February 5, 2012
Legal Resource Group, LLC

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Legal Trends
December 2, 2008

The Reverse Peter Principle

It may seem counter-intuitive that recessions make it more difficult to recruit for senior management positions in law firms, but during economic slowdowns, people in secure positions are increasingly reluctant to take the risk of seeking a new position. This concern comes at three levels. The first is a concern that candidates always have about moving to a different firm: getting along with the COO, the Managing Partner and their peers. Secondly, candidates are equally concerned about being able to meet the expectations of their new firm, especially if the position involves a promotion. 
But a third concern that faces candidates during a recession:  whether the new job will actually materialize and whether applying for it will be a threat to their current job. For law firms, cost reduction means reductions in staff and the culture of many firms means that new hires, especially those who have not yet started are the most susceptible to downsizing. To attract top candidates during a recession, law firms may want to consider severance provisions for involuntary termination that take effect when an offer is extended. Perhaps a greater problem is the concern by candidates that their current position may be jeopardized if their candidacy with another firm becomes known. The fear of this causes many candidates to not respond to a position opportunity unless it is being offered through a recruiter that they trust and, even then, with conditions of confidentiality. 
In fact, according to a recent Wall Street Journal article, this candidate insecurity also extends to incumbent employees being considered for promotion. It’s called the “reverse Peter Principle” referring to the management theory that people rise to their own level of incompetence and then progress no further. Management employees fear that they may be putting themselves in harm’s way if they accept a position from a position in which they are fully competent, to one where they will have a steep learning curve.

IRS Mileage Rate Jumps

Despite the fall in gasoline prices, the IRS announced one of the highest increases in their deductible rate for driving on business. The rate rose from 50.5 cents per mile to 58.5 cents, a 15.8 percent increase. Most law firms use the IRS rate for reimbursement of business automobile travel as the rate at which client travel is charged.

Amendment to FLMA

The Department of Labor recently released long awaited changes in the Family and Medical Leave Act to accommodate military service. Under the FMLA expansion, employers are required to offer up to 26 weeks of unpaid leave to employees who provide care to wounded U.S. military personnel and 12 weeks of FMLA leave to immediate family members (spouses, children or parents) of Reservists and members of the National Guard who have qualifying exigencies including: (1) short-notice deployment, (2) military events and related activities, (3) child care and school activities, (4) financial and legal arrangements, (5) counseling, (6) rest and recuperation, (7) post-deployment activities and (8) additional activities where the employer and employee agree to the leave.

Breaking the Glass Ceiling

Senior management, at the partner and the staff level, continues to be heavily dominated by white males. Many female managers fear that the media-expressed concerns about Sarah Palin’s ability to maintain work and family responsibilities have opened the door to making it acceptable to raise gender-based concerns that were thought to have been removed from the workplace. Some HR managers are concerned that in highly conservative organizations, like law firms, the ability of women to have a work-life balance may have been harmed by the recent election campaign. Author Dana Mattioli suggests six tips for women considering and accepting high level management positions in such firms:
1.      Make sure women are valued simply by looking at the gender of similar positions in the firm, as well as the Executive Committee and the partnership as a whole. Being a trailblazer may be rewarding but it is also dangerous.
2.      Identify the personality types of male members of firms and respond to them accordingly by adapting managing styles and means of communicating, e.g., deal with an alpha-male in a no nonsense, get-it-done kind of style.
3.      Find a mentor who is successfully functioning in a law firm and learn from her experience.
4.      Speak assertively. Eliminate the phrase “I’m sorry” from your vocabulary unless it is truly warranted. Women’s tendency to apologize for situations for which they aren’t responsible demonstrates weakness. 
5.      Socialize with the boys. Tag along to lunch or after work. If you are left out, organize your own events.
6.      Don’t assume stereotypical roles. Be careful to not appear servile by cleaning up after co-workers or bring coffee to meetings.
The author claims that while these may seem like common sense, they are routinely not followed by female managers with gender-based organizational difficulties.
 
 
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Scrooging Holiday Parties

Unlike London where law firms seem to be having a competition over who can run the most frugal holiday season, most US firms seem to be moving forward in the spirit of the holidays. The exception is New York City where banks, investment banking firms, several Wall Street law firms and even ABC News have informed their staff that holiday parties are out. In part, this is a symbolic cost reduction but many of the affected employees think that partying while many of their fellow employees are facing a layoff is not at all a jolly theme for the parties. In fact, the New York Times reports that caterers and party planners said they are seeing cancellations—and, even more, are cutting back with simpler menus, fewer guests, shorter hours and less glamorous glassware.  Outside of New York, there does not appear to be any wide scale cutbacks in party planning.

2009 Wage Increases

A lot has changed in the past couple of months. An informal poll we conducted among large law firms about three months ago told us that 2009 staff salaries were averaging an anticipated increase of 3.8 percent. Now a number of firms are rethinking their wage policy and considering substantially lower increases. As we talk to firms now, the attitude seems to be “wait and see” with the level of increase depending on the extent of the recession. As one COO told us, “We don’t want to be giving normal increases and then find ourselves laying people off and rolling back raises in a couple of months.”