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Employment lawyers say a new law mandating sexual harassment training at California companies means more business for firms with established training practices. But no one expects a revenue bonanza. For most management-side labor and employment firms, the new law — which affects only businesses with 50 or more employees — is expected to provide a modest boost to a side business. “We’ve seen an uptick in calls,” said Andrew Livingston, an employment partner at Heller Ehrman White & McAuliffe. But he also notes, “We don’t look at [training] as a separate profit center.” For many big firms, training is regarded primarily as a service to clients, something partners provide but don’t actively encourage. Training is confined to a side business because it’s seen to have limited profit potential. Clients who want in-person training tend to ask for well-known partners, who could earn far more for the firm by heading up a litigation team rather than charging a one-time fee for a brief training session. In order to maximize the payout from training, some firms have created online training programs. “The online training has a quite higher profit percentage immediately because you’re not sending a lawyer out,” says Seyfarth Shaw of counsel Martha Gates, the West Coast training director for the firm’s separate training company, Seyfarth Shaw at Work, which does in-person and online trainings. Firms like Littler Mendelson, Seyfarth Shaw and Jackson Lewis say their online training projects are doing an increasingly brisk business. “We’ve expanded in the last six months. We’ve had an absolutely phenomenal two years,” said Shanti Atkins, CEO of Employment Law Training Inc. (now doing business as Employment Law Learning Technologies), a separate e-training project by Littler Mendelson. ELT has seen even more requests for training programs in the wake of California’s new law, Atkins said. But online programs come with their own challenges. The same thing that makes online training so profitable — limited attorney involvement — leaves the industry vulnerable to competition from tech companies. Littler’s ELT is now seen as the only law firm-founded online training company to become a factor in the crowded field. Its long client list includes Comcast Corp., Merrill Lynch and Occidental Petroleum Corp. Atkins says ELT, which survived a near-bankruptcy in 2001, is now in the black, but she refuses to disclose financial figures. Other online training programs also don’t divulge such information. Lawyers at other firms remain skeptical that the online training business will ever truly take off for law firms. “I’m sure they are busier because of the new law. I’m busier because of the new law. But there’s a lot of competition,” said Jeffrey Tanenbaum, an employment partner with Nixon Peabody who questions whether law firms can compete with tech companies. Tanenbaum has good reason to wonder: He was one of a group of Littler partners involved with ELT’s founding in the late 1990s when a group led by partner Garry Mathiason invested in the project. Tanenbaum isn’t the only former Littler partner convinced by ELT that e-training and legal practice aren’t a perfect marriage. “I was someone whose arm was politely twisted to invest in ELT, and I got nothing for it,” said Fraser McAlpine, who left Littler for Akin Gump Strauss Hauer & Feld in 2003. Other employment firms seem to regard ELT as a cautionary tale, and are balancing their desire to get into the e-training market with a reticence to take on a startup’s risk. Seyfarth Shaw and Jackson Lewis, for instance, have farmed out their tech needs to enter the market with little up-front investment. Seyfarth pays GoTrain, a separate online training company, to produce its programs. Similarly, Jackson Lewis has “partnered” — the firm won’t discuss the specifics of the deal — with Workplace Answers, an established San Francisco-based online training company. The deal has Jackson Lewis lawyers providing content and customer support for online trainings. “We know that we have a relationship with a real company with real clients,” said Michael Lotito, a partner in Jackson Lewis’ San Francisco office. Tech competitors agree that it makes sense for law firms to minimize their investment and their direct involvement in online training. Russell Gee, a vice president with Massachusetts-based online training firm Integrity Interactive, said law firm-owned e-training companies struggle to compete. “I run into them at trade shows, and they sort of scratch their heads and say if you’re a law firm, it’s hard to run this outside company that operates differently,” he said. Gee noted that programmers tend to expect to share in profits or stock — a foreign concept to partners used to dividing the profits among a limited group. Smaller firms say they have reaped great benefits by emphasizing live training. “I would say [live training is] 20 to 30 percent of our practice in terms of revenue,” said Stephen Hirschfeld, a partner with Curiale Dellaverson Hirschfeld & Kraemer. Curiale specializes in in-person trainings. It restricts its online offerings to “Webinars” — live seminars delivered via Web cast — that most employment attorneys say are more effective than online programs without a live lawyer participating. Similarly, Liebert Cassidy Whitmore has carved out a niche training public employees — and increasingly law firms — on a host of issues, including sex harassment. The 45-lawyer firm conducts 400 to 500 trainings a year at rates ranging from $1,600 to $2,000 for a three-hour session to $2,500 to $3,000 for a full day, said Managing Partner Melanie Poturica. “It’s been tough for our competition to compete with us,” she said. “We have a standalone training department with a training director and four employees.” Poturica said 10 to 11 percent of the firm’s annual revenues come from in-person training, giving little incentive to go online. “We have not put a lot of resources in it. And because we’re as successful as we are in the standup training, it’s not where we’re focused,” she said. Ultimately, most employment lawyers agree that firms like Liebert and Curiale are exceptions to the general rule that the majority of firms lack the technical expertise or desire to make trainings into a gold mine — if only because most attorneys find litigation more profitable and more appealing. “I don’t think any of us want to be fulltime trainers,” said Paul, Hastings, Janofsky & Walker partner Jeffrey Wohl. “We didn’t go to law school to do that.”

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