Will Big Law Go Hollywood?

While working as a legal editor in Manhattan after practicing law in New England, I answered—on a dare from actor friends—a Backstage ad. “Irish Spring” was looking for a new spokesman. At that point, I had no real acting experience (other than in the courtroom), but a love of Shakespeare and a passable Munster accent (thanks to a semester at University College, Cork and summer work on my cousin’s Limerick farm) gave me confidence enough to bluff my way into an audition. And a second audition. And when the third and final came up, I passed it up, terrified that I’d be exposed, since I was from New Jersey, not Kerry, as my “enhanced” acting resume had it. (Later, when auditioning in Dublin for “The Commitments”—this time more plausibly as an American journalist—I learned that Procter & Gamble couldn’t have cared less where I was actually from—the “Lucky Charms” leprechaun was voiced for 50 years by Staten Island native Arthur Anderson; an actor of completely un-Irish roots).

Advertisement

But here’s the point. To do the commercial, Procter & Gamble’s ad agency, Young & Rubicam, wrote the script, then once approved, hired an independent producer and director, who assembled the global team of professionals to make the commercial. These individuals—casting director, locations manager, cinematographer, sound engineer, editor, even craft services manager—were skilled, independent workers coming together to make that commercial. This is the “Hollywood Model:” the most efficient way to assemble talented, creative professional workers to produce defined-term projects. And it might just work for today’s law firms.

But first, it’s important to note that today’s Hollywood Model wasn’t always the way showbiz worked. In Hollywood’s four-decade Golden Age, which lasted through the 1960s, the studios functioned as one-shop filmmaking entities, with artists and craftspeople employed and apprenticed under long-term employment contracts (and, until antitrust concerns drew the curtain on the studio’s vertical integration, the studios also controlled the distribution and exhibition of their films).

Today’s project-based Hollywood Model differs from the short-term, one-person contractor “gig” model (think “Uber”) in complexity and wider-ranging applicability, and it’s become a popular alternative to the century-dominant corporate model. In the Hollywood Model, professionals are hired strictly for a project with a defined end date. This model is being used in a growing number of nimble ventures that have creative components, including music, restaurant design and fashion. In the friction-free economy that supports the Hollywood Model, much less capital is needed as workers are hired on an as-needed basis.

Could the Hollywood Model offer a solution for more efficient deployment of legal services? It’s happening already. In the pre-recession and pre-predictive coding ‘80s and ’90s, contract attorneys were the dirty little secret that law firms and corporate law departments deployed. These lawyers were generally vetted and hired by third-party agencies for short time document reviews or research projects, but were housed in relatively plush firm or corporate settings and integrated with the client, mitigating the much smaller pay they received compared to their law school classmates who were hired as associates at the same firm or in-house legal department.

But with the recession came a surfeit of unemployed attorneys willing to do any work designated “legal”—even if just in name and not by pay. Hourly rates spiraled down, and the increasingly commoditized contract attorneys were housed in cheaper locations, segregated from the corporate headquarters and law firm main offices, as well as from the client’s unique culture. The outsourced attorneys went from offsite to offshore in many cases, further depressing pay, and further depressing recent law school grads forced to take document review contract jobs for less pay. It became not only less efficient, but soul-draining.

Since Judge Peck’s approval of predictive coding three years ago, the bottom has dropped out for the need for JDs for document review work. The legal staffing agencies that survived are deploying higher-level legal specialists—including experienced attorneys – to work with the clients on site, though such attorneys must be still be closely supervised under ABA Model Rules 5.1(b) and 5.3(b), limiting efficiency for in-house counsel.

Another evolving efficiency in legal staffing is the growing use of litigation funding. For law firms, capital is raised from partners to finance firm investments, with the amounts invested based on projected annual income (contributions usually at 20-25%), and supplemented by bank lines of credit. But since the Dewey collapse, firms are seeking a higher percentage of partner contribution rather than face possible bank defaults. This makes raising sufficient capital more challenging.

For law firms, litigation funding provides assurance of capital flow and coverage of fixed costs, without giving up all of the firm’s contingency fee. Law firms also can offer a client the option of funding via a respected third party, permitting more alternative fee arrangements and greater likelihood of asserting rights via litigation that they would otherwise decline to pursue due to high costs and risks—a win for the client and outside counsel.  The corporate client can also benefit directly from litigation funding, knowing that it can bring an affirmative action without blowing up the legal department budget, and even contributing to the company profits. It’s providing elements of the Hollywood Model in allowing a dedicated professional funding entity to allocate capital and assist with risk management, reducing the capital contributions of the law firm partners as well as those of the corporate client.

ABA Rule 5.4 prohibits non-lawyer sharing of profits, and prohibits law firm incorporation where outside investors could provide much-needed capital. The conservatism and self-protection mechanisms of lawyers have held back on the obvious need for more efficient business models. Law firms are businesses; the ABA will be forced to recognize that, and the ethical obligations of an incorporated business of lawyers practicing law can be enforced by retaining individual lawyer obligations while permitting incorporation (particularly if the directors of the corporation are the actual lawyers).

The Hollywood Model offers a future for the provision of legal services. The ideal model will work as Hollywood truly works: the client is analogous to the studio, which, when faced with a legal issue that cannot be handled in-house, will seek the independent judgment and assistance of a particularly suited outside counsel. That firm, akin to the ad agency (for commercials) or producer/director (for film) in the Hollywood Model, should deploy and supervise the team needed, just for that project (and they shouldn’t be all lawyers, but skilled in the task assigned).

The increasing ability of businesses to more timely quantify and track data and business needs (including legal) is allowing more quantification of discrete legal tasks, permitting a wider range of work assignments with a better projection of costs and more demanding deliverables. Although the business client is more likely to consolidate more work with a dwindling number of outside law firms (and favor those most responsive and efficient—even if not Big Law), the subdivided legal assignment allows greater flexibility in deciding who can carry out the task instead of defaulting to outside or inside counsel, and can also allow greater delegation by the law firm to the professional best suited to the task.

On the supply side, talented young lawyers are demanding a work-life balance and are reluctant to commit to the multiple years of subservience and unlikely odds of winning partnership in the current “tournament of lawyers” system, providing further catalyst for more flexible employment arrangements. Law schools will also have to include more experiential training, but on an expedited schedule so that graduates can be more productive upon graduation. Mentorship of associates is dying. In the future, we may see more firms like the “virtual” and growing law firm FisherBroyles, a firm of experienced attorneys (all partners) connected by technology that has forgone the mentorship model of the traditional law firm, and says it is delivering services at better prices without the overhead and training costs of traditional big firms.

About the Author

gleasonPatrick Gleason is an attorney and the vice president for corporate and legal consulting with Chase Cost Management, a division of LAC Group. He is also a former actor and writer.

Send this to friend