Are you the manager or the visionary?
I was just getting used to the "Information Age" when I learned about Dan Pink from Stewart Levine, a friend of mine.
Pink says we're moving out of the information age and into the "conceptual age" in which creativity will be supreme.
Wow, sure is tough to stay current. Someone asked me today about widgets. I said I learned about them, along with Blackacre, in law school. But, apparently, widgets has taken on a whole new meaning. :-)
How does this impact the law firm? Well, is the leader of your firm a visionary, one who can see the future for the firm, or a manager, one who implements the firm's policies? It is rare that we find one person embracing both roles.
Age discrimination lawsuits will be harder to win
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.
Senior lawyers at risk
Layoffs in the legal profession have been in the news lately, but downsizing from the top? More experienced attorneys, even senior partners in some larger law firms are not as secure in their jobs as they once were in what may be more signs of practicing law as a business. Law.com bloggers and co-hosts Bob Ambrogi and J. Craig Williams welcome Ed Poll, a recognized expert and author in law practice management and Stephen E. Seckler, president of Seckler Legal Consulting, to discuss the new benchmarks the legal profession is seeing in job performance and what The Business of Law may look like in the future.
Every law practice has a value & can be sold!
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!
Senior lawyers being told to find new employment
In an interview for Lawyer2Lawyer I discussed the current trend in law firms to review their business model and their entire operation. They're taking the opportunity to cut back where appropriate because their revenues are declining ... and they are reducing their highest expense -- senior lawyers.
Don't waste a good crisis is the new mantra.
Wilmer Hale, a major law firm, recently announced that they have told a number of lawyers to look for other employment come the Fall. But, they have also done something that I have not heard anyone else do. At the same time they revised the standards to remain with the firm, they also are offering those impacted the opportunity to learn new skills that will give them the chance to meet the new standards.
While some may think their action is age discrimination, I believe it is o.k. to change the law firm model provided you also offer education and training programs to those involved so they can meet the new standards.
For me, a comparative situation might involve a secretary who has been employed by the firm for a long time. The secretary is proficient in dictation. Now, the firm believes that dictation is not the most efficient method to convert a lawyer's thoughts to paper. So, the firm converts to a new technology, making the secretary's skills obsolete. Rather than fire the secretary, though, the firm offers the secretary education programs to enable her/him to learn the new technology. If the secretary fails or refuses to learn and utilize the new technology, I believe there is no requirement to retain the secretary on staff.
Thus, with lawyers. Many were made partners because they had large billable hours, because they were good "minders" of clients despite the fact that they were not "finders" or rainmakers. Today, rainmaking has become a significant attribute that is important for partners to have. Those who don't become expendable.
While painful for many, I do believe it is not inappropriate for the firm to ask this of its lawyers.
Age discrimination should not be automatic response
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...Stress kills lawyers
Lawyers have among the highest suicide rate of all professions, after cancer and heart, and 6 times the rate of the general public. Most at risk are attorneys between the ages of 48 and 65. "Significantly, suicide accounted for 10.8 % of all deaths."
Many suicides come because of the intense pressure on lawyers to succeed, both financially and "professionally," and after some disappointment such as being laid off or losing a major trial.
I noted in earlier writings that lawyers have a difficult time accepting rejection, a feeling that occurs almost every time a major effort such as a trial or important negotiation occurs. Sales people, on the other hand, accept rejection as part of their daily lives. In fact, the mantra for sales people goes something like, "Each 'no' is one step closer to 'yes.' And, it takes 9 no's to get to one yes." What a powerful culture. Lawyers' culture of perfectionism and elitism, on the other hand, creates much of the difficulties of the profession.
What would the impact be, for example, if we were to say to ourselves that we cannot fix every problem or challenge presented to us by clients? What if we were to say that it's the client's issue, that we will do our best, but that, in the end, it's still the client who got himself into the pickle barrel?
Internships for new lawyers
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.
FDIC unlimited bank account protection
I just met with my banker and she told me of a new program that is very significant for many.
As you know, FDIC insurance protection was available up to $100,000 per customer; for the first time in 28 years, Congress changed this to $250,000. And then, for clients trust accounts, the FDIC instituted a new regulation that stated all clinets' trust accounts, under certain guidelines, could be insured without limit.
Now, the FDIC has instituted yet another change ... only for certain banks that make application and are approved. The FDIC will insure all non-interest bearing accounts without limit. This will even allow you to transfer funds from an interest bearing account to a non interest bearing account, and then be protected for the full amount.
Check with your bank to find out if you can get this added protection in these uncertain times. The program is scheduled to extend through December 2009, though it's suspected that the program will be extended further.
New Lawyers Forum announced
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.
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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)
Starting a new law practice
Do you want to start a new practice? There are certain characteristics that will assure you a greater chance for success. Persistence is a key factor; and a financial reserve goes a long way to give you time to work through business mistakes.
Lawyers will still be needed in the "new economy"
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.
ROI on law firm revenue
The other day, I listened to a teleseminar given by Mark Santiago with Kerma Partners. He confirmed my belief that focus on increasing revenue will produce greater results/profitability for the law firm than focusing on reducing expenses.
He referred to a study (which I'm eager to review) that demonstrated a 10:1 return on revenue efforts as contrasted to a 1:1 return for expenses.
That is why rainmakers sit in the catbird seat; they control the direction of the law firm.
The Business of Law®
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.
Is malpractice also breach of contract?
If your engagement agreement says that "you will act in a professionally responsive manner," you may be held to both malpractice standards (negligence; tort) and breach of contract! That is the new ruling in Maryland's Abramson v. Wildman and may be the rule elsewhere.
Check both your jurisdiction rules and your engagement agreement.
Starting a solo practice
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.)
Coaching creates a high return on yourself
The Complete Lawyer published my article, talking about the very high return on yourself as a result of our coaching process.
Fee or Free
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.
Do you know when you've succeeded?
The other day, I was cycling up Red Rock Canyon in Las Vegas, NV.
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I went from about 2500 feet to 4713 feet. En route, the road was rolling hills. So, sometimes I went down, but then there was an ascent next ... all the way to the top, about 7.75 miles from the start.
Before I reached the top, however, I was complaining to myself about how hard this ride was ... and whether I could complete the ride as I had intended. When I reached the final plateau, not having ever ridden there before, I was not sure that was the top. I thought there were more rolling hills ahead of me. I asked a couple of cyclists who were descending. When they told me this was the top, I was elated I had made it to the top, relieved that the pain of the trek was over and quite surprised at how hard I had fought with myself.
