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 lawyers who receive the big bucks are thought to be folks who can get them out of very expensive matters more quickly than others could, thus saving them thousand and millions of dollars in litigation expenses or other business expenses … or close deals faster that would enable the client to start making a lot of money sooner.
The attorney might have a unique set of skills needed by the client at that moment.
Lawyers who command high prices tend to be in limited practice areas such as bankruptcy, taxes and M & A, where the stakes are extremely high … and the cost of the lawyer is really only a blip on the screen for the client.
The cost per hour is irrelevant to the total cost of the legal services delivered.
Fees to lawyers are more frequently now based on value to the client. The lawyers compensation becomes his/her equitable contribution to the benefit delivered to the client, making the "cost" per hour irrelebant.
U.K. based lawyers, according to WSJ, charge more.
The writer also ignores the thousands of lawyers, more than 50% of the profession who earn less than $100,000 per year at hourly rates as low as $50 per hour, sometimes lower. Is there a cognitive dissonance here? I think so. One’s reality, the high-flyers, is not the reality of all. And the WSJ should recognize that instead of flaming the flames of hatred against lawyers by throwing around large numbers of an infinitesimal group of people — they are not representative of the profession. And, oh by the way, where is the companion piece that talks about how much money the CEO, CFO, et al of these very same companies that are hiring these lawyers? Let’s look at a balance and fair perspective.
William Hebert, President of the State Bar of California, is leading the charge to dismember the State Bar. Hebert’s plan would eliminate six lawyers’ seats on the Board of Governors, shrinking the current 23-member body to 17. The Governor and Legislature would still name six non-lawyers to the Board, but the state Supreme Court would choose the remaining 11 lawyer-members, stripping Bar members’ current power to elect them.
In other words, despite paying dues, practicing lawyers would no longer have any say in the election of the people who govern their every action, their every responsibility to the public and their very right to earn a living. Does this sound a little like “taxation without representation?”
Yes, the state Legislature’s edict was to study the issue of governance and respond to Legislature. But, there is an option not being pursued by the Bar: Responding that the status quo works just fine, and “if it ain’t broke, don’t fix it.” Or, let’s identify exactly how the Bar is being unresponsive to the public and address those issues. A wholesale change being contemplated will not change the public’s perception nor will it protect the public any more so than the current body does. This reminds me of the recent insurance discussion. The public would have been protected only be demanding that lawyers have malpractice insurance. But, the Bar didn’t go that far. Instead, they merely made it a requirement to notify clients if they didn’t have such insurance. In other words, we’re looking for band-aids; we’re not looking at the real issues. The Legislature didn’t help by connecting this report to the dues bill. And eliminating the voice of lawyers in the election of its governing body likewise will not address the Legislature’s core concerns.
The issue, raised by a body whose members no longer contain a meaningful number of lawyers, is about public protection … and the perception by some that the State Bar’s sole mission should be to protect the public. I don’t know where these folks have been hiding, but that is the mission of the current Bar. All one has to do is read the Rules of Professional Conduct. All one has to do is speak to the hundreds, if not thousands, of lawyers who feel the wrath of the Bar by its actions and in-actions (and I’m not referring to the disciplinary system that appropriately charges a small percentage of lawyers with misdeeds).
In fact, only one State Bar President in recent memory was so bold as to suggest that the State Bar has two goals: One is to protect the public; and two is to help lawyers be more effective for their clients and more efficient in the delivery of their legal services, again for the benefit of the public. Neither the staff nor any other president in recent memory has publicly uttered anything but the first goal.
And if it’s a question of being “more responsive to the general public,” there are other approaches that can be suggested. But Mr. Hebert doesn’t even look in that direction. Merely cave into the Legislature out of fear that a dues bill might be held hostage. Does this sound like a British leader we remember in dealing with a certain tyrant? Appeasement won’t work in this circumstance either.
I have been a very strong supporter of the integrated bar all these many years since law school. However, Mr. Hebert has finally caused me to flip the switch. I am now in favor of converting the State Bar to a licensing and disciplinary agency only. The result will be a savings to lawyers of at least 20% of their current dues. It takes 80% of the dues to run the disciplinary system. That’s close to$32 million. Lawyers can then join voluntary bar associations, either local or state-wide, create the education programs they need for their betterment, lobby for laws that will benefit the public without impediment, and otherwise create activities that improve their professional conditions.
In today’s Managing Partners Roundtable, we talked about the costs of digitizing all files the firm maintains. One partner suggested that failure to do so might result in malpractice allegations. This is an interesting concept, one that I don’t believe has yet taken hold.
Cons: Expensive, time consuming, lawyers must be involved to determine which file matters can be "cleansed" and tossed, files must be taken apart to scan, decisions on what hard copy to toss now and what to save (and for how much longer)
Pros: Reduction in amount of real estate needed to store files, lower cost of occupancy resulting from a conversion, searchability by keyword rather than memory, one time investment.
