Category: Management
There is a great deal of heat generated thus far over the ABA looking into the issues of internet marketing/advertising/promotion … They have not overtly yet taken a position, only solicited commentary for the ethics commission to consider.
Yet, many bloggers and commentators believe that the ABA is seeking to destroy the marketing advantage gained in the social media by sole and small firm practitioners.
The mood of the country, as seen in the recent election, appears to be that less is more. (Though I believe that that is true only as an electioneering slogan — just wait until "they" get into power.) Translating that feeling, though, into the legal world and we want fewer rules to regulate our conduct.
Yes, there are enough rules already on the books to protect the innocent and govern the "guilty." But, new technology does require a new look … perhaps even a loosening of the current ad hoc rules. Frankly, I’d rather have the ABA review these issues than the many states who tend to take a far more restrictive stance than does the ABA.
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The press will fixate on this lawyer’s hourly billing rate. But, that is not why he was disbarred. Rather, he was disbarred because of his wild and bizarre conduct.
There is no prohibition to charging a high hourly rate so long as at least 3 factors co-exist: 1.) The client receives value commensurate with the charge; 2.) The client perceives he/she has received value commensurate with the fee; and 3) There is sufficient communication between the lawyer and the client to confirm that the client understands what the charges will be … and the client is sophisticated enough to accept or reject the engagement agreement and fee being proposed.
The difficulty with fee disputes is that they are always "Monday morning quarterbacking," usually being determined by people who are using outdated standards of evaluation. The only real issues are 1) Did the client understand the fee structure and 2) Did the client receive sufficient value (not time) to justify the fee.
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A recent article in WSJ suggests that "Women in Finance Shrink." It’s clear that women up for reelection may not all win their elections, thus reducing the number of women in Congress. And law firms have difficulty retaining women as they become more senior…and, proportionately, women are not advancing in the ranks of management as high or as quickly.
Are we losing gains made in earlier years? Were those gains only superficial? Or have we arrived at the point where gender is irrelevant?
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I was wondering how long it would take?
Sarah Martinez, a recent law school grad, broke the ice. She has sued Howard, Rice, Nemerovski, Canady, Falk & Rabkin in San Francisco Superior Court for extending her an offer of employment, deferring it and now reneging, saying it didn’t have the resources to hire anyone in the near future. Among the counts alleged are racial discrimination, sex discrimination, and breach of contract.
While every case stands on its own facts and merits, it’s clear that Big Law will have to alter its offering policies in the future. The impact on law schools and those coming up through the grades is yet to be determined, but I suspect it will dramatically alter the economics of the future practice.
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A major player in the IP field announced that its merger plans with another IP firm have been called off. The assertion is that there were conflicts issues with one major client that could not be resolved and the client would not waive the conflict. While I may be dubious about the veracity of this assertion, sitting on the outside, it does happen.
But, then the firm announces that "… the downturn in patent litigation persists, with fewer cases being filed and more settling earlier…. (C)ases coming in are smaller with tighter budgets and leaner staffing expectations…." And this results in firings/terminations/layoffs (say it anyway you want, the people are gone) of lawyers and staff. In other words, the troubled economy is still having its impact on law firms.
So far, so good. But, then the firm also announces that it sees an increase in patent prosecution, counseling and reexamination work, particularly in the electronics and software practice and the firm will hire first-year associates. Again, from the outside, it looks like the firm is firing experienced lawyers who get paid 3X and will hire first year associates who will get paid 1X. You fill in the numbers. When industry does this, it’s called "age discrimination." It may also be called "stupid" because it negatively impacts the morale of the organization … and you don’t build a loyal, cohesive and capable workforce by seeking the least expensive team members. Why couldn’t the firm offer the presumably lower paying jobs to the experienced folks? In this economy, they might not like it, but they’d rather stay employed and working with colleagues they know and like and trust. And, the organization will look like a caring place to work, making needed economic changes but also sensitive to the needs of its current work force.
Just seems to me to be a better way to do things. And, at the very least, the PR ineptness of these announcements coming on the heels of one another is just astounding.