How many of our clients don’t realize or appreciate the success we bring to the table for them? What have you done to educate them about the process of your representation? I was fighting myself because I had never been in Red Rock Canyon before. Most of your clients have never been involved in the judicial process before. And even sophisticated clients with previous involvement don't truly appreciate what lies ahead. What have you done to show them a preview of what’s to come? What have you done to make their journey easier? What have you done to shine a flashlight on the road in front of them?
When you shine the flashlight, and they still agree to move forward, the likelihood is that they will pay you your full fee without question and promptly in accordance with your engagement agreement.
Use the flashlight!
Outside counsel: Listen Up!
For those lawyers interested in knowing what Corporate Counsel are concerned about, see Rees Morrison's article.
Can you afford to retire?
While the economic crisis is being felt by nearly every segment of the working population, one group of workers is faced with particularly tough decisions regarding their futures. Law firms need to be prepared to assist them in making a transition during challenging times. Six-in-ten workers (60 percent) over the age of 60 say they are putting off their retirement due to the impact of the U.S. financial crisis on their long-term savings, according to a survey by CareerBuilder.
I agree with Ron Friedmann that lawyers, even partners in larger firms, are feeling the economic strains of today's world and therefore delaying anticipated retirement. But one group of lawyers may not: Sole and Small Firm lawyers. These folks have something of value that they can sell .. converting their equity into cash. Most lawyers never thought their law practice was a saleable asset. So, while their investments may have tanked, they can look to their law practice for ready cash.
Change creates opportunity
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.
Lawyers survival - cont'd
I like the comment of Stephen Mabey, who said:
"History should be a guide post not a hitching post and when marketplace adjustments increase in both strength and frequency I think falling back on historical prose that we are different than all other industries / marketplaces is a great way to ensure a repeat of history."
Despite the pain, I'm not sure how many of us can alter our course of conduct. But, clearly, the successful ones will have to make some mid-career alterations.
Will the legal profession survive as it is?
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.
Leverage and morale
Susan Ward quotes Adam Smith in her blog posting today.
I respectfully disagree with his assertions. This is what I said in response to Susan's comments:
It's hard for me not to disagree more. Leverage always has been, and will continue to be, a motor for profit. Whether that leverage comes from associates or from non-equity partners (another form of associate) is not clear, nor important, for this discussion. Time will tell. And Susskind's conversation merely discusses another form of leverage, technology, just not the human form.
In China, years ago (I can't speak for today because it's been many years since I was there), the leverage the economy used was people. They couldn't use machinery because they had so many people who needed work.
Yes, experience is important. But, it is also teachable. Perhaps the more progressive law firms will wake up to how important continuing education is for their lawyers (partners and others) as well as their staff.
Morale is low. Agreed. But, that in part is because of failed expectations. Expectations in BigLaw must be brought in line with economic reality; the business model needs to be adjusted a bit ... then morale (with good leadership) will rise.
The End of Lawyers?
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.
Put your best billing foot forward first
Put a “positive spin” on the description of your services. I have been saying this for many years in the context of preparing your billing statements for work done for clients.
Continue Reading...Entitlement thinking may be on the way out
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.
IOLTA funds update
See the latest edition (March 3rd) of our newsletter featuring a discussion about the safety of IOLTA funds and the responsibility of lawyers for the failure of banks holding their accounts.
Plumbers must take as many hours of education as lawyers
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...Law firm revenue is decreasing
In this morning's session of large law firm managing partners, a group I've facilitated for more than 10 years, I heard hand-wringing I've never heard before. September 2008 was a watershed benchmark for revenue. Since then, revenues have decreased each month for many of the firms. There are only occasional rays of hope in certain practice areas. There seems to be a significant excess supply of lawyers. This is a significant change. As one lawyer cautioned, though, when the paradigm shifts again (as in the past), there will be an inadequate supply of experienced lawyers available to meet the demand.
How do you see the future both for the profession as well as for your own practice area?
Make a plan -- Trust your plan
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.
Drop in legal revenues predicted
See the ABA Journal that predicts a 20% drop in legal revenues and a 50% drop in associate billings, spurred primarily by technology and client resistance.
There are opportunities in the market. Thinking optimistically may open you to them. Thinking pessimistically certainly will cause you to miss them. How much of today's firm layoffs is because of pessimism, not because of critical analysis of the firm's position and client (and prospective clients) needs? Like much else in the law firm environment, I suspect that this is much of a knee-jerk reaction rather than serious review and strategic planning.
I'm reminded of a statement from one of the recent TED speakers who said pessimism will certainly cause you to retract while optimism will at least allow you to see the opportunities, no matter how few, that are there. Seeing the opportunities is the first step to taking advantage of them.
Opening a Law Office
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.
Layoff or Buyout
Hogan & Hartson seeks to do something new. They are offering a buyout to the legal secretaries and word processing staff. Their belief is that voluntary action is better, more humane, and yet reaches the same goal of staff reduction as layoffs does. Under the terms of the buyout, the more senior staff selecting the option will receive more compensation. The more recently hired staff will receive less; but the minimum employment must be 5 years.
On the one hand, the firm may be losing significant talent. On the other hand, the more senior is the staff person departing, the higher will be the savings for the firm.
Continue Reading...Economy strikes again
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.
Law firms making capital calls on partners
Has your firm asked you to pony up money? Have you faced a capital call recently? Are your partner distributions being reduced?
A recent (January 29th) Wall Street Journal article discusses the new phenomenon. Several top law firms are asking their partners to increase their capital accounts and/or are reducing the partner distributions, all in an effort to raise more cash for the law firm. Why? Because the new focus is on reducing law firm debt and increasing liquidity in an era where banks are restricting their loan portfolios, even for "favored customers." With revenues and profits constricting, law firms are wise to review their debt structure.
When the law firm cannot open the bank's loan window, or doesn't want to abide by the many restrictions and covenants that are attached to any bank loan, the firm will look to partners. And, for those partners who are themselves financially thin, they may have to be the one asking the bank for help in order to satisfy the capital call. To get the personal loan needed to fulfill the capital call, the lawyer may have to mortgage his/her home, pledge other assets as additional collateral or even get guarantors.
Solo and small firm lawyers experience the peaks and valleys of compensation as a normal course of business. To survive tough times such as we currently are experiencing, reduced debt and a reservoir of savings is essential to survival.
