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Shot in Arm
Medical Specialists: Health Care Attorneys’ David McFarlane

For most business owners, the complexity of Obamacare has been nothing short of a headache. But for a slew of L.A. law firms, that very complexity is proving a moneymaker.

Practices specializing in health care law – especially those where the attorneys have immersed themselves in the intricacies of the Affordable Care Act – are seeing a significant upswing in business. Revenue and staffing are on the rise.

Glendale attorney David McFarlane is among those seeking to profit from the complicated health care law. He launched Health Care Attorneys last year to offer counsel to employers facing a list of new laws and regulations.

Though still working from a home office, McFarlane has boosted his client count from 30 to 100 and has brought in a partner, Ryan Moulder, to help carry the load.

“For the legal industry, this is an untapped revenue stream and will be for decades to come,” he said.

Ben Fenton, a founding partner at West L.A.’s Fenton Law Group, which opened in March, said he and his partners came from a broader health care practice and immediately sought to adopt a more distinct focus on the Patient Protection and Affordable Care Act. Five attorneys joined Fenton in the new venture, and each agreed the best investment would be to read and understand the entire act.

The investment, at least thus far, has paid off.

Fenton Law Group this month opened its second office, in Oakland. It now has nine attorneys and Ben Fenton said the number of clients has almost doubled since March.

At Century City health care law firm Hooper Lundy & Bookman, founding partner Robert Lundy Jr. said he expected revenue to jump 13 percent this year to $54 million. That growth mirrors the demand for health care attorneys who can make sense of the several thousand pages of regulations in the Affordable Care Act.

“It has complexity of regulations like you wouldn’t believe,” Lundy said. “Is there more work to do? Absolutely.”

Seeking counsel

Benjamin Tilson, chief operating officer of West L.A. medical group Visiting Physicians of California, said it’s difficult enough to start a business without trying to understand the Obamacare regulations. Visiting Physicians launched last year to provide care to elderly patients and those who have difficulty leaving their homes.

“It would be impossible and potentially dangerous, from a business standpoint, to not have counsel,” Tilson said. “There are elements that need to be understood on a deeper level.”

It’s that kind of demand that is keeping Lowell Brown, a partner in the health care practice at the downtown L.A. office of Arent Fox, busy.

“There’s a finite number of us,” he said. “If you’re a health care lawyer, you’re in demand.”

Despite a strong demand, understanding the ACA is not a quick and easy process.

The Affordable Care Act requires law groups to have expertise in government regulations, mergers and acquisitions, technology and several other practice areas, said Lundy, who founded Hooper Lundy 27 years ago.

“It’s so complex, you need sub-subspecialists to really give clients what they need,” he said. “There are parts of the law I could never learn, even though I’ve spent my whole career as a health care lawyer.”

What’s more, it has become a very competitive market.

“There’s an ocean of need out there and there’s so much confusion,” said Harry Nelson, managing partner at West L.A.’s Nelson Hardiman. “The question is: Can you structure a firm that can make a profit?”

McFarlane, who keeps overhead down by working from his home, said larger firms can charge $1,000 an hour or more, but he has opted to stay competitive by charging a more modest $300 an hour. He believes the strategy is viable because his overhead expenses are minimal.

While clients are clamoring for counsel to help them understand the still-young law, lawyers practicing in the field are mindful that mastering the ACA, which is under seemingly constant challenge, is difficult.

“The dominant part of the Affordable Care Act is uncertainty,” Brown said. “If the Republicans control both the Senate and the House (after November’s election), who knows what’ll happen?”

McFarlane shrugged off the idea that Obamacare might still be repealed. He said he and his partner still get regular complaints from employers about the law, but most have started to accept it’s likely not going away.

Even if the law is scaled down or even repealed, many lawyers agreed there will always be a demand for experienced health care counsel.

Hospital mergers, new technological developments – like electronic medical records – and more federal prosecutions against alleged health care fraud mean there will always be a pool of anxious clients. As a result, Lundy said, new subspecialized practices have been developed to address a broader range of potential disputes.

Fenton, on the other hand, said the ambiguity surrounding the law often lurks in the back of his mind.

“It’s always something we’re thinking about,” he said. “You just have to make sure you’re not growing too quickly.”

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