Opinion: No Passing Fad, ADR Is The New Normal
A great deal of interest has been expressed of late as to the future of the profession of law, both in Connecticut and throughout the country.
Several years ago, a Connecticut Bar Association Task Force on the Future of the Legal Profession, co-chaired by Brad Saxton, who was then the dean of Quinnipiac School of Law, and Tim Fisher, now is now the law school dean at the University of Connecticut, provided many thoughtful but sobering ideas on what was on the horizon, including some trends portending significant changes.
Other analyses, such as Richard Susskind's The End of Lawyers?, identify a number of new models which could change the legal practice landscape dramatically.
Just some of the significant trends which have become evident across the country are:
• A demand by corporate clients for a departure from the traditional billable hours format toward alternative fee structures. Recently, the United Technologies Corp.'s legal department was honored by the Association of Corporate counsel for pioneering efforts in achieving alternative billing. Similarly, Henkel Corporation's legal department was recognized by the Connecticut Law Tribune for utilizing a request for proposal process for all new outside counsel hires. Neither of these approaches would hardly have been considered mainstream a decade or two ago. Moreover, corporate clients are demonstrating a greater appetite and knowledge of alternative dispute resolution (ADR).
• Growing support for the unbundling of certain legal services and limited-scope representation.
• More people passing the bar than there are job openings. (This publication reported that there were twice as many admittees in 2009 than there were openings.)
• Declining law firm revenues: The American Lawyer magazine reported that revenues have stalled or fallen at almost 25 percent of the nation's 100 top-grossing firms.
• Technological efficiencies and outsourcing of services meaning less work for the armies of new associates hired by major law firms.
The result of these economically and technologically driven factors has been a change in the very structure of the traditional law firm and the way it does business.
Indeed, the law firm community has been experiencing a number of shockwaves: one of the most striking was revelation of the extreme financial difficulties at Dewey & LeBoeuf, a worldwide firm with a rich history. Another example was the announcement by Weil, Gotshal & Manges LLP that it was laying off some 60 associates and more than 100 other employees while significantly reducing partner take-home pay to the tune of what was reported to be "hundreds of thousands of dollars" per year. All of this was caused by a drop-off in business. The Wall Street Journal quoted the executive partner as referring to the situation as "the new normal."
Although many of the seismic law firm changes became most evident after the financial collapse five years ago, the consolidation, shrinkage and general upheaval continue even as the economy improves. Nor has Connecticut been immune from these developments, as it has seen its share of law firm contractions.
Specific areas of practice have been particularly affected by the fast-moving changes. Not the least of these areas has been the field of litigation and ADR. Evidencing ADR's role in some of the major changes taking place are:
• The emergence of ADR departments within some of Connecticut's most prestigious law firms.
• The departure from the bench of some our most respected judges for a career in private dispute resolution.
• An increased Judicial Branch emphasis on ADR.
• A noticeable increase in attention to ADR in all three of Connecticut's law schools,
• Settlements producing major shortfalls in anticipated law firm total revenue. One national report projected a $35 million gap in a major national firm's anticipated earnings because of settlements in major cases.
• The pronounced decrease in the number of filed jury cases going to judgment resulting in discussions of the "vanishing trial."
Increasingly, Connecticut's — and the nation's — most accomplished trial lawyers have demonstrated skill and accumulated experience in alternative methods of dispute resolution. Mediation, for example, no longer has to be forced upon trial counsel by an insistent corporate client or ADR organization, but is frequently selected as the dispute resolution mechanism of first preference.
Three decades ago, the question was whether ADR truly had staying power or was merely a passing fad. Today — amidst the tumultuous and fast changing developments in the legal industry — the question has become whether the use of ADR has indeed become the new normal.•