New Jersey Bar Updates Bona Fide Office Requirements

In a testament to the degree that technology is changing the day-to-day practice of law, the New Jersey State Bar Association is proposing to amend a finding issued last March by a state Supreme Court Committee that seemed rooted in a pre-internet mindset.

As reported in the New Jersey Law Journal:

"Recognizing that technology has fundamentally changed the way lawyers conduct business and responding to a recent state Supreme Court Committee finding that essentially opposes the use of virtual offices, the New Jersey State Bar Association is now suggesting the state Judiciary amend the parameters lawyers must adhere to for establishing a law office.

"We do not at all mean to suggest that the 'traditional' law office is a relic of a bygone era ... But for many attorneys and their clients, mobile telephones, personal digital assistants, e-mail and video conferencing offer opportunities for communication and information-gathering far more suited to their client's needs than a physical office location," states the Bar report."

This is a significant departure from the Bar's position over the last ten years, during which they advocated for the necessity of bricks-and-mortar law offices in the state to ensure the quality of legal representation.

"Even before the March opinion, the state Bar had been examining the bona fide office rule, given the changing nature of the way lawyers conduct business.

After several months of examination, a committee of the association's Professional Responsibility and Unlawful Practice Committee and Solo and Small Firm Section said the time had come for the rule to change.

In the report, which was forwarded to the Supreme Court last month, the groups said attorneys might need to designate physical locations for some things, such as audits and the service of papers. But for day-to-day work with clients, an office might not be necessary, and might even increase the cost of legal services.

It also suggested revising the rule to allow flexibility while stating that accessibility and responsiveness to clients, other lawyers and the courts must remain a top priority."

Here we have yet another example of technology stripping away the vestiges of Old Law and reshaping the way the practice of law is actually executed.

Outsourced and Off-Site

Law.com reports an interesting change in the way contract attorneys are being used.

"In the old model, firms would call a staffing agency and request 20 or so contract attorneys to come to the firms' offices and handle document review for a client. The law firms would then mark up the bill for housing the contract attorneys and having them use their computer systems, and then bill the client.

Under the new system... clients are calling the staffing agencies directly and creating deals on what they will pay for contract attorneys. Those rates typically include discounts or rebates...

The clients then tell the law firms that if they have to use contract lawyers on the clients' matters, they have to use the certain staffing agency at the rates the clients negotiated.

... in response, law firms are starting to ask that these contract attorneys not be placed in the firms' spaces or use their computer systems. The rationale is that the firms are no longer getting any profit from using the contract lawyers and don't have as much control over who is selected, creating security concerns when opening up the firms' computer system to attorneys it didn't hire."

Interestingly, this model is looking more and more like traditional offshoring always has. The attorneys doing the work are sitting in offices off the law firms' premises, and technology has eliminated any distinction between domestically located offices and international offices.

The Mobile Lawyer

Technology continues to tear down the walls of the traditional "office", extending the workplace beyond the horizon.

A recent ABA survey documenting the rise of telecommuting polled more than 850 attorneys and reports:

• 71% of ABA members surveyed telecommute

• Of those, 88% perform remote work from home

• 32% in hotels

• 21% in others’ offices

• 14% in public places such as libraries or courthouses

• 12 % in coffee shops and cafes

• A significant portion of that work being performed remotely is legal research (35%)

This last statistic is consistent with the type of work that is most successfully and efficiently performed remotely.

Attorneys are comfortable undertaking more rudimentary tasks like legal research and legal writing outside the "office" because it is background work that will later be integrated into a larger whole.

For the same reason, these are the types of work that are also most successfully outsourced to project-based, contract attorneys.

The foundation of legal outsourcing is apparent in the types of work attorneys are already comfortable having performed outside the office.

Chicago Gun Control Ordinance Challenged

A group of citizens in Chicago challenged the Chicago gun control ordinance stating that the ordinance violates the constitutional rights of the citizens. The ordinance bans gun shops in Chicago and prohibits gun owners from stepping outside their homes, including porches and garages, with a handgun. The ordinance was passed unanimously by the Chicago city council. It will take effect from July 12. The petitioners contend that the ordinance violates the gun owners' right under U.S. Constitution Second Amendment to bear arms and hence should be declared null and void. The Second Amendment protects the right to possess a handgun in the home for the purpose of self-defense. Recently the U.S. Supreme Court had held that the Second Amendment applies to states and municipalities as well as the federal government. However, a federal court held that the Second Amendment does not prohibit regulation of firearms where that regulation will effectuate the goal of promoting public safety.

Same-Sex Civil Unions Bill of Hawaii Vetoed by Governor

A bill permitting same-sex civil unions in Hawaii was vetoed by the governor stating that it is an issue of societal importance which has to be voted on in a public referendum. The governor indicated that this is an issue that requires the reflection, collective wisdom and consent of the people and the right to directly decide the matter is to be given to them. The state of Hawaii is one of the U.S. states where gay rights movements are very active. The bill, if had become law would have conferred upon homosexual and heterosexual couples rights and benefits equal to those afforded married couples in the state. The state Senate approved the bill in January and it was approved by the House in April. The gay rights activists have declared that they would challenge the decision in court as it violates constitutional rights which prohibit discrimination on the basis of sex. A few states like Washington DC, New Jersey, Oregon and Nevada have recognized same-sex civil unions.

Not So Fast

This time last month the Bureau of Labor Statistics released their preliminary report for May, initially indicating an increase of 300 jobs added to the legal services sector. While not a large increase, any ray of sunshine is more than welcome these days.

Unfortunately, that report turned out not to be accurate. The adjusted numbers in the final report for May actually show a loss of 600 legal services jobs.

And it doesn't get any better, with June's preliminary report showing a decline of another 3,900 jobs last month.

All tallied, the unpleasant math totals more than 22,000 legal sector jobs that have been eliminated over the past twelve months.

This squeeze on legal staffing is also a primary driver for one of the most significant emerging trends identified in the Altman Weil survey we discussed last week.

More than 50% of those surveyed expect the use of external, non-headcount, contract-based attorneys (both domestic and international) to become a permanent part of their business models.

As The Legal Intelligencer noted this week, GC's face "increasing workloads, hiring freezes, and budget crunches that prevent significant use of outside counsel." And the solution for many is the strategic use of lower-cost project-based attorneys.

Increased reliance on contracting with outside attorneys on a project basis may be a timely solution -- born out of current necessity -- but it also seems to be one that will become an ingrained component of many firms' and departments' business models.