, partnership, professional
    corporation, or limited liability company.
   Types of management structures for private law firms include: powerful managing partner, rule by
    all partners/shareholders, and rule by management committee/board.


CHAPTER OUTLINE/NOTES
I. The Legal Team
The legal team consists of attorneys, administrators, law clerks, librarians, legal assistants, secretaries,
clerks, and other parties.

 A. Attorneys
    Attorneys counsel clients regarding their legal rights, represent clients in litigation, and negotiate
    agreements between clients and others.
     1. Partner/Shareholder—A partner or shareholder is an owner in a private law practice who shares
        in its profits and losses.
   2. Managing Partner—A managing partner is chosen by the partnership to run the firm, make
      administrative decisions, and set policies.
   3. Associate Attorney—An associate attorney does not have an ownership interest in the law firm
      and does not share in the profits. The associate is an employee of the firm who receives a
      salary and has no vote regarding management decisions.
   4. Lateral Hire—A lateral hire is an associate who is hired from another firm.
   5. Nonequity Partner—A nonequity partner does not share in the profits or losses of the business,
      but may be included in some aspects of the management of the firm and may be entitled to
      other benefits not given to associates.
   6. Staff Attorney—A staff attorney is an attorney hired by a firm with the knowledge and
      understanding that he or she will never be considered for partnership.
   7. Contract Attorney—A contract attorney is an associate attorney who is temporarily hired by the
      law office for a specific job or period. When the job or period is finished, the relationship with
      the firm is over.
   8. ―Of Counsel‖—The ―of counsel‖ position is a flexible concept but generally means that the
      attorney is affiliated with the firm in some way, such as a retired or semiretired partner. ―Of
      counsel‖ attorneys lend their names to a firm for goodwill and prestige purposes, to attract
      additional clients and business to the firm.

B. Legal Administrators
   Legal administrators are responsible for some types of law office administrative systems, such as
   general management, finance and accounting, human resources, marketing, or computer systems.
   Administrators typically have college degrees in business, accounting, or related fields.

