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Fear of giant payouts to plaintiffs continues to impel employers to spend money for staff training in discrimination and sexual harassment law. That’s the good news. The bad news for lawyers on the compliance and prevention side is that necessity has also brought on a rash of competition from lay consultants offering similar services at a lower cost. The encroachment by nonlawyers is the latest stage in an evolutionary process that began with Lehmann v. Toys ‘R’ Us, 132 N.J. 587 (1993), where the state supreme court announced that management could be answerable in punitive damages for tolerating a gender-hostile workplace. Lehmannkicked compliance-and-prevention lawyers into high gear. They went on a campaign to convince existing and prospective clients to adopt policies sanitizing their workplaces or, for those clients with extant policies, to revise them. After all, no one knew then how wide the maw of the unleashed beast might open. After nearly a decade of application and further judicial honing of Lehmann, the scope of the doctrine is easier to define and compliance is more of a drill. That means that in-house counsel who want to cut legal costs — and who doesn’t? — can opt for canned advice in the form of videotapes, interactive programs or human resources consultants, all at lower rates. “You have psychologists, you have sociologists, you have consultants, all getting into this area,” says Brian Cousin, a partner in the Florham Park, N.J., and New York offices of Greenberg Traurig. “As a lawyer, and as a partner in a large firm in particular, it’s hard for us to compete at the price levels that are being offered with these nonlawyers.” Take, for example, Teterboro, N.J.-based Quest Diagnostics. In-house employment counsel William Johnson says corporate counsel, managers, outside lawyers and consultants provide seminars for its 30,000 workers nationwide. “I don’t know that you have to have lawyers do the training. Sometimes it gets too legalistic and not practical enough,” Johnson says. “My employees don’t need to know all the case law.” Cost is not the deciding factor but it is considered, he adds. In that regard, nonlawyers have the upper hand. For $20 a person, an employer can provide training with use of a computer-based course called “LearningAction.” The course, which covers a handful of U.S. Supreme Court cases on harassment and discrimination, is the same for all 50 states but users can insert their own content based on local law, says senior product manager Anthony Cross. The producer of LearningAction, Best Software of Herndon, Va., claims that its 45-minute Web-based course is better than a live lecture because it requires the listener to answer questions at the end of each section. Those who give incorrect answers cannot continue to the next section, says Cross. Some LearningAction clients have the program content reviewed by a lawyer before use, but the company takes no position on whether the product should augment or replace legal counsel, Cross says. HR Compliance and Advisory Services of Jersey City, N.J., another employment lawyer-substitute, is less objective on the need for lawyers. The company, whose services include consultation on employee handbook reviews, employee discipline and termination, and regulatory compliance, maintains a Web site that takes aim at lawyers. “Facts revealed in compliance reviews are not protected by attorney-client privilege; only recommendations by an attorney to correct violations are protected. Thus, the need to pay legal fees for nonlegal services is unnecessary,” the site states. Another page reads, “In contrast to law firms and other consulting companies that do compliance reviews, consultants for HR Compliance are certified Human Resource professionals with proven track records as managers in a corporate Human Resources environment and a minimum of seven years experience in their field of expertise.” Patricia Handley, the president of HR Compliance and Advisory Services, says she does not give legal advice. She says the low-cost consultations provided by her company are needed because many human resources departments at small companies have been decimated. Predictably, lawyers who offer training on employment law issues are quick to point out the shortcomings of their nonlawyer competition. “The one thing that we always like to point out to clients is New Jersey is a very difficult place when it comes to the principles of employment law,” says Steven Suflas, a partner at Ballard Spahr Andrews & Ingersoll in Voorhees, N.J. “This is a much more employer-hostile state, so a program someone does in Tennessee might not comply with New Jersey employment law.” “I’ve looked at a zillion videotapes. They’re corny,” adds Francine Esposito, a partner who heads the training program at Grotta, Glassman & Hoffman in Roseland. “I think most people know you can’t touch somebody’s breast or say ‘sleep with me or I’ll fire you.’” Lawyers say that new wrinkles in the law perpetuate the need for their expertise. Suflas points to a ruling last summer by the state supreme court in Gaines v. Bellino, 173 N.J. 301, which underscored the need for preventive measures to augment written sexual harassment policies. Yet amid strong demand, competition exerts pressure on the prices law firms can charge for such training. Though lawyers interviewed were reluctant to discuss rates, many have switched from hourly to flat-rate billing for employment training to make the cost more palatable. For some lawyers, the low-cost competition has turned workplace training into a loss-leader service they offer chiefly to their litigation clients. Some lawyers say they have to keep an explanation ready for when clients ask about the merits of hiring lawyers over nonlawyers for the job. Greenberg Traurig’s Cousin says when new clients approach him for employee training, he offers to reduce his rate or to credit the cost of the seminar toward future services. Most of the companies that sign up for his training seminars, however, already have retained his firm after being hit with employee litigation. Esposito has developed her own computer-based sexual harassment and diversity training program. She refuses to sell the CD-ROM by itself, however, and offers it only as a supplement for workers hired between a company’s annual seminars. In Grotta, Glassman’s labor and employment newsletter, Esposito writes that legal counsel “should conduct, or at the very least, review all employment-related training.” Training that says the wrong thing, Esposito writes, “could ironically encourage, rather than prevent, lawsuits.” One way that lawyers can get back some of the consulting business is to follow Ann Kiernan’s lead. The New Brunswick< N.J., solo practitioner became an independent contractor five years ago for Fair Measures of Santa Cruz, Calif., a training company staffed by lawyers. Kiernan says Fair Measures has provided her assignments at high-tech companies such as Sun Microsystems Inc. and Cisco Systems Inc. Technology companies willingly fund harassment and diversity seminars because they have a corporate culture where employees value training of all types, says Kiernan. Kiernan says clients sometimes ask her about the merits of employment law training by nonlawyers. “There’s a whole body of law developing about what happens when you don’t do the right type of training.”

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