LawBizBlog : Law Practice Management, Lawyer Coaching, Legal Consulting, Law Firm Retreats : LawBiz Blog : Ed Poll

Doctors, like lawyers, have little or no business education in medical/law school. Today's Wall Street Journal  (Education for Executives) discusses doctors journey back to school (business) in order to learn skills that were omitted from their medical education. They need these skills in order to run their medical practices, medical groups and hospitals.

Doctors outreach for management training demonstrates a recent shift in thinking: "...we are much more similar to other businesses that we are different." Taking the business side of medicine more seriously can benefit not only doctors, but also patients, a fact slowly being understood in the medical profession.

Why is it that doctors are ahead of lawyers in this understanding? Why is it that medical schools are incorporating management principles into their teaching and few, if any, law schools do? Why is it that lawyers continue to be reactive, rather than be proactive? Worse still, why is it that lawyers fail to react to their clients wishes?  Bar disciplinary proceedings continue to show that more than 50% of clients' complaints relate to poor management practices. Why?

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Regular readers may recall my strong belief that young lawyers do not learn in law school the fundamentals of what they should know to practice law.  In contrast to doctors (who put in years of residency, hospital and clinic work, and other apprenticeship before they begin their own practices), young lawyers begin their professional careers with little hands-on experience in “The Business of Law”® or practical client service.  The result far too often is unhappy lawyers, unhappy law firms and unhappy clients as the young lawyers try to learn in “the school of hard knocks” what law schools did not teach them.

 

I’ve written about many possible models to provide this training – articling programs in Canada and the U.K., pro bono internships, law firm training apprenticeships, CLE specialist education, and more.  Recently I surveyed the readers of LawBiz® Blog and asked whether they thought on-the-job training of new lawyers before they enter practice was a good idea.  The unanimous answer was “yes.” As to what form this training should take from a variety of options presented, nearly 60% of respondents said that law firms over a certain size (revenue or head count), as well as public interest law firms, should be required to engage a pro rata number of graduates, whether they end up working for those firms or not.  An even higher percentage of respondents, nearly 85% suggested that the courts (both trial and appellate) should make available clerkships for the graduates, or that law schools should create seminars and practicum programs to teach the skills lacking in the normal curriculum.

 

Especially interesting were a number of other ideas that the survey participants suggested.  These practicing lawyers had some excellent thoughts on the type of training that would benefit those entering the profession:

·         Work at a company under the direction of an in-house lawyer  (admitted to practice in the state where the work is done) with management responsibility within the legal affairs department.

·         Externships at government agencies such as the SEC, state securities commissioners, the Patent and Trademark Office, state corporations departments, state revenue departments,  state legislatures and accounting/audit firms of a certain size.

·         Law school placement of third year students in extern programs, with the success and extent of the placement becoming a major criterion in evaluation of the school’s performance by U.S. News & World Report, Barron’s and others that evaluate law schools.

·         Requiring that all law school graduates who pass the bar exam serve an apprenticeship program under the direct supervision of a member in good standing of the bar who shall, at the conclusion of the apprenticeship, attest to the legal proficiencies of the new lawyer and recommend to the state bar that the apprenticeship be considered successfully concluded

·         Turning the third year of instruction in law school into an apprenticeship program, replacing the courses that are taken in the final year just to fill out the time

 

If you have other ideas, I’d welcome hearing them.  Perhaps together we can begin a groundswell of opinion in which real lawyers, rather than just law school professors, have a say in legal education.

 

 

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It’s always gratifying when one’s opinions receive outside support.  Sometime ago, I wrote that law schools really don’t teach the day-to-day aspects of being a lawyer – interacting with clients and running a practice – because such skills are seen as too “trade-oriented.” 

That viewpoint was echoed in a Wall Street Journal column by Cameron Stracher, professor at the New York Law School.  Stracher observed that law school students are “reading about the law rather than engaging in it,” with the result that “when they graduate, young lawyers rarely know how to interview clients, advocate for their positions, negotiate a settlement or perform any number of other tasks that lawyers do every day.”

What especially struck me in Stracher’s column, as I noted in previous writings, was the observation that, until our modern era, most lawyers learned their profession by apprenticing themselves to practicing lawyers, learning from them by watching and doing.  It brought to mind the difference between the way lawyers and doctors are trained.  Doctors, of course, put in years of residency as part of their training.  They work in hospitals and clinics, treat patients, observe other doctors as they go on their rounds.   Most doctors begin their medical careers with a very good idea of what they will face.

A number of larger law firms have or are creating education programs for their new, and even some continuing, associates. Just this morning, I learned from an “alumna” of the former Thacher law firm that she enjoyed her time with Big Law because this firm believed in continuing education for its associates. Also, Howrey recently announced the creation of an apprentice program for all of its new associates, rather than delaying their new hires as other large firms have done. And, in both Canada and England, there is a tradition of “articling,” very similar to an apprentice program. In other professions, such as accounting, an apprenticeship is required before granting the Certificate. There are other examples.

Should we return to an apprentice system for law school graduates before licensing them as lawyers? What's your opinion?  Click here to take our short survey. Our survey will end at midnight, November 11th.

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There's much talk about the end of the billable hour. Because it's easy to administer, it will be stay around so long as clients accept it.

This highlights the difference between the large firms and others. The large firms deal with large clients ... who have purchasing power others don't. 

The real question is not whether large firms will accept this new way of billing/pricing, but rather whether small firms will create a laundry list of unbundled services and fixed prices/fees.  If they all do, then the consumer of these services may ultimately have more power ... by walking among lawyers to opt for the least expensive ... Until then, there are few ways, if any, for the consumer to make price comparisons among small firm or sole practitioners.

If they all don't, my prediction is that the billable hour will remain as the last vestige of a maturing legal community. On the other hand (said like a true lawyer), perhaps some will break with tradition and create that laundry list in order to differentiate their law practice from others ... and urge clients to come to them so they can know, in advance, what their cost exposure will be and so they can budget for their legal cost. 

Where do  you think your firm is headed? ... to undbundle and create fixed fees as in a laundry list ... or retain the billable hour? Please comment with your prediction.

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I was asked the other day whether I've seen an increase in lawsuits against law firms for the layoffs, firings and terminations ... or for postponing start dates for recent graduates that were "hired."  What has been your experience?

Such lawsuits may not yet have surfaced; it takes awhile for the public to be aware of such litigation ... and statistics are hard to come by.  I haven't seen any evidence of increased litigation. There seems to be enough problems for all concerned without adding the specter of litigation.

Continue Reading...

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In a suit, Williams & Connolly, a D.C. law firm, is seeking payment of more than $2 million in legal fees. The client and law firm apparently resolved their differences and created a payout plan, with the client pay 1/3 of the amount ... and now refusing to pay the balance or 2/3 remaining amount.

What makes this case more interesting is that a resolution of the fee dispute was achieved. And later, the client refused to honor the settlement agreement. The client ostensibly believes it can harrass the law firm and then settle again for a lesser amount.

Questions for the law firm:

1.  Why did you allow fees to get so high in the first place? Collections should have been more aggressive.

2.  Did you have a budget for the litigation for the client that the client accepted ... or was nothing said about the extent of the legal services to be delivered?

3.  Was the size of the legal fee a surprise to the client?

4.  Why didn't you fire the client before $2 mil?

5.  Why didn't you get security for payment of the settlement amount, such as a stipulated judgment in the event of a default or other guarantee such as a letter of credit?

Someone was asleep at the switch...both during intake and during the representation ... and seemingly also at the negotiation for settlement of the fee dispute.

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Is the big firm salary model broken? That's the topic addressed by Michelle Lore in the Minnesota Lawyer. Associate pay is only one of many areas of cuts in expenses that law firms are reviewing. In our Managing Partners Roundtable, just yesterday, large law firm managing partners said that they are now "lean." They have cut all the "fat" or excess expenses they can, some of which have become evident in 2009 and others which will show up first in 2010 results.

What will the law firm model of 2010 look like? Or will law firms ignore the lessons of 2007-2008 and seek to go back to "normal" as the economy turns around? "Head in the sand" approach usually doesn't work for long term success.

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Recently, the question was raised as to how much time clients' old files must be retained ... The long and short is, it depends.

There is a duty of safe-keeping for original documents. They can never be destroyed. Your best bet is to make arrangements for the client to retrieve these documents.

Another general mantra is that files can be destroyed when

• it's reasonable under the circumstances to do so
• your jurisdiction has a definitive time provision, such as 10 years (few states do)
• your client agrees to a destruction protocol in your engagement agreement

Here are some provisions to consider for the minimum time frame

• passage of time for filing a malpractice action
• passage of time for lawyer misconduct (is there such a statute of limitations?)
• equal time to maintain client trust account documents
• time equal to corporate and tax records

Bottom line, there generally is no minimum time provided for in the rules of general conduct or in the general rules concerning corporate governance. Lawyers are, generally, stuck with maintaining the clients' files unless the can find the clients and persuade them to retrieve their material and / or create protocols in the initial agreement that the client accepts and signs.

Oh, and what happens to the lawyer who retires, sells his practice ... or worse, dies in his boots? How can the estate of the lawyer protect his/her heirs? What can the lawyer do in advance to protect those loved ones who follow him, seeking to clean up and close his practice?

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Outside law firms are being badgered with requests/demands for lower fees. It seems that corporate general counsel have only price on their minds. This may lead to the creation of an in-house legal department. When does it "pay" for a company to create an in house law department? Is money the only factor to consider?  What can outside counsel do to forestall this and retain the work?

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In a decision this week, the US Supreme Court decided to change precedent. And who said "conservative" justices don't make law, are not "activists"? This decision is one of those based on ideological lines.

The Court in a 5-4 decision said that the burden of proving age discrimination lies solely with the plaintiff. In previous cases, the plaintiff merely had to prove that age was a factor ... and then the company had to show that there were legitimate reasons for the termination. How, now, will plaintiffs be able to show that age was the primary factor? Afer all, the plaintiff was not in the room when the decision to terminate him/her was made.

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I've just returned from a presentation by accountants on valuing a law practice. They talked about "excess earnings," "discounted cash flow," and "market value." They essentially discussed the valuation of a law practice from the perspective of the divorce court which fails to recognize market value as an appropriate standard of valuation, ostensibly because they can't find enough data points to make the information reliable.