C. Legal Assistants
   Exhibit 1–3 contains side-by-side definitions of a legal assistant/paralegal from the American Bar
   Association (ABA), National Federation of Paralegal Associations (NFPA), National Association
   of Legal Assistants (NALA), and American Association for Paralegal Education (AAfPE).
       The American Bar Association recently stated in its Guidelines for the Approval of Legal
   Assistant Education Programs: ―As we approach [and enter] the 21st century, one of the highest
   priority goals of the American Bar Association is to increase access to legal services. . . . One of the
   most effective ways to improve access to legal services is through the expanded utilization of well-
   qualified legal assistants who, with proper training and supervision, can be delegated work that
   would otherwise have to be done by a lawyer.‖
   1. Legal assistant—Legal assistants are a distinguishable group of persons who assist attorneys in
      the delivery of legal services. Through formal education, training, and experience, legal
      assistants have knowledge and expertise regarding the legal system, and substantive and
      procedural law, which qualifies them to do work of a legal nature under the supervision of an
      attorney.
   2. Freelance or Contract Legal Assistant—A freelance or contract legal assistant works as an
      independent contractor with supervision by and/or accountability to an attorney.
   3. Independent Legal Assistant or Legal Technician—Independent legal assistants or legal
      technicians provide services to clients in regard to a process in which the law is involved, and
      for whose work no lawyer is accountable. Legal technicians assist in providing ―self-help
      services to the public.‖
   4. Legal Assistant Manager—In larger legal organizations, a legal assistant manager may oversee
      the legal assistant program for the organization, including hiring, supervising, training, and
      evaluating legal assistants.
   5. Exhibit 1–6 shows survey data regarding typical daily functions of legal assistants. Exhibit 1–7
      shows survey data on typical legal assistant specialty practices. Exhibit 1–8 shows survey data
      regarding the types of practices in which legal assistant work, in what size firms legal assistants
      work, who supervises legal assistants, and the ratio of attorneys to legal assistants in different-
      sized law firms. Exhibit 1–9 shows compensation data for legal assistants. Exhibit 1–10 shows
      the percent of law firms paying overtime to legal assistants.
   6. Fair Labor Standard Act (FLSA)—The FLSA is a federal law that sets minimum wage and
      overtime pay requirements for employees. Employees do not need to be paid overtime if they
      fall into one of the four ―white collar‖ exemptions: executive, administrative, professional, or
      outside sales. If an employee is ―exempt,‖ it means that he or she is not required to be paid
      overtime wages (e.g., wages for time spent in excess of 40 hours a week). The issue of whether
      legal assistants are classified as ―exempt‖ is hotly debated.
          The U.S. Department of Labor, which administers the FLSA, has long taken the position
      that legal assistants are ―nonexempt‖ and are entitled to overtime pay over 40 hours a week
      because their ―duties do not involve the exercise of discretion and independent judgment
      required by the regulations,‖ and that they do not fall into the learned profession exemption
      because ―an advanced specialized degree is not a standard prerequisite for entry into the field‖
      (since there are many two-year associate degree paralegal programs). The Department of
      Labor’s position has been widely criticized for the ruling because it fails to take into account
      the recent practice and utilization of: recognized status of the profession, advanced education,
      continuing legal education, substantive duties performed, and the degree to which a legal
      assistant exercises discretion and independent judgment in the performance of the job. In one
      1994 case, Reich v. Page & Addison, P.C. (Case No. 3:91-CV-2655 in the United States District
      Court, Northern District of Texas, Dallas Division), a jury found that legal assistants at the Page
      & Addison law firm were exempt from overtime requirements; nevertheless, the Department of
      Labor did not change its general position on the matter.
   7. In Missouri v. Jenkins, the U.S. Supreme Court allowed the plaintiff to recover legal assistant
      fees from the defendant at the prevailing market rate for legal assistants in the area. Because the
      Court was interpreting a federal statute, courts under a different statute may reach a different
      conclusion. Since Missouri v. Jenkins, many federal and state courts have allowed for the
      recovery of legal assistant billable hours.
   8. Legal assistants are profitable to law offices because the law office is allowed to charge for the
      legal assistant’s time. Clients are willing to pay for legal assistant time, since their billing rate is
      substantially less than what an attorney would charge to do the same work.

D. Office Managers
   An office manager is found in smaller firms and handles the day-to-day operations of the law
   office, including such activities as timekeeping and billing, supervision of the clerical support staff,
   assisting the managing partner in preparing a budget, and making recommendations with regard to
   changes in systems and purchases. Office managers typically do not have degrees in business.

E. Law Clerks
   A law clerk is usually a student who works for a law firm on a part-time basis while he or she is
   finishing a law degree. Law clerk duties revolve around legal research and writing.

F. Law Librarians
   A law librarian is responsible for maintaining a law library, conducting legal research, advising
   legal professionals regarding research techniques, and managing library resources. Maintenance
   includes purchasing new books and periodicals; classifying, storing, and indexing books; updating
   the holdings; and coordinating computer-assisted legal research (e.g., Westlaw, LexisNexis, and
   other services).

G. Legal Secretaries
   Legal secretaries or administrative assistants provide assistance and support to other law office staff
   by preparing documents, composing correspondence, performing word processing and filing
   functions, and aiding in the scheduling of appointments. Competent legal secretaries have highly
   specialized skills and perform many services for law firms.

H. Clerks
   Clerks provide support to other staff positions in a variety of miscellaneous functions. Law offices
   have a wide variety of clerks including mail clerks, copy clerks, messengers, process servers, file
   clerks, calendar clerks, and billing clerks.

