Karen Mathis, immediate past chair of the American Bar Association, focused her year on developing a new awareness for the legal profession. She said recently that 400,000 lawyers will retire in the next 10 years. That’s the entire current membership of the ABA!
In a recent poll, the following areas were said to be the greatest concern for sole and small firm practitioners:
According to one source, crisis management statistics include causes that are outside of those traditionally thought about by law firms. But, in addition to Katrina, broken pipes, etc. think about the following:
About 53% of marketing executives responding to a recent survey by BtoB and Eric Mower and Associates, said they have experienced a business crisis that resulted in negative news coverage, declining sales or reduced profitability. About the same number (57%) reported that their company does not have a crisis response plan currently in place.
Of the 43% of companies that have developed a plan, 10% worry about their ability to carry it out, and only one-half have trained spokespersons ready.
Some 23% of respondents who went through a crisis said it took three months to a year for their brand to fully recover, while 13.3% said recovery took more than two years and 17.7% said they have not yet recovered after two years.
Causes for these companies’ crises vary. A majority of survey respondents (55.7%) said layoffs, shutdowns or business foreclosures created the crisis. Some 45.2% blamed operational or services failures, 33% cited legal or ethical problems and 32.2% pointed to a competitive attack, such as negative word-of-mouth or messaging by others who have a vested interest in damaging the company.
Many folks are complaining about the high price demanded by lawyers. It was reflected in an article in the Wall Street Journal a few months ago and, more recently, by a few corporate counsel in suggesting that they will “fire” their outside counsel because of their hourly rates.
In its December 6th edition, the Los Angeles and San Francisco Daily Journal highlighted California’s “Top Neutrals.” I read the supplement with great interest … and was struck by the very high prices demanded/commanded by these triers of fact. From a low of $400 per hour to the upper reaches of $12,000 per day, I don’t hear the complaints against these rates!
Years ago, our system of independent neutrals developed because of changes in the judiciary’s retirement system causing economic pain to judges who remained on the bench, I lamented the separation of the rich and poor … The poor folks had their matters heard by the judiciary, paid by taxpayers. The rich had their matters heard more quickly by independent neutrals, paid by the parties. Independent neutrals who work full-time earn far more than judges.
Our system of justice suffers when economics plays such a dominant role in the determination of disputes, when the poor receive different treatment than the rich. It’s bad enough when the rich can afford to gather a “dream team” for the assertion of their claims; but, it’s outrageous when economics can determine who will be the trier of the facts.
The President said that “the State Bar shouldn’t base policies upon what will or won’t be popular … Ultimately, our responsibility is to do the right thing." With this remark, the President of the State Bar of California justifies requiring 30,000 mostly small firm and sole practitioners to disclose to clients when they do not have malpractice insurance.
I find this remark of particular interest because it is usually said by one who wants to justify an act that is opposed by the vast majority of his very own organization. It is also offensive because it fails to address the very issue at hand. This statement is like Mom’s or Dad’s "…just because …" response to a kid’s inquiry as to why he should or shouldn’t do something.
In this case, the statement is used to justify an action that will prejudice an isolated group of lawyers who practice in the small firm environment. They need assistance from the Bar … and they don’t get it. Instead, they get slapped in the face. We might just as well place yellow arm bands around these folks and say they are "bad" people. There is no empirical evidence that this group of lawyers is subject to more malpractice claims than others. There is no empirical evidence yet set forth that suggests any reason to isolate this group of lawyers and identify or punish them in this fashion.
Yet, this very same organization has not, to date, honored its earlier (2005 Board of Governors Retreat) stated commitment to its members to provide them with help in their businesses (The Business of Law®) because it might antagonize a few legislators or other special interest groups or cost a few dollars or place additional demands on the staff. Where is the Board when they’re needed?
This attitude explains why members of the legal community, generally, have lost confidence in its governing body. Why the Board of Governors would anticipate that lawyers in this State would support it in any future disagreement with the State Legislature or with the Governor is beyond understanding. One can “turn one’s cheek” only so many times before the resentment rises to the point of action.
The perception amongst small firm attorneys that the State Bar is the enemy and not the friend clearly gains traction with actions such as taken now by this Board. John Dutton of the Board of Governors perhaps said it best. “Dutton argued that some county bar associations, a few State Bar committees and most of the members of the Conference of Delegates of California Bar Associations have joined critics in opposing disclosure. ‘And here we are,’ he said, ‘saying, ‘We’re going to jam it down your throat. We don’t care what you think.’”
Of course, the very Governors voting on this issue also fail to disclose any personal financial interest they may have in this issue, and several do. They also fail to address more important issues for disclosure if we were truly interested in client protection. And, most importantly, they fail to create an affordable insurance program that would allow economically marginal (but very good) lawyers to buy the very product the Board is promoting! (Dare we remember that the State Bar obtains several million dollars each year from the insurance program it promotes?)
Q: Ed, can Outsourcing really make a firm more productive and profitable?
Where courts have refused to uphold a covenant not to compete given by one lawyer to another in the sale of a law practice, one of the primary arguments against validating the covenant is that clients have a right to counsel of their own choosing. And, the argument continues, saying that a lawyer cannot practice law in a given area for a reasonable period of time restricts that right.
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Gary Chen, Senior Analyst for Yankee Group Enterprise made the following important points in the recent Application Continuity 2007 conference about technology:
That means that technology becomes even more important in the management of a law firm. Technology affects current law firm profitability and becomes essential for survival and continuity in times of disaster. In current terminology, "knowledge management" will be the backