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Category Archives: Cash Flow – Finances

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Credit Card Use — Beware!

Posted in Cash Flow - Finances
On February 10, 2010, the California Supreme Court handed down its decision in Pineda v. Williams-Sonoma Stores, Inc., — Cal. Rptr. 3d —, 2011 WL 446921 (Cal. Feb. 10, 2011). This decision should be studied by everyone who accepts credit cards in payment for goods and services.  Yes, this applies to gas station pumps that… Continue Reading

$1,000 per hour club

Posted in Cash Flow - Finances
The Wall Street Journal does it again, in today’s edition. Their headline talks about the few (less than 2.9%) lawyers in this country who can command $1,000 or more in hourly rates. Their headline ignores some of the very important considerations client think about when deciding who to represent them and how much to pay: The… Continue Reading

Open Letter to the State Bar President

Posted in Cash Flow - Finances, Management
(Note: The California State Bar President asked  California lawyers to contribute to the State Bar’s efforts to provide legal services to those in need. Following is an open letter to the President; his letter is set forth below.   Dear Mr. President:  I agree with you completely. There is a tremendous "justice gap." I’m glad… Continue Reading

Compensation strikes again!

Posted in Cash Flow - Finances, Management
Today, a client called me to ask whether I know a compensation systems consultant who can help their firm create the right environment for non-equity partners to become equity partners. My response was i) compensation systems are a function of the firm culture and governance; ii) one first must analyze what the goals of the… Continue Reading

Compensation is where the rubber meets the road

Posted in Cash Flow - Finances, Management
As in most law firms, compensation systems is where governance and other issues are expressed. In a recent matter, a female partner claims that Dewey & LeBoeuf, a law firm that has received diversity awards, discriminates against women. She asserts that women partners receive less compensation than men in the firm. The firm’s partner distribution system… Continue Reading

Financing contingency cases

Posted in Cash Flow - Finances
In a conversation with a client, we discussed his current predicament. He is strapped for funding in several large contingency matters. He’s looking for funding. That struck a cord in me and I write about it today at LawBiz Forum. There are finance companies, in addition to other resources, that lend money on such cases.… Continue Reading

Crammed?

Posted in Cash Flow - Finances
There are several meanings for this word, but now a new one enters my vocabulary. The term for bogus charges in a phone bill is cramming! The current issue of AARP’s magazine discusses the history of the activity and suggests that there is only way to prevent unauthorized third-party charges on your phone bill: Call… Continue Reading

Lawyers are not the only ones with realization issues

Posted in Cash Flow - Finances
PTinMotion is the magazine for the American Physical Therapy Association, my daughter’s professional association.  While reviewing its contents, waiting for her to receive her specialization certification, I read an article entitled “Make-or-Break Strategies for Tough Economic Times.” Perhaps the author read an advance copy of my new book, Growing Your Law Practice in Tough Times.… Continue Reading

Lawyers get paid a lot

Posted in Cash Flow - Finances
Today’s Los Angeles Times discusses the high cost of its corporate parent’s bankruptcy proceeding, again mentioning the specter of $1,000 per hour fees for some lawyers and the average of $500 per hour for all the lawyers. Why should lawyers be paid so much? At the outset, it’s easy to understand the emotional reaction to… Continue Reading

Restructuring student loans

Posted in Cash Flow - Finances
In the only case decided today, in United Student Aid Funds, Inc. v. Espinosa, (No. 08-1134) the U.S. Supreme Court allowed  the restructuring of a student loan. I didn’t think such loans could be part of bankruptcy proceedings, but apparently I was in error. My question now is:  How many more students/former students will be… Continue Reading

Lost time = Lost revenue

Posted in Cash Flow - Finances
In an interview with Todd Gerstein, President of SmartWeb Parts, he talked about attorneys’ time "leaks."  This is an interesting concept, one supported by a number of different surveys. These surveys all point to the fact that time is lost (and therefore not billed) when an attorney fails to make contemporaneous notations of work being… Continue Reading

Transparency for E & O Insurance – Finally!

Posted in Cash Flow - Finances
It didn’t take all that long … I received in the mail today, along with more holiday greeting cards, an errors & omissions insurance policy application. Finally, the insurance industry is showing its true colors in the recent campaign to have uninsured lawyers painted with the “yellow band” brush. The cover letter for the application… Continue Reading

Credit lines dry up – Law firms impacted

Posted in Cash Flow - Finances, Management
It’s reported in today’s Los Angeles Business Journal that SBA loans have evaporated. “Banks really are stingy…” is the headline. Small Business Administration guaranteed loans, funded by banks, have fallen by 53% from the 2008 level, a year in which the number of loans also decreased from the preceding year.  This is further evidence that… Continue Reading

Recalibration of law practice economics

Posted in Cash Flow - Finances
NALP survey suggests that 2% of 2008 graduates opened a solo practice within 9 months of graduation! That’s a lot of folks who will be representing clients without prior experience either in the management of a practice or much experience in the technical practice areas (tax, family law, bankruptcy, etc.). I wonder what kind of… Continue Reading

Suing for legal fees

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

Client security fund amended

Posted in Cash Flow - Finances
The California Client Security Fund has been changed! Now, instead of $50,000, the amount available has been doubled to $100,000 …. AND … there is no "marriage penalty." That means that a husband and wife are considered as two applicants, raising the amount to $200,000 possible reimbursement from the state’s client security fund for a… Continue Reading

Lawyers should go where the competition ain’t

Posted in Cash Flow - Finances
In a recent NY Times article, several recent law school graduates lamented the recent economic changes, as well as they might.  Big Law has, in effect, shut down their recruiting efforts and the lush $160,000 starting salaries seem to have evaporated. "Lock step" compensation models have been transformed to merit based models. And a number of… Continue Reading

Surgically remove lawyers

Posted in Cash Flow - Finances, Marketing
For the second day in a row, the WSJ ragged on lawyers. It’s front page headline says "How to Surgically Remove Lawyers From Hospitals" ….  Without reading more than the front page headline, one would think that lawyers are a problem for hospitals and need to be removed … and here’s how to do it.… Continue Reading

The Billable Hour Questioned

Posted in Cash Flow - Finances
Today’s Wall Street Journal must have read my last blog post that legal costs are controllable.  Flat fee pricing is the model that is discussed in the WSJ article.  The assertion is that flat fee agreements will result in lower costs for the client … and less revenue for the law firm. I’m not yet… Continue Reading

Cost of legal services is controllable

Posted in Cash Flow - Finances
In a recent conversation between Inside and Outside Counsel, Inside Counsel expressed their concern over the escalating cost of legal services. They seemed to concur that the greatest impact on cost is not the hourly rate being charged; staffing has the greatest impact on the overall cost of legal services. The next element with the… Continue Reading