Practicing in a recession: Scenes from Janesville
By Alex De Grand, Legal
Writer, State Bar of Wisconsin
Feb. 4, 2009 – Janesville is Exhibit
A for the weak economy. It is also the place to look for answers to how
a lawyer should practice when the going gets tough.
If the national recession had a local address in Wisconsin, it would
likely be in Janesville.
General Motors, Janesville’s second
largest employer, ceased SUV production on Dec. 23, 2008, cutting
2,200 jobs with the car manufacturer and at least 1,150 at supplier
companies. Unemployment in the Janesville metropolitan area was last reported
to be 8.1 percent, higher than the state average of 5.8 percent.
So while many lawyers around the country are anxiously wondering when
and how the downturn will impact their communities and practices,
Janesville attorneys are already taking stock.
Janesville attorney David
Moore of Nowlan & Mouat, LLP, said that so far his firm has been
resilient to the downturn, demonstrating the strength of its diversified
structure. Moore said his 126-year-old firm traditionally focused on
business transaction work, including the formation of the Samson Tractor
Company that eventually became a part of GM. But, he said, the firm
branched out in the last 30 years so that as real estate and other
commercial activity has fallen off, its work in family law, litigation,
foreclosures, and collections has increased.
Moore also credits a cohesive firm culture in which the attorneys
share the economic woes. “We have a tight-knit group of lawyers so
if one area of practice goes down, it does not mean a lawyer is out on
his ear,” he said. “We approach this as a firm. This is not
to say that individual incomes won’t go up or down, but the firm
needs to be the focus.”
A similar response to the economic emergency was reported by George
Steil, Jr. of Brennan Steil & Basting, S.C., another of
Janesville’s prominent firms. Steil agreed that work had shifted
away from areas of law that prosper in good times and toward those like
foreclosures. This has resulted in all attorneys in the firm sharing
workload and being very busy, he said.
Steil observed that his firm was prepared to adjust, commenting that
attorneys tend to have greater flexibility in offering their services
than other businesses such as auto parts suppliers.
It takes a village
But Steil said that beyond the efforts of individual firms to
withstand the downturn, the city took important steps to prepare for a
diminished GM presence years ago. “The GM plant had 8,000 people
at its peak,” Steil said. “But over 10 years, that number
was reduced. By the time it closed, it had 2,500 employees. The city
knew GM was slowing down.”
Acting preemptively, Steil said the city aggressively recruited other
industries and encouraged expansion of local employers, especially Mercy
health System and Lab Safety Supply, to change its economic
mix. He noted many of Janesville’s larger businesses,
including clients of Brennan Steil & Basting, have a regional focus
and are not directly affected by the local economy, also easing the
crunch.
Moore stressed the role local government must continue to play.
“My concern is local government’s ability to point toward
the future, rather than withdraw like a turtle in a shell,” he
said.
“Janesville needs to resist the impulse to slash public
spending on services and schools because those are the things that will
end up drawing Janesville’s next wave of businesses,” Moore
said.
Lawyers – with their training and unique position – have
an important role to play as community leaders in those kinds of
debates, Moore added. “Lawyers can do a lot of community service
– everything from food pantries and up to and including serving on
their local chambers of commerce,” he said.
Likewise, Moore said lawyers have a financial responsibility to the
community. “Our firm set up a charitable fund with our local
community foundation a few years ago,” Moore said. “Our
partners contribute money to the fund every year at the same time we
distribute our profits. We recently approved a $15,000 grant to Healthnet of
Janesville, Inc., a local provider of health care services for the
uninsured and low income residents of Rock County.”
Both Steil and Moore cited the example of Kenosha, which lost an auto
plant but returned to prosperity, as a model for Janesville. They
credited that city with taking a creative and entrepreneurial approach
to its predicament. But most importantly, they insist upon an optimism
that things will eventually improve.
“The best thing we can do is help young small businesses grow
into successful businesses,” Moore said. “The economy is
going to get better.”
Signs of the times
In the meantime, Moore and Steil have noticed some particular
challenges of practicing in a downturn. Many of them exist in any
economic climate, but have become more pronounced with the current
troubles.
For example, Moore said that there have been more litigants deciding
to go unrepresented. These pro se parties are unfamiliar with proper
procedure and consequently cases can end up taking far longer to
resolve.
Also, Moore said, courts tend to allow them far more latitude than
would be given to a licensed attorney in hopes of avoiding reversal on
appeal. However, this almost works to penalize a represented party.
For his part, Steil said that a client’s ability to pay becomes
a greater concern in tough times. Steil said in some cases, the client
may be asked to pay a larger portion of a fee in advance and an attorney
may have to make greater inquiry into the client’s ability to
pay.
At the same time, Steil said that in these economic times his firm
has made efforts to increase its amount of pro bono work, especially in
the area of landlord-tenant law.