Successful Law Firms Are All Alike (Part I)
In the first of this 2-part segment, Ed discusses 5 of 10 characteristics common to all successful law firms.
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In the first of this 2-part segment, Ed discusses 5 of 10 characteristics common to all successful law firms.
Target is. How long will it take for a law firm to be considered a "retailer"? Will size matter?
The Court, in the Target case said "… a retailer may be sued if its website is inaccessible to the blind, stating that the Americans with Disabilities Act of 1990 prohibits discrimination in the "enjoyment of goods, services, facilities or privileges… Until this ruling, commercial websites were not considered a place of accommodation and were assumed to not fall under the Americans with Disabilities Act…"
Home of some of the wealthiest boat owners!
This day was absolutely gorgeous.
In a recent blog post, I made reference to the ABC News series that if only 5% of our businesses were to buy only American made products, we would increase the number of jobs in this country by 250,000!
A funny thing happened when I watched television the other day … Harry’s Law. The protagonist was arrested by a police officer for driving a Mercedes in a small town that made it illegal to own, drive or park a foreign vehicle in the town!
Though coincidental, this program takes the idea to its ultimate. The argument in opposition to the law, obviously, was the Commerce Clause (and perhaps not so obviously, the First Amendment) … One point of the story was that this country was founded on the principles of of tolerance and inclusiveness; that is our strength.
Today’s law firms are struggling to pay for their 3 most importance expenses: labor, rent, and insurance. This week, Ed offers tips to help you manage your cash flow so that paying the bills doesn’t break the bank.
Five LawBiz Management publications available immediately in Amazon’s electronic format
Venice, CA – November 4, 2011. Attorneys and law firms who are looking to improve the profitability of their practices now have a new way to access the practical guides to profit of award-winning law business management coach and consultant Ed Poll.
Effective immediately, five of Poll’s publications are available as Kindle ebook editions. The publications include:
“I’m excited to be able to offer yet another way for the legal community to access my publications,” said Ed Poll. “As ebooks continue to grow in popularity, I want to ensure that lawyers can access them through whichever medium is most convenient—hard copy, Kindle ebooks, or by using the Kindle app on popular tablets like the iPad.”
Each book is available in the English language in all 4 Amazon.com Kindle stores, in the US, the United Kingdom, Germany and France, at a price of US$9.99. The price includes free wireless delivery via Amazon’s Whispernet. More information about Ed Poll’s books is available at Amazon.com. The books are also available in hard copy format from LawBiz Management at www.lawbizstore.com.
Robert Denney, a well -known and very capable marketing consultant, reports in his monthly newsletter that: "… an outsider … joins DLA Piper as co-chair of the entire 4,200-lawyer firm. This is probably an unprecedented move, at least in BigLaw. Corporations frequently hire senior executives from outside the company – or even from outside their industry – but large law firms almost always elect partners to senior management positions. In most cases this means they have little senior management experience and must climb a steep learning curve…"
Perhaps the legal profession is approaching reality in letting lawyers do what they do best, lawyering, and leave the managing to professionals. Or, at the very least, engage a professional coach who has walked in their shoes (i.e., practiced law) and also has business experience. The idea of having a business professional at your side, or at least available by phone, works in industry and is beginning to work in the legal profession for mid-size firms as well as sole and small firm practitioners.
Large firms, more than we care to know, have made news in the last couple of years by "going under," i.e., defunct! Firms such as Howrey and Heller Erhman became the targets of personnel raids. Very good lawyers from these, and similar, law firms departed and joined other major, national law firms. Today’s WSJ comments on the current state of affairs for some of AmLaw 100 law firms.
Some folks are asking whether your new lateral partner have any unwanted baggage? In some instances, the new firm accepted partners from the old firm with the understanding that the lawyer would bring over clients from the old firm as well as his "unfinished business." This provides for immediate billing .. and therefore an opportunity to acquire great talent at a very low or zero cost.
These firms, and others, have gone into bankruptcy to collect funds to pay the firms’ creditors. In a law firm, the major assets "walk out the door every evening. Computers, furniture and real estate are of minimum value, if any, in a law firm. Accounts receivable are a major asset, though often difficult to collect from clients when they know there will be little serious effort to collect.
But, when the partners from the old, now defunct, law firm went, they generally took "their" book of business with them … and the "unfinished business" of the clients that went with them. One argument is that clients have a right to seek their own choice of lawyer. And the other argument is that the partner and new law firm benefited, resulting in a profit to the new firm that truly belongs to the old firm.
This battle will be fought for years, I suspect. But, the reality of our world is that anyone can sue anyone else, even if wrong. In the meantime, the largest pool of cash available to the trustee in bankruptcy for the defunct firms is the new firm and, perhaps, the lawyers, individually, from the old firm. Whether legitimate or not, new firms have been economically compelled to settle many of such claims in order to go on with the new firm business.
The new firms thought they were getting a steal! Maybe. But, I’m reminded of the old say that "…if it looks too good to be true, it probably is too good to be true." There is a cost to everything, even a very attractive, new lateral partner with great talent and a great book of business.
In California, as all over the country, state support for higher education is decreasing. For example, in 2001, 70% of a state law school’s operation’s costs were covered; in 2010, such funds covered only 30%. In 1965, my enrollment costs were in the hundreds of dollars; in 1991, tuition and fees for the academic year were a bit more than $3,000; and today, the number is close to $45,000 … PER ACADEMIC YEAR. All states are in similar positions.
And on the federal level, Congress is considering eliminating the student loan program! If that does happen, higher education will truly be only for the rich and perhaps truly gifted who may be eligible for scholarship.
No wonder students have to borrow money to go to school. I’m surprised that the average debt on graduation is as low as it is; the last figure I read was about $100,000.
From the seller’s perspective, i.e., the law schools, one must ask why should they lower tuition? My alma mater recently sent me a letter that stated their next entry class of 321 students comes from an applicant pool of more than 7,000! Almost 25 to 1! With demand like that, I wouldn’t lower my price, either.
But, with such high cost of entry, graduates and students are now asking whether the schools have an obligation to assure their employment after college … In fact, several lawsuits have already been filed, and more to come, asking this very question. As I wrote in an earlier blog, the schools are not managing students’ expectations very well.
The Dean of my alma mater, a top tier school, said at graduation this year that he is sad to say that last year’s class still has a considerable number of unemployed students … and that this year’s graduating class will likewise find a tough employment market. Not only are many, a rather large percentage, unemployed, they also lack the practical knowledge and skills to open their own law practice. This is a skill the law schools do not even feign to teach. It is beyond their "professional standing."
Under these circumstances, perhaps schools need to post a consumer warning on each application: Caution: Attending Law School May Be Hazardous To Your Pocketbook. There is no guarantee that you will be gainfully employed for your ability to practice law. And, in fact, disclosing you have a law degree may be deleterious for other employment. The prospective employer may worry that you’re just hanging around, waiting for a legal position to open up, or that you are too smart for the job under consideration.
Isn’t that a double whammy!?
Is higher education a right? No. Should it be? Perhaps. But three things are clear:
Politicians need to take note: The teaching of our youth, even through college, is our primary responsibility and should not be compromised. Fighting war cost trillions! Educating our young cost millions! The former is irrelevant if the latter is left untended.
Great tree … and so inviting to climb!