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I’ve talked about internships for lawyers. We’ve discussed articling in Canada. And now I find out that the State of Georgia has a mandatory mentoring program for brand new lawyers. Perhaps we’re not so far away from the internship process. On the other hand, since Georgia has been working this path for quite a few years and others have yet to follow, perhaps it’s still a pipe dream that even the current recession won’t make happen at either the law school or Bar level. It may still take the combination of law firms and client demands to create an effective post-law school education program for learning how to become a lawyer.
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Law practices sometime serve up challenges. With forethought (plan) and some courage (and, yes, good fortune), we can meet and overcome the challenges we face … and thrive. Here, at the Golden Gate Bridge, we had some challenges, from heavy fog on the Bridge to narrow passages to navigate on the Vista, returning to the highway under the Bridge. While the fit was snug, we did just fine. In this case, there was no plan, some courage and, yes, good fortune.
As in many instances, including the operation of your law firm, thriving is the intersection of preparation (hard work) and good fortune. We had that on this day. What are you doing in your practice to prepare for your future?
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Today, I had a discussion with a very bright individual who is seeking new office quarters. He was having difficulty with the math, so he thought. He was seeking to understand the interplay between basic rent, common area charges (charges for maintenance, taxes, etc. that the landlord assesses at the end of each lease year to cover the cost of operating the building, paid pro rata by each tenant), and his actual cost of occupancy (total actual rent!).
I suggested that he walk away from this bottom down thinking. Instead, I suggested he look at the situation bottom up, and get his real estate broker involved to earn his keep.
First, figure out what you want to pay for monthly and/or annual rent. You can do this in a number of different ways. You can say that historically I’ve earned X% profit on Y number of revenue dollars; when I move into new quarters, I will earn more revenue because (better facilities, closer to prospective clients, larger space to hire more staff, etc.) and therefore, with the same percentage for occupancy cost, I can pay more …. and that number is $X.
Or you can say my revenue is likely to stay the same even after the move (or I’m not sure and I want to be conservative) … and don’t want to pay more than the same rent I’m paying now. That number is $X.
With that number in mind, tell your broker to find you the space you require (with the specifications you want) for that amount. Don’t worry what words are used, whether base rent or common area charges, etc. The lease contract must state that the maximum annual rent will be $X.
If the broker says that you can find plenty of space for that amount, great; if he says you’re crazy, there is no space for that amount, then you have choices to make: Work harder, work smarter to earn more revenue/profit to pay the higher rent, reduce your profit and take-home pay, or join forces with another to share the space and cost of the space.
But, don’t let others dictate how you should think. Don’t let the system force you into a thinking pattern that will confuse you or prevent you from knowing what your cost of operation will be.
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While I was in Yreka, CA, I learned about The State of Jefferson. This was a political movement in the late 1930s. The focus of the movement was to create a new state out of southern Oregon (dissatisfied with the power of northern Oregon) and Northern California (wanting to keep its riches – water) out of the greedy hands of Southern California.
Pearl Harbor, December 7th, 1941, put an end to this effort. The entire effort of everyone was turned to the War … Though I didn’t know about this group, they surfaced again in the early 1960s, if not earlier. It was Pat Brown, the greatest governor (IMHO) California ever had. It was his focus that built the University of California into a powerhouse, and it was he that successfully lead the Feather River project on the ballot. This assured that water from the north would flow into southern California. This brought water for the farmers in the area as well as the growing population. With water connecting the State, there is very little likelihood the two segments will be separated at any time.
But, the State of Jefferson is still a state of mind. There are many folks who would like to see the separation. But there is no consensus. So, it appears to be more of an historical society.
In working with your clients, are you separate from them? Or are you able to create an inseparable bond, as Governor Pat Brown did for the people of California?
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As quoted by Alan Weiss, citing an IBM survey, CEO’s focus on three elements:
1. Embody creative leadership (take prudent risk, invite disruptive innovation)
2. Reinvent customer relationships (set priority of customer intimacy)
3. Operating dexterity (flexible cost structures and opportunistic capabilities)
Shouldn’t this be what law firms do? Take prudent risk to grow the practice and enhance the well-being of its members and staff; focus their energies outward, to benefit their clients, which would include both pricing and costing flexibility.
Too often, law firms are all about their lawyers, and they forget the well-being (intimacy) of their customers/clients.
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