Category: Cash Flow – Finances
When will Sunday sales come? Perhaps they’re here, with “garage sales.” But I suspect “Sunday” laws prevent this day from becoming a national trend.
Besides that, there is “Black Friday.” “Small Business Saturday.” “Cyber Monday.” “Giving Tuesday.” “Wellness Wednesday.” What happened to Thursday? Oh yes, that’s reserved for Thursday night football (pro) … and Monday night (pro) and Friday night (high school) and Saturday (college) and Sunday (pro).
Our efforts to reserve large chunks of time for commercial enterprises go unabashed and are limited only by one’s creativity and marketing energy. One such campaign just came to my attention for the first time: 40% discount on the purchase of a complete pair of glasses. Professionals do not discount in advance; in fact, this is a “first” for vision care. The purchase must be made on a date certain and within a constrained time frame.
There may be discounts by professionals, but only as inducements to pay outstanding accounts receivable, not to induce increased sales.
What is the professional services world coming to? Ah, more and more every day like The Business of Law®
By a 6-3 vote, the U.S. Supreme Court validated the health insurance concept and Congressional intent to cover millions of people not previously covered. It’s fascinating, if not tragic, how politics continues to rule court decisions … the details of this individual case, I’m sure, will be played out in great detail in media today and days to come.
Medicine has residency; accounting has two year service requirement to become certified. Now law has incubators … not quite the same thing.
Years ago, seeking to address an RFP (request for proposal) of a large prospective client, I assembled a team of skilled specialists. I was flattered that they all said “yes” to joining me, knowing only me and the prospective client. None of us, individually, could have met the client’s needs. We trusted one another enough to work together and arrange the details of compensation, etc. at a later date. But, I never gave a thought to how our team would be managed for peak performance.
In the current issue of Harvard Business Review, the author suggests that “…many critical tasks are performed by teams created on the fly, but lack of stability can hinder their performance…It’s one thing to make yourself more efficient, quite another to make a team more efficient, and still another when that team’s membership is in constant flux…
To some degree, technology and pricing policies are creating practices of “teams on the fly” as well as “unbundled services.” With short-term teams assembled on the fly becoming increasingly common, the authors set out to investigate how fluid teams can work better.
From 2000 to 2007, over 42,000 legal malpractice lawsuits were reported to liability (malpractice) insurers, according to the American Bar Association Standing Committee on Lawyers Professional Liability. This committee segregated 21 root causes of negligence across all practice areas.
Only one such root cause accounted for over 10% of the total claims. “… This root cause is failure to know or apply the law…” This accounts for 11.3% of the total. As one pundit said, that’s an easy one to correct by “…sticking to your knitting…” Handle only matters you are competent to handle, even if the client’s money is on the table, tempting you.
Malpractice actions otherwise can be categorized as time – based issues, such as failing to calendar dates, failing to follow up on looming deadlines and failing to react appropriately to the calendar. These three together account for 17% of the total.
“Conflicts of interest,” amounts only to 5.3% of the claims in the ABA study. However, Rules of Professional Conduct 3–300 and 3-310 provide a larger trap for the unwary, whether at the beginning of a case or mid-stream.
“Collection policies” is a major speed bump for lawyers. Insurance companies and law schools will urge strongly that a lawyer never sue for unpaid fees because the following day, the same lawyer will be sued for negligence. There are a several ways to address this, including doing good work, regularly reviewing your accounts receivable to be sure the client pays under the terms of his or her signed engagement agreement and conducting a peer review of one’s own work before following through with a collection complaint. Failure to pay is seldom because of absence of funds; it is a symbol of dissatisfaction with the lawyer and the process of communication (or lack thereof) … and this must be addressed promptly.
Failure to act from fear of one’s own imperfections merely gives strength to one’s client and encourages the client to violate the agreement and the reason to be connected with the lawyer.
The practice of law is a business and must be operated under good business principles. Failure to do so creates tension and conflict between the client and lawyer at the time each needs the other the most.
In 2009, the voters of the city of San Francisco approved proposition Q. The net effect of this initiative was to tax the payroll of partnerships, including lawyers, hedge fund managers and doctors. The California Supreme Court recently denied review of a lower court’s decision that this is a legitimate tax voted on by the people of San Francisco.
The protagonists were essentially fighting about a decade’s worth of payroll taxes, a not inconsequential amount of money. The city is in the midst of a transition away from payroll taxes to gross receipts taxes. The counter argument that this is a tax on the privilege of doing business in San Francisco doesn’t seem to carry much weight or be very important. Another argument will be made … No one likes to pay taxes, until they need the public services.
“Marketing” is no longer only for the rarefied equity partner. Quinn Emanuel, a major law firm, announced it will require Associates and Of Counsel attorneys to actively participate in at least one marketing effort during the year.
There is skepticism among marketing personnel, and even lawyers, how effective such a requirement will be. It would appear, however, that any focus on “marketing” even if not directly related to the current activity of the associate would sensitize the associate to “new business” opportunities that cross the path of every professional regularly. While the approach of this law firm is unique, it addresses the query registered by one associate years ago to the managing partner of one of my clients: what can the associate do to expedite the path to partnership? The response of that managing partner was, “… Just do good work…”
In today’s competitive environment, that response is no longer adequate. Doing “good work” is no longer sufficient. While the law is a “profession” and good work is required, the law is also a “business” and marketing/selling is the first step to attaining new clients and increased revenue. “Making a better mousetrap” is no longer sufficient in a competitive world. Even a quality law firm must get its message to its prospective client base.
The number of new lawyers admitted to the bar was lower in 2014 than in 2013; in addition, law school admissions were considerably lower than in previous years. That suggests there will be fewer lawyers ready and able to fill the ranks of the Baby Boomers as they increasingly leave the practice. Prices to consumers of legal services may increase, depending on the increased utilization of technology. But, compensation for lawyers, even entrepreneurial lawyers will be squeezed and likely lead to continued decreased attractiveness for law school admissions.
When the prices of services or goods continue to rise, creativity enters the fray to lower the price, or a parent price. In the sale of food products, for example, the weight or size of the package decreases to keep the price at its previous level. With professional services, technology appears to provide more effective, speedier and higher quality legal services. Hence, the model rule of professional conduct concerning competence gets modified to include technology skills comparable to those of colleagues in the practice area and/or geographic area of delivery.
Just today, in reviewing materials preparatory to moving my office after 25 years at one location, I reviewed the June 6, 1983 issue of Time magazine. Two articles were of particular significance. One was the cover article about “…stress, seeking cures for modern anxieties…” The other was about education, “…have degree, will travel.” “The class of ’83 faces the worst job prospects since World War II…”
Ironic, but these two topics seem to be in the forefront even today, February 2015. There may be nuances between the two years, however I suspect there are not significant differences in the proposed solutions.
Jerry Maguire said “Follow the Money. A former labor union leader said “Follow the bank account, not the budget, to see how much money is really available to offer union members-employees.
Why is it, then, that some politicians are attacking the Affordable Care Act, originally a Republican proposal, and many economists are saying there is hardly an economic ripple? They cannot both be right?
As attorneys, we’re taught to argue both sides of the equation. As citizens, it would seem that we need to focus on the truth and follow the evidence