While the recession has pounded some big law firms elsewhere, firms here say they've held their own by shifting focuses where necessary to meet whatever demand there is. Though corporate law and real estate work has been soft, they say, bankruptcies and foreclosures haven't.
"Businesses are holding the line, limiting their legal expenses," says Shaun Cross, CEO of Lee & Hayes PLLC, of Spokane. "There's been a marked reduction in the amount of corporate business work. That dried up in the fall of 2008. There've been a lot fewer transactions to work on."
Chuck Teegarden, firm administrator for Lukins & Annis PS here, says "Our attorneys apply their talents to the areas where the work is. They're being creative during a period of time when creativity is called for. Commercial real estate is not all that active. Those attorneys find other areas to practice in."
Cross says the recession has pushed more potential clients into financial trouble, creating some legal work for attorneys.
"Generally, for most attorneys in the Spokane region, litigation has remained fairly active" he says. Individuals and businesses in financial straits have necessitated more bankruptcy filings, more "debtor-creditor work," and more foreclosures, he says.
Bankruptcy and foreclosure work has been on the rise in his firm, although some other types of work have been slow, says Spokane attorney Kenneth Watts, who operates a solo general law practice here.
"Personally, real estate has improved for me," Watts says.
Prominent Spokane bankruptcy attorney Kevin O'Rourke says that while his caseload has held steady throughout the recession, the rate of filings is still well below where it was before bankruptcy reforms took effect in 2005.
Another area of law that seemed to surge during the recession, at least initially, was divorce, says Spokane attorney Brian Meck, who specializes in family law.
"It seemed like divorces had an upswing immediately after the recession began, because there was more stress in otherwise tenuous marriages," Meck says. "Then it tapered off once people ran out of money."
Among law firms surveyed for the Journal's list of Spokane law firms (see page B4), eight reduced their attorney staff during the past 24 months, while eight added staff and nine remained the same.
"The recession has hit the legal community between the eyes," says Cross of the national legal industry. "If it's been a recession for business since the fall of 2008, it's been a depression for law firms."
Cross says he knows of national law firms with more than 1,000 attorneys that have closed during the recession. Such firms, he says, had been charging fees upwards of $1,000 an hour to support the high salaries of their senior partners and to cover office lease costs that often ran $90 per square foot. He says their clients, finding ways to save money, realized they could get equally good services for $400 an hour.
In Spokane, law firms say the recession has forced them to look for other types of work to offset a reduction in legal work in, say, the commercial real estate industry. Among the areas in which Lukins & Annis has done more work lately have been estate planning, which involves wills, probate, and trusts; succession planning, which involves the future transfer of a business's ownership; and recreational property planning, which can involve dividing the rights to a lake cabin or other recreational property among a group of relatives, says Teegarden.
Also, he says, "some farmers are doing well" and need help with tax issues. Similarly in agricultural law, "water rights is starting to heat up," Teegarden says.
As for commercial real estate law, he says, "It was pretty quiet for a while," but there's been more activity in recent weeks. Meanwhile, "We haven't seen any decline in construction law litigation," he adds.
One saving grace is that the wheels of justice move slowly, so some lawsuits initiated earlier are still going on, he says.
"We may still be working on a case for someone whose roof collapsed in the big snowstorm two years ago," Teegarden says.
Cross, too, says work is starting to emerge again in commercial real estate.
"There've been some signs of economic activity. Deals are starting to take place," he says.
Lukins & Annis is mining more work in the area of intellectual property. Spokane attorneys Keith Bergman and William Jeckle merged their intellectual property practice, Bergman & Jeckle PLLC, into Lukins & Annis PS in April, and since then Lukins & Annis also has added two other intellectual property attorneys, says Teegarden. It now handles biological, mechanical, nuclear and software patents for its clients.
"It's a real benefit to our business clients," Teegarden says.
Cross says that in general, the practice of business law has evolved from a primary focus on real estate to a focus on corporate law and now to a focus on intellectual property. He says that 30 years ago, 90 percent of a business's value was found in its tangible assets, such as property, physical plant, and equipment, but now 90 percent of the value of Standard & Poor's 500 companies is found in intangibles, such as goodwill, trade secrets, and patents.
He cites Microsoft Corp.'s 57,000 patents as an example. He says China's patent filings grew by 29 percent last year, and that Lee & Hayes represents several clients there.
As with retail business, tough economic times can be especially difficult for a small law firm.
David Carlson, whose law practice here focuses on real estate litigation, says that property owners are putting off dealing with boundary problems, easements, and liens, and legal work for developers is way down. He says he's been doing more business law and has looked at other ways to diversify.
"We haven't laid anybody off, and we've kept our advertising the same, but we've cut way down on supplies," Carlson says. "So far, we've done pretty well. This year, things are starting to move again. Developers are starting to look at new projects, and properties are starting to sell. Things are turning around."
Burke Law Group PLLC, of Spokane, added lawyers and support staff at the beginning of the recession, but "trimmed up our staff when the recession got the worst," says founder John Burke. The firm once had six attorneys and 11 support staff. It now has three attorneys and six support staff.
Burke declines to say whether some areas of the practice are doing better or worse than others because of the recession.
The firm offers legal services in family law, collaborative law and mediation, collections, landlord-tenant actions, real estate issues, and estate planning.
Besides downsizing, the firm's strategy for weathering the recession has focused on increased networking and more focused marketing.
"When we have a recession like this, you have to pay more attention to what you're doing to get your name out to the public. You have to shake the tree harder to find good clients to keep yourself busy," Burke says.
He adds, "We're not necessarily spending more money on marketing the firm, but our marketing is more targeted. We're being directed and purposeful on what we're spending money on."
The firm also has implemented more flexible payment options for its clients. "We're being more creative in how people can pay. That definitely helps with revenues," Burke says.