2011 ‘Largest Law Firms’ directory message: Proceed with caution

Coming off a painful, economically challenging 2009, there were beacons of hope for many of the state’s largest law firms at the end of 2010.

There were positive shifts in work among once-cool practice sectors, such as real estate transactions, commercial contracts and loan originations. And there weren’t any layoffs or practice group dissolutions.

But several managing partners told Michigan Lawyers Weekly in its 2011 edition of “Michigan’s Largest Law Firms” directory, which publishes June 20, that sitting in the driver’s seat still meant impulsively scanning for potholes.

“[T]he last three years in the U.S. has shown it’s a tricky business,” said Michael W. Hartmann of No. 1-ranked Miller, Canfield, Paddock and Stone, P.L.C. (279 attorneys). “In this world, things change pretty quickly, and you have to adapt pretty quickly.

“Law firms have concluded that; I don’t think you can assume what you did two years ago will work two years from now. Law firms have to adapt like clients do — and clients don’t get [much time] to adapt.”

Among the findings in the directory, which chronicles activity from Jan. 1, 2010, to Jan. 1, 2011, among 63 Michigan firms that have 20 or more attorneys:

Alternative billing methods and more-focused client budgets were widespread: As Henry B. Cooney of No. 8-ranked Plunkett Cooney (150 attorneys) explained, “Five, 10 years ago, the idea of having a litigation or transactional budget didn’t exist, at least not very much. It certainly exists today, and we see that quite a bit.”

They also were problematic: “I think most CEOs and general counsel would tell you, people are still trying to figure out alternative fees,” said David Foltyn of No. 2-ranked Honigman Miller Schwartz and Cohn LLP (228 attorneys). “Clients are still trying to figure out how it works, and lawyers are still far behind in project managing and predictability.”

Lateral recruitment was frequent: And it was advantageous, the principal reason being “you can react to market conditions more quickly,” noted Douglas E. Wagner of No. 3-ranked Warner Norcross & Judd LLP (219 attorneys). “When you’re hiring a law student, you’re projecting out two or three years as to what your needs are going to be, but in a lateral market, you can fill a need within a few months.”

Value still is everything: Coming up with what’s expected from the firm isn’t always what the firm itself expects. Lawrence J. Murphy at No. 7-ranked Varnum LLP (153 attorneys) said one thing that’s been apparent in the past few years “is that clients are increasingly demanding that their law firms provide value as defined by the clients, not as defined by their lawyers.”

Rounding out the 10-largest firms list are Dickinson Wright PLLC (No. 4 with 218 attorneys); Dykema Gossett PLLC (No. 5 with 180); Clark Hill PLC (No. 6 with 166); Butzel Long (No. 9 with 143); and Bodman PLC (No. 10 with 138).

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MSC amends lawyer advertising rule

The Michigan Supreme Court has amended Michigan Rule of Professional Conduct 7.3 — Direct Contact With Prospective Clients — to require lawyers who engage in certain types of client solicitation to include the words “Advertising Material” as part of the pitch.

According to the staff comment accompanying today’s amendment:

MRPC 7.3 has been reformatted and describes the general prohibition regarding a lawyer’s solicitation, and also describes the types of communication that are allowed, including a lawyer’s general advertising, and a lawyer’s targeted communications to possible clients who are facing legal problems (as protected by Shapero v Kentucky Bar Ass’n, 486 US 466 [1988]). The amendment of MRPC 7.3 requires that inclusion of the term “Advertising Material” applies only to written materials, including e-mailed communications, but not to television or radio advertisements. The amendment also requires a 30-day period to pass before an attorney may contact a potential client after a death, injury, or accident.

The staff comment is not an authoritative construction by the Court.

The amendment takes effect Sept. 1, 2011.

The Court adopted the amendment on a 4-3 vote. Justice Diane Marie Hathaway dissented, stating that she would “decline to adopt.”

Justice Marilyn Kelly dissented, opting instead for ABA Model Rule of Professional Conduct 7.3.

Justice Stephen J. Markman dissented as well. Markman said he didn’t think the amended rule significantly addresses the problems of lawyer advertising. He also stated that the the amended rule places small firms at a distinct economic disadvantage:

Essentially, as in other states, the floodgates have been opened in Michigan concerning lawyer advertising, with fortunes now spent in this regard on television, radio, billboards, and 1-800-LAWSUIT telephone numbers.

In the face of this transformation of the advertising environment, this Court now issues a new rule focused upon which of the four corners of a postcard soliciting clients the words “advertising material” must appear.

The upshot is that those lawyers, and law firms, which engage in client solicitation by the hundreds of thousands will continue to engage in business as usual, while those lawyers, and law firms, which engage in client solicitation one person at a time will become more heavily regulated.

Further, the latter group will be prohibited during a 30-day period from soliciting business from certain categories of potential clients, while the former group will be allowed to continue soliciting such business during the same period.

For better or for worse, the United States Supreme Court has redefined the rules of the game for lawyer advertising, and I would not indulge in the illusion that by the measure this Court adopts today, we are doing anything of consequence to improve upon these rules.

Instead, all that we are doing is placing the small law firm at an increasing economic disadvantage to the large law firm in terms of client solicitation. I see little point to the new rule, and would not adopt it.

Butzel Long chairman leaves post

Crain’s Detroit Business has reported that Philip J. Kessler has stepped down as Butzel Long PC’s chairman and as member of the firm’s board of directors. Richard Rassel, a previous chairman, will be acting chairman.

Kessler will continue as a shareholder at the firm and plans to focus more exclusively on his commercial litigation and intellectual property practice, he said in a statement.

Justin Klimko, a board member appointed president in May to handle day-to-day operations at the firm and share leadership duties with Kessler, will continue in that role.

As of Jan. 1, 2010, the 156-year-old Detroit firm had 171 attorneys.

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