By Gayle Cinquegrani, Bloomberg BNA
At a time when most big law firms are streamlining their business models to maximize profits, Cozen O’Connor is aggressively expanding into the labor and employment law market.
Labor and employment law practice groups often generate less revenue for a firm than higher-profile corporate matters. Law firms often maintain them as a convenience for clients of other practice groups who prefer to have one law firm handle all their legal matters.
“Our firm is not just interested in service lawyers but in expanding labor and employment to be one of our core practices,” Joe Tilson, co-chair of Cozen O’Connor’s labor and employment department, told Bloomberg BNA Sept. 20. “A lot of law firms have decided not to grow their labor and employment practices, and a lot have decided to slash their labor and employment practices because it’s a rate-sensitive area.”
“We’ve been bucking that trend,” Tilson said. “It’s been Cozen O’Connor’s strategic plan for several years to grow a national labor and employment law practice,” and “we have been quickly populating our offices around the country with labor and employment lawyers.” In particular, “we want to expand our labor and employment law practice on the West Coast” because “California is one of the most fertile areas of employment litigation,” he said.
Doubling the Employment Lawyers
The 650-lawyer firm more than doubled the size of its labor and employment practice during the past two years, the firm said.
Cozen has a cadre of 71 labor and employment lawyers resident in 13 of its 25 offices, and it’s recruiting more for the other offices, according to Tilson and Tom Giotto, co-chair of Cozen O’Connor’s labor and employment department.
In the past few weeks, Cozen added labor and employment partners in Denver, Pittsburgh, and Washington. Earlier in the year, it lured 22 labor and employment attorneys away from Buchanan Ingersoll & Rooney.
Insurance is a major reason that employment law practices generate lower revenue. About 15 or 20 years ago, insurers began offering employment practices liability insurance, Giotto said.
EPLI covers employers against claims made by employees alleging discrimination, wrongful termination, harassment, and other employment-related violations.
“The insurance companies have done a pretty good job of restricting fee increases in this area of the law,” Giotto said.
“They started to control the fees” by restricting “what they were willing to pay lawyers who were defending those cases” on behalf of employers. Now, EPLI is “common even for the larger client.”
Cozen thinks it can succeed even in this environment. “It’s all project management,” Giotto told Bloomberg BNA Sept. 21. Cozen has “never been a firm that turned away lower-fee work.
What we’ve done is figure out how to do that work effectively, efficiently, and profitably,” he said. The firm uses “technology and all the new innovations to manage these cases.”
In addition, Cozen “offers alternative fee arrangements and more flexible rates than most firms of our size,” Tilson said.
Proximity to Clients
The firm considers it important to have labor and employment lawyers throughout the country so they can be near their clients.
“Clients like to have labor and employment lawyers with boots on the ground. It’s a very people-oriented business,” Tilson said.
“There’s a more human element in the business because you’re dealing with people’s livelihoods.” Furthermore, “the labor and employment law field often presents time-sensitive problems,” he said. “When there’s a strike, it’s critical to have lawyers there.”
As large law firms have closed their labor and employment practices, many labor and employment lawyers have moved to midsize firms or specialized boutique firms, Tilson said.
Nevertheless, Cozen has “been able to attract top labor and employment law practitioners” to bulk up its practice because “laterals that come to us can expand their business,” Tilson said.
Landing new clients has a big impact on a lawyer’s total pay. A lawyer who brings in a client receives a lucrative origination credit even if his partners handle the actual legal work. Labor and employment lawyers in a full-service firm have “the ability to sell more services to clients”—such as real estate, intellectual property, tax, and corporate services—than lawyers in boutique firms do, Giotto said. “People in our firm would have the ability to sell multiple services to clients, and that could impact your compensation,” Giotto said.
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