Perhaps it is not unreasonable to ask yourself the question, "Do I really want to be a law firm partner?" Do the benefits outweigh the risks?
Life's Lessons from the Superbowl
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.
The Wage Gap Struggle for Women Lawyers
Anna T. Collins, Esq. (Portland, Maine) writes an article in The GlassHammer about the gap in compensation between men and women in the legal profession. Her issues are well-taken. See below for quotes from our author and coach, Ed Poll.
Continue Reading...Billable hours - again
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.
What will be the cost of malpractice insurance?
Insurance rates are based on three elements:
1. Losses. Carriers normally allow 5% to 10% for claims payouts, or losses.
2. Reinsurance. The cost of reinsurance, where the primary carrier passes some of the risk of their policies to other insurance companies, called reinsurers.
3. Investment income. Carriers normally invest their cash reserves in stocks, bonds and other income producing products to increase their own net profit or return for the benefit of shareholders.
Expense reduction or investment advance
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.
A carriage builder in an automobile world!
“A carriage builder in an automobile world.”
That’s how one staff person described his boss, an attorney not willing to become an effective marketer, but yet believes he’s entitled to receive the same level of business that he has for years. He doesn’t understand that the world is changing, that practice areas once popular are no more and that he has to adapt or be swept out of the practice.
Corporate Counsel Want Value
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...Unemployment Insurance Not Applicable to Lawyers
I came from an immigrant family as many people in my generation did, and still do. Growing up, my parents were involved in the labor movement and unemployment insurance was a big deal. In today’s context, unemployment insurance s hardly significant. But, don’t tell that to the many who are seeking this benefit and can’t crash through the long lines and busy telephone lines.
NPR did a piece today on what unemployment insurance is today and what it means.
Here are some statistics that I find fascinating, and which I did not previously appreciate. There are about 10 million unemployed workers, about half of them being in only eight states including California, Florida, Michigan and New York. There are millions more who don’t even qualify because they were self-employed or have been out of work too long ... they sort of get lost in the system.
The Question
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.
Bankrupt lawyers
Bankruptcy will be an important practice area for the legal profession, obviously, in 2009 and 2010, as we continue to move through the major upheaval in our economy. And our law firms will benefit.
However, one aspect I did not expect was that lawyers and law firms will likewise face economic hardships … And I'm not addressing the obvious issues coming from the collapse (for other reasons of the large firms such as Heller, et al.).
I'm addressing the more mundane, the traditional, average lawyer, the lawyers that make up the bulk of our profession. When these lawyers are in trouble, the entire profession needs to wake up and pay attention.
I was just contacted by an attorney asking me to value a law firm for purposes of the lawyer’s personal bankruptcy. His law practice is an asset of his personal estate. Times are hard when the helpers need help themselves.
Lowering legal fees
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.
Even Big Solo can fail
Failure can be experienced by small firms as well as large firms. In the case of Dreier, the real shame is not that Dreier failed - he committed fraud and there is nothing new about fraudulent conduct causing failure ... and even jail. The sad part of this tale is what happens to other lawyers working in the Dreier firm.
Litigation is not the answer - usually
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.
From Big Law to Your Law
Carlolyn Elefant has created yet another e-book, available for free, and worth reading.
"The perfect crime"
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...Predictions from 2006 coming true?
Salaries frozen
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.
Panic attack
The economic crises has finally hit home. People I know are talking about October and November as being months when the world stopped! ... and they couldn't get off. No one seems to know what is going to happen next.
I met yesterday with managing partners of several major law firms in my Managing Partners Roundtable.
Continue Reading...So you thought you are a lawyer?
Do you want to be a banker or lawyer? See LawBiz Tips current edition for one perspective.
Everyone can benefit from a coach
In his article, Restoring Optimism, Law Practice Today (Nov. 08), David Maister suggests that law firm managers are coaches, but that they “edge away from the coach role” during tough economic times. I would concur that the really great managers are primarily coaches to their minions even while they understand and have a firm handle on the economics of the firm. I suspect, however, that there are very few managers or firm leaders who have this attribute.
Continue Reading...Do you want to be partner?
Are you sure you still want to be partner?
Time sheet records = Revenue billed
Complete your time sheets daily, every day.
The best practice is to keep a running log of time (software-based or otherwise) of everything you do as you do it. If you’re a scrap-of-paper person, then you need to aggregate and compile the list for your billing program 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. And failure to keep current, proper time records will usually result in more than just 1/10th of an hour lost ... DAILY ... and MANY thousands of dollars in lost billable revenue!
Do you still have your 401(k)?
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?
Our financial fiasco and legal fees
Listen to Patrick Lamb, a prominent attorney and leader in the discussion of value billing and alternative fees. In our podcast, I asked Patrick to discuss the impact of today's crises on both legal fees and attorney compensation.
Trust Accounting in Times of Financial Crisis: Trust Accounts for Lawyers
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?
Poll to teach at Solo Practice University
I will teach at a new school, an on line school that will teach law school members and lawyers ...
There is no organization so focused on the sole practitioner as is the Solo Practice University. I am thrilled to participate with Susan Cartier Liebel in implementing her concept and offer guidance to those who represent more than 70% of private practitioners in the legal profession.
Law schools do not teach law students to be sole practitioners; they will get the sense of the arena in which most lawyers operate today and will increasingly practice in the future. As larger firms begin to refine their needs, and to release more attorneys than in past years, more lawyers will move toward solo practice. They will need the skills that Solo Practice University will offer. My hope is that our law practice management offerings will advance both the economics and the satisfaction with the practice that these lawyers will experience.
Not only will we talk about the principles of successful law practice, we will offer coaching service to address specific challenges facing individual enrollees. Check it out and come join us.
Time sheet records = Revenue billed
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!
Even law firms feel the strain of today's economy
Law firms are not immune from the economic woes and financial crises being experienced by the rest of the economy. Other than a few law firms that have dissolved, though, the pain being felt by law firms as institutions is just not that bad. Laying off a few associates, or delaying the start date of recently hired graduates, may be novel for law firms, but is not huge in the grand scope of law firm economics.
Individual partners in Big Law may be feeling some pain, that is if you call "pain" taking home a few dollars less. A 20% decline in equity partners' compensation when already earning $1,000,000 just doesn't get much sympathy from many.