However, with all due respect to the courts (and the accountants who parroted the courts' standards, the reality is that the courts will use any logic (or lack thereof) to "do equity" as between the two spouses before the court. That does not reflect market reality.

In my experience, every law practice has value ... what it may be is a subject of further discussion, but it has value! And to use formulae that are created to perpetuate a fiction does an injustice to the lawyers who have spent a full career building their goodwill and now want to retire and realize benefits from that goodwill ... We are not in the divorce court!

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Wilmer Cutler Pickering Hale and Dorr has told some of its more experienced lawyers that they will not have a future with the law firm. Without knowing more, it's difficult to come to any conclusions about why there will be termination notices, and why those notices will be directed to more senior or experienced lawyers.

Continue Reading...

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At least one law firm gets it! They have created an internship program rather than delay the entrance of its new 37 hires. Great idea in development. Best wishes to Drinker Biddle for their efforts. See additional commentary on this.

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FOR IMMEDIATE RELEASE

 

Contact: Ed Poll

LawBiz Management

800.837.5880,EdPoll@lawbiz.com  

NEW ONLINE FORUM LAUNCHES FOR LEGAL PROFESSIONALS

Ed Poll Unveils LawBiz® Forum as New Online Community

 

VENICE, CA MAY 5, 2009 - Nationally recognized law firm management expert Ed Poll, JD, MBA, CMC, announced today the launch of www.LawBizForum.com, an online destination for lawyers, sole practitioners, partners, managing partners, of-counsel and in-house counsel, and others who are members of the legal community providing services to the American people.

www.LawBizForum.com will promote discussion about issues that enable lawyers to more effectively and efficiently deliver their services to their clients, such as management, marketing, technology and finance, and others. LawBiz® Forum is a place where the legal community can exchange ideas and techniques in order to improve the personal and professional lives of its members.

“Law is an honorable profession. Only lawyers are given the unique responsibility in the United States Constitution to help those accused of a crime, a fundamental right guaranteed to all citizens,” remarks Poll. “This helping, caring nature of the legal community sometimes is forgotten by the psychological, social, and economic pressures facing lawyers, and I created this forum so that we can care for each other.”

LawBiz® Forum will have several levels of membership. All visitors to the site can review the discussions at no cost. However, members will be able to contribute to the discussions, participate in exclusive webinars, and have online access to Poll’s books and audio products.

In addition to LawBizForum.com, Ed has a popular YouTube Channel (www.youtube.com/LawBizGuide), and has also started to use Twitter as a way to reach out to the cybersphere. You can follow Poll at twitter.com/lawbiz.

---

About Ed Poll

 

Ed Poll, J.D., M.B.A., CMC, is a nationally recognized expert in law practice management. He helps attor­neys and law firms increase their profitability consulting with them on issues of internal operations, business development, and financial matters. Poll brings his clients a solid background in both law and business. He has 25 years experience as a practicing attorney and has also served as CEO and COO for several manufac­turing businesses. In 1990, he founded LawBiz® Management Company and is now focused on coaching lawyers, speaking, and writing.

Poll is the author of numerous publications that have become the definitive works in the legal field, including: Law Firm Fees & Compensation: Value and Growth Dynamics (LawBiz© Management Co. 2008), Attorney & Law Firm Guide to The Business of Law: Planning and Operating for Survival and Growth, 2nd ed. (American Bar Assoc. 2003); The Profitable Law Office Handbook: Attorney’s Guide to Successful Business Planning(LawBiz® Management Co. 1996); Secrets of the Business of Law®: Successful Practices for Increasing Your Profits!(LawBiz® Management Co. 1998)

 

 

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In listening to Richard Susskind at a recent presentation before an American Bar Association audience, I was struck by his two primary principles, at least as I understood them at that time.

 

First, technology was making the practice of law more efficient, more like a commodity, with resulting downward pressure on both costs and fees.  Second, clients were becoming more sophisticated and demanding, with the resulting requirement of being client-centric for survival. In other words, the practice of law would need to become more collegial and team-oriented to serve the needs of clients in the future.

 

As I sat there, listening to an obviously impassioned and eloquent presentation, a light bulb went on for me. First, re technology. During the industrial revolution, we learned that the more equipment we could use to make something, the less labor was required, the lower the price could be charged. With a lower price, volume increased and profits likewise could rise. Then, we moved into automation, with the same result ... just a different name. The more a machine could produce a product or service, the less expensive it might be ... and the result would be a lower price with higher volume, all of which produced higher profits. Today, we’ve moved to technology. The principles are the same, just the label is changed.

 

The move from the Industrial Revolution to today’s technology may have increased in speed of change, even exponentially, but the principles are identical. Increased machine power reduces labor which tends to reduce cost which tends to reduce price which increases volume ... and profits.

 

Second, when we discuss client-centric practices, we are talking about partnering with clients ... understanding what they need, listening to what they want and bridging the gap between the two with our value proposition. Our value is to understand what they want and show them how we can provide value by addressing that want and also to protect them by delivering what they need to address their challenges.

 

This partnering, in my earlier manufacturing experience, is called “client loyalty.” One day, I was called in by a buyer of my product. He said that his company had done a quality comparison among my product and others that were sold on his shelves. My product did o.k., but was not so superior that he could ignore the price discount offerings of my competitors. He said to me, “Ed, I don’t need you to meet the competition, but I do need you to do something so I can show that I’ve addressed the competitive marketplace.” As I walked away from his office, I realized a very important fact: This buyer was loyal to me. He had called me last. He gave me the opportunity to compete, without having to reduce my price all the way to the level of my competitors. He called me at the end of the process and was willing to “partner” with me in the sale of my products to his customers. To me, that is client-centric.

 

Law firms that can partner with their clients, can show their clients how they can reduce their legal costs (without reducing the lawyers’ per unit fees), can develop strategic plans for defending/pursuing legal challenges are the law firms that will thrive in the new economy. It’s these law firms that Richard Susskind was talking about.

 

This may be new language, like a new business fad of TQM, Sigma ... etc., but it still is the old-fashioned care about your client/customer and treat them well ... and you will be rewarded by a loyal client willing to work with you for the mutual benefit of both the client and the lawyer/law firm.

 

See my new book, The 3 Dimension Lawyer: How to Thrive in the New Economy, to be released later this year by West Pub. Co., and to our new community web site.

 

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More and more, we are seeing evidence that law firms operate under the principles of The Business of Law®.

In acquisitions, a company can buy assets or the corporate stock of the company. Which method is chosen usually depends on tax and potential liability issues. In a recent article, the writer analyzed why Wolf Block didn't merge to survive. Reasons given for the failure to merge here included the law firm's large unfunded pension liability, partners' substantial tax impact by a change in their fiscal year as a result of a merger and the ego of some of the partners insisting that the new firm name begin with "Wolf."

Ego aside, the economic consequences of a merger were avoided by closing the doors, though there certainly were other economic consequences to the individuals involved. Those partners with a portable book of business went elsewhere and suffered less. Those partners and associates without a "book" suffered more.But, all experience difficulties.

What happened to their pension? Out the window!  What happened to the firm's reputation and goodwill of decades of effort? Out the window!  Did the lawyers, especially the "insiders," suffer any stress?  You betcha!  

And, let's not forget the issues faced by clients who didn't know who their lawyer would be in the following days and months. Some of these clients will say "a pox on your house!" They will engage a second law firm for some of their matters ... just to make sure they are not left hanging in the wind with the same uncertainty in the future -- to have the ability to move quickly if they need to be sure they have legal representation while their lawyer finds a new home.

Perhaps worse, when a lawyer leaves a law firm and both that lawyer and the law firm compete for the business of the client, I've seen the client say, "A pox! I'll get a different lawyer/law firm for all my matters." And both lose.

Business principles control. The ego, the arrogance, the ignorance of business principles notwithstanding, lawyers will suffer in this new economy. Irrespective of the economic betterment for the lawyer, clients may move away, leaving both the lawyer and the law firm in the breach.

 

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More lawyers are looking to go solo ... In hard times, this may be the only option left ... at least before going to start a corner hot dog stand (according to a recent WSJ article) ... LawyersUSA writes about what it takes to do this. 

(In full disclosure, I wrote the article.)

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A client of mine asked me whether he should charge a prospective client a fee for their initial consultation, the meeting before being engaged.

There are three approaches to this issue, long debated amongst lawyers:

1.                   Free initial consultation

2.                   Paid initial consultation

3.                   Paid initial consultation with the payment applied to the total bill if they engage you.

There is no one right answer or magic bullet in response to this question. Obviously, everyone wants to get something for nothing. But, we then also run into the bromide that "you get what you paid for."  In this case, nothing.

Whether you can charge for the initial consultation is normally a question of the client’s trust in you, their confidence in you … and how long it takes to generate those feelings in the client toward you …

I don’t think “free” connotes expertise … and that’s what prospective clients are looking for. In deference to the current economy, and the need attract clients, you might consider alternative #3 ...  charge them an initial consultation fee, and apply that amount toward the total fee in the event they should retain you.

This is never an easy choice. But, we must remember that people do believe they get what they pay for ... and anything free is usually viewed with suspicion either as to motive or expertise. A discount in an on-going relationship, however, is viewed differently and not to be confused with the issue at hand.

 

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For those lawyers interested in knowing what Corporate Counsel are concerned about, see Rees Morrison's article.

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One could view the current situation with the attitude that whenever there is challenge (a much over-used word today), there is also opportunity. Certainly better to consider opportunities than feeling like a victim in constant pain.

Our new newsletter is now on the stands.

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Larry Bodine suggests that law firms that survive today's economic crisis will:

• Have “customers” not “clients.”
• Offer flat fees per project or per procedure.
• Have rates that are markedly lower than in 2008.
• Will routinely produce budgets for all legal work.
• Be run like real businesses, which know their costs, can calculate a profit margin, and offer customers “just in time” services at the best price possible.
• Realize that customers are fickle and expect personalized service.
• Have lawyers that fly coach and stay at cheap hotels near the client’s offices, instead of the Four Seasons 5 miles away.
• Have lawyers that know their clients business, their goals, strategies and objectives, and work to help the client make more money or cut their costs.

I have been talking about the difference between clients and customers and patients and customers for a long time. I'm glad that Larry's first point on his list is the same.  Why should this be so important? Because not all of us are clients; we all are customers. Therefore, we can relate. There was a hit movie years ago where a mean doctor was a patient. Only after his experience did he have more compassion for patients and changed his ways. Today, medical schools are required to teach doctor-patient relations.  When will law schools do the same?