I. Other Legal Team Members
   1. Expert Witness—An expert witness is a person who has technical expertise in a specific field
      and agrees to give opinions and testimony at trial.
   2. Investigator—Investigators are hired in cases to gather facts and evidence regarding a case.
   3. Consultants—Law offices use consultants for advice on how to run their business efficiently.
   4. Temporary/Permanent Staffing Firms—Law offices may use temporary or permanent staffing
      firms and may outsource projects or services as needed, including copying, mail, record
      management, and others.
   5. Specialists—Law offices may use a number of specialists, such as computer specialists,
      bookkeepers, records managers, payroll specialists, and analysts (in large firms) such as
      biologists, chemists, and other experts.

II. Types of Law Practices
A. Corporate Law Practice
   1. Some businesses, including large corporations, banks, retailers, manufacturers, transportation
      companies, publishers, insurance companies, and hospitals, have their own in-house law
      departments.
   2. Corporate law departments handle a variety of legal concerns in such areas as labor relations,
      federal tax law, environmental law, Security Exchange Commission filings, general litigation,
      employee benefits, real estate law, and workers’ compensation claims.
   3. The general counsel is the chief attorney for the corporate legal department.

B. Government Practice
   There are many types of government law practices, including law departments for agencies, district
   attorneys, city attorneys, attorney generals, and U.S. attorneys, to name a few.

C. Legal Services/Aid Office (Legal Clinic or Public Law Office)
   1. A legal services/aid/clinic office is a not-for-profit law office that receives grants from the
      government and private donations to pay for representation of disadvantaged persons who
      otherwise could not afford legal services.
   2. Legal services/aid offices typically represent persons in areas relating to child support, child
      custody, disability claims, bankruptcies, landlord disputes, and mental health problems, among
      others.
D. Private Law Practice
   According to the American Bar Association, there were 1.1 million attorneys in 2005.
   1. Sole Practitioner—A sole practitioner is an attorney who individually owns and manages a
      practice. Sole practitioners are typically generalists, meaning they handle a wide variety of
      cases such as probate, family law, criminal law, and personal injury.
   2. Small Law Firms
      a. The small firm has fewer than 20 attorneys.
      b. A small law office that specializes in only one or two areas of the law is sometimes called a
          ―boutique firm.‖
   3. Medium-Size Firms
      a. The medium-size firm usually has between 20 and 75 attorneys.
      b. Medium-size firms are usually organized into subject-area departments and have
          professional administrators.
   4. Large Firms
      a. The large firm has between 75 and several hundred attorneys.
      b. Large firms have practice groups or departments such as antitrust, bankruptcy,
          environmental, estate planning, intellectual property, international, labor/employment,
          litigation, patents/trademarks/copyright, property, and tax, to name a few.
      c. The internal structure of large firms is more similar to the structure of business corporations
          than to other types of law firms.
      d. Large firms usually employ a large number of legal assistants.
   5. Megafirms—Megafirms can have a thousand or more attorneys.
   6. Plaintiff/Defense Firms
      a. Many private law practices may categorize themselves as either plaintiff or defense firms.
      b. Plaintiff-oriented firms represent clients who bring claims against others. They tend to be
          smaller than defense-oriented firms, are generally not as well funded as defense firms, and
          have fewer employees.
      c. Defense-oriented firms have the luxury of billing defendants who are typically businesses.
          This gives defense-oriented firms a more stable cash flow, enabling them to hire more
          personnel, purchase advanced equipment, and spend more on litigation services such as
          hiring expert witnesses and taking as many depositions as needed.
   7. Mergers and Acquisitions
      a. Law firm mergers are commonplace in the legal industry. There are different reasons for
          firms to merge, but some of the strategies are related to growth and survival. When a merger
          takes place, conflict of interest questions can be a problem as well as culture differences,
          staffing issues, and political power struggles, among others.
   8. Geographic Service Areas
      a. In the past, law firms usually practiced in a single location. That is not necessarily the case
          any longer.
      b. The Internet, computer networks that tie offices together, and large, multi-office law firms
          have changed this.
      c. Many firms have a geographic service area strategy, which may include being local,
          statewide, regional/multi-state, national, international, or industry specific.
III. Law Practice Organization Structures
A. Legal Forms of Private Law Firms
   1. Sole Proprietorship—In a sole proprietorship, the proprietor—in this case, an attorney—runs
      the business, personally receives all profits, and is personally responsible for all losses and
      liabilities of the law office. A sole proprietorship is a legal structure and should not be confused
      with a sole practitioner. A sole practitioner, for instance, does not have to use the sole
      proprietorship form of legal structure.
   2. Partnership—The partnership legal structure allows two or more attorneys to associate
      themselves together and to share in the profits or losses of the business. All the partners are
      jointly and severally liable for the actions of the firm and for the debts of the partnership.
   3. Professional Corporation—The professional corporation legal structure allows a single
      shareholder or group of shareholders from the same profession, such as attorneys, to share in
      the outcomes of a business. Unlike a partnership, in which partners are liable for the debts of
      the partnership, shareholders are not personally liable for the debts of the corporation.
   4. Limited Liability Company—The limited liability company is a legal structure recognized by
      30 states that allows for limited personal liability of company debts for owners, but is treated
      like a partnership for tax purposes.

