Adjusting to the New Economy

A conversation with Jonathan Bennett, managing partner at law firm Dunn Carney Allen Higgins & Tongue.

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A conversation with Jonathan Bennett, managing partner at law firm Dunn Carney Allen Higgins & Tongue

Jonathan Bennett is managing partner at Portland-based law firm Dunn Carney Allen Higgins & Tongue. Bennett talked to Oregon Business about how the firm is adapting to more frugal clients and how the law firm business model is changing.

How you are adapting your business model to accommodate more cost- conscious clients

Our clients are most interested in the quality of our legal work and our responsiveness to their needs. Having said that, we are mindful that businesses are looking for ways to reduce their legal budgets and spending. Most importantly, they want certainty. We try to address those concerns by providing budgets for the work we are going to do; or if we cannot, then communicating promptly with the client as to what has changed and the reasons for not meeting the budget. In addition, we do some flat-fee work. We have found that is most effective for our firm and for our clients when we have a large volume of work that involves similar types of transactions or litigation where both parties can reasonably predict the costs that are going to be incurred to do the work.

How the improving economy affects spending on legal services

I wouldn’t say it is really changing that much. More transactions are coming through the door. Maybe where clients were not willing to involve a lawyer or trying to manage on their own without legal services, they are sending the work to the law firm again. We are noticing an uptick in transactions and litigation.

Areas where the uptick in transactions has been strong

Real estate transactions are up, which our firm specializes in. Business transactions are up.

How the law firm business model will evolve in 10 years

There will be increasing use of technology. That will allow attorneys to be more efficient and more self-sufficient, particularly those who are skillful with the new technology developments. There will be more telecommuting and more remote work. The percentage of overhead that is attributable to office space and to personnel will go down, and the percentage attributable to technology will go up. I don’t think this profession can be replaced entirely by technology. I find negotiating, advising, consulting and litigating are all people skills and require interaction between people.

New trends in litigation

There will always be mass litigation that we read about in the paper — very large class-action suits, securities claims, antitrust litigation — those kinds of litigation are very substantial and I don’t think those will go away. The smaller cases that involve small and medium businesses that might have a million dollars at stake or less — there will be less of that kind of litigation, and it won’t go to court and it won’t go to arbitration because business leaders will try to resolve those claims without incurring the expense and the risk of dispute resolution.

Possible litigation arising from the Affordable Care Act

With consolidation of the health care delivery model, there will be some litigation potentially regarding unfair competition, violation of noncompetes, monopolization. There could continue to be constitutional challenges. You have more people insured, and there could be an increase in litigation regarding coverage denials. Something that is in the news today is Medicare has lifted the ban on gender-reassignment surgery. Washington and Massachusetts have cited the Affordable Care Act for regulations requiring gender-reassignment surgery to be covered. It could be that because of Oregon’s proximity to Washington it becomes an issue here.

How legalization of recreational marijuana impacts employment and labor law

As an initial matter, this is not binding on employers. The use of marijuana is still illegal under federal law. Most employers want to continue to create and maintain a drug-free workplace. It is not going to have a direct impact on whether employers need to permit the use medicinally or recreationally of marijuana. What issue might come up is in the random-testing programs. Where employers will still want to test for marijuana and other drugs and alcohol in the event that there is an accident or injury, they may not want to include marijuana in a prescreening application of employees. That is due to the fact that the testing technology at this point is not sophisticated enough to determine when the use was. It is only sophisticated in determining that it happened within a 30-day period. I think a lot of employers would be willing to hire somebody even if they used marijuana in the past 30 days.

New regulations that have legal implications for Oregon businesses

Oregon’s privacy laws are going to be expanded in terms of the type of information that can be protected. When you have the world we have today of hackers and cyber attacks on companies’ data, this could be more of an operational concern to comply with the privacy laws. Another matter is there are anticipated regulations regarding minority and marketability discounts on valuations of closely held entities. These regulations may only affect state and gift consequences and may not apply to other income tax settings, but we will have to wait and see. There are some closely held businesses that are expediting their completion of interfamily transfers because they don’t want to lose the discounts that might be applicable under current law. Oregon is also joining some states that are mandating employee paid sick leave.

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