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Richard Susskind has written a book suggesting that lawyers may become obsolete unless we make some dramatic changes.

 

I see nothing unusual about his conclusion … that legal work will be unbundled and that the work that is more mundane and routine will be systematized and perhaps even automated. Technology advances provide us with opportunities that didn’t exist before. We can, today, create better product for less money. Technology is only one aspect. Globalization is another. And this isn’t just for the large law firms. A client of mine, in Texas, opened an office in India for the specific purpose of document review and document production – it’s done for less money more quickly … And he can get a faster turnaround because of the time difference.

 

Law is slow coming to this process. My background is in manufacturing. I’ve owned and operated several companies. In order to retain prices, not to increase prices, we would do everything we could to automate. When automation, reducing the amount of labor costs, would go no further, we reduced the size of the container. For example, we would go from 32 oz to a 22 oz jar or a 10 gal. container to a 5 gal. container.

 

When we have time of challenge as we do now or changes in our economy and culture, we have the opportunity to innovate for improvements in products and services. We have the opportunity to create new demand. I see this beginning to happen in our parts of our economy. It will have to happen in the legal profession, nay the legal business (The Business of Law®), if we are to continue to serve our public as we know.

 

 

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Ownership mentality, or the lack thereof, is a primary cause for the failure of many organizations, including law firms. When entitlement is the primary psychological attitude, the organization and the people it serves suffer! There is a vast difference between ownership thinking and entitlement. One of the unanticipated benefits of our financial difficulties may be to whack  "entitlement" thinking on the head.

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In an article I wrote for February 2009 issue of  The Bottom Line, the publication for the Law Practice Management & Technology Section of the State Bar of California, I discussed the continuing education requirements for lawyers as contrasted with others such as plumbers, et al. The article was a follow-up to piece to comments I have made here on June 12, 2006 (MCLE whining)  and November 22, 2005 (Plumbers get more education than lawyers), all of which focus on the complaints lawyers have made about their education requirements to retain their licenses.

Continue Reading...

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I recently returned from a week in the Santa Ynez Valley, CA area. The purpose of my vacation was to ride a bike with 35 others from around the world who were similarly enthusiastic about cycling, plus coaches and staff. The Amgen Tour of California started in Northern California and went south, passing through this area (Solvang, Los Olivos and surrounding communities). I watched the Tour’s time trial held in the valley. It was exciting to see Lance Armstrong and other elite cyclists pitting themselves against the clock to see who was the fastest.

Armstrong finished 12th in the time trial, one of his specialties before retiring 4 years ago. And he finished the overall Tour in 7th. In other words, in two races he's entered (the other last month in Australia), he's finished in the top 10 ... after only a few months of training ... and 2 competitive races! And he is 37 years old, an age past which most cyclists are not seen in competition. What a remarkable achievement.

From a psychological perspective, the man is unhappy at not finishing higher up the ladder, because he has such high expectations of himself. He has to continually be coached to greater success as well as to recognize his progress,  to keep reality in place.  His plan is working and is on target. 

Trust the plan. Work the plan. Good advice for Lance Armstrong, a winner in all respects. And good advice for lawyers wanting to achieve greater success.

Prepare a plan. Work the plan. Trust the plan. Make adjustments where and when appropriate as you progress through the benchmarks of your plan.

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The California Guide to Opening and Managing a Law Office has just arrived! It's a 600 page power packed treatise that evey sole practitioner should review. It, along with the ABA's Flying Solo, is uniquely designed to raise issues that need answers for success.

Disclaimer: I'm responsible for two of the volume's chapters. There are many contributors and editors who have made this an outstanding reference work.

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California's Governor is now suing the California Controller. The Gov wants to furlough government employees for 2 days per month, unpaid! He says that will help the cash-strapped state. Funny how top paid folks always look to the lowest paid folks to carry the burden.  How about the auto industry flying to Washington to ask for money in corporate jets!  Or bank executives getting hundreds of millions of dollars in compensation buyouts ... all the while asking/blaming the ones who least afford cuts to reduce their compensation.

Oh, and the latest! .... California is withholding payment to appointed attorneys in criminal defense matters ... who, among lawyers, gets paid the least, and who, among lawyers, needs the cash flow the most? Appellate lawyers who take on appointments from the State ... Wow! And it's these folks who are now being stretched in receiving payment for services delivered.

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Mimi Donaldson is a football fan (who knew?), but a major fan!  She was glued to the television and, while the game was on, came up with the following life's lessons from the game:

Immediate need:
What do we do for money right now?
Here are 3 tips we can learn from last Sunday's Super Bowl to help us manage in these troubled times.

#1: FOCUS
Ben Roethlisberger, the winning quarterback, extended many plays with tremendous focus and presence of mind. Larry Fitzgerald, a brilliant wide receiver, turned the game around with a long touchdown run because he looked for an opening and never looked back.

Lesson – We need to focus on the value of our product and service, stay calm in the face of doubters, and look for an opening for success -- and never look back!

#2: INTERCEPTION
At the end of the first half, James Harrison intercepted the ball and returned it 100 yards (the length of the field) for a touchdown with the longest run in Super Bowl history. The interception changed the context of the game and shifted the momentum.

Lesson – This is not in the traditional job description of a linebacker (he needed oxygen afterwards). In our businesses, we need to do something different now; attend a meeting you've never attended; look for an opportunity in a non-traditional place.

#3 – WHEN THE WHISTLE BLOWS, THE PLAY IS OVER!
Santonio Holmes caught the winning touchdown. But he had dropped a sure touchdown pass just moments before. He begged his quarterback for one more chance – telling him, “Please let me get this game for you.” Each man respected the finality of the play before. They did not allow it to affect the next play.

Lesson – We need to shake off our past mistakes and the alarming economic forecast, and recognize that each moment is a new moment of now.

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Friday’s New York Times has brought light to a steamy debate in the legal community: Is billing clients by the hour the most effective and profitable way for a lawyer to collect his or her fees? In these recessionary times, this norm has become more unpopular. Clients are asking more questions and wondering if law firms are prolonging their problems instead of resolving them.

 

According to the American Bar Association’s Model Rule of Professional Conduct 1.5,  “a lawyer shall not make an agreement for, charge, or collect an unreasonable fee.” Reasonableness is further defined by several criteria. Ultimately, though, what lawyers charge must be commensurate with the value their clients receive.

Continue Reading...

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One of my law firm clients has a lawyer who is what I would call a "reluctant marketer."  This lawyer is a great lawyer, a "worker-bee," but not a great rainmaker. The managing partner considered engaging a coach to help the lawyer improve his skills within his comfort zone. Why is this important? Because the amount of work for this lawyer that is being internally generated is lessening. In other words, this lawyer has to begin helping himself a bit.

Parenthetically, I saw a recent survey that shows the amount of hours being worked by lawyers, generally, is coming down. But more on that later.

But, the management committee has come back and said that "costs" are frozen. No more spending. Is this a backward way to look at the situation?  What about looking at expenditures from the ROI perspective?  If you buy a new piece of equipment and it pays for itself in a couple of months, wouldn't you move forward? I think you should.  If a coach or marketing director can help the lawyer increase his/her revenue because of improved rainmaking efforts, shouldn't you invest in the process?

And what would this mean to the other lawyers?  A reduction in their take home pay? When you're already earning hundreds of thousands of dollars, a collective reduction by only a few dollars in sdthe short run for an ROI building expenditure may be worthwhile.

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Association of Corporate Counsel is workingon a "Value Challenge Index." Susan Hacktt, Senior Vice President and General Counsel for ACC, talked about the Index before the Los Angeles chapter of Legal Marketing Association today.

Susan made several significant points. One concerned the traditional allocation of revenue: 1/3 for overhead, 1/3 for associate compensation and 1/3 for partner income. The net result is that 2/3 of the revenue received by law firms is funneled toward attorney compensation.

Susan suggested that General Counsel, as lawyers, understand this formula and are therefore more resistant to outside counsel increasing billing rates. Lawyers wanting to earn more to move up in the AmLaw PPP (profit per partner) ranking isn't sufficient reason for the corporate client to pay more.  And the rationale that expenses have increased is also not well received ... 1/3 of the firm's expenses may have increased somewhat, but the more sophisticated clients believe that the primary factor for increased expenses is increased associates' compensation.  Since associates' contribution to the law firms' delivered value is suspect, clients are reluctant to pay increased rates. In fact, some clients refuse to pay for any first year associates' work on their matters.

Continue Reading...

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The Edge Annual Question Center asks the question for 2009:  What will change everything?

Profound question, indeed. And the answers are equally profound. Scroll down the pages and see the responses from the brightest minds of our time ... my head was swimming just reading the titles of the responses.

Thank you Matt Homann for bringing this to my attention.

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Clients seek to control the costs of their legal challenges. According to a study by the Association of Corporate Counsel, as noted by Larry Bodine, corporate general counsel do so in the following ways: 

"The most common methods to control outside legal spending during the past year were: case/matter budgets (52.9%), discounted/alternative fees (52.9%), re-allocation of work to firms with lower rates (43.7%), billing guidelines/ spending rules (43.7%), and electronic bill reviewing and auditing (34.6%)."0

While reallocation of work seems to be an obvious choice, I've always wondered why more law firms don't do this. If you have several choices among quality law firms, why wouldn't you go with the less expensive?  Perhaps because business is often based on relationships, and if there is a good relationship between client and counsel, the legal work may not go into play to find out whether there is a less expensive option available. This is often called "loyalty," the most desired state of affairs for vendor-partners.

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Forty years after the Pueblo was captured by North Korea, the sailors received judgment for damages.  This merely gives the sailors a piece of paper. Go collect! Not, that's the rub. And ask the Goldman family how much of their 33 million dollar judgment they've received from the assets of O.J. Simpson.

In the beginning of 2009, we need to hearken back to the words of Rodney King, "Can't we all just get along?" The obvious answer is "no."  But, litigation may not be the best answer either; it's certainly not the only answer.

Law firms, even the major law firms (like Heller used to be), whose litigation work makes up more than 50% of their revenue, will need to focus on greater diversity in their offerings if they want to protect their future. More than 10% in any one area always puts a business at risk. Sometimes the risk pays well; sometimes it doesn't.  Just ask the lawyers who were at Heller about the high times and then the implosion.

