Category: Management
As we begin to look at how the profession will change in 2015 and beyond, we must look at the Australian market. Here, large accounting firms are adding major law practice components to their stable of professionals. In at least two instances, more than 100 lawyers were engaged by accounting firms. Multi-disciplinary connections are back on the table. While this will not happen overnight in the U.S., it’s clear that we cannot ignore these changes outside of our borders. This is especially true for the larger law firms that want to compete in the Asia-Pacific market; I’m sure there will also be a ripple impact here.
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The business cycle consists of three elements: marketing to get the new client and retain the old client; production to produce and deliver the legal service, advice and/or documents; and finance to collect your billings and operate your firm. The first two tend to be the focus of most lawyers. Billings and collections tend to be ignored or given short shrift or delegated to a staff member with less interest and skill.
One statistic shows that sole practitioners spend 40% of their time in non-billing tasks, such as marketing, billing, collections and other aspects of running the law practice. In firms of 11 to 20 lawyers, the percent falls dramatically to 8%. Hence, the larger firm earns more money. They produce more effort; they bill more; and, even with poor collection efforts, they will likely collect more revenue than their solo counterparts.
Perhaps you should engage personnel to deal with some of the non-billing tasks, whether internally or outsourced and/or perhaps you should consider practice management software as your assistant. Failure to attain the appropriate resources to enhance your production efforts and non-billing needs is cheating yourself. Coaching will help you understand how to address these issues.
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One Federal judge takes the highest court to task.
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In yesterday’s news, the Oakland A’s (the best team at this point of the season) announced trades that brought them 2 outstanding pitchers. Why did they do this? After reading Moneyball, you will know why. Teams’ trade activities highlight the two seasons of baseball, the first that will end in a few days and the second that begins after the “trade deadline” date.
I just finished reading “Moneyball: The Art of Winning an Unfair Game.” Great expose by Michael Lewis about the 2002 A’s and their general manager, Billy Beane who changed the way the game is played. How could a team with the lowest payroll in baseball win more games than any other team?
Beane used new data to understand baseball talent, data that was ignored by traditionalists and older scouts. Because of his non-traditional perspective, he was successful in attaining the talent he needed at bargain prices … He won “the game” while being strategic and cost conscious. I suspect that was what prompted yesterday’s trades.We’ll know by the end of the season. 🙂
Are you doing that in your law firm as well?
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In a recent case, the lawyer was successful in growing his practice. So much so that he engaged 30 staff; they met with clients and even provided legal advice in loan modification matters. The net result is that the attorney did not provide adequate supervision for his staff and allowed them to five legal advice. This was the unlawful practice of law. The attorney was guilty of violating the Rules of Professional Conduct and was suspended for two years. Punishment could have been more, but the lawyer made financial restitution to aggrieved clients and agreed to community service during his suspension.
Moral to the story: Grow your practice with appropriate supervision of unlicensed staff and technological support. Don’t allow unlicensed staff to provide legal advice. Coaching helps both with growing your practice and with operating your practice efficiently and within professional guidelines.
The larger one’s firm gets, the more management issues arise. Running a law practice is equivalent to running a professional service business and management principles are as important as being legally competent.
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In years gone by, many people attended law school because a legal education enhanced their skills. In today’s world, entry into law school is first evaluated based on ROI, return on investment. And, in some instances, the comparison is coming up short. After the Great Recession, getting a job after law school was not guaranteed. Law school graduates, in addition to being uncertain about their job market, faced extraordinary debt burden.
A 2012 survey indicates that at least 24% of law school graduates are not practicing law. Rather, they were finding their way into nonprofit and education sectors and the federal government. This compares with9% in a similar 2003 survey. One factor pushing this statistic is the need to reduce or pay some of that student debt.
And when considering whether lawyers are satisfied in their chosen career, measured against whether they would go to law school again if given the opportunity, almost 2 out of seven said “no.” This latter statistic seems to be consistent with similar statistics of earlier years. In the 1970s, in response to a survey that I commissioned with the State Bar of California, almost 1/3 of the respondents indicated they were not satisfied with the practice. But they didn’t have the huge amount of debt that today’s graduates are carrying. I suspect that what keeps people enrolling in law school is another statistic: those graduates with the highest grade point averages have median pay levels that exceed $121,500, more than those who achieve the lowest grades. This is a significant difference, and the reason for the continued attraction of law schools.
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The conduct of lawyers, not just litigators, continues to go “south.” Why is this? Have the teachings of our mothers and fathers gone unheeded? Or, in this more litigious world, and the greater incidence of divorce (most of which is with great conflict), do manners, good taste and just plain “niceness” go out the window?
For many years, bar associations have been wringing their hands over how to improve the reputation of the legal community. Clearly, the lack of civil behavior does nothing to enhance our profession’s reputation or regard from among the lay public.