B. Private Law Firm Management Structures
   1. Powerful Managing Partner—The powerful managing partner management structure is one in
      which a single partner is responsible for managing the firm. The managing partner is
      responsible for day-to-day operations of the partnership, while partners vote on major firm
      decisions. The powerful managing partner structure is autocratic, in that power rests with one
      person.
   2. Rule by All Partners/Shareholders—Rule by all partners/shareholders is a management
      structure in which all partners/shareholders are included in decisions that affect the firm. This
      is a democratic structure.
   3. Rule by Management Committee/Board—The rule by management committee/board
      management structure uses a committee structure to make management decisions for the firm.
      Common committees include the library committee, automation committee, finance committee,
      and personnel committee.

C. Corporate, Government, and Legal Aid Organization Structures
   1. Corporate law departments are either centralized, meaning the office is located in the corporate
      headquarters and provides services to the whole company, or are decentralized, with separate
      attorneys located throughout the organization.
   2. Many government practices are decentralized, with each agency having its own legal
      department.
   3. Because they are usually nonprofit corporations, legal services/aid practices are overseen by a
      board of directors. The board of directors hires an executive director to operate the
      organization.
WEB LINKS
http://www.aafpe.org
Home page for the American Association for Paralegal Education.
http://www.abanet.org
Home page for the American Bar Association.
http://www.abanet.org/lpm
American Bar Association site devoted to law practice management.
http://www.abaparalegals.org
American Bar Association site devoted to the use of legal assistants in law practices.
http://www.abanet.org/marketresearch/resource.html
American Bar Association site for research and statistics regarding the legal profession.
http://www.alanet.org
Home page for the Association of Legal Administrators.
http://lawyers.findlaw.com
General legal-related search engine.
http://www.paralegalmanagement.org
Home page for the International Paralegal Management Association.
http://www.legalassistanttoday.com
Home page for Legal Assistant Today magazine.
http://www.nala.org
Home page for the National Association of Legal Assistants.
http://www.paralegals.org
Home page for the National Federation of Paralegal Associations.


KEY TERMS
associate attorney
attorneys
boutique firm
clerks
contract attorney
expert witness
Fair Labor Standards Act (FLSA)
FLSA exempt
FLSA nonexempt
freelance/contract legal assistants
general counsel
independent legal assistant
law clerk
legal administrators
legal assistants
legal assistant manager
legal secretaries
legal services office
legal team
managing partner
nonequity partner
―of counsel‖
office manager
partner or shareholder
powerful managing partner
rule by all partners/shareholders
rule by management committee/board
staff attorney