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Bill padding is the perfect crime, according to William Ross. There are many examples lawyers can point to in their own firms. However, there may be an element that some are overlooking. That is the obligation to "snitch" on one's peers if they suspect the practice is being committed by a colleague. 

Obviously, such practices are difficult to detect by clients. The question is whether such practices can be detected by a colleague and then, if suspicion exists, what needs to be done about it. Must the lawyer report the suspected practice to the firm? Must the lawyer report the suspected practice to the client? Must the lawyer report the suspected practice to the State Bar disciplinary board?

Continue Reading...

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Big Law freezes salaries for 2009 ... and bonuses will be reduced for 2008!  Clients are demanding that rates remain constant, no rate increase for most, though some will be able to get away with modest increases.

Clients, in general, are becoming more demanding. Lawyers need to "get over it." Lawyers are not entitled to continuous increases and must realize that we are in competition, not with other lawyers so much as with other service providers by way of comparison. And clients will leave if they are not happy with how we relate to them, serve their interests both economically as well as responsiveness.

One example happened to me just this morning. I asked my lawyer a question by email. He called me to respond rather than responding to me with an impersonal email. He asked a simple question or two and provided me with a very simple, yet effective answer that addressed my issue completely. I'll pay at least 1/4 hour (or his minimum if higher), but my issue of the moment was addressed completely. That's effective, efficient service.

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Do you want to be a banker or lawyer? See LawBiz Tips current edition for one perspective.

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Are you sure you still want to be partner?

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Many companies are going bankrupt. This is a growing practice area of the law. What will be the impact on the pension plans through bankruptcy?  A number of large law firms are closing their doors ... what will be the impact on their 401(k) plans?  Have they become 101(k)’s, or gone away altogether?

Chapter 7's usually terminates the 401(k) enabling the participant to roll it over into another appropriate plan. Chapter 11 may or may not impact the fund.

Staff should review the plans where there funds are placed . Unfunded employer contributions are at risk. There may be a full vesting if the firm discontinues contributions ... but unfunded is still unfunded!

While I claim no specific expertise in this area, there has been an entire generation of employees/staff/associates, et al., who have counted on the growth of their pension plans for retirement, early or otherwise. Now, for the first time in years, there is a feeling among many that they may not be able to retire at all ... or at least many years later than anticipated.

In the recent past, we talked about multiple generations working together in the same firm, with all of the consequent challenges of communication. While many thought the Baby Boomers (400,000 of them) would retire in the next 10 years, it is conceivable that they may not be able to leave because of the decreased value of their pensions and other savings.

What will happen?

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When: November 25, 2008 (11:00 a.m. - 12:00 p.m. PT)

Where: Teleseminar

Sponsoring Organization: Texas Continuing Legal Education

When handling money or things for clients, a clients' trust account is required. What must you do to set up such an account? Hos is this account managed? What is the difference between this account and an attorney's general account? How might a lawyer run afould of the Rules of Professional Conduct? What is the liabiltiy of the laweyr for staff mistakes and bank failures?

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Complete your daily timesheets by day’s end. The best practice is to keep a running log of time (software-based or otherwise) of everything you do as you do it. Or, certainly before leaving the office that day. Even if your memory rivals that of the elephant, you will miss things if you don’t do this every single day.

One missed 10th of an hour each day translates to 23 lost hours a year. At $100 per hour, computing this time, without doing more work at all, will result in $2,300 additional revenue. That isn't much, but it's more than a good dinner. Increase these numbers by your actual billable rate ... and the time you actually don't bill, you will increase revenue by a very significant number!
 

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I received a call from a client today. He was talking about billing out $150,000 last month, but collecting only $90,000. This is a realization rate of 60%. In any business, if you collect 60 cents on the dollar, you are going to face disaster in short order. The same is true in the legal profession.

If you earn only 60%, in order to survive, you will need to treat the 60% as 100%. In other words, all your financial decisions will need to be based on the money actually collected, not on the billings sent out. If you can run your business on the 60%, that would be fine, but few lawyers can ...

Lawyers must vigilantly focus their energy on collecting what they bill. Failure to do so will cause economic failure. Unlike good wine, accounts receivable do not get better with age. For help, see my book, Collecting Your Fee: Getting Paid from Intake to Invoice, published by the ABA.

Lawyers seeking growth have two ways:  Increase revenue with new clients (or more work from existing clients) and increasing their realization rate. As noted in a previous post, focusing on reducing expenses can address only a small portion of the equation, P=R-E. Increasing your realization rate, however, enables you to take full advantage of the effort you've already expended.

The call caused me concern, but there is a bright side ... It was the wake-up call to run the law practice well.

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The American Lawyer brought us the "AmLaw 100," and more. Some blame Steven Brill, creator, for lawyers focusing on the business side of the practice. That would be an interesting discussion.

But, whatever one thinks about Brill, The American Lawyer has done it again. This time, on the negative side of the practice of law, layoffs.

Listing of firms and articles concerning layoffs is the first time I've seen this all in one place. Scary to think that there is so much of this going on that it merits concentrated press coverage.

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During our program at the recently concluded ALM Law Firm Leaders conference, today, Running Your Firm as a Business - A Closer Look at the Middle Office, I had an ah-ha moment!  The moderator of our panel, Ron Friedmann, Senior Vice President Marketing of Integreon, talked about Australia’s law firm, Mallesons. The firm received an award for innovation from the College of Law Practice Management. Their project created a whole new office environment – ostensibly this was to reduce expenses, but actually had a dramatic impact on revenue by enhancing their service for the benefit of clients; they increased the number of client contacts..

Continue Reading...

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Aric Press, editor in chief of The American Lawyer, wrote in this month’s edition that “Next year’s Global 100 is apt to be a less pleasant experience (than this year’s law firm’s financial results). The best that law firms can hope for is that 2008 will mark the bottom, a dip in the otherwise inexorable rise of firm revenues and profits. A brief pause: Those are the optimists talking.... the work is down, collections are slower, hiring is off, and law firm leaders spend less of their time plotting global conquests and more trying to decide if anyone will notice that the quality of the paper in the Xerox machine has been taken down a grade...”

Alan Greenspan said recently that this crisis will not go away in the near future; it’s a longer term challenge. I’m old enough to have experienced a prior economic crisis (no John, not the Great Depression!), and it took a full generation to overcome. My fear is that it will take a full generation, or more, to overcome today’s crisis. Although the participants of the recently concluded ALM Law Firm Leaders conference seem to be more optimistic. I’m hoping they’re going to be proven correct.

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David Maister started out his ALM session for the Law Firm Leaders Forum by saying that all law firm strategic plans are the same! They're all correct, but not unique. The bottom line problem is that, like a drunk, there is no will power on the part of law firm leaders to hold partners accountable for their failure to reach the goals of the strategic plan.

Continue Reading...

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During times of economic crisis, law firms need to be even more careful with the economics of their practice, according to writer Shannon Nelson of Law360.

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Partnership:  Be careful what you ask for. As my mother used to say, "... you just might get it."

Myles Lynk, Professor at Arizona State University, spoke at the ABA's Law Practice Management Section's conference in Tucson. His topic was "Choice and Opportunity--Race, Politics and the Practice of Law.

Continue Reading...

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Allison Shields asks a fascinating question, "What do the Flying Wallendas have to do with strategic planning?" This was in response to my blog post reflecting an earlier conversion among Allison, Aviva Cuyler and me.

And I agree wholeheartedly with Allison's conclusion:  "If your firm hasn't started the strategic planning process, now is as good a time as any to begin. Your strategic plan can begin by focusing on where your firm is now, what challenges it faces and what resources are available to meet those challenges and anticipate what might happen in the future and begin scripting a response so that you can act instead of panicking."

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Another law firm laid off a large number of folks. This is depressing. I think there is a better way.

Coincidentally, I read yesterday about Toyota in the Wall Street Journal.  Toyota's sales are decreasing; they've closed a plant. They did not lay off workers. Rather than giving them paid leave, as GM and Ford have done on occasion, the workers come into the plant and take education courses to improve their skills and to do deferred maintenance. When it is time to reopen the plant, their workers will be even better skilled and the plant will be even more efficient. This is part of the Japanese philosophy of continuous improvement. Most importantly, Toyota employees feel a greater loyalty to the company.

Large law firms hire new lawyers, then terminate senior lawyers. One managing partner termed this technique as "culling."  But, each lawyer laid off cost the law firm between $250,000 and $500,000, according to every managing partner I've talked to. This goes right to the "bottom line." Firms looking to cut expense in order to improve profits should look no further than their hiring and firing practices!

Rather than fire experienced lawyers, why doesn't the law firm offer new education opportunities for its lawyers and its staff? New lawyers don't know how to "find the courthouse." Experienced lawyers know not only where the courthouse is, but they also know the culture of the law firm. There is much they already know, and for which the law firm has already paid. It's a lot less expensive to educate experienced lawyers in a new practice area than it is to train a brand new lawyer.

And, they would improve the morale of those in the firm, increasing the loyalty to the firm. This would result in better service to clients as well as increased profits.

What is wrong with the current picture? Why is it that law firm management has yet to understand what American industry already knows? I have heard a number of explanations, but none of them make sense to me. Perhaps you can help me on this.

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One pundit commented today that our 401 K's have now become 101 K's!

With close to 400,000 lawyers (Baby Boomers) slated to retire in the next 10 years, the legal profession will be rocked! How, however, no one is yet commenting.

With the current financial collapse, and investment values plummeting by 50% in many cases, we may not see so many retirees, after all. Even lawyers may have to work longer years than they anticipated. We may have one more generation than contemplated in the work place. Will we see even more challenges in an effort to understand why each generation reacts differently to the same stimuli? How will we reconcile the differing values between, and now among, generations? As Rodney King once said, "Can we all get along?"

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During an economic crisis, yes, some call it a depression, Heather Milligan has some cogent ideas to market your practice:

• What are your clients’ key industry pubs reporting on today? Understand how the financial markets impact their companies.
• If your clients/referral sources are at risk, call and see how you can be of service to THEM. Not just their companies, but THEM. If their company is on the brink of collapse or bankruptcy, their first concerns will be about putting food on their table, not who is handling the filings.
• Face time. Face time. Face time. You need to be, and stay, top-of-mind with your key contacts.
• For we marketers, time to start thinking about clearing our budgets of “unnecessary” items. Now might not be the best time to kick-off a rebranding campaign or overhaul the website. I’m not going to ask for a high-capacity color laser printer right now. End-of-year charitable contributions/tables-of-ten will soon be reaching your desks. How are you going to evaluate them?