The real "hurt" is being felt by lawyers other than "Big Law," the small firms and sole practitioners. These lawyers can ill-afford a large reduction in compensation. They're not at the top of the pack to begin with ... and they generally represent clients in "personal," not "corporate," matters. Personal injury, family disputes, criminal defense and personal debtor claims, among others, tend to pay less to begin with. Couple this with reduction in number of clients and number of matters and slower payments, then you can begin to feel the real pain being felt in the profession.
While few can predict with any real accuracy the change in the economic winds, the demise of law firms is caused more, in my opinion, by poor business judgment of lawyers rather than the change in the winds. Expanding without a safety net, relying on only a few big clients while making capital expenditures relying on the continuity of that revenue, and failing to address assertively a declining realization rate are real reasons, among others, for law firm troubles.
It's just too easy in our world to blame someone or something else! As Pogo said, "We have met the enemy and he is us." The reasons for law firm problems are generally as a result of poor business practices, plain and simple. Yes, there may be extenuating circumstances, but not such as to tear the firm apart or cause its demise. There is no entitlement ... and there is only ourselves to blame. Given these premises, we can move forward to greater success.
Realization rate is the basis for survival
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.
Purchase price for sale of law practice
In discussing the value of his law practice, my client mentioned the figure given to him by his financial planner, a number designed to assure his standard of living. This was the number he wants for the purchase price of his practice. I suggested that the two numbers were unrelated ... and that the value of the practice may be more or less than the number his financial planner wanted for his style of life.
This caused us to return to the reason he wants to sell his practice and the time frame for achieving a sale. The more urgent is the desire to sell, the lower will be the price; the less urgency, the greater will be the price. Neither number has much to do with what it will take to reach and maintain your desired standard of living. Such a number may impact your decision to complete a transaction, but really has nothing to do with an objective valuation of the practice.
Layoffs abound at law firms
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.
Selling your law practice
On Friday, I coached a client about selling his practice. Our conversation was far-ranging. I started with several questions of my client that, in my opinion, set the stage for all further deliberations. How do these questions resonate with you? What additional questions might you ask yourself?
- Why do you want to leave your practice?
- What do you want to do in the "second season of your life?"
- Do you want to retire, or start a new adventure?
- Can you achieve the same objective without selling your practice?
Law firm overhead - Can we cut?
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...Pricing and Profits
Today's Wall Street Journal has news about 3 major companies' profits being higher than anticipated. Coincidentally, they all raised the prices of their products.
Despite "high" hourly pricing in the legal community, one wonders whether there isn't room to raise prices further. If this is something you may want to consider for your strategic plan, see my article that suggests how and when to adjust fees.
Will 2008 be a brief dip for law firms?
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.
Law is a Business
The Business of Law® is not a generic term. In 1995, lawyers did not think they were in a business, let alone a service business. And I was successful in my application to register this as my mark. It has been my mark for more than 10 years.
Today, lawyers in the large law firms understand that law is an honorable profession, but is also a business.
Peter Zeughauser in the ALM Law Firm Leaders conference said that the AmLaw 100 revenues are $64.5 B. That’s BILLION dollars. And 3 firms account for 10% of that number; that “profits” (why are we talking about profits if we’re not in business?) increased 8.7% in 2008, ranging from a low of $410,000 to $4.95 million.
Maister's Plan for the Future
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...Law Firm Leaders Gather to Commiserate
CNN just released a poll that suggests that most Americans are angry, worried, and stressed out about current conditions in our country. The legal profession is not immune to these forces. Law firm leaders from small, mid and large sized firms gather for a two day program designed to provide guidance on what the law firm of today needs to do in order to stay competitive in a changing economy. The sponsor of the program is ALM (now IncisiveMedia).
Continue Reading...Law firm economics during crisis
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.
Continue Reading...Challenges facing law firm leaders
Law Firm Leaders Forum takes place Wednesday and Thursday, October 22 - 23, 2008 at the Westin Hotel, New York.Dan DiPietro from Citi Private Bank and David Maister will, among others, head the cast for Wednesday.
Peter Zeughauser and Greg Nitzkowski, of Paul Hastings, will, among others, present on Thursday. I have the pleasure of participating in a segment on Thursday as well.
If you're in New York then and reading this post, let me know. Perhaps we can get together.
Partnership: Be careful what you ask for ...
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...Lawyers: Can you refuse ex parte notice?
I was having a conversation with Marc W. Matheny, a sole practitioner in Indiana, today. And the conversation turned to voice mail messages.
The message I've heard a number of lawyers leave on their machines says that they do not accept ex parte notices on this line. I had never thought about this before, but I pose the following question for your consideration: How is it that you can refuse to be served? If you were personally served with a summons and complaint, can you refuse to accept service? During my 25 years as a practicing lawyer, I can't remember an instance when refusal was permitted. I admit that it's been awhile since I practiced, perhaps the rules have changed.
If your phone number is your normal business contact point, and if phone service for ex parte matters is acceptable in your jurisdiction, how can you tell the other party that you refuse to accept service just because youir answering machine is on?
This poses an interesting question for me ... and one I suggest lawyers address with their local court rules before relying on the sufficiency of the voice mail statement concerning service. At the very best, you will be fighting a battle about the sufficiency of the service rather than the merits of the matter ... and this is usually not productive either for the lawyer or the client.
Law firm strategic planning & the Flying Wallendas
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."
Law firm strategic planning or just a bunch of tactics?
Last night, during a break at the ABA Law Practice Management Section's Fall conference, I watched an MSNBC commentator talk about the presidential campaign and the candidates' strategic plans, or lack thereof. Then, I went to dinner with Allison Shields and Aviva Cuyler. We talked about the strategic planning process of law firms. We agreed that very few law firms we've seen have such a plan in place. During our conversation, I recalled a managing partner telling my large law firm Managing Partners Roundtable meeting just this week that his firm created a strategic plan about a year ago and had projected several scenarios, one of which was an economic downturn ... and what his firm would do if such an event occurred. He said his firm is doing fine today, still staying close to their strategic plan.
Continue Reading...Law firm lays off more lawyers and staff
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.
Lawyer Retirement May Be Only a Dream
Will lawyers actually see their “second season,” their “red zone” of life? Will the 400,000 lawyers projected to retire within the next 10 years have to work or will they be able to retire? Will lawyers be just like others in our country today who are seeing their “nest eggs” dwindle by at least 50% in just the last few weeks?
Continue Reading...Retirement may be merely a vision now
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?"
