Category: Management
A recently released report from the Eversheds international law firm discusses some conclusions for the future of the legal profession. One of the elements not really addressed in my reading of the release was the disconnect between lawyers and their clients in large corporate enterprises. Why should this be the case? Why should lawyers and the folks they represent be far apart in their thinking about the profession and how it is being conducted?
There is no simple conclusion. But one element may very well be that clients (General Counsel) feel pressure down from their CEOs and Boards of Directors. They need to be more price and cost sensitive. Partners in larger law firms, on the other hand, want larger compensation packages for themselves in order to be seen as peers of the CEOs who are earning far more than in the past; lawyers do not want to be seen as vendors, but as peers … and frequently compensation is a factor in this perspective. Of course, it’s hard to be a peer with a CEO whose average compensation went from 4:1 to 17 and even 34:1 between him/her and the average employee working for him. And it’s a bit disingenuous for that executive to say that lawyers’ fees are too high. Even in companies whose stock is falling, or whose profits are falling, it is rare to see the CEO offering to reduce his/her compensation.
Here are some of the key findings of the research report and my thoughts related thereto:
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Charles A. James, General Counsel of Chevron, Inc., started his keynote remarks at Los Angeles’ LegalTech program by describing his employer, Chevron, as one of the Corporate 5!
I’m familiar with Corporate 100, AmLaw 100, etc. When he spoke about the top 5 companies in the world, he jarred my sensitivities. He’s right, of course, and I intellectually knew that. But, he connected with the emotional side of my understanding. He got my attention.
Of course, that’s the function of the keynote presenter – get the attention of the audience. He did that by describing his gripes against technology vendors … and challenges to law firms.
Discussing how much work Chevron “farms out” (outsources) to outside counsel, and the metric (see below) he uses to increase the size of his internal legal department, Mr. James was more candid than I recall from other GC.
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It’s very hot where I am today — over 100 degrees. Many parts of our country are facing one natural disaster or another. Sweltering heat, overrun rivers, fires, etc. You name it, and Nature seems to be telling us that she is in control, not us. Can we do something to address Nature’s wrath? In many cases, the answer is yes … be sure we have enough power for air conditioning, build the levees well enough to withstand the "500 year storm," etc. You get the idea. There must be the political will to do this.
Likewise, in our law practice. Clients get angry with us, they have financial reverses, they didn’t get the result they expected or, for some unknown reason, they just don’t pay their bill. Can we do something to avoid this situation? More so than with weather, the answer is "yes." We can be more proactive in both our intake session — setting reasonable expectations — and we can be more vigilant monitoring our clients’ behavior after our billings are mailed, making sure we get paid for work we do or we stop working before the client will be prejudiced by our cessation.
I discuss some of these scenarios in my book, Collecting Your Fee: Getting Paid from Intake to Invoice, which is mentioned in today’s LawBiz® Tips alongside my article, "If All Else Fails, Sue."
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New York’s Attorney General announced a settlement with two law firms who will pay $500,000, plus, to avoid prosecution.
There is a new twist raised in these cases. Under the "double billing" phenomenon, a lawyer cannot bill two clients for the same minute of time. When using the hourly billing system, you can bill only one client for each segment of time to be billed. In other words, when waiting in court for a matter to be called, and billing client A for that time, the lawyer cannot bill client B for that same waiting time though he/she is doing other work for client B pending the call of the court. Or, while charging client A for travel time, the lawyer cannot charge client B for working on his matter on the plane.
The new twist is that lawyers in two law firms were listed as employees of the New York State’s pension funds. This gave them retirement credits from the funds even though they either did no work at all for the funds or were gainfully employed and paid by the law firms, not the funds. This takes "double billing" to entirely new level!
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The client’s perception of value determines whether the price we charge is reasonable for the service provided. Demonstrating value lets you make a convincing case about raising your fees. (more…)
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West LegalEdcenter will host a LawBiz program entitled, The Budget as the Foundation of an Engagement. Why should you think about creating a budget, a budget for the practice, a budget for the client matter? Create a budget only if you want to get paid!
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Larry Bodine reports from the Illinois State Journal-Register:
"Who’s licensed to practice law in Illinois? None of your business.
That’s what the state Attorney Registration and Disciplinary Commission has told a Seattle company that wants to post the names of lawyers on the Internet and assign grades based on performance, awards, experience and disciplinary records.
Avvo (listen to our podcast interview with Mark Britton, CEO and Founder of Avvo, Inc.) has posted information online about lawyers in more than a dozen states. The company, which started its Web site a year ago, says it has received lists of lawyers from 30 states. Illinois, however, has balked.
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In a recent interview, authors of Kickstart – How Successful Candians Got Started talk about how they got the idea for their new book. They also share the traits that all the successful interviewees seemed to share:
1. They love what they do
This means that they aren’t "working," they’re "playing" — Long hours do not become burdensome, but and extension of the joy they take in what they do. If you’re going to put in long hours, you ought to be enjoying the time.
2. They’re persistent and focused on what they do
This means that they don’t allow distractions to take them away from their vision.
3. They’re "pushy" about getting to the top of their respective endeavors.
This means they are assertive and directive when needed.
Good traits to have in any field to be successful. A new associate in a law firm would do well to learn these lessons, and more that you can glean from the 70 interviews (including a Canadian Supreme Court Justice) in the book.
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Many lawyers are finding easy ways to communicate with clients … by sending status reports. If anyone wants a copy of one, send me an email to edpoll@lawbiz.com and ask. These are simple forms, originally developed by Michigan attorney, Wes Hackett, a good friend.
Many lawyers, unfortunately, never figure out that their client is unhappy. They just think that the client has no additional legal work. They don’t realize that the client was so unhappy that, though they didn’t complain, they just didn’t return! What a shame not to have the sensibility to even know this.
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"Law is subject to the same laws of economics as every other business." Thus spoke Tower Snow, former chair of Brobeck, the then large San Francisco law firm. (more…)
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