Law firms throughout NH feeling the economic pinchBy MICHAEL COUSINEAU
New Hampshire Union Leader
August 23. 2014 8:15PM
MANCHESTER - Rather than continuing to divide its legal work among several law firms, the city school board last winter voted to send all legal matters to Drummond Woodsum, a Maine-based firm that last week opened a larger Manchester office.
The firm was chosen because of "their extensive background in all areas of education, education law from special education to regular education to employment solutions, so we felt like having one central legal counsel who could be reached very easily would be a really good direction for the district to go," Superintendent Debra Livingston said last week.
Drummond Woodsum is spreading its wings with 24 of its 110-plus attorneys licensed in New Hampshire, with six working out of the new Elm Street office in Manchester, another half-dozen based in Portsmouth with the remaining dozen working out of Portland, Maine.
"We really want to have a statewide practice in New Hampshire, and we felt to do that, it wasn't sufficient to just be on the Seacoast," said attorney Benjamin Marcus, the firm's president and managing director.
The firm looked at Manchester and Concord and chose the best space available, at 1001 Elm St., he said.
"Schools and municipalities have been a big growth area (for us) in New Hampshire," Marcus said.He said the firm, which opened an office in Portsmouth in 2006 and a small Manchester office in 2013, represents more than 50 schools districts across the state.
The New Hampshire clients produce between 15 percent and 20 percent of the firm's overall revenues, Marcus said, and the firm hopes to add more attorneys on this side of the Piscataqua River.
Tom Rath, founder of the Rath, Young and Pignatelli law firm, which has offices in Concord, Nashua and Boston, said he has seen the legal profession change over the years
"Lawyers are more mobile, less and less long stays at one firm," Rath said in an email. "Firms are pretty mobile as well, lots of mergers, acquisitions, etc. More and more out-of-state-firms establishing offices in N.H. More and more N.H. firms establishing offices out of state."
Rath said the Great Recession "hit all the firms in a material way. Most fees are earned assisting in making transactions happen. In a recession, there are not many deals made. Real estate sales slow, and that hurts firms that do a lot of closings and real estate law."
Companies try to refer less work to outside firms, and many planned transactions don't get finalized.
"Frequently if the deal doesn't close, the bill doesn't get paid. And as companies fold, clients are lost," Rath said. "In the end, law firms ride on the strength of the economy. When the economy slows, legal work can get scarce.
In 2012, Wiggin & Nourie, a Manchester law firm dating to 1870, closed, citing the "poor economy" as one factor.
According to state figures, New Hampshire had 2,275 lawyers in 2012 compared to 2,345 in 2008 and 2,360 in 2002. The New Hampshire Department of Employment Security in June projected 2,384 attorneys by 2022.
In another measure, a survey of associate lawyers working in the Manchester-Nashua area showed the mean hourly rate they charged dropped nearly 28 percent from 2010 to 2012, according to TyMetrix, which sells software to law firms.
The mean hourly rate that partners billed, however, rose 3 percent to $321.20 in 2012, while the mean for associates stood at $178.86.
The national rates grew for both classes of attorneys between those years.
Marcus said his firm actually grew during the recession, which he said was attributed to people "looking for more value" for their legal dollars.
"The recession was brutal on many law firms," said Marcus, who counts among his clients a Native American tribe that runs a New England casino.
Rath said "clients are in the driver's seat" today when it comes to how bills are arranged, with some insisting on an agreed-to amount rather than a per-hour charge for a specific legal task.
Technology is reshaping the jobs of attorneys as computer software has replaced many administrative assistants. Email and the electronic filing of court documents have made the legal profession more efficient.
Mark Broth, an attorney at Drummond Woodsum, said junior lawyers once indexed and prepared summaries of lengthy depositions they were required to read.
"Well, now, deposition transcripts come with the word indexes. They're sent to law firms as word documents," Broth said. "They're searchable, so a lot of that work that was lawyer work has been displaced by technology."
Rath said technology also puts greater expectations on the legal system.
"I think technology will drive a lot of the change," he said. "The speed with which communications now move will inevitably demand a legal system that moves at something quicker than glacial speed.
As a society we are becoming ever more impatient with delay, and that extends to the legal system as well. I think there will be continued pressure for more cost effective methods of moving legal issues, and clients will become ever more savvy consumers in the legal area as well as in all others."