Oregon State Bar Bulletin — OCTOBER 2006

As the federal bankruptcy overhaul approaches its first anniversary, a new survey suggestd the law is resulting in some unintended results, according to a survey of 700 members of the National Association of Consumer Bankruptcy Attorneys (NACBA).

More than two-thirds (68.5 percent) of those surveyed said that their bankruptcy filings are up in the third quarter of 2006, compared to the first half of the year. Almost three out of five bankruptcy attorneys (57.5 percent) now expect filings to reach their pre-overhaul levels by or before the law’s second anniversary in 2007.

According to the survey, the primary impact of the new law appears to be more paperwork hassles and higher expenses for already cash-strapped consumers. More than three quarters of bankruptcy attorneys said that the time involved in preparing a bankruptcy filing has gone up by 50 percent or more. Respondents variously estimated the extra time at 50-75 percent (26.5 percent), 75-100 percent (23.1 percent), and "more than 100 percent in increased time" (27.1 percent). When asked if "the increased paperwork required under bankruptcy reform changed the results or simply increased the costs of bankruptcy," more than nine out of 10 (92.8 percent) said "mostly increased the costs" while fewer than one in 100 (0.7 percent) said "mostly improved the results."

Henry Sommer, NACBA president and a Philadelphia bankruptcy attorney, railed against the legislation. "The bankruptcy law changes were premised on a faulty assumption, "promoted by the credit card industry, that there was massive abuse going on by thousands and thousands of people who could pay their debts."

Read more about the survey at www.nacba.org.

The newly released 2006 Altman Weil Law Department Metrics Benchmarking Survey, published in partnership with LexisNexis Martindale- Hubbell, reports total legal expenses per lawyer up 7.9 percent over the previous year.

"Despite all the talk about finding ways to reduce outside legal spending, some law departments still appear to have a difficult time walking the walk, since the largest part of the increase was attributable to external legal fees and expenses," said Altman Weil principal James Wilber.

"After holding the line on expenses for the past several years, we’re now seeing a significant jump. General Counsel can only do so much in response to billing rate increases, and there will always be critically important work that is predominantly price insensitive."

Total law department expenses in all companies surveyed averaged $914,229 per lawyer, up 7.9 percent in fiscal year 2005.

The internal costs of operating an in-house law department rose to an average of $332,823 per lawyer, a 2.6 percent increase over the prior year. Lawyer compensation and benefits, the biggest internal expenditure, averaged $258,205 per lawyer.

Outside expenditures rose 5.5 percent to $602,070 per lawyer on average for all law departments nationwide. The Computer/Electrical Manufacturing and Chemical Manufacturing industries had the highest average outside counsel expenses: $1,017,948/lawyer and $935,402/lawyer respectively. The Insurance industry had the lowest at $292,134/lawyer.

Lawyer staffing in corporate law departments was up in 2005, with the key measure – lawyers per billion of revenue – rising to 3.49 lawyers/billion compared with 2.93 lawyers/billion in 2004.

This increase was reflected in both the number of management lawyer positions and the number of general lawyers.

The Bulletin is always on the lookout for quality manuscripts for publication on these pages.

Don’t be shy. If you have a manuscript, suggestion or idea, contact us at (503) 620-0222, ext. 340 (Paul Nickell) or ext. 348 (Julie Hankin), or by e-mail at editor@osbar.org.

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The Clackamas County Family Law Group recently published the completely revised sixth edition of its Resource Guide for Divorce Lawyers.

The 204-page catalog provides a listing of of experts that family law attorneys can use to evaluate and prosecute their cases. Altogether, it lists 203 professionals in 15 categories, ranging from real, personal and business property appraisers, custody evaluators, children’s counsel, mediators, counselors and appellate counsel. Detailed resumes for 134 experts are included.

Cost is $30. Copies are available from John Lundeen, P.O. Box 1146, Lake Oswego, OR 97035.