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On September 26th, ACC is planning a live webcast seminar to introduce its "value revolution," designed to teach about lowering large law firm fees to corporate clients.

Continue Reading...

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In many states, the practical skills concerning “The Business of Law”® that lawyers most need to keep their practices profitable and problem free – training in effective client service and law practice management techniques – either are not covered or actively eliminated as legitimate MCLE credits.  They also happen to be skills that no law school faculty offers either.  In fact, in conversations I’ve had with educators, their view of law as a profession means that any such programs about effective client communication are trade-oriented and therefore inappropriate for law schools.  The result was described several years ago in The Wall Street Journal by the publisher of the New York Law School Law Review, who observed that law school students are “reading about the law rather than engaging in it,” with the result that “when they graduate, young lawyers rarely know how to interview clients, advocate for their positions, negotiate a settlement or perform any number of other tasks that lawyers do every day.”

Continue Reading...

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A thought from Alan Weiss, consultant:  “If Hollywood's collective genius can create a $100 million film which flops at the box office, I don't see reason to exactly beat yourself up if you choose a lousy vacation spot, cook a poor meal, or scratch the side of the car. Stuff happens. Get on with your life, and don't let a momentary poor judgment create a lifelong depression.”

And in your law practice, the fact that you haven’t paid sufficient attention to “The Business of Law”® doesn’t’ mean you shouldn’t/can’t start now. Today is Labor Day, hopefully a day of rest for you … start tomorrow to work “on your business,” not just “in your business.”  And build something of value (otherwise known as goodwill) that can be passed on to your family, your estate, when you’re ready to retire. You don’t have to just close the doors and walk away.

 

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A new, ABA Formal Opinion 8-451 (August 5th), states the obvious: A lawyer may, but is responsible for, outsource work to lawyers and non-lawyers support appropriate to represent the interests of his/her client.

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Does more information become competitive intelligence ... or just more information? Read Ann Lee Gibson at her new blog only if you want to learn more, i.e., become more intelligent! Congratulations to Ann for a great start.

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Famous words. And the legal community is beginning to feel them.

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In our Managing Partners Roundtable discussion this morning, we talked about the effect and value of surveys. Not enough law firms ask their clients "how am I doing?" Too often, marketing gurus suggest that written surveys be sent in the mail after a matter or litigation is concluded. I suggest that this is the wrong time ... no matter what you learn from the responses (and in my experience, you won't get many responses, probably not even a statistically valid amount), it's after the fact. That means that you will not be able to salvage that client relationship if there is real dissatisfaction!

One of my clients taught me an important lesson:  Send a short survey with the first billing. If there is anything wrong, it's best to know at the beginning when you have time to correct any deficiency.

Most lawyers are reluctant to ask the question. They're afraid of the answer. But, what better result could you get than to be told there is something that you can correct ... and thereby strenghthen the relationship when you do. The client feels appreciated and heard ... and recognizes that you care enough to ask and to make a change.

In larger firms, we concluded that it is very beneficial for the managing partner to periodically visit the top 10 clients of the firm. Even when I was in industry, the fact that I as CEO cared enough to visit a customer had a dramatic impact on our relationship and the buyer's/customer's goodwill toward us.

Bottom line, we don't exist in a vacuum. We must understand and know the needs and wants of our clients ... and what better way to find than to ask, directly. In addition, this process confirms that the relationship is between the client and the firm, not an individual lawyer in the firm. 

Obviously, there was much more said this morning, but this concept caused the managing partners to vow to make changes in their firms. What are you prepared to do in your relationships?

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Someone asked what I think of an attorney charging a client for work done while he/she is on vacation?

The comment, specifically, was:  "Attorneys do need a vacation... what do you think about attorneys that (sic) file Notice of Unavailability and charge clients for work performed while on there (sic) vacation."

Wherever and whenever an attorney performs legal services, he/she should be able to charge for the work done so long as it is in compliance with the engagement agreement. There is normally no exception for work done for clients while on vacation or after "normal" business hours. So I don't see any problem here, unless there is a subsidiary inference that the attorney is not truly working or working at a slower pace than would have been the case if he/she were elsewhere.

As an additional point, I believe (as I've said quite some time ago) that the attorney has the right to charge the client for preparing and filing (and even appearing in court thereon) the Notice of Unavailability. But for the notice, the attorney might have to spend much more time defending against notices/motions if the adversary takes advantage of the attorney's absence on vacation ...

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As a member of the National Speakers Association, I had the learning opportunity to participate with several of the great voices of our generation.

Marshall Goldsmith, who coaches more than 50 of the top 100 CEOs of corporate America, commented on several psychological observations that I found interesting:

• What we do at home, we do at the office, and vice versa. In other words, if we are unkind to our colleagues, our staff and our adversaries, we're probably exhibiting to same behavior to our spouses and our children.
• Among the annoying habits that can hold successful people back is winning too much. Generally, we're successful because we're competitive. Being competitive, we win. But, we don't know when to stop. We even compete on who is to select the restaurant to go to for dinner.
• Successful people often add too much value. In other words, we add something to another person's idea. Instead of saying "thank you" and being quiet, we say that is a great idea, but it would be better if you add x, y, or z.  He says that the quality of the idea may go up by 5%, but the participation will go way down ... because it now is no longer the other person's idea. We have stolen the other person's investment in the process.
• Destructive comments prevents forward progress. Avoid the use of the words, "no," "but" and "however." These words discount the value of the other person and their ideas. By merely saying "thank you," we can create, maintain and retain our team with significantly greater results for all involved.
• Leadership is a contact sport!  Studies show that where the leader followed-up, there was greatest improvement.
• What got you here, won't get you there. Those competitive attributes that got you to the leader's position are different than the attributes of a successful leader. You must alter your skill set in order to succeed in your new position.

Powerful thoughts, indeed. How can you apply these thoughts to your law practice.  How can you coach your team to greater heights? Do you have a coach yourself? What do you want from your coach? Have you told him/her? How can a coach help you reach greater heights?

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Tonight, ABC did a program about Randy Pausch, the Carnegie Mellon University computer professor who recently died of cancer. His "last lecture" has become famous, is a book and apparently will be a movie in the near future.

His story is inspiring. His last comment: When you walk off the field, can you say that you gave it your best shot, that you "left it on the field," and that you have no regrets, even if the end result was not as you would have liked.  One of his last comments was to say that he waited until the age of 39 to marry because it took him that long to find a woman whom he loved more than himself. The love and support between these two humans, and their children, also, was a joy to witness.

His comment is an outstanding rule for life, a mantra to live by ... and it's also a very good rule for your law practice. Are you truly committed to your and your law firm's success? Are your clients the focus of your attention and your primary concern? Can the circle of your joy be extended to include your colleagues and staff? Do you have a toxic law firm environment? What can you do to eliminate this toxicity?  What can you do to have a life and a law business you enjoy and value?

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Facts:
1.  In 2000, 60% of associates left their firms within 5 years.
2.  In 2005, 80% of associates left their firms within 5 years.
3.  Every time an associate leaves, it can cost a firm from $200,000 to $500,000!
4.  "De-equitization" is no longer unusual; in fact, at least one firm has paid millions of dollars in penalties for firing partners -- the EEOC called it age discrimination against employees.
5.  Today, many firms are terminating relationships with their attorneys, and corresponding staff.

One could argue that law firms are businesses and merely reacting to the vagaries of today's economy. While that is true, it seems that we are stuck on the horns of a dilemma. Rather than terminating lawyers in one area while at the same time seeking other lawyers (laterals and others) for different practice areas, it seems far more prudent to teach new skills to the lawyers you now employ. This would save the firm money and, perhaps more important, it would enhance the morale of the law firm ... Also, how about preserving the client relationships that the departing lawyers have enjoyed while with the firm?

Something is wrong with this picture ... and until law firm management "gets it," there will continue to be turmoil in the legal community.

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Marketers have frequently complained that marketers are not given a “seat at the table” of law firm management. The Legal Marketing Association, in Strategies: The Journal of Legal Marketing, recently expressed the organization’s new definition of marketing: “Marketing is the activity, set of institutions and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners and society at large.”

That’s a pretty broad statement, yet lacks simplicity and directness. This may be one reason why the seat at the table is still denied to many who claim the title “marketer.” Continue Reading...

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British CEO pay rose 287% in the last decade; private sector workers' pay rose only 47% in the same period.  Workers' contributions are measured; CEO contributions often are questionable and substantial severance packages are given even when corporate stock prices and earnings have decreased.  Under these circumstances, It's hard to ask ordinary workers (who generally live paycheck to paycheck) to take cuts in compensation. (See June 30 article in USA Today.)

The U.S. corporate figures are similar, only bigger.

Now look at AmLaw 100. Are the numbers different? Not by much ... When partners are earning in excess of $1,000,000, some in excess of $5,000,000, how can you complain about associates seeking $160,000? Because the firm will feel compelled to raise its rates to clients? Because some clients will resist? And the C-Executives complaining are earning how much? How many millions?

Sorry, but in this circle, there is little sympathy for the corporate client with those numbers who complains ... This corporate client has options:  Why not engage regional law firms with equal skills and lower rates?  Is it necessary for large firm partners to earn such large sums in order to be at the table with CEOs as a colleague, not as a vendor, or can their expertise be sufficient to earn them the seat at the table?

Interesting difference, though, between law firms and corporate clients.  The corporation pays a high severance package while the law firm does not. Another difference is that the corporate executive is able to negotiate the very attractive severance package before entering his/her employment and the lawyer generally is not.

One day, I'll create a listing of the differences between the C-executive and the lawyer. I think this would be very enlightening for us. But, that's for another day.

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A recently released report from the Eversheds international law firm discusses some conclusions for the future of the legal profession. One of the elements not really addressed in my reading of the release was the disconnect between lawyers and their clients in large corporate enterprises. Why should this be the case? Why should lawyers and the folks they represent be far apart in their thinking about the profession and how it is being conducted? 

