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Duane Morris lawyers start smaller firmv


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Four local lawyers have left the Philadelphia-based law firm Duane Morris and started a new firm in downtown Harrisburg.
Arthur Hoffman, Robert Goduto, Robert E. Kelly Jr. and Marc Moyer split from Duane Morris’ Harrisburg office in mid-April. They have formed Kelly Hoffman & Goduto.
The new firm will specialize in general commercial litigation, as well as insurance industry issues and medical-provider liability, licensure and regulation, Kelly said. Goduto has experience in employment law and workers’ compensation.
The lawyers weren’t unhappy at Duane Morris, Kelly, 51, said. Rather, he said, they wanted to start a smaller firm that would have more flexibility in experimenting with new billing arrangements.
Scott Penwell is the managing partner in Duane Morris’s Harrisburg office. Penwell said the departing lawyers generally worked in low-margin areas, such as workers’ compensation.
“It’s the kind of business that, if you have a smaller shop, you can do more economically,” Penwell said.
Duane Morris, which has 500 lawyers worldwide and 22 in Harrisburg, has been moving away from those areas. Penwell said Duane Morris has been active in trying out new fee arrangements, especially on large cases involving multiple plaintiffs.
Firms bill mostly by the hour for their services, with partners charging anywhere from $80 an hour to $385 an hour for their services in Central Pennsylvania.
For the last five years, attorneys nationwide have been testing other payment methods. Larger firms hesitate to experiment, Kelly said, because they are built around the hourly fee.
The new methods involve flat fees paid for specific services or a mix of flat fees and hourly rates. Such methods would be most attractive to businesses, such as banks and insurance companies, that have an ongoing need for legal help, Kelly said. In charging a flat fee, lawyers would have an interest in controlling costs.
Hourly rates reward lawyers simply for working more, not for working more efficiently, Kelly said.
Other methods could include paying defense lawyers a contingency fee based on what they save if they win or settle a case, Kelly said. Plaintiffs’ attorneys have long earned money based on what they recover for a client.
As with plaintiffs’ attorneys, the contingency fee would give defense lawyers and their clients a shared interest in a case’s outcome, Kelly said. He declined to discuss specific arrangements.
John S. Oyler, managing partner at McNees Wallace & Nurick, said his Harrisburg firm of about 80 lawyers is open to alternative fee methods.
But, he said, clients generally prefer hourly rates, from which the firm generates 90 percent of its revenue. Oyler declined to reveal the firm’s total revenue.
About five years ago, Oyler held a meeting with general counsels from five of his firm’s largest clients. He asked the attorneys whether they would be interested in alternative fee arrangements. For the most part, he said, the lawyers preferred hourly fees. Only in certain cases, where the workload was predictable, did they want to try new methods.
For a small company, fixed fees would fit deals such as a sale, Oyler said.

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