Several years ago, a Chicago law firm began this process by scanning documents through a photocopy machine. Their contract provided for payment only when paper was copied and printed, not just scanned. Thus, this segment had limited cost. Disabled people were employed to do the work, thus enabling the firm to do well by doing good, and maintain its cost of labor at a lower cost than would have resulted with its own personnel. The entire process was conducted in the evening so the normal workflow of the firm was not disrupted. This firm was ahead of its time in this process.
In today’s meeting, I learned of a major firm that completed this project last year at a rather high cost. But, the investment was believed to be essential to an efficient future operation of the firm. And, of course, younger lawyers are so conversant with the electronic world that some seldom even touch paper anymore.
Technology has and will continue to have a major impact on the efficiency of the delivery of legal services and the costs to clients.
Have you ever had problems traveling, making connections or finding that weather is a great excuse to be surly to those you serve? If you’ve ever experienced any of these, or a myriad of other issues facing us when we travel, check out my latest commentary on having been stranded in Manhattan, trying to get home from JFK. While bad weather is a legitimate catalyst for scrambling (as in Chicago), just remember that you’re in the business and know these things happen. Be prepared with a good attitude – your customers need all the help and pleasantness they can get.
Thus, as lawyers, you know that your clients will always be in stress. Make sure that you and your staff are pleasant. It will make the relationship go more smoothly … oh, and yes, they will be far more willing to pay your bills timely! Heed this advice only if you understand that you are in The Business of Law®.
<auer Brown writes about a new California Bar opinion that addresses wireless network use.
Quoting from their note, they say:
"Attorneys owe their clients a duty of confidentiality and competence. But when an attorney uses wireless Internet to communicate or access files, such as in an airport or other public location, is that communication over an unencrypted wireless network confidential? And is an attorney competent if he or she broadcasts client confidences, including employer confidences for in-house counsel, over an unencrypted network?
On January 20, 2011, the State Bar of California issued formal opinion no. 2010-179, addressing these questions. The opinion provides six factors that attorneys should consider when determining whether a particular technology is appropriate for their communication.
The level of security afforded by that technology, including whether reasonable precautions may be taken to increase that level of security by, for example, encrypting email.
The legal ramifications to a third party who intercepts, accesses or exceeds authorized use of the electronic information—that is, whether the form of communication is protected by law, like telephones and information stored on computers.
The degree of sensitivity of the information—the more sensitive the information, the more security is appropriate.
The possible impact on the client of an inadvertent disclosure of privileged or confidential information or work product—again, the more severe the consequences, the more security is appropriate.
The urgency of the situation—if a message absolutely must be delivered immediately, security is a secondary consideration.
The client’s instructions and circumstances, such as access by others to the client’s devices and communications—if, for example, a client has specified that email is not confidential enough, or that a particular kind of communication must be encrypted, the attorney must comply with those instructions." See their note for more.
My friend and colleague Carolyn Elefant, on her MyShingle.com blog, recently spoke to me about issues in selling a law practice (/). Carolyn raised an excellent point when discussing an advertisement by a 70-year old lawyer in Kansas who sought to sell his practice. The advertisement featured the fact that the firm uses practice management software tools like Amicus, HotDocs and QuickBooks, and has a database with a list of 4000 contacts. As Carolyn observed, such information is ample evidence that the firm has at least made an adequate investment in technology.
This is an important point in two respects. First, if a lawyer contemplating retirement has not kept the practice’s technology up to speed, the value is going to be diminished in negotiations once a potential purchaser realizes that a substantial IT investment will be necessary. The principle is the same as that of a house purchaser who wants $20,000 off the purchase price if the house needs a new roof that the purchaser will have to pay for.
The second important point is more positive. If you havedone the right things with your practice – kept technology up to date, invested in new office space with modern infrastructure, maintained strong referral relationships with other firms – be sure to communicate those facts up front. Their value may not be easily quantifiable, but they definitely support the firm’s goodwill: its reputation, client base and client loyalty. The decision to sell a practice is no time to be modest, or to assume that the firm’s virtues are self-evident. Communicate those virtues up front, and make sure potential purchasers know how their worth supports your asking price.
This evening, taking a break from LegalTech Show, I went to dinner at the Oceana, near the Hilton Hotel. Outstanding food.
From there, I went to see Colin Quinn in the "Long Story Short," written by him and directed by Jerry Seinfeld. It’s not often that a play/script is above me. But, this one was so good … it is a historical comparison of Greek and later times to today … The lines were so clever that I missed savoring them before Quinn was on to his next bit. This is one where I would like to sit with the script and slowly inhale the words. A remarkable piece of writing … and the delivery was good, but too fast for me.