There is no simple conclusion. But one element may very well be that clients (General Counsel) feel pressure down from their CEOs and Boards of Directors. They need to be more price and cost sensitive.  Partners in larger law firms, on the other hand, want larger compensation packages for themselves in order to be seen as peers of the CEOs who are earning far more than in the past; lawyers do not want to be seen as vendors, but as peers ... and frequently compensation is a factor in this perspective.  Of course, it's hard to be a peer with a CEO whose average compensation went from 4:1 to 17 and even 34:1 between him/her and the average employee working for him. And it's a bit disingenuous for that executive to say that lawyers' fees are too high. Even in companies whose stock is falling, or whose profits are falling, it is rare to see the CEO offering to reduce his/her compensation.

Here are some of the key findings of the research report and my thoughts related thereto:

Continue Reading...

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It's very hot where I am today --- over 100 degrees. Many parts of our country are facing one natural disaster or another. Sweltering heat, overrun rivers, fires, etc. You name it, and Nature seems to be telling us that she is in control, not us.  Can we do something to address Nature's wrath? In many cases, the answer is yes ... be sure we have enough power for air conditioning, build the levees well enough to withstand the "500 year storm," etc. You get the idea.  There must be the political will to do this.

Likewise, in our law practice. Clients get angry with us, they have financial reverses, they didn't get the result they expected or, for some unknown reason, they just don't pay their bill. Can we do something to avoid this situation? More so than with weather, the answer is "yes." We can be more proactive in both our intake session --- setting reasonable expectations --- and we can be more vigilant monitoring our clients' behavior after our billings are mailed, making sure we get paid for work we do or we stop working before the client will be prejudiced by our cessation.

I discuss some of these scenarios in my book, Collecting Your Fee: Getting Paid from Intake to Invoice, which is mentioned in today's LawBiz® Tips alongside my article, "If All Else Fails, Sue."

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The client’s perception of value determines whether the price we charge is reasonable for the service provided. Demonstrating value lets you make a convincing case about raising your fees.  Continue Reading...

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Larry Bodine reports from the Illinois State Journal-Register:

"Who’s licensed to practice law in Illinois? None of your business.

That’s what the state Attorney Registration and Disciplinary Commission has told a Seattle company that wants to post the names of lawyers on the Internet and assign grades based on performance, awards, experience and disciplinary records.

Avvo (listen to our podcast interview with Mark Britton, CEO and Founder of Avvo, Inc.) has posted information online about lawyers in more than a dozen states. The company, which started its Web site a year ago, says it has received lists of lawyers from 30 states. Illinois, however, has balked.

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Many lawyers are finding easy ways to communicate with clients ... by sending status reports. If anyone wants a copy of one, send me an email to edpoll@lawbiz.com and ask.  These are simple forms, originally developed by Michigan attorney, Wes Hackett, a good friend.

Many lawyers, unfortunately, never figure out that their client is unhappy. They just think that the client has no additional legal work. They don't realize that the client was so unhappy that, though they didn't complain, they just didn't return!  What a shame not to have the sensibility to even know this.

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Carolyn Elefant at My Shingle suggests that airlines new fees for passengers who check baggage may be seen as "nickel and dime" fee increases. And, she wonders out loud whether lawyers are doing the same thing to clients when they charge for photocopying, etc. Continue Reading...

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The California State Bar Board of Governors last week adopted a new professional rule of conduct. Lawyers must now advise their clients in writing when they do not carry malpractice insurance, either in their engagement agreement or in a separate document.

The rule is flawed, as I’ve argued in more than one past post. Since lawyers are skilled in finding loopholes, I suspect that this new rule will be honored in its breach ... and therefore not provide meaningful protection to clients.

There are creative alternatives the 30,000 sole and small firm lawyers impacted by this rule may take to avoid the intent of the Board and its new rule: Continue Reading...

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Paraphrasing Alan Weiss, self-esteem is the single most important challenge facing most people. Those of you who know me, know that cycling is my avocation, my passion.  In connection with this,  I've just finished reading How Lance Does It by Brad Kearns.

Of particular interest to me is how Lance Armstrong has been able to focus on his journey, not the outcomes, and thereby maintain his confidence and his self-esteem. Not that he would welcome failure, but that failure was not a factor if he prepared himself and his environment for his best effort.

Several quotes I think are particularly worth noting, at least from my perspective:

"Don't take anything personally. Nothing others do is because of you. What others say is a projection of their own reality. When you are immune to the opinions and actions of others, you won't be the victim of needless suffering."  (by Don Miguel Ruiz in his The Four Agreements)
Continue Reading...

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Adam Smith echoes my philosophy -- and discusses the importance of the intake procedure. Collecting Your Fee from Intake to Invoice further echoes the importance of the intake process. I maintain that you can tell at the beginning, from the intake interview, whether you will get paid at the end!

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Michael Brychel, Senior Legal Auditor at Stuart Maue, headquartered in St. Louis, Missouri, writes an interesting review of our newest publication, Law Firm Fees & Compensation: Value & Growth Dynamics.

He says, "For those who accept the premise that “law firms ARE businesses – get over it” this book will be an effective jump start to incorporating that perspective into useful practice."

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There’s LinkedIn, Facebook, MySpace, Plaxo Pulse, and .... other social networks.

In a recent article by Larry Bodine, he cited the following statistics:  Less than 8% surveyed believe social networking is important to them; 91% said they spend less than 25% of their online time working with social networks. Still, these are rather large numbers to be devoting to a networking process that is relatively new ... As with other technologies, we will have to wait and see if this takes hold.
Continue Reading...

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In a recent Los Angeles Times article, the headline read “Double-O: Better for Obama than Oprah.” The writers of the article cite a study by a Fordham University political science professor. He concluded that her popularity went from 74% before the endorsement to 56% and is currently at 46%. He suggests that Oprah’s endorsement for Obama was far more costly to her than might have been imagined. Continue Reading...

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Selling Your Law Practice: The Profitable Exit Strategy, is the catalyst for a number of calls to me about succession planning for small law firms.

The challenge in our industry is that  i) most lawyers don't think they have anything of value to sell;       ii) lawyers tend to be focused on the here and now, wanting to take as much money out now as possible, leaving little value in the law practice; and  iii) have little or no desire to think about legacy ...  This makes it difficult to focus on succession.

I'm not talking about the legal aspects of succession, but rather the business aspects of it .... why/when/how ...  As our  practice ages, we may see a movement not only toward the ABA's "second season," but also  personal legacy within the profession.

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In Law Firm Fees & Compensation: A LawBiz® Special Report, I discuss several formats for billing legal services. Jeff Bleich, President of the State Bar of California, discusses one of these formats, the billable hour in his April column of the California Bar Journal.  He raises the specter of the “billable hour trap.” He maintains that the profession must change its fee structure and move away from the current policy of billing by time. He reflects the thinking of many lawyers who are feeling the pressure of working long hours.

Because of his comments, I began to think about this subject in a way different than I have ever done in the past. I want to share some of my revelations as, perhaps, a catalyst for your further consideration on what clearly is a very important issue.
Continue Reading...

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Sole and small firm practitioners have more at stake than insurance in the current debate at the California Board of Governors over mandatory disclosure of malpractice insurance coverage, much more! Their very existence is threatened. Perhaps that is an overstatement. What is clear, though, is that the economic well-being of this group, and the very survival of many individuals in this group, is being threatened.  Continue Reading...

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The current edition of LawBiz® Tips is now posted

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The Ohio Bar adopted a new rule of professional conduct, Rule 1.17, that allows the sale of a law practice as of February 1, 2007. Continue Reading...

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I was recently reminded of Lily Tomlin's sentiment.  One of the greatest attributes of the legal profession, aside from its being a loving, caring profession, is that we continue to learn new things every day! I suppose that's one reason to call it a "practice."

But, when we continue to learn, we also know that there is a lot still to learn. This tends to impact one's self-esteem. In talking with several psychologists and organizational development experts, poor self-esteem is one of the greatest challenges to lawyers.

Recognizing that this is a lifelong journey may take the pressure off of current feelings about one's skills and self-esteem. That, also, may make one more sensitive to clients' needs and less aggressive with opposing counsel. Civility (a major Bar initiative) comes with self-confidence, which also tends to reduce costs for clients.

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On a listserv recently, a lawyer requested comments about his proposed letter to his clients. He wants to "shout from the highest roof" (from an old Doris Day film) to his clients that he plans to maintain his current fee structure, that he will NOT raise his fee rates.  I responded as follows: Continue Reading...

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If you are salaried staff and not paid by the hour, and if the 29th day of February falls on a weekday, are you working that day for free?

Once every four years, we receive the opportunity to make a gift to our employers. Do you think they appreciate it? <g>

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Most lawyers work on Main Street, not Wall Street. Yet all lawyers are impacted by the American Bar Association’s social and political efforts. In my opinion, the single most important power given to the President of the United States is the appointment of Supreme Court justices. It is unfortunate that this process is so tainted today by political ideology and so very fortunate that the ABA is there as an independent third party to challenge the process. That may be its most important function.

However, as the Executive Director of the ABA, Henry F. White, Jr., at the ABA’s Solo Caucus in Los Angeles’ Mid-Year meeting, February 10th, said, “At the end of the day, it’s all about money, despite the goodness.”  He, and his fellow panelists, M. Joe Crosthwait, Jr. (moderator), Karen J. Mathis (ABA immediate past president), and H. Thomas Wells, Jr. (ABA president-elect), were preaching to the choir. Continue Reading...

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I love Andy's question, "It's Valentine's Day, Are You Still in Love With Your Business" (aka Practice)?

He gives us 3 steps to follow if we love our practice ... and 3 steps, if your answer is "no," to fall back in love with your business.

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Civility is the new mantra for bar associations across the country. In California, last year, the then president of the State Bar created a task force to study the issue and develop a set of guidelines.

But, the legal profession merely reflects society at large. I just came across a 2007 book titled The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn't written by Robert I. Sutton, a Stanford professor. Great title!

How about these statistics:

• The number of homicides in the workplace is up
• "Boss-icide" has doubled in 10 the last 10 years
• Workers murder 3 to 4 supervisors each month, double the number of 10 years ago
• "Going postal" is more than the post office violence
• "Desk rage" is a new term
• 27% of workers experienced on-the-job mistreatment, according to a 2000 study
• One in 6 report persistent psychological abuse
• 36% of employees reported persistent hostility from coworkers and supervisors, according to a 2002 US Department of Veterans Affairs study
• 91% of nurses experienced verbal abuse that left t hem feeling attacked, devalued or humiliated, according to a 2003 study.

