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Last year, John Mola was preparing for his group’s largest continuing legal education event of the year — a New York seminar for corporate and securities attorneys that was expected to be a cash cow. But a couple of months before the scheduled event, the Sept. 11 attacks were launched on New York. Mola, director of the San Francisco office of the Practising Law Institute’s Minimum Continuing Legal Education program, had to cancel the event. Like a ripple effect, three other seminars suddenly weren’t happening either. “Nine-eleven had a major impact on our revenue stream,” Mola said. “The cancelled programs meant a lot of lost revenue at the end of fourth quarter in 2001. Hundreds of thousands of dollars we weren’t able to keep.” With law firms spending less in a recession, the CLE industry is also struggling to make ends meet. PLI, a nonprofit, recently trimmed 10 percent of the staff in its New York headquarters. Other providers have frozen hiring and are trying to stay afloat while understaffed. The financial situation is so dire at the top end of the industry that PLI now requires all of its speakers and panelists to pay their own traveling expenses. The American Law Institute of the American Bar Association is asking instructors to voluntarily pay their own expenses. “ALI-ABA’s faculty is largely traveling, and we have asked our faculty to consider forgoing their reimbursements — many have been generous and are doing that,” said Alex Hart, ALI-ABA’s director of courses of study. While Sept. 11 may have increased the intensity of the industry’s current downturn, the problems began months before the attacks, Hart said. “The week of 9/11 we lost three seminars and lost lots of revenue. But enrollments had already started to slip and we’ve continued to see slippage a year after,” he said. And the flagging economy has resulted in a decrease in sales of books and periodicals as well. Some San Francisco Bay Area CLE providers saw the writing on the wall years ago. A Berkeley provider, Continuing Education of the Bar, has been diversifying its offerings over the last few years. CLE courses make up only approximately 15 percent of CEB’s revenue, and the organization’s focus now is primarily on publishing. CEB director Craig Conly recently left for a staff job with the University of California, Berkeley’s senior vice president. CEB has other important staff positions to fill but isn’t currently seeking replacements. “We’re no different than anyone else in this economy,” said Booker MacClaine, CEB’s director of human resources. “We’re affected like the rest of the legal community.” To make recovery even more difficult, Bay Area law firms, who have been hit even harder than the rest of the country since the demise of dot-coms, have scaled back on travel expenses. Palo Alto, Calif.-based Wilson Sonsini Goodrich & Rosati only allows its attorneys to travel to seminars within the state, according to Larry Brown, the firm’s manager of training and professional development. “We have over the last two years gone to a guideline of local programs only, absent special circumstances.” Lawyers at San Francisco-based Brobeck, Phleger & Harrison are also traveling less. “People are more cost-conscious when they’re going to a conference that requires travel,” said Curtis Mo, a partner in the East Palo Alto office who lectures at PLI seminars. Meanwhile, while national CLE providers struggle to make ends meet, smaller local CLE providers have actually noticed a modest jump in attendance. Barbara Fanning of the Bar Association of San Francisco said her group has seen a bit of an upswing in attendance. Cost-conscious attorneys like the price of BASF’s programs, which are mainly offered at lunch and cost $20 to $30. Attending a PLI seminar costs firms thousands. In addition, the proliferation of online CLE providers has given attorneys more options. Lawline.com, a 2-year-old company based in New York, has seen a steady increase in business from month to month, said Judy Stein, its executive producer and vice president of production. But big or small, CLE providers have seen the subject matter of their course offerings affected by the sagging economy. BASF cut back on subjects relating to venture capital and high technology, Fanning said. “We have seen greater attendance in bankruptcy, real estate and accounting [courses].” But the news is not all bad. There has been growth in some areas of CLE offerings. The wave of corporate scandals like Enron has forced the Securities and Exchange Commission to enact new regulations, and passage of the Sarbanes-Oxley Act — which seeks to address the origin of corporate accounting misdeeds — has opened up a new market for courses as attorneys scramble to understand the new, complex regulations. “Harvey Pitt, chair of SEC, came up with a list of 1,000 programs post-Enron,” said Mola. “We modified our program for corporate and securities lawyers and the [new] responsibilities of lawyers [working] in publicly traded companies. We sent out an e-mail telling lawyers we were going to cover these new requirements and customers came out of the woodwork wanting that information.” In addition, as law firms spend less on travel, their consumption of videoconferences, teleconferences and Webcasts has increased. Sandra Geller, PLI’s associate director for programs, said revenue from Web programs is on pace to triple this year from 2001. ALI-ABA has been providing videoconferences beamed via satellite for some time, and the group is staying the course and hoping things pick up. “We are trying to develop more online technology, but have not seen a dramatic increase in revenues or interest,” Hart said. “Online sales are declining as well.” “It’s been a difficult business since the spring of 2001 — we’re just doing whatever we can to economize and streamline and do everything we possibly can to serve the bar the way we have in the past.”

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