Heller Ehrman - Business as usual or a disaster waiting to happen
Wall Street isn’t the only institution falling down around us. A law firm, not the first, that was first opened 118 years ago in 1890, collapsed in a heap of depressed lawyers, staff and clients, not to mention vendors. Many people were significantly impacted by the dissolution of this 600+ lawyer firm.
How could a banking institution, built over decades, collapse in hours? How could a law firm of such magnitude collapse in a matter of weeks? For the law firm, there are a number of reasons provided in the public airwaves, each of which carries a significant lesson about The Business of Law®.
Here are a few of the lessons that popped out for me:
Law Firm Marketing During Crisis & Chaos
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?
Three Lenses for Law Firm Recession Survival
The days of multi-million dollar profits per partner and rapidly rising triple-digit associate salaries were never real for most law firms, especially when considered in light of the demographic of law - more than 70% are in small law firms. But, now firms big and small, conservative and highly leveraged, all feel the business pressure from the economic downturn.
Big Law and the "Value Revolution"
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...General Counsel & The Future of the Profession
I had the pleasure of talking with Paul Williams of Major, Lindsey & Africa. Paul focuses his energies on placing lawyers as General Counsel of major corporations. From his perspective, he suggests that General Counsel today receive more respect. Of course, GCs today have a much larger budget for legal fees than ever before. And many GCs come from the ranks of major law firms. Coming from the elite law firms and handling such large sums of money, one would expect private lawyers to give the corporate lawyers more respect. Also, in many cases, GCs are increasing the size of their legal departments as one way to control legal costs ... they can “purchase” the legal talent at wholesale (as an employee of the legal department) rather than retail (law firm associate or partner).
Following are some of my thoughts and conclusions drawn from my conversation with Paul. Not wanting to attribute words or ideas to Paul that he may not have intended, I will accept responsibility for the following conclusions that I reached from our conversation:
Lawyer Education to Benefit Clients
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...Lawyers' responsibility for clients' trust funds
Managing and accounting for client funds held in trust is a personal responsibility of the lawyer. Although there are a number of good computer software programs to assist with trust accounting, including QuickBooks by Intuit, the lawyer who receives clients’ trust funds bears all the responsibility of accounting for every penny. In an accounting sense, these funds are a liability of the law practice to the client, must be kept in an entirely separate account, and cannot be commingled with any other law firm funds. Recent challenges to the country’s banking system raise the specter of bank failures, with wide impact on the American public. Lawyers, for example are the subject of recent inquiries because of their IOLTA trust accounts.
Continue Reading...Work ON your business
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.
Gaming is real life
In response to my last post, the following comment was forwarded to me:
Q: Isn't gaming what they teach in law school, essentially? Probing for weaknesses and exploiting them ruthlessly when found? It seems that with the adversarial legal system, gaming is built right into the DNA of the experience. I agree they are being poor ethical exemplars by gaming the rankings but I'm not sure it's entirely inconsistent with the legal system.
Outsourcing legal and legal support services
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.
Continue Reading...Your response time sucks!
My frustration level has been exceeded! How about yours? Have you had dealings with vendors who fail to respond to your reasonable inquiries and requests? Have you had appointments (doctors and lawyers are the stereotypical examples) that have kept you waiting beyond the stated appointment time?
If you're a lawyer or other professional reading this, think about how your clients feel in conducting their business with you. Read on for nuances of this issue.
Continue Reading...Competitive intelligence
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.
Virtual world is real
Is the Virtual World real? It apparently has more “life” than I knew. Even the IRS is involved, recently ruling that independent, virtual contractors were, in reality, part-time employees for whom taxes needed to be withheld. What impact will this have on other “virtual businesses?” What impact will this ruling have on “virtual assistants?” Are they independent contractors, our assumption in the past, or employees, though at a distance?
It's the economy, stupid!
Famous words. And the legal community is beginning to feel them.
Continue Reading...Marketing department layoffs - same as lawyer layoffs?
Is there a connection between marketing department layoffs and associate layoffs?
Continue Reading...Surveys of law firm clients
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?
JDSupra - another networking opportunity
I have now joined JDSupra. See my profile.
The organization is designed to gather documents used by one lawyer that the first lawyer is willing to share with another lawyer ... this is a great way to find a starting point in a practice area in which you are not well versed. It may even be a great way to find a good format and content to use in your matter/case that someone else has used in another, similar matter.
Years ago, when practicing law and as chair of the Beverly Hills Bar Association's Family Law Committee, I organized and chaired a stellar group of family law lawyers to create and edit a Bar/Bench book with forms that the trial judges were using in the Los Angeles Superior Court. It was called The Billy G. Mills Bench Book. Judge Mills, at the time, was the presiding judge of the Family Law Court. The joint effort produced an outstanding work that helped many lawyers address the concerns of the Bench for the benefit of clients.
Today, JDSupra is using technology to produce an even greater result for attorneys seeking the right form at the right time to be more efficient and avoid rifling through files to find that elusive document that they remember seeing, but just can't find right now, the moment of need!
JDSupra will also introduce content that I will produce for law firm management. We hope to provide an ever broader platform to help lawyers become more effective with their clients, more efficient in the delivery of their legal services and more profitable for themselves, the objective of LawBiz Management.
Notice of Unavailability
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 ...
The Power of Nice
Unlike Leo Durocher's famous statement that "nice guys finish last," she believes that "nice girls finish first." After all, she asserts, people like to buy from people they like ... And we generally don't like people who are not nice to us. Kaplan says it's easier to be mean and gruff. It takes a special effort to be nice. Paraphrasing a saying my mother used so often, "You get more with honey than with vinegar."
This seems so obvious to me, but obviously is something that our profession finds so difficult to understand. Many Bars have adopted "Lawyer Civility Codes." Why should this even be needed? Quoting an infamous source, "Why can't we all just get along?" Why is it that we need be rude and obnoxious to our adversaries? Do we truly believe that such conduct will win us points or cause our client's position to be moved forward? On the contrary, such behavior often merely entrenches the opposition further. Being nice, courteous and kind requires neither that we be a doormat nor that we cave in to our adversary's position ... we can stand forthright to advocate our client's interest and position, yet still be civil and nice.
Again paraphrasing, "Try it, you might like it." Certainly, there will be reduced stress all around.
P.S. This works with colleagues and staff as well.
Learn from the greats
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.