Recently, the State Bar of California modified the lawyer’s oath of office. It is a court rule (9.4), not a rule of professional conduct. And, there does not seem to be any consequences to a violation of the new oath that does not already exist with the judge in a given matter. The language, specifically, includes the words “dignity, courtesy and integrity.” As it stands now, this seems to be a subjective standard and does not increase the power of the court to impose sanctions on any lawyer activity.
When California Chrome did not win the Belmont Stakes this last weekend, its owner went berserk and complained that the race was not fair. He suggested that all horses run under the same rules. In other words, any horse eligible for the Triple Crown should be run in all three races, the Kentucky Derby, the the Preakness and the Belmont Stakes. Taken in the abstract, his criticism might be correct. The point, however, is where and how he said it. In other words, he didn’t play by the “rules” of genteel civility.
There may be other reasons why California Chrome did not win at Belmont. One such reason is that he appears to have stumbled coming out of the gate, injuring himself; another, his post position was not to the liking of his team. Whatever other reasons there may be, the ultimate conclusion is that California Chrome ran three races to the single race of the winner of Belmont. The words of the owner will be an asterisk or afterthought to the history of this horse. And, if the rules of horse racing are modified in the future, perhaps his outburst was appropriate.
When lawyers are uncivil, or lack civility, in dealing with one another, no one receives a benefit. Lack of civility is not seen as a strength, but merely as an annoyance. Civility does not make one weak. Nor, in most instances, do our clients appreciate the added expense that oftentimes results from having to overcome one’s adversaries’ lack of civility. Yes, there is a difference between horse racing and the practice of law. But, in both scenarios, as my mother used to say, “one can get more with honey than with vinegar.” Equally important for lawyers, our clients do not believe this is better lawyering. On the contrary, they tend to disrespect us for not being civil and causing them increased expense.
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In today’s newspaper, Don J. DeBenedictis, staff writer for the Journal, discusses law schools’ new approach to help law school graduates find jobs. This idea is one of several being discussed to match the supply and demand of legal services. It is clear that there is a greater demand for legal services than is now being fulfilled. However, many contend there is an oversupply of lawyers. Some writers suggest, I believe correctly, that there is not an oversupply, but rather a mismatch between the two.
One reason for the mismatch is that most lawyers seek to work for the smaller percentage of affluent clients. Working for the less affluent client requires a reduced level of compensation. Sometimes it is difficult to match the reduced remuneration working from low to modest means clients with the debt level resulting from educational expenses.
The staff writer discusses law schools in California that are now providing funds to graduates who are willing to work for government or public interest employers. The amount of money received by the graduates is not grand. We’re talking about, perhaps, $15 per hour. However, the graduates are earning enough money to pay expenses and gain valuable experience preparatory for their next job. This program reminds me of one Southern law school that provided sufficient funds to open a new law practice if the graduate located in a rural or other geographic community that needed legal services. Provided the graduate remained in that location for five years, the “loan” would be forgiven.
It seems that any suggestion brings out adversaries. The positive side of seeking to match supply and demand is countered by those who say that law schools are merely disguising their percentage of graduates employed. While this may be true, it is also true that these graduates are employed, just not at a high level of income written about by the sensationalist media. It is also true that American Bar Association statistics separate between traditional jobs and “funded” jobs, thus disclosing the truth of the employment claims made by law schools.
One could also look at this as a postgraduate fellowship. This is an incredibly positive effort on the part of law schools and their funding sources for this program. My congratulations.
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An ABA task force recently found that only 56% of recent law school graduates achieve full-time employment as an attorney within twelve months of graduation, over the last five years, applicants to law schools have declined by roughly 50% from approximately 100,000 to approximately 50,000 per year.
This will have a dramatic impact on the availability of lawyers for the American public. And couple this statistic with the more than 400,000 lawyers who will retire in the next 10 years, and you will see a dramatic change in the legal landscape.
For those who complain that there are too many lawyers, this should satisfy their desire to thin the ranks of lawyers. For those who want to better serve those currently under-served Americans, this will add yet another challenge to the system. And for lawyers, the likelihood increases that the Bar will add yet another requirement of pro bono service and added cost to doing business as a lawyer.
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New rules relating to the issuance of 1099 forms are in place that impact even funds in one’s IOLTA account. If you have oversight and management of the funds such as selecting the expert witnesses or investigators in a personal injury matter, you may have sufficient dominance to be required to issue a 1099.
See Priv. Ltr. Rul 97-44-02 (1997) and 91-02-013. See also Rev Rul 93-70, 1993-2 CD 294.
The threshold amount if $600. Beyond that, consider the consequences of filing/not filing. And if you’re a co-recipient of a settlement draft with your client where a portion of the draft is for attorney’s fees, you will still have to report and/or attach an explanation to your tax return.
Moral of the story: These laws are complex. Consult your tax adviser.
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