LawBiz® Blog

LawBiz® Blog

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California Bar Licensing Is About to Change

Posted in In The News, Management, Personal Thoughts, Services

Two changes are about to occur in the lives of “want to be lawyers.”

First, to appease their conscience, the Board of Trustees of the California State Bar considers requiring law students to take on one more obligation before graduating, 50 hours of free or low-cost legal services for the “needy” within a year of passing the bar examination. What is the issue? Is it to address the concern that so many people cannot afford to hire an attorney? Or is it to provide additional and needed training for newly minted lawyers?

If it is the latter, law schools to be accredited by either the state or the American Bar Association should include the client representation process in the curriculum before granting the degree. If it is the former, all lawyers should be required to provide “legal aid” or low-cost services or a percentage of their gross revenue to legal aid organizations.

If either of these alternatives were implemented, two powerful entities would rebel. Law schools with their prestigious alumni would howl; and all lawyers would consider a percentage of their gross revenue to be an additional tax and anathema.

The second change is the reduction of California’s three-day bar examination to two days. Whether the complaint is that three days is more arduous than two days, which it is, or whether the more than $800,000 savings to the Bar is the motivation is not clear. Somehow, it just does not seem that saving money is of major concern to the “powers that be.” It is also clear that educating its members – attorneys – is also not a major concern. Over 70 percent of the annual State Bar budget is directed toward the disciplinary system. Of the matters within that system, over 50 percent relate to management issues. Educating lawyers to be more effective in managing their business and dealing with their clients (unrelated to theft of client trust funds) would result in a significant reduction of expenses to the Bar, and increase more effective service to clients and, oh perhaps even a reduction of annual dues to lawyers.

But then, LawBiz® has been whistling in the wind about this issue for decades.

“Selling” is an essential for all professionals

Posted in Cash Flow - Finances, Management, Marketing, Services

“Marketing” is no longer only for the rarefied equity partner. Quinn Emanuel, a major law firm, announced it will require Associates and Of Counsel attorneys to actively participate in at least one marketing effort during the year.

There is skepticism among marketing personnel, and even lawyers, how effective such a requirement will be. It would appear, however, that any focus on “marketing” even if not directly related to the current activity of the associate would sensitize the associate to “new business” opportunities that cross the path of every professional regularly. While the approach of this law firm is unique, it addresses the query registered by one associate years ago to the managing partner of one of my clients: what can the associate do to expedite the path to partnership? The response of that managing partner was, “… Just do good work…”

In today’s competitive environment, that response is no longer adequate. Doing “good work” is no longer sufficient. While the law is a “profession” and good work is required, the law is also a “business” and marketing/selling is the first step to attaining new clients and increased revenue. “Making a better mousetrap” is no longer sufficient in a competitive world. Even a quality law firm must get its message to its prospective client base.

Increasing price of legal services and technology as the antidote

Posted in Cash Flow - Finances, In The News, Management, Marketing, Technology

The number of new lawyers admitted to the bar was lower in 2014 than in 2013; in addition, law school admissions were considerably lower than in previous years. That suggests there will be fewer lawyers ready and able to fill the ranks of the Baby Boomers as they increasingly leave the practice. Prices to consumers of legal services may increase, depending on the increased utilization of technology. But, compensation for lawyers, even entrepreneurial lawyers will be squeezed and likely lead to continued decreased attractiveness for law school admissions.

When the prices of services or goods continue to rise, creativity enters the fray to lower the price, or a parent price. In the sale of food products, for example, the weight or size of the package decreases to keep the price at its previous level. With professional services, technology appears to provide more effective, speedier and higher quality legal services. Hence, the model rule of professional conduct concerning competence gets modified to include technology skills comparable to those of colleagues in the practice area and/or geographic area of delivery.

The more things change, the more they stay the same.

Posted in Cash Flow - Finances, In The News, Management, Personal Thoughts, Technology

Just today, in reviewing materials preparatory to moving my office after 25 years at one location, I reviewed the June 6, 1983 issue of Time magazine. Two articles were of particular significance. One was the cover article about “…stress, seeking cures for modern anxieties…” The other was about education, “…have degree, will travel.” “The class of ’83 faces the worst job prospects since World War II…”

Ironic, but these two topics seem to be in the forefront even today, February 2015. There may be nuances between the two years, however I suspect there are not significant differences in the proposed solutions.

Follow the Money … Act Based on the Evidence

Posted in Cash Flow - Finances, In The News, Management, Uncategorized

Jerry Maguire said “Follow the Money. A former labor union leader said “Follow the bank account, not the budget, to see how much money is really available to offer union members-employees.

Why is it, then, that some politicians are attacking the Affordable Care Act, originally a Republican proposal, and many economists are saying there is hardly an economic ripple? They cannot both be right?

As attorneys, we’re taught to argue both sides of the equation. As citizens, it would seem that we need to focus on the truth and follow the evidence

Malpractice and Bar Discipline May Not Be the Same

Posted in Uncategorized
Today, Ed will be talking with Cindy Shapiro. Cindy is a partner at Reback, McAndrews, Kjar, Warford, Stockalper & Moore LLP. She’s practiced professional liability defense since 1994. Her practice includes defending professionals from malpractice and related claims.