Paralegal compensation
- Compensation increases averaged between 3 and 5%
- The highest paid paralegals are litigation support/technology managers who earned a median annual base compensation of $115,000
- The average billing rate for paralegals was more than $150 per hour, with rates for most positions exceeding $175
- Paralegal case managers in law firms averaged 1,642 billable hours, followed by senior paralegals at 1,530 hours
Like every other profession and trade and business, the practice of law is a business ... That means we're governed by the same formula: P=R - E. Profit (take home pay) equals revenue collected less expenses.
Remember the ABA study that opined that lawyers who billed 1,500 hours per year would earn a substantial income? Apparently, the standard today is between 1800 and 2200 hours of billable time. That doesn't leave much time to eat, brush your teeth or say hello to your kids. And, of course, this does not include the hours spent on visioning the future of and operating your practice today as a business, which it is.
We need to spend many hours tilling the soil if we want to advance, both professionally and economically. "The grass is NOT greener on the other side." It's just a different set of challenges.
"No regrets - I gave it my best shot"
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?
Be kind to techies -- or else!
Churn & Burn
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.
This is truly scary -- Laptops can be searched!
The panel suggested that travelers should no longer expect privacy!
Rules of professional conduct require confidentiality. ABA Model Rule 6.1 provides that "A lawyer shall not reveal information relating to the representation of a client ... " Thus, a lawyer should not have any information on the laptop about clients' matters. If that's true, then can a lawyer travel across the border with a laptop? Arguably not!
Is marketing working for you?
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...
Be proactive
Does this sound familiar? Is this why law firms, no matter how large, act as though they are hotels for sole practitioners? Is this why even large law firm lawyers talk about "their clients" rather than talking about "firm clients"?
If you can keep your eye on the "team," does your firm have a strategic plan? Is your firm planning proactively for its future, or are you merely reacting to the marketplace and your existing clients?
High Compensation for Poor Performance
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.
Never say no to a prospective client
The Future of the Law Firm
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:
Chevron GC gripes against technology vendors
I’m familiar with Corporate 100, AmLaw 100, etc. When he spoke about the top 5 companies in the world, he jarred my sensitivities. He’s right, of course, and I intellectually knew that. But, he connected with the emotional side of my understanding. He got my attention.
Of course, that’s the function of the keynote presenter – get the attention of the audience. He did that by describing his gripes against technology vendors ... and challenges to law firms.
Discussing how much work Chevron "farms out" (outsources) to outside counsel, and the metric (see below) he uses to increase the size of his internal legal department, Mr. James was more candid than I recall from other GC.
Continue Reading...
If all else fails, sue!
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."
Double billing - A new twist
There is a new twist raised in these cases. Under the "double billing" phenomenon, a lawyer cannot bill two clients for the same minute of time. When using the hourly billing system, you can bill only one client for each segment of time to be billed. In other words, when waiting in court for a matter to be called, and billing client A for that time, the lawyer cannot bill client B for that same waiting time though he/she is doing other work for client B pending the call of the court. Or, while charging client A for travel time, the lawyer cannot charge client B for working on his matter on the plane.
The new twist is that lawyers in two law firms were listed as employees of the New York State's pension funds. This gave them retirement credits from the funds even though they either did no work at all for the funds or were gainfully employed and paid by the law firms, not the funds. This takes "double billing" to entirely new level!
What should I consider when raising my fees?
Budgeting for Success
AVVO runs into roadblock
"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.
Common traits for successful people
1. They love what they do
This means that they aren't "working," they're "playing" -- Long hours do not become burdensome, but and extension of the joy they take in what they do. If you're going to put in long hours, you ought to be enjoying the time.
2. They're persistent and focused on what they do
This means that they don't allow distractions to take them away from their vision.
3. They're "pushy" about getting to the top of their respective endeavors.
This means they are assertive and directive when needed.
Good traits to have in any field to be successful. A new associate in a law firm would do well to learn these lessons, and more that you can glean from the 70 interviews (including a Canadian Supreme Court Justice) in the book.
Unhappy client?
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.
Law is subject to economics - duh!
Legal fees seen as "nickel and dime"
Down economy - Don't cut the muscle with the fat
Lawyers will find a loophole
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...
Cash reigns supreme
What a novel concept! In the posting of another blogger, the suggestion was made that only accrual accounting tells an accurate picture of a law firm's financial position. Yet, one can find many businesses that have good accrual financial statements but fail because they lack cash flow to sustain their business. The reverse is true. Businesses can show losses in the accrual system but have great cash flow -- they collect their sales and receivables very quickly -- and survive for quite a long time.
Possibly the first national law firm grew to its prominent position many years ago because of the almost fanatical focus on collecting accounts receivable. Their realization rate was very high. It is essential for lawyers today to focus on this metric to be successful.
Profits are essential, but cash is and has always been the key ingredientt for successful businesses and law practices. It is still true today ... and, as the article suggests, cash reserves will enable the business to continue even through a down economy.
Self-esteem can be built
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...
Lawyers cannot put their thumb on the scale when weighing meat
How about billing clients for time not spent at all doing their work? As a young lawyer, when advised by my mentor, to be liberal with my time sheets, I took this to mean "put my thumb on the scale" when weighing meat in the butcher store. The ABA Journal tells us about a lawyer who did something similar.
Strategic planning is key to success
Lawyers should go where the business is
It's time to stop focusing on real estate, construction, banks, mortgage companies and airlines, according to Larry Bodine. Go where the money is: energy, steel, industrial metals, coal companies and railroads. See the 10 Best Performing Industries on MarketWatch.com.
This reminds me of the book written by Harvey MacKay, Dig Your Well Before You're Thirsty or the phrase "... fish where the bass are..."In other words, provide services that your clients need ... If your skills are no longer in hot demand, modify your practice area to adapt your skills to the needs of the clients. If you're in the larger firms, and are practicing real estate law currently, you might be better advised to learn bankruptcy or workouts to adapt your current skills to the needs of the clients. If you're in a small firm or sole practice, this might be more difficult to accomplish with less personal economic impact, but still possible.
The key is to either provide services the market needs ... or to have the capital to sustain the wait until the market comes back to your skills.
Law Firm Fees & Compensation
He says, "
Legal fees - Value is in the eyes of the beholder
Price and value are clearly not the same when it comes to legal fees. While both are time sensitive (as of any given moment in time), the former generally is set by the seller/lawyer and the latter is generally perceived by the buyer/client. Price can be value, in my opinion, when the client is involved in the setting of the legal fee and price is determined by the value perceived by the client. Some folks call this "value billing."
Will lawyers adopt to social networking?
