Law Firms Still Shelling Out Bucks - Where it Counts

The old adage that says you have to spend money to make money might cause eyes to roll in an economy where many law firms simply don't have the bucks to spend. But there are some who still appear to be sticking to that sentiment.

Consider the San Francisco office of Duane Morris, for instance, which celebrated its 10th anniversary March 11 by hosting an event at the Asian Art Museum, honoring a local civic leader and environmental entrepreneur Michele McGeoy, with the 2009 Duane Morris Leadership Award. The firm's gift to her and her non-profit organization, Solar Richmond: $25,000, plus a year of pro-bono legal services.

"When the economy was better, we routinely did client thank-you events around Christmastime," said Tom Berliner, a partner in the energy and environmental group at the San Francisco office. "Over the last couple of years, we've toned that stuff down. But we have a commitment to charity, and it's all relative. Even if the dollars are down, we felt that it was appropriate to continue this program."

But there is another factor: It's good for business. The selection of McGeoy complemented the San Francisco office's renewable energy practice area, Berliner said.

"It's nice to tie in an interest in greening the planet with someone who is greening the planet."

In San Diego, Pillsbury Winthrop Shaw Pittman hosted its "2009 Evening at the San Diego Museum of Art" June 17 with a private showing of Richard Avedon's photography, and cocktail party. The firm isn't saying how much the event cost, but managing partner Sue Hodges echoes Berliner's comment that it's all relative.

"After all," she said, "if business sponsorship of the arts ceased completely during economic downturns, we would lose our cultural heritage, and that cannot be seen as positive."

The firms are not just dropping cash on charitable and cultural events, though.

At the Los Angeles office of Akin Gump Strauss Hauer & Feld, big bucks are being invested in a new program to provide clients' in-house counsel with continuing education credits. The price tag on that is about $200,000, according to David C. Allen, the partner in charge of the L.A. office, and a member of the firmwide management committee.

"This gives clients the opportunity to stay abreast of new developments and get CLE credits without spending the money," he said, "and keeps us in front of the client on relevant issues."

That's not to say the firm isn't trimming elsewhere.

"We've cut back on all discretionary spending that doesn't really touch our clients," Allen said.

For instance, rather than shelling out money on travel and hotels, the firm is more likely to do teleconferencing.

"Like most businesses, while we have cut back substantially in our budget, we have not cut back on the part of the budget that grows your business - keeping in contact with your clients," Allen said.

Peter Zeughauser, a consultant in the Newport Beach-based Zeughauser Group, agreed this is a sound business practice.

"Networking and maintaining a high profile in the community is directly related to sales and business development," he said. "This is where most firms want to focus their activity now if they're smart."

Gary Davis, a principal with San Francisco-based Patterson Davis Consulting, said he's attended many law firm events in the past six months.

"While I am sure that there have been events that have been scaled back or even canceled, due to the economy, most firms see the value - long term and short term - in continuing to host events," he said.

But, Davis added, he has noticed some changes.

"I would say that the events I have attended are more modest than in the past," he said. "The nice food and plentiful drinks still remain, but the bells and whistles, like party planners, decorations, expensive party sites and party favors, have been scaled back or eliminated."

Since the downturn, Best Best & Krieger, with eight offices in California, has been trying to find ways to meet client needs, without breaking the bank, said Maggie Watkins, chief marketing and business development officer.

"To the extent that we can hold receptions at our facilities, that would be the preferred way," she said, "rather than incurring extra expenses of being in a hotel or another fancy venue."

At a recent event at the San Diego office, for instance, the firm hosted 50 members of the Urban Land Institute, serving beer and wine, instead of mixed drinks, and cheese, crackers and a veggie tray, instead of hot appetizers. The firm also is being more careful about validating parking for events, which Watkins said, can cost several hundred dollars.

Watkins said she's surveying the firm's clients to gauge their needs. Instead of traveling to a seminar, how would they feel about viewing a Webinar instead?

"These events are very expensive at a hotel, and it means a lot of time away from the office for clients to come," Watkins said. "They might appreciate the efficiency of doing a Webinar. The question is, can we accomplish the same goal by doing it differently?"

No matter the business, everyone is looking for ways to cut back, she said.

"There is that feeling that if there ever was a year not to go over the top, this is the year," Watkins said.

In the case of Morrison & Foerster, its partners have been donating 1 percent of their annual net income to the firm's foundation to the tune of about $25 million since its inception in 1986, according to Paul T. Friedman, the San Francisco-based foundation chair.

"We put our money where our mouth is, whether it's a good year or a bad year," he said.

But, Friedman added, like most other firms, Morrison & Foerster has seen its profits dip in the last year.

"If we make less money," he said, "1 percent equals less."

The biggest chunk of the foundation's money goes to support disadvantaged and at-risk children, with a smaller percentage going to other causes, including the arts.

Mark Zebrowski, managing partner in Morrison & Foerster's San Diego office, sits on the board of the La Jolla Playhouse.

"Our involvement with the playhouse has not been cut back," he said. "My suspicion is that we will be spending more this year than last year."

It's a way of combining culture with commerce: The firm sponsors a show each year, tied into a client event, Zebrowski said.

Procopio, Cory, Hargreaves & Savitch, with offices in San Diego and Carlsbad, supports about 250 charitable groups.

"We always try to keep a focus on not only cutting checks and spreading them around, but on groups where our attorneys take an active role on boards," said managing partner Thomas W. Turner Jr.

In-house, Duane Morris is continuing its partner confabs a few times a year, which Berliner estimates can cost in the $400,000 to $500,000 range. The most recent meet was in Atlanta, and it was money well spent, Berliner said.

"It's important for our partners to meet face to face," he said.

In October, there is an annual retreat planned for all of the firm's lawyers, this year in Philadelphia.

"If you're a big firm, and you don't know the people, and you've got a client on the phone, you can end up referring them to someone that ends up like oil and water," Berliner said. "That would be bad for everybody. These get-togethers help us to get to know each other and who is doing what."

But, he said, there are limits to the spending.

"The firm takes a fatherly view - 'Is this really something necessary to do?'" Berliner said. "They want to know that it's well thought out, and I appreciate it. We really want to hold people accountable. It's in the interest of the firm to do that."