Our conversation today will focus on risk management to prevent lawyers from getting involved in the first place. An ounce of prevention is much better than a pound of cure.

20 minutes, 10 seconds
4.7MB

Interview with Brett Burney, Technology Consultant and Chair of the 2015 ABA Chicago TechShow

Posted in Audio & Podcasts
Today’s interview is with Brett Burney, Technology Consultant and Chair of the 2015 ABA Chicago TechShow from April 16-18.Rule 1.1 of the Model Rules of Professional Conduct has been modified to include familiarity with technology as part of the definition of competence.

Listen and, more importantly, go to the Tech Show.

19 minutes, 34 seconds
4.5MB

The “new” power of the client

Posted in Cash Flow - Finances, Management, Marketing, Personal Thoughts

 

Some pundits have declared that the era of the customer is now upon us. In an announcement by Costco Wholesale Corp. and American Express Co., the 15 year relationship of exclusivity will come to an end in 2016. The economics appear to be clear. Costco wants/needs to bolster its sagging profits; AmEx believes it will not be earning “enough” to continue. Hence, the power of the buyer (Costco) to pick up its marbles and find another credit card company. Obviously , the buyer has options. AmEx will lose about eight percent of its gross revenue and its stock price has already suffered.

A similar situation occurred years ago between a large regional supermarket chain and an even larger (by revenue) national cheese supplier. The supplier believed it had a unique customer branded franchise and could force the supermarket to bend to its will. The supermarket gave the processor 48 hours to remove its product from the store cases and it was years before the manufacturer could reenter. The franchise was not so strong as the supplier believed.

In each case, and in most others, there is a breakdown in communication and relationship that far transcends the economics.

Law firms have felt similar pressures in the last several years. To say that law firm clients have reached new heights of power is a mis-characterization.  Rather, a super sensitivity on the part of General Counsel to the needs of the corporate employer/client which signs his/her paycheck and a breakdown in the loyalties of organizations to their outside counsel fostered by a “take it for granted” attitude by outside counsel.  The goal still is a “partnership” between the lawyer and the client. In the past, some lawyers have taken the client relationship for granted. Perhaps, the client will speak up more assertively today. There is more to loyalty than merely a technical command of the law.

Value of Human Assets vs. Value of Capital Assets

Posted in Cash Flow - Finances, In The News, Management, Personal Thoughts, Technology, Uncategorized

John Claassen, in a “guest column” in the February 4, 2015 edition of the Los Angeles Daily Journal entitled “PROTECT THE VALUE OF HUMAN ASSETS,” quoted Bill Gates’ opposition to increasing the federal minimum wage as follows: “If you raise the minimum wage, you are encouraging labor substitution, and you’re going to go buy machinery and automate things.”

The tension between machinery and labor is an age old issue. This precedes the development of the cotton gin and other industrial revolution equipment. In a 1983 trip to China, I observed hundreds of laborers sweeping the streets with bamboo brooms; in my community, this work was then being done by street cleaners driving trucks. More territory could be covered, with greater effectiveness and less labor. China understood that, in 1983, if they automated this task, they would have an even higher unemployment rate, risking such dissatisfaction which might cause an overthrow of the then current government.

Owners and employers in a private enterprise economy are always seeking greater efficiency and profits. They make the choice between labor and technology based on many factors, only one of which is return on investment. To say that increased mandated compensation such as a minimum wage would promote automation is no doubt true; however,  it was also true in the 1930s, the 1800s, the 1700s and likely will be true in the future. It is true in every industry and profession.

Society in the past has focused on the well-being of its populace, not just the numbers. This includes healthcare, minimum wages, regulations of civility toward one another and other aspects of human endeavor. We value human assets. We value new technology and research and development. New technology and increased efficiency improves our life and increases the well-being of all our citizens. We encourage the growth in each area of endeavor by tax policies and other approaches. If I read Mr. Claassen correctly, he suggests there is a tension between the two, and policymakers should not ignore nor discount the value of “lower wage workers.”

The legal profession understands this process. Thousands of lawyers have been laid off, fired or encouraged to retire since the Great Recession. Many of them were document review lawyers or lawyers with little or no marketing skills. In Mr. Claassen’s terminology, these were the “lower or middle income” lawyers of the profession. Such economic disruption never happened in the profession before. Despite the economic improvement of our economy, and law firm profitability, most of those jobs will not return. Why? Because technological improvements have made many obsolete or more expensive than clients want to pay. Discovery search technology is far more efficient and accurate than hundreds of document review lawyers. These jobs will not return. This is progress. Does it come with some pain to individuals? Yes. Should there be an economic soft landing for those affected? Perhaps. That is a matter for society to determine, but it is not reason to limit wage increases or disfavor research and development.

 

Southern California Law Schools address “modest means” clients

Posted in In The News, Management

UCLA School of Law, Pepperdine University School of Law and Southwestern Law School have been awarded a one-year grant from the State Bar of California’s Commission on Access to Justice to establish a modest means incubator, a pilot program to help new attorneys launch and develop viable law practices serving modest means clients.