Category: Management
Is the big firm salary model broken? That’s the topic addressed by Michelle Lore in the Minnesota Lawyer. Associate pay is only one of many areas of cuts in expenses that law firms are reviewing. In our Managing Partners Roundtable, just yesterday, large law firm managing partners said that they are now "lean." They have cut all the "fat" or excess expenses they can, some of which have become evident in 2009 and others which will show up first in 2010 results.
What will the law firm model of 2010 look like? Or will law firms ignore the lessons of 2007-2008 and seek to go back to "normal" as the economy turns around? "Head in the sand" approach usually doesn’t work for long term success.
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I listened to a fascinating interview today about dogs seeing the future. Alexandra Horowitz’s “Inside of a Dog: What Dogs See, Smell, and Know” draws on that of an early-20th–century German biologist, Jakob von Uexküll, who proposed that “anyone who wants to understand the life of an animal must begin by considering what he called their umwelt . . . : their subjective or ‘self-world.’ ” Hard as we may try, a dog’s-eye view is not immediately accessible to us, however, for we reside within our own umwelt, our own self-world bubble, which clouds our vision.
While we mainly look at the present, the dog’s “olfactory window” onto the present is wider than our visual window, “including not just the scene currently happening, but also a snatch of the just-happened and the up-ahead. The present has a shadow of the past and a ring of the future about it.” Now that’s umwelt.
Ms. Horowitz challenges the alpha theory of training dogs. The idea that a dog owner must become the dominant member by using jerks or harsh words or other kinds of punishment, she writes, “is farther from what we know of the reality of wolf packs and closer to the timeworn fiction of the animal kingdom with humans at the pinnacle, exerting dominion over the rest. Wolves seem to learn from each other not by punishing each other but by observing each other. Dogs, too, are keen observers — of our reactions.”
My, oh my, is there a lesson of cooperation and collaboration here for lawyers? <g>
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Recently, the question was raised as to how much time clients’ old files must be retained … The long and short is, it depends.
There is a duty of safe-keeping for original documents. They can never be destroyed. Your best bet is to make arrangements for the client to retrieve these documents.
Another general mantra is that files can be destroyed when
- it’s reasonable under the circumstances to do so
- your jurisdiction has a definitive time provision, such as 10 years (few states do)
- your client agrees to a destruction protocol in your engagement agreement
Here are some provisions to consider for the minimum time frame
- passage of time for filing a malpractice action
- passage of time for lawyer misconduct (is there such a statute of limitations?)
- equal time to maintain client trust account documents
- time equal to corporate and tax records
Bottom line, there generally is no minimum time provided for in the rules of general conduct or in the general rules concerning corporate governance. Lawyers are, generally, stuck with maintaining the clients’ files unless the can find the clients and persuade them to retrieve their material and / or create protocols in the initial agreement that the client accepts and signs.
Oh, and what happens to the lawyer who retires, sells his practice … or worse, dies in his boots? How can the estate of the lawyer protect his/her heirs? What can the lawyer do in advance to protect those loved ones who follow him, seeking to clean up and close his practice?
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What are you doing about recruiting? Most of the larger firms have either delayed entry of those to whom they extended offers … by a few months, at least. And some have outplaced these folks to public interest activities for a year with only a stipend.
More law schools are experiencing reduced recruiting efforts … And the real hurt will be felt by 1L students because of the blockage in 3L and 2L’s.
What do you see for the future recruiting efforts for your firm and for the industry?
And how does this phenomenon impact the recruiting of lateral associates/partners to smaller law firms?
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Outside law firms are being badgered with requests/demands for lower fees. It seems that corporate general counsel have only price on their minds. This may lead to the creation of an in-house legal department. When does it "pay" for a company to create an in house law department? Is money the only factor to consider? What can outside counsel do to forestall this and retain the work?
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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.
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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.
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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.
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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!
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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.
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