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...
Law Technology Trends
Continue Reading...
Lawyers core competency - Must we specialize or be incompetent?
Billable h ours on the way out?
Does any or all of these new approaches increase the cost of doing business? Possibly. Do they increase satisfaction of your clients. Definitely. Do they increase your revenue? Quite probably.
These approaches are worth considering and perhaps adopting for your practice.
Succession for lawyers
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.
Cash flow of lawyers is impacted by insurance proposal
Still, the question I asked earlier in this series has yet to be answered by the Board of Governors! Why is it that shareholders of law professional corporations do not have to disclose that they do not have malpractice insurance? Or, at least meaningful malpractice insurance? All they need to do is sign a piece of paper saying that they will be responsible for the first $50,000 of a malpractice judgment. There is no financial statement required, no verification of financial ability and no insurance policy required under the current rules; nor is there any such requirement under the new proposed rule!
And why is this fair in the minds of the Governors supporting this proposal?
Is the billable hour a trap? A contrarian perspective.
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...
LawBiz® Tips
Solo lawyers and malpractice insurance debate
What do successful law firms have in common with successful basketball teams?
Are there any lessons to be learned from this excitement for lawyers and law firms?
Continue Reading...
LawBiz® Tips now posted
Law Firm Fees & Compensation
Learn why legal fees and compensation are integral components of the same dynamic!
Selling a law practice in Ohio is now legal
Sales attorneys in the offing
"The road to success is always under construction."
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.
Law firm profitability - Lessons from basketball
For me, this is reminiscent of the discussion I had recently with a client who asked me to do a profitability analysis of her firm She and her partner believed that the expenses of their small firm were too high My review of the data indicated that there were areas where reductions or revised characterization would be relevant. For example, several capital expenditures could be removed from the expense side of the profit and loss statement and recast as assets; a management fee could be removed or recast as a draw by one of the partners because such a fee is inappropriate for a small firm. However, the real focus for this firm should be on increasing its revenue. That would have the most dramatic impact on the performance of the firm. Recasting the expenses would not change the cash flow of the firm, but would help generate the mental toughness confidence that they are not in terrible shape, that they could succeed, and provide the mental toughness to continue seeking the appropriate client base to generate increased revenue.
Looking at the relevant data helps remove the fear of failure, engender confidence that small changes in one's own behavior can have large impact on one's success, and bring the realization that success is just around the corner.
Marketing fee stability
ABA Tech Show
As I walked around the Hilton Hotel, the new site for the show, I met many folks that I have known for years and some new folks as well. It is in these walks around the Exhibit Hall and elsewhere at the Show that I learn the most.
Once again, though, I realize that it's the people you know that is the most important element to growing one's business ... Competence is presumed. But, when people like and trust you, they will help you grow, they will teach you valuable lessons about your business ... and they make it a joy to attend conferences such as this. And, if they happen to be customers/clients of you, they will be loyal to you, you will be able to count on their business for your firm's growth.
Will you work for free?
Once every four years, we receive the opportunity to make a gift to our employers. Do you think they appreciate it? <g>
The Red Zone of Your Career
Karen Mathis, immediate past chair of the American Bar Association, focused her year on developing a new awareness for the legal profession. She said recently that 400,000 lawyers will retire in the next 10 years. That’s the entire current membership of the
Open Letter to the American Bar Association
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...
Challenges facing sole practitioners
- Income fluctuations
- Managing the practice
- Lack of help in the practice
- Isolation from other attorneys
- Inability to discuss ideas with colleagues
Continue Reading...
Are you still in love with your business?
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.
Professionalism vs Competence
Respondents said "yes" (15%), "no" (84%) and "don't know" (1%). It is clear that people are tired of bombastic behavior, at least in the workplace. Can this be translated into a more collegial, and team-oriented work environment?
Patrick Lamb, a leading proponent of "value billing" has certainly committed himself to the concept of team effort. He opened a new practice with two other partners in January 2008. Collegiality, outstanding client service and billing for value delivered (not time spent) gets promoted one step at a time. Patrick has taken that first step in his new firm. Congratulations and best wishes for his continued success.
As more lawyers succeed in this business model, perhaps others will follow. Then, perhaps, will civility in the profession be achieved.
As a side note, I'm currently reading (actually, listening) the recently published book about Lincoln and his leadership skills. I'm struck by the number of lawyers who were the leaders of our country and the large percentage of our representatives in government (House of Representatives, Senate, and State legislatures) who were lawyers. At one time, the balance substantially exceeded 50%. Contrast that to today when only around 25%, if that, of these bodies are lawyers. Perhaps the lack of civility in our society in general and the legal profession in particular, is the reason for the lack of faith in lawyers. I don't know the reason or the answer to this dilemma. But, I do know that many lawyers are stressed, are "burned out" and are unhappy with their chosen profession.
Given this history, I am quite surprised and pleased that 3 of the viable, now 2, Democratic candidates for President are lawyers.
Civility has no chance to succeed!
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.
If our society is facing these issues, how can we expect lawyers to be more "civil" than others?
Fraud by lawyers
The theory is that knowledge by clients will prevent fraud. I've never known knowledge of such settlements preventing thievery. But, then, I've also never known clients who walk away just because a lawyer has one sentence in a fee agreement that they have no malpractice insurance.
First, there is a very small percentage of "bad apples" in the legal profession. Second, remedies such as the "disclosure" requirement are band-aids on a scab. They are not truly remedial of the cause of the problems. While the rubric is "client protection," the real protection will come from better education of lawyers, including practice management education, providing affordable malpractice insurance, and then requiring every lawyer to have malpractice insurance -- real insurance, not self-insurance!
Facebook for Lawyers
- 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
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?
Crisis management, and then some!
According to one source, crisis management statistics include causes that are outside of those traditionally thought about by law firms. But, in addition to Katrina, broken pipes, etc. think about the following:
About 53% of marketing executives responding to a recent survey by BtoB and Eric Mower and Associates, said they have experienced a business crisis that resulted in negative news coverage, declining sales or reduced profitability. About the same number (57%) reported that their company does not have a crisis response plan currently in place.
Of the 43% of companies that have developed a plan, 10% worry about their ability to carry it out, and only one-half have trained spokespersons ready.
Some 23% of respondents who went through a crisis said it took three months to a year for their brand to fully recover, while 13.3% said recovery took more than two years and 17.7% said they have not yet recovered after two years.
