I was coaching a client today. She pulled at my heart strings by telling me the problems she is having with several of her clients who owe her money, big sums of money.
One of the clients paid her $37,000 two weeks ago and already owes her another $27,000. After complaining about some of the services and getting a $5,000 reduction in billing, he has not yet committed to a date certain for payment of this amount. Oh, yes, you guessed part of it. "The check went out last week."
Should she continue working for this client? My advice was to review your file to make sure it’s clean and not susceptible of negligence claims, make one last effort to collect by telling the client he has to pay what is owed within 7 days or you will file a motion to withdraw because the client has not honored his agreement commitments, and then be sure you are far enough away from trial to have sucha motion granted.
Bottom line, however, while you are taking care of your client, you must take care of yourself! If, while focusing attention on the client’s issues, you ignore your own billings and accounts receivable, you will lose the respect of the client, you will not get paid the full amount owed to you, and you will not get more referrals from this client. Lawyer Beware!
I respectfully disagree with his assertions. This is what I said in response to Susan’s comments:
It’s hard for me not to disagree more. Leverage always has been, and will continue to be, a motor for profit. Whether that leverage comes from associates or from non-equity partners (another form of associate) is not clear, nor important, for this discussion. Time will tell. And Susskind’s conversation merely discusses another form of leverage, technology, just not the human form.
In China, years ago (I can’t speak for today because it’s been many years since I was there), the leverage the economy used was people. They couldn’t use machinery because they had so many people who needed work.
Yes, experience is important. But, it is also teachable. Perhaps the more progressive law firms will wake up to how important continuing education is for their lawyers (partners and others) as well as their staff.
Morale is low. Agreed. But, that in part is because of failed expectations. Expectations in BigLaw must be brought in line with economic reality; the business model needs to be adjusted a bit … then morale (with good leadership) will rise.
Richard Susskind has written a book suggesting that lawyers may become obsolete unless we make some dramatic changes.
I see nothing unusual about his conclusion … that legal work will be unbundled and that the work that is more mundane and routine will be systematized and perhaps even automated. Technology advances provide us with opportunities that didn’t exist before. We can, today, create better product for less money. Technology is only one aspect. Globalization is another. And this isn’t just for the large law firms. A client of mine, in Texas, opened an office in India for the specific purpose of document review and document production – it’s done for less money more quickly … And he can get a faster turnaround because of the time difference.
Law is slow coming to this process. My background is in manufacturing. I’ve owned and operated several companies. In order to retain prices, not to increase prices, we would do everything we could to automate. When automation, reducing the amount of labor costs, would go no further, we reduced the size of the container. For example, we would go from 32 oz to a 22 oz jar or a 10 gal. container to a 5 gal. container.
When we have time of challenge as we do now or changes in our economy and culture, we have the opportunity to innovate for improvements in products and services. We have the opportunity to create new demand. I see this beginning to happen in our parts of our economy. It will have to happen in the legal profession, nay the legal business (The Business of Law®), if we are to continue to serve our public as we know.
Yes, we "sell" all the time. My definition of "marketing" is the process by which we persuade another of the merits of our idea. This comes in the context of persuading a judge or jury of our client’s position; of persuading our supervising partner that we’re the right person to work on a matter (in a large firm); of convincing a prospective client that we can get the result they seek. This is all marketing/selling. And we do it all the time. I even do it in my sleep when I seek to persuade my wife that I’m entitled to a portion of the bed when we move around. Marketing/selling is both conscious and unconscious. When we make it conscious, we have a better chance of succeeding.
Put a “positive spin” on the description of your services. I have been saying this for many years in the context of preparing your billing statements for work done for clients.
Ownership mentality, or the lack thereof, is a primary cause for the failure of many organizations, including law firms. When entitlement is the primary psychological attitude, the organization and the people it serves suffer! There is a vast difference between ownership thinking and entitlement. One of the unanticipated benefits of our financial difficulties may be to whack "entitlement" thinking on the head.
See the latest edition (March 3rd) of our newsletter featuring a discussion about the safety of IOLTA funds and the responsibility of lawyers for the failure of banks holding their accounts.
Bruce Crist, mentioned in my previous blog post, sent me another note. Seems I’m wrong again.
I mentioned that California attorneys are required to take 12.5 hours per year. The actual requirement is that lawyers receive 25 hours (down from 36 by recent amendment) of MCLE approved education. That works out to be, according to C.P.A. Bruce, 8.33 hours per year.
And Bruce admits that this is less than plumbers are required to take in MA. Bruce says now that plumbers are required to have 44% more education than most lawyers. Taking a line from Bruce, "… and the point is?" I made my point earlier.
Bruce, thanks for the "joust" and for reading my article.
In an article I wrote for February 2009 issue of The Bottom Line, the publication for the Law Practice Management & Technology Section of the State Bar of California, I discussed the continuing education requirements for lawyers as contrasted with others such as plumbers, et al. The article was a follow-up to piece to comments I have made here on June 12, 2006 (MCLE whining) and November 22, 2005 (Plumbers get more education than lawyers), all of which focus on the complaints lawyers have made about their education requirements to retain their licenses.
