Legal work related to healthcare reform has been taking up a growing share of business at Boutwell Fay LLP, an employee-benefits specialist whose partners said they expect the trend to strengthen through 2014 as various parts of the Affordable Care Act take effect.
The Irvine-based boutique firm has seven lawyers spread between two offices. It focuses solely on benefits plans and compliance with the ERISA, short for the Employee Retirement Income Security Act, which sets minimum standards for pension plans in the private sector.
The firm’s practice areas include ERISA-related disputes; health and welfare plans; and retirement plans, such as 401(k) plans.
“I think if we analyzed our billings, it would be a trend where the health-and-welfare plan work is taking up a larger chunk of our overall work,” said Sherrie Boutwell, who cofounded the firm 15 years ago with Alison Fay.
“Certainly, our expectation is that the Affordable Care Act will result in more work for us but perhaps not so much right now,” Fay said.
She cited a delaying effect brought on by the White House’s announcement last July that it was pushing back the enforcement of the employer mandate provision that would impose penalties on employers with 50 or more full-time employees for failing to provide coverage for workers. The deadline is now 2015, but Fay said employers should be addressing the issue well before then.
“A lot of employers have sort of put this on the back burner,” Fay said. “A lot of companies said, ‘OK, we’ll do it later,’ but really, they should be looking at it right now.”
She added that more questions will surface and that companies will require more legal services across-the-board as acceptance and utilization of state health-insurance exchanges grow.
“I expect that things will pick up more, now that the exchange has gone through its first round of enrollment,” she said. “Also, what’s going to be interesting in the near future is the coordination of the exchanges with the employers.”
People who sign up for insurance through state exchanges are eligible for government subsidies in the form of tax credits if they can show their employers didn’t offer them affordable coverage.
“But one question I’m not clear on, and I haven’t heard any answers on, is how they are verifying whether or not an employee has been offered affordable coverage,” Fay said.
“What we haven’t seen so far is that notice coming back from the exchange to the employer, letting that employer know that the employee has filed. When that starts to happen, I think our involvement will increase, because employers will need to respond to information requests from the government.”
Meanwhile, Fay and Boutwell are fielding questions from client companies of various sizes, especially from those “still struggling with whether or not they are actually subject to the ACA,” Fay said. “Some companies are on the border between having enough employees to be subject to the act, and those are the smaller employers. But then the larger employers just know they are subject to it. Their questions are more directed at how to, for example, count hours for part-time employees. … And then there are all the updates that are coming out all the time. ACA is still something people need to work through; there’s no set precedent for anything.”
Healthcare isn’t the only area for which Boutwell Fay has become known as the “go-to” firm. It also focuses on niche employee-benefits matters, such as 401(k) compliance, executive compensation and government audits.
“Healthcare is new, but we, as this firm, have been around for 15 years in OC,” Boutwell said. “One thing that has changed over the years as the level of government regulation has grown exponentially is that it’s becoming more and more important that each of us owns a subset of an area to a degree that we didn’t used to in the past. We almost are having to create subspecialties within the firm just in order to keep up with the amount of information and new regulations and new cases. I think it will continue to go in that direction.”
Boutwell, who earned a bachelor’s degree from the University of California, Irvine, and got her juris doctorate degree from UC Los Angeles, practiced in Santa Barbara for a couple of years before returning to Orange County in 1985. She worked at Morrison Foerster LLP before moving to a smaller firm in OC, where she met Fay, who formerly worked at Gibson Dunn & Crutcher LLP. Fay has been practicing in Orange County since 1985 after four years in San Jose. She studied at the Hastings College of the Law and Stanford University.
The two have built the firm while raising their families.
“When we first formed the firm, we had young kids,” Boutwell said. “We wanted to have a nice, high-quality benefits practice and still have the flexibility and time to raise our kids.”
It so happened that the firm has had all female attorneys throughout the years until its recent hire of two male attorneys to run its New York office. The focus on female lawyers wasn’t by design, according to the partners.
The firm is still 100% women owned, Boutwell said.
Jeremiah Hanrahan specializes in insurance products and services for employee benefit plans, and Evan Giller focuses on retirement plans for nonprofit and governmental entities.
Boutwell said the firm will add lawyers as needed as the workload grows.
“We really have a desire to grow this firm and add on some capabilities,” she said. “It was our intent from the start to limit the practice just to employee benefits, and that’s the way we’ve kept it. That was a successful approach for us because we’re not in competition with a lot of the firms that refer us work. We get work from all different kinds of firms that have a general practice.”