One factor that seldom is discussed is the "second-hand" impact of tolerating jerks on the rest of the organization. Jerks in any organization need not ... and should not ... be tolerated. The costs are very high. Those law firms that have been sued, and lost, can attest to one level of cost. But there are many levels, including low morale, lost productivity and high turnover.

If our society is facing these issues, how can we expect lawyers to be more "civil" than others?

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In a recent post, Joshua Fruchter cited several statistics that I find quite interesting:

• There are more than 63 million active users on Facebook
• Since 2007, Facebook grows by more than 250,000 per year
• There's been an average 3% growth annually since 2007
• Active users double every 6 months

Interestingly, according to Joshua and Facebook, more than half of its users are college graduates and professionals. Sounds like a good demographic for lawyers!

One challenge, though, is how many of these professional and social networking entities can one participate in ... Consider, for example, LinkedIn, supposedly a primary business networking entity. And what about YouTube? One could spend an entire life in this new, virtual world ... and I'm not sure that would produce the best results. So, how does one choose?

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In my book, Collecting Your Fee: Getting Paid from Intake to Invoice, I maintain that your intake procedure is the most important step in the collection process; that an appropriate conversation with your client about payment of fees in the beginning of your relationship will almost certainly assure payment; and that a business-like approach to the pricing of legal services and collection of legal fees will assure collection of most, if not all, your outstanding billings.

However, where there is delayed payment, be sure it is not because of a legitimate complaint against you or the service provided. Given that, if the client has the ability but not the commitment to pay, you may want to consider filing suit against the former client.

You should review certain considerations before doing so: Continue Reading...

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In the op-ed of the Los Angeles Daily Journal, January 29, 2008, R. Konrad Moore suggests that public defenders who choose to strike betray the constitutional rights and liberty of their clients.

Shame on you for thinking that public defenders owe more to society than other lawyers, public officials or average citizen.  Mr. Moore seems to believe that becoming a government employee, a public defender, means that one's human and normal rights are checked at the door. 

Yes, becoming a lawyer does mean that there are certain rights and responsibilities one takes on that are not required by others.  However, I do not hear Mr. Moore suggesting that all lawyers owe a pro bono obligation to society, or that government officials are not entitled to seek increased compensation or that Corporate America has a social responsibility to its customers and a responsibility to its shareholders by keeping CEO compensation within reasonable boundaries or, for that matter, that the State Bar owes a duty to the public to require that all attorneys have malpractice insurance.  And, I don't hear that the State Bar owes a duty of any kind to its members, let alone  obtaining a program of low cost malpractice insurance so that attorneys could then better protect the public they serve. That would be spreading responsibilities too far. He's concerned only about limiting the compensation of public defenders.

Why then showed public defenders not be entitled to come together as any other group of employees in order to seek better conditions of work.  Does Mr. Moore mean that the government can give any compensation, no matter how low, to public defenders and that the public defenders should be grateful to receive it?  What about district attorneys?  If they were to organize, as some have, does Mr. Moore likewise believe that there is a violation of the constitutional rights of citizens?

His argument is disingenuous and should be placed in its proper context. More to the point, why does Mr. Moore not argue that it is the responsibility of government and its citizens to make sure that defendants receive the best possible representation by compensating public defenders fairly and in accordance with compensation generally received in private law firms?

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This was the title of a program offered today by the Los Angeles chapter of Legal Marketing Association, with panelists Susan Hackett, General Counsel of the Association of Corporate Counsel, and Michael Roster, former chairman of ACC, General Counsel of several major corporations, and managing partner of a major law firm.

ACC, at its annual meeting in Seattle, WA in October 2008 intends to roll out an effort to relate law firm billings to client perceptions of value. To some degree, the panelists suggest that they seek to roll back the clock 40 years, when there was a “professionalism” about billing, a stronger and more effective bridge of communication between the client and its relationship partner at t he law firm and less emphasis on increased profits per partner. ACC is not quite sure how they intend to get there nor what the “it” will look like. But, the discussions with stakeholders has begun. And the ride promises to be interesting, to say the least.
Continue Reading...

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As a follow up to our last posting, see item #2 therein, about the need to supervise both your staff and all attorneys in your firm.  This is a requirement that is being studied with greater intensity by the Bar throughout the country.

In furtherance of this issue, you may want to see Carolyn Elefant's commentary about a contract attorney who is being prosecuted by the Illinois Bar for overcharging.

My question takes a slightly different perspective:  Why wasn’t the large law firm charged with breach of rules of professional conduct that require adequate supervision?  Why only the contract attorney who overbilled?  If the contract lawyer overbilled, the "supervising" attorney in the larger law firm is equally responsible as though the contract lawyer were in the same law firm, on the same payroll. After all, it is this latter principle that allows the larger law firm to bill at their normal hourly rate rather than at its cost for engaging the contract lawyer.

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The business cycle of practicing law includes getting the client, doing the work and, finally, getting paid.

David Leffler, in GPSolo Magazine (Oct/Nov 2007) suggests that there are five stages to paying a lawyer’s bill:

1.    Denial – Client says this couldn’t be my bill, the charges are too high.
2.    Anger –  Client says lawyers are way too expensive for what they achieve.
3.    Bargaining – Client seeks to negotiate a reduced fee with the lawyer.
4.    Depression – Client doesn’t contact you and is unavailble for your calls.
5.    Acceptance – When Client sends you a check that clears the bank.

David talks about the importance of the beginning of the lawyer-client relationship. I agree. The intake process is what essentially sets the tone of the relationship. In my opinion, your success in the intake process at the beginning will determine your success in collecting your fee at the end.

For more about suggestions about lawyers' collections efforts, see my book.

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In a recent interview, Scott Drexel, Chief Trial Counsel for The State Bar of California, made the following suggestions to stay away from trouble with The State Bar:

1.    Know the rules of professional conduct of your State. For example, in California, whenever there is a complaint against an attorney, he/she has a duty to cooperate with the investigating body. To me, this sounds like a violation of one’s Fifth Amendment rights; but, failure to cooperate is analogous “obstruction of justice” and is a separate violation of the rules.  Also, settling a malpractice action cannot contain a provision for withdrawal of a State Bar complaint without becoming a separate complaint by itself.  I think many attorneys would fail the quiz if these questions were on it.

2.    Supervise your staff. Failure to supervise your staff properly has become a major issue in California. Too often, staff is deemed to have “practiced law” by their actions – a clear violation of the rules.

3.    Create a law practice management plan. More than 50% of all complaints against attorneys have a connection to the management of the office. Failure to pay attention to The Business of Law® will cause much grief for the lawyer.

4.    Communicate!  Failure to respond to clients is still the number one complaint against lawyers. A 1994 Oregon Bar study showed that confidence in one’s lawyer as evidenced by their responsiveness is more important than the results achieved. Sounds like a good bed-side manner covers many ills.

5.    Don't delegate. Contrary to the rule of delegating authority to perform tasks, one cannot delegate responsibility for your office, including trust accounts. Embezzlement occurs all too often because the lawyer failed to retain control. Despite the criminal action of a staff person, it is the lawyer who will be disciplined by the Bar, it is the lawyer who must make restitution, and it is the lawyer whose reputation will be sullied. From my perspective, this is a very sad way to end one’s career; it can be an economically disastrous way to end one’s career as well.

These are 5 lessons that should be learned well by every lawyer, irrespective of one’s State.

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The President said that “the State Bar shouldn't base policies upon what will or won't be popular ... Ultimately, our responsibility is to do the right thing."   With this remark, the President of the State Bar of California justifies requiring 30,000 mostly small firm and sole practitioners to disclose to clients when they do not have malpractice insurance.

I find this remark of particular interest because it is usually said by one who wants to justify an act that is opposed by the vast majority of his very own organization. It is also offensive because it fails to address the very issue at hand. This statement is like Mom's or Dad's "...just because ..." response to a kid's inquiry as to why he should or shouldn't do something.

In this case, the statement is used to justify an action that will prejudice an isolated group of lawyers who practice in the small firm environment. They need assistance from the Bar ... and they don’t get it. Instead, they get slapped in the face. We might just as well place yellow arm bands around these folks and say they are "bad" people. There is no empirical evidence that this group of lawyers is subject to more malpractice claims than others. There is no empirical evidence yet set forth that suggests any reason to isolate this group of lawyers and identify or punish them in this fashion.

Yet, this very same organization has not, to date, honored its earlier (2005 Board of Governors Retreat) stated commitment to its members to provide them with help in their businesses (The Business of Law®) because it might antagonize a few legislators or other special interest groups or cost a few dollars or place additional demands on the staff. Where is the Board when they're needed?

This attitude explains why members of the legal community, generally, have lost confidence in its governing body. Why the Board of Governors would anticipate that lawyers in this State would support it in any future disagreement with the State Legislature or with the Governor is beyond understanding. One can “turn one’s cheek” only so many times before the resentment rises to the point of action.

The perception amongst small firm attorneys that the State Bar is the enemy and not the friend clearly gains traction with actions such as taken now by this Board. John Dutton of the Board of Governors perhaps said it best. “Dutton argued that some county bar associations, a few State Bar committees and most of the members of the Conference of Delegates of California Bar Associations have joined critics in opposing disclosure. ‘And here we are,’ he said, ‘saying, 'We're going to jam it down your throat. We don't care what you think.’”

Of course, the very Governors voting on this issue also fail to disclose any personal financial interest they may have in this issue, and several do. They also fail to address more important issues for disclosure if we were truly interested in client protection. And, most importantly, they fail to create an affordable insurance program that would allow economically marginal (but very good) lawyers to buy the very product the Board is promoting! (Dare we remember that the State Bar obtains several million dollars each year from the insurance program it promotes?)

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Where courts have refused to uphold a covenant not to compete given by one lawyer to another in the sale of a law practice, one of the primary arguments against validating the covenant is that clients have a right to counsel of their own choosing. And, the argument continues, saying that a lawyer cannot practice law in a given area for a reasonable period of time restricts that right.
Continue Reading...

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Did you see the Tuesday edition of Wall Street Journal, Health section? David Armstrong discusses  the business interests of doctors -- and their ethical responsibility to disclose their personal financial interests in any business that benefits from their prescribed medical treatment, whether that treatment be medicine, equipment or otherwise.

