April 6, 2010
Implementing Health Care Reform
There are a lot of unresolved issues surrounding the health care reform act passed by Congress, but, as it now stands, there are some requirements that affect law firms. In 2011, firms will be required to meet some minimum standards including ensuring that their benefit provisions cover dependent children up to age 26 and that lifetime limits and "unreasonable annual limits” (to be defined by the Secretary of Health and Human Services) are removed from plans. Also in 2011, the exclusion for over-the-counter drugs from flexible spending accounts, health reimbursement arrangements and health savings accounts takes effect. This will require plan amendments and new summary plan descriptions, together with an appropriate communications program for partners and employees. For firms that are self-insured or use third-party administrators, while the amendments will be done for them, the law firm cannot delegate responsibility to assure that the documentation is up to date.
A big requirement in 2012 is reporting the value of employees' health care costs on their W-2 forms for tax year 2011. This may not be as hard as it sounds in that experts recommend that employers take the overall average value and tier it based on whether it's an individual or family contract in the same manner as the COBRA calculation. The only difference here is that employers will have to remove the COBRA administrative surcharge in the COBRA premium to get back to the overall value. The 2000 Billable Hour Myth
The frequently cited 2000 billable hour requirement for associates may be more urban legend than fact. A report by NALP shows two interesting facts. First, the average law firm (of all sizes) associate recorded 1,838 hours in 2007 (the most recent year for which data is available). Only 16.5 percent of firms averaged 1,950 hours or more but the hardest working firms were the largest (over 700 lawyers) and the smallest (under 50 lawyers). But, when comparing billable hours required and billable hours worked, larger firms had higher requirements than smaller firms, even though the actual performance by their associates were very similar. Takeaway: large firms talk a good game but don’t enforce the expectation. Breast Feeding Mother’s Rights
One relatively unpublicized requirement under the Patient Protection and Affordable Care Act is the requirement that employers provide: (A) a reasonable break time for an employee to express breast milk for her nursing child for one year after the child’s birth; and (B) a place, other than a bathroom, that is shielded from view and free from intrusion from co-workers and the public, which may be used by an employee to express breast milk. However, employers are not required to pay employees who take a breastfeeding break—unless a state law says otherwise. Also, an employer with less than 50 employees is exempt if the requirements would “impose an undue hardship” by causing it “significant difficulty or expense” as compared to the employer’s size, resources and business structure. Less Wordy Employee Handbooks
New law firm employees commonly are asked to sign an acknowledgement form saying that they “have read and understand” the firm’s employee handbook. But have employers, particularly law firms, made handbooks so detailed and written in such legally correct language that they are effectively unreadable for the new hire? Most legal administrators would agree that HR manuals should be short and readable but the requirement to meet legal requirements and protect the firm often makes this difficult.
Recently the Society for Human Resource Management held a contest to create an employee handbook in 25 words or less. Among the winners was “Act like you want to be here. Do your job well to be rewarded. Fail, and be fired. Play nice. Do no harm.” While that may not pass muster with your firm’s employment lawyers, the general theme is to make an extra effort to make manuals more readable. One suggestion from HR consultants is that acknowledgement forms should limit the employee to acknowledging receipt of the handbook and having been instructed to read it, rather than specifically acknowledging that they have read it. Legal Recruiting Fall-off
The fact that 2009 was a difficult year for law school graduates is well known but a new report by the National Association for Law Placement provides statistics that show the magnitude of the fall off. Offers to 2Ls (2010 graduates) fell from an overall median of 15 in 2007 and 10 in 2008, to 7 in 2009. In firms with more than 700 lawyers the median went from 30 in 2007 to 8 in 2009, a 73% fall off in two years. In hiring for 2010 summer associate positions, the percentage of callback interviews resulting in offers fell to 36% from the historic norm of 60%. Not surprisingly, the acceptance rate of summer associate offers by students hit 43%, the highest rate ever recorded. With respect to deferrals, law schools reported that 85% of 2009 graduates saw their start date deferred beyond December 1, 2009.
The bad news is that 2010 doesn’t look any better. Almost without exception, law schools reported fewer employers on campus. Over half of schools (54%) reported a decrease of 30% or more in the number of employers on campus in fall 2009 compared with fall 2008. About 38% reported a decrease of 5-29%. These figures varied somewhat by region, with schools in the Mid-Atlantic and West/Rocky Mountain regions most likely to have reported a decrease of 30% or more (70% of schools and 65% of schools, respectively.) Further, analysis by enrollment size shows that larger schools were most likely to report a decrease of 30% or more in the number of employers on campus. On the employer side, most respondents visited fewer schools in 2009 compared to 2008; half decreased the number of schools visited by 40% or more. This includes one in five who did not go on campus after having done so in 2008. The nationwide median number of schools visited by employers making visits was six.
THEWESEMANNREPORT
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A comprehensive analysis of the 2010 Legal Marketplace in
The Southeastern Region of the United States.
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Florida Georgia North Carolina Louisiana Mississippi
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Atlanta Miami Tampa Orlando New Orleans Birmingham
Memphis Nashville Charlotte Raleigh.
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