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Law schooling begins

On Tuesday, May 5th, at 9 a.m. PT/12 Noon ET, I will hold my first class for Solo Practice University. We will open with a prepared session about strategic business planning for approx. 1/2 hour and then conduct an open mic session to address all questions of interest to you.


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The Business of Law®

 

More and more, we are seeing evidence that law firms operate under the principles of The Business of Law®.

In acquisitions, a company can buy assets or the corporate stock of the company. Which method is chosen usually depends on tax and potential liability issues. In a recent article, the writer analyzed why Wolf Block didn’t merge to survive. Reasons given for the failure to merge here included the law firm’s large unfunded pension liability, partners’ substantial tax impact by a change in their fiscal year as a result of a merger and the ego of some of the partners insisting that the new firm name begin with "Wolf."

Ego aside, the economic consequences of a merger were avoided by closing the doors, though there certainly were other economic consequences to the individuals involved. Those partners with a portable book of business went elsewhere and suffered less. Those partners and associates without a "book" suffered more.But, all experience difficulties.

What happened to their pension? Out the window!  What happened to the firm’s reputation and goodwill of decades of effort? Out the window!  Did the lawyers, especially the "insiders," suffer any stress?  You betcha!  

And, let’s not forget the issues faced by clients who didn’t know who their lawyer would be in the following days and months. Some of these clients will say "a pox on your house!" They will engage a second law firm for some of their matters … just to make sure they are not left hanging in the wind with the same uncertainty in the future — to have the ability to move quickly if they need to be sure they have legal representation while their lawyer finds a new home.

Perhaps worse, when a lawyer leaves a law firm and both that lawyer and the law firm compete for the business of the client, I’ve seen the client say, "A pox! I’ll get a different lawyer/law firm for all my matters." And both lose.

Business principles control. The ego, the arrogance, the ignorance of business principles notwithstanding, lawyers will suffer in this new economy. Irrespective of the economic betterment for the lawyer, clients may move away, leaving both the lawyer and the law firm in the breach.

 


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DuPont Law Firm Model Cracks

In an article in the ABA Journal, DuPont is reported to be looking at regional law firms, not just Big Law, for its outside counsel arrangements. DuPont started the trend to consolidate its outside counsel needs into fewer, larger law firms. This made sense. The more you can consolidate your resource needs, the lower per unit fee you can negotiate because of your increased power. Also, you can reduce your costs of operation because you have fewer billing statements to review, enabling you to keep better track of the accounting and reduce inadvertent errors.

As I’ve written before, however, Big Law, with all of the negotiating power of DuPont, still charges more than smaller firms with lower overhead and a smaller profit appetite. They’re hungrier for the business. I chided ACCA and its members for failing to see this.

They are about to get the message … good news for the smaller law firms whose quality of legal work is equal and whose economic appetite are more reasonable.


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Is malpractice also breach of contract?

If your engagement agreement says that “you will act in a professionally responsive manner,” you may be held to both malpractice standards (negligence; tort) and breach of contract! That is the new ruling in Maryland’s Abramson v. Wildman and may  be the rule elsewhere.

Check both your jurisdiction rules and your engagement agreement.


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Starting a solo practice

More lawyers are looking to go solo … In hard times, this may be the only option left … at least before going to start a corner hot dog stand (according to a recent WSJ article) … LawyersUSA writes about what it takes to do this. 

(In full disclosure, I wrote the article.)


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Budgeting for the law firm

Budgeting for the law firm … and budgeting for individual client matters (both litigation and transactional) has been an important tool for success for the law firm on the one hand and controlling legal costs for ton the other.

Incisive Media’s LegalTech West Coast panel will discuss how budgeting can be most effectively used by those who have ignored it in the past … A “why” and “how” session at a fast pace. Further, unless one bills for services, one doesn’t get paid … My mother used to say “You don’t get something unless you ask for it.” And without collections, you cannot keep the lights on or food on the table.  This discussion will also focus on billing for work done, hoping to suggest collection tips as well. “Bottom line,” this is a numbers game that lawyers need to learn and be more effective. If not, they will not survive, let alone thrive.

Join me as moderator of an outstanding panel in Los Angeles on Thursday, June 25th.
 


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