Causes for these companies' crises vary. A majority of survey respondents (55.7%) said layoffs, shutdowns or business foreclosures created the crisis. Some 45.2% blamed operational or services failures, 33% cited legal or ethical problems and 32.2% pointed to a competitive attack, such as negative word-of-mouth or messaging by others who have a vested interest in damaging the company.
Collecting Your Fee -- Sue As Last Resort
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...
Dress is part of the Courtroom drama
Casual day (turned into casual all the time by many) really doesn't have a place in the minds of many traditional law firms. And we're seeing a move back to traditional dressing standards. Only in certain areas of practice is it appropriate to dress "down." Otherwise, what Mom told us, "dress for success," really is true.
Public Defenders Are Taken to Task - For Shame!
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?
The Revolution is Coming -- Notes from the Corporate Side
My earlier post summarized their comments and included a few of my challenges to their concepts.
Susan has given permission to include her notes from their Power Point presentation.
The discussion has been joined. Please email your thoughts to me. We all will have a hand in the shaping of the future of our profession.
The Revolution is Coming - Where Will Your Firm Be When It Arrives?
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...
You must supervise your staff
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.
The death of a satirist - and more
Without knowing his connection to the Capitol Steps, I invited him to be a keynote speaker at my Managing Partners Roundtable’s Diversity Conference in 2006. During his presentation, he talked about his theory of “5 generations.” Paraphrasing him, he said that every 4 (5?) generations repeats itself. The first generation creates a new world, the 2nd generation sustains this new world, the 3rd generation enhances or expands or grows the world, the 4th generation destroys the world and the 5th generation starts with a new world again. While my paraphrase clearly does not do Bill Strauss’ comments justice, the concept of “history repeating itself” is important. Bill said that one can trace and support this theory merely by looking at the history of the world.
With his theory, he drew certain conclusions about the differences among today’s generations, what we call the generation gap. His comments resonated well with the managing partners, the partners and the younger associates in our audience of more than 200 lawyers.
With increasing longevity, and therefore more generations co-existing than ever before, it’s essential that we understand these issues if we’re to cooperate and continue to grow as a society. With his death, we have lost an important contributor to this conversation.
Getting Paid to Complete the Cycle
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.
Succession planning is essential to success
In my mind, whether your law firm can survive the departure of the firm’s leader is a critical element of success. The “leader” may be the primary rainmaker, the managing partner or the sole practitioner who has built significant goodwill over his/her years of practice.
One study shows that “...only about one-half of public and private corporate boards have CEO-succession plans...” Even fewer law firms have succession plans.
Stephen Miles, managing partner of a leadership consulting practice, said “‘Succession planning is often done looking at the rear-view mirror ... when it should be done looking out the front windshield.’” (WSJ, page B1, November 26, 2007)
When writing Disaster Preparedness & Recovery Planning for Law Firms, the executive directors in our group realized that our focus was on business continuity, not just recovery. And continuity requires succession planning ... In one event, the succession will come naturally by aging; and in another event, the succession will come suddenly, without warning! Will you be prepared in either event to continue your law firm into the next generation of leadership?
How to Stay Away From 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.
Retirement: Is this the new four letter word?
Continue Reading...
Self interest abounds in State Bar action
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?)
Do you want to grow? Then "outsource!"
Q: Ed, can Outsourcing really make a firm more productive and profitable?
Selling your law practice with a covenant not to compete
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Social Capital - How to invest
Does disclosure affect strategy or competence?
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?
Is pessimism prudence?
Her response is that by envisioning what could go wrong, she can prepare for it happening and be ready to overcome it if it does happen. Perhaps her attitude is where i got the title for my book Disaster Preparedness & Recovery Planning for Law Firms.
In today's ABA email, there seems to be some vindication for her approach. An article by Debra Cassens Weiss said:
"... Martin Seligman of the University of Pennsylvania, who studies positive psychology, says most optimists do better in life than merited by their talents alone.
But with lawyers, the opposite is true.
Seligman's survey of law students at the University of Virginia found that pessimists got better grades, were more likely to make law review and got better job offers.
"In law," he told the newspaper, 'pessimism is considered prudence.' "
Canadian lawyers share best practices
Lawyers fees compared to the value of those fees
Rees Morrison observed, "Certainly no law firm can hazard more than a guess on the worth to a particular client at a particular time of its 10 paralegal hours, 20 associate hours, and 8 partner hours on a revision of a major sublease. For much that law firms do, value and cost are incommensurable."
I agree with Rees when one looks backwards. However, if one reviews the matter with the client before the engagement actually begins, the client generally will be able to assess the value to him/her/it. At that point, the law firm and client, together, should evaluate whether the anticipated service can be delivered for a fee that is commensurate with the value delivered as perceived by the client.
Budgeting for the matter, with the involvement and concurrence of the client, will go a long way to establish both the value to the client and likely fees the law firm will charge.
In this discussion, we must be careful not to equate the result for the client with the value because no law firm can guarantee the outcome.
Malpractice Insurance Disclosure Sent to Committee
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...
Thinking outside the pumpkin
Lawyer Benchmarks Taught by Airstream
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
Thinking beyond the norm
Other fields of endeavor often provide us with examples of this type of thinking. See below for one example in the art world. I've seen this type of approach only twice in my life, once by Salvador Dali in possibly my favorite works of art of all time and once by my sister (also an artist).
See the Cochrane Mural
For those people that live in another part of the world, Cochrane is a community just west of Calgary, Alberta . (Not the one in Northern Ontario.)
This mural was unveiled at the Cochrane Ranche House July 1, 2007. Each tile is 1 foot square, is it's own individual picture, and each is by a different artist. All of them together form this huge mural. You can click on each of the tiles to see them in detail. Check out the horse's eye and nostril and anywhere else on the mural. Also the two below it.
Managing Partners Compensation
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...Email takes a holiday on Friday
USA Today said in a recent column that Fridays are going from casual to e-mail-free. That may be the only way to cut down on the excesses of email. Use email at business only for important tasks that cannot be done otherwise, especially communications in the same office. Address important emails first. And don’t procrastinate responding ... This may help some.
Continue Reading...Disaster preparedness - Business continuity
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...Disaster plans impacted by technology
- 83% of medium businesses (more than 100 people) have remote or mobile workers
- That means that only 17% of such businesses have no mobile workers at all
- Lifestyles today blend work and personal activities with fluid boundaries between the two
- 15% of our workforce are telecommuters
- 23% of our wor