The bottom line is that it is the patient's responsibility to ask the doctor if he/she has any financial connection to the recommended treatment. The suggestion is that if the answer is "yes," the patient should get a second opinion. Not bad advice, but still a matter of personal trust and interaction between the doctor and the patient.

If the doctor has a financial interest in a treatment modality, this may influence the doctor's prescribed treatment. Note that there is no movement here to demand that doctors disclose whether they have malpractice insurance. Perhaps because the existence of insurance is not likely to influence the treatment modality to be prescribed.

Why is it that some lawyers misguidedly believe it is important for lawyers? It's existence or absence does not affect the legal strategy advised or vigor or competence of legal representation. As a side note, however, it is interesting to note that most of the lawyers advocating that other lawyers make disclosure DO have a personal financial stake in the outcome of this discussion. Most represent insurance carriers who whose premium income might increase. Yet, there is no disclosure required by them in their discussions of this topic. Interesting, eh?

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In October, managing partners from across the country gathered at the Canadian Bar Association's third annual high level conference created to focus specifically on their issues.  They came together in Montreal to exchange ideas and discuss best practices. The Lawyers Weekly wrote about the conference and, particularly, my remarks.

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The State Bar of California’s Board of Governors narrowly voted to amend the current proposal to require lawyers who don’t carry malpractice insurance to disclose this fact to their clients. The amendment would require such disclosure only in those situations where a lawyer is required to have a written engagement agreement pursuant to Business & Professions Code §6147 & 6148.

That amended proposal, then, was defeated; a subsequent sense of the Board was to send this issue to its own committee (Regulations, Admissions & Discipline Committee, not the original task force that was submitting the proposal) for further study. Two issues were uppermost in the Board’s mind. One was whether the amended proposal could be adopted by the Board without further public comment and, second, whether the full ramifications of the original proposal were completely understood by the Board.

It is hoped that the RAD committee will be successful in addressing the issues that face all of the stakeholders involved, the public and members of the Bar, without the perception of self-interest or financial gain for the Bar ... and with the interest of all lawyers in mind (including the 30,000 not currently insured). Continue Reading...

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There are benchmarks in life ... and in our law practices. Benchmarks might be as significant as a marriage, a birth or a death. In law, it might be graduating from law school, opening one’s own practice, winning a significant case, or in today’s world of Baby Boomers, moving into our "second season."

The Airstream trailer (see my earlier posts on this subject) has taught me and confirmed many lessons I’ve learned over the years. Here are just a few that our current trip has triggered:

Change is part of life, and we must learn how to manage change to be successful

Change requires that we be flexible

Life involves continuous improvement

Luck is the intersection of preparation and opportunity

Continue Reading...

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In an article written by Richard Gary (Firm, Inc., March/April 2006), he says that "... the principal message that compensation decisions affecting the managing partners should send is: ‘The qualities that will make our firm successful over the long term are superior lawyering, client service, teamwork, and fairness.’ In practice, that means that the (full time) managing partner should not be the firm’s highest paid partner ..."

Agreed that the compensation system must appear to be fair. If not, the whole infrastructure of the firm will collapse. But, one must realize the importance of the position. As Gary concurs, managing partners preside over businesses whose revenues are in the millions, even hundreds of millions, of dollars. This is not a position to be taken lightly or to be appointed to just because "you were out of the room at the time of the vote." This is a demanding position, requiring the trust of everyone (lawyers, staff, etc.) in the firm to be successful. This is the CEO of the firm and should be compensated accordingly.

Continue Reading...

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While making a presentation about recovering from disasters to the Association of Legal Administrators national conference for financial issues, (see my latest book, Disaster Preparedness & Recovery Planning) I listened to another presenter talking about the insurance aspects of disaster. She noted some frightening statistics: More than 40% of all businesses never reopen after they experience a disaster; of those that do open, more than 30% fail after two more years of operation.

Continue Reading...

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Q: My practice is in a rut and I don’t know why. How can I attract more clientele—both old and new—as well as those who come from diverse backgrounds?

Continue Reading...

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While at a recent conference, the speaker mentioned several interesting statistics about the “changing face of America.” In the year 2000, 70% of our population was non-Hispanic White; that percentage will drop to 52% in the year 2050. Similarly, the Hispanic population will double between 2000 (13%) and 2050 (25%). The Asian population will also double from 4% to 8% in the same time frame.

If it is true that people buy from people who mirror them, then law firms’ “cast of characters” will have to change. This is a really strong business case for diversity! Some Corporate America entities have already fired their law firms when they failed to provide the appropriate diversity responses desired by the client. That, more than being the “right thing to do,” will claim the attention of lawyers. And it is happening now.

Good questions to ask yourself, irrespective of the size of your law firm (including sole practitioners):

• What does my law firm look like (color, ethnicity, etc.)?
• What does my client base look like?
• What client base do I want in the future, and what do they look like?
• Is there a match between my law firm and the client base I want?

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With tomorrow being October 8th and Columbus Day, it is time to recall the great traveler who taught is that the world is, in fact, round! He went from the East to the West.

It took Thomas Friedman to teach us that "the world is flat" by going from the West to the East!

Friedman teaches, among other things, about "outsourcing." Many lawyers are using this principle (sometimes also called "delegation") to lower their cost of operation and thus increase their profit. Even sole practitioners and small firm lawyers can effectively use this principle.

I encourage you to read Friedman's book.

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The tidal wave has not yet struck! That means there is still time to save ourselves.

The California State Bar Board of Governors voted today on the proposal to require disclosure to prospective clients that they do not have malpractice insurance (if they don't). Other lawyers who are either exempt under the rule or who do have E & O coverage do not have to discuss malpractice insurance or disclose anything about the subject in their engagement agreement.

Continue Reading...

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During a discussion amongst law firm chief financial officers that I moderated for the American Bar Association, one of the best practices mentioned was the use of check scanners. Coincidentally, not more than 7 weeks after that event, my bank installed a check scanner into my office.

It is a remarkable instrument that further reduces the bank float from your clients and gives you almost immediate access to "good funds." No more waiting for the "check to clear" or other excuse for delaying your use of funds. Continue Reading...

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Recently I was honored by my selection for induction into the Million-Dollar Consultant™ Hall of Fame.  I prepared some remarks on the top ten lessons I've learned in starting my consulting career; but it struck me that these apply equally to a lawyer starting a new practice.  Since nearly 90% of the 1.1 million U.S. lawyers are solos or in small firms, the odds are high that many lawyers will be in a practice startup situation at some point in their careers.  These ideas from building both my own law practice and later my coaching practice may provide some pointers for your success. Continue Reading...

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LAWBIZ® EXPERT RENEWED AS PROVIDER FOR LEGAL EDUCATION

Ed Poll Was Renewed as an Approved Provider of Education for California Lawyers

Venice, Calif. September 13, 2007 – California-based law practice management expert and lawyer Edward Poll was once again approved as a provider of education for lawyers licensed by the State of California for the term of September 1, 2007 to December 31, 2010.

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News just hit that the iPhone has been hacked and unlocked! You weren't supposed to be able to do this --- guess what? A 17 year old kid did! 

Terry L. Brock tells us the story of George Hotz of New Jersey and then extrapolates some principles from George's persistence in breaking the iPhone code.

What will this mean for users? Ability to get to other phone companies, not just AT & T?  Will this affect the privacy and confidentiality issues uppermost in conversation of lawyers? Will there still be an expectation of privacy when lawyers use the iPhone?

While the legal issues may be argued in court, the market place will make many decisions for users as well as Apple, the manufacturer.

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Professional Legal Management Week is coming .... October 1 - 5.

Celebrate with your staff and those in your office who make it possible for you to focus your attention on the practice of law and the meaningful connection with your clients.

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In a recent blog post, I suggested that it was o.k. for lawyers to seek profit. One justification that I didn't suggest, however, becomes very clear when you look at state bars disciplinary reports:  Clients' trust accounts are invaded by economically marginal lawyers (exclude out and out theft from this discussion, a rare event).  Thus, when we encourage lawyers to be business-wise, we are actually seeking to protect the public. 

Being effective with clients, efficient in the delivery of services to clients and therefore more profitable, we are actually protecting the public by providing sufficient resources to the lawyer to feed his/her family and therefore have no need to invade the trust account funds.

To say that law is a business, a service business, is not to deny that it is also a profession rooted in the highest ideals from the very beginning of our country. Continue Reading...

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Disaster Preparedness is Focus of New LawBiz Special Report

Contact:  Ed Poll
800-837-5880
edpoll@lawbiz.com

Immediate Release July 24, 2007

Edward Poll, principal of LawBiz® Management Co., announces the publication of Disaster Preparedness & Recovery Planning for Law Firms: A LawBiz® Special Report.  This third in a series of Special Reports on topics of practical and major importance to the effective and profitable management of The Business of Law®, has just been released.

Disaster Preparedness & Recovery Planning for Law Firms: A LawBiz® Special Report offers guidelines on how lawyers and law firms can prepare to minimize the debilitating impact that disasters of all kinds can have on their law practices and the clients they represent. The issue for most of us isn’t if a disaster will occur, but rather when a disaster occurs, what should we do in order to recover quickly and effectively.

Topics covered include first defining “disaster,” then creating a plan that deals with the various types of disaster that might befall us including fire, earthquake, burst water pipes and, yes, even planes crashing into our buildings.  This new book also deals with insurance, financial planning, data recovery and, most importantly, personnel (our “human capital”) planning, among other topics.

Michael Hirsch, former FEMA Deputy General Counsel, said “... I highly recommend it (this book) for attorneys and law firms as a basic document on how to be prepared to respond to and recover from disasters.”

Tom Edwards, Executive Director of Munger, Tolles & Olson LLP, said “... Ed is the primary architect for my colleagues’ and my firm’s disaster recovery plans and he was, is, and remains a driving force behind our plans.”

“With our first Special Report on Business Competency for Lawyers, LawBiz® began a new kind of book,” Poll states. “ The content is practical yet sophisticated, and provides basics for managing and running a successful law business. This new book is the third in this series.”

Ed Poll is a leading authority in the field of law practice management and the Principal of LawBiz® Management Co., a firm that consults with and coaches lawyers and law firms throughout the United States, England, Australia and Mexico. Poll is a Board Approved (SAC®) Coach to the Legal Profession, and a charter member of the Million Dollar Consultant’s™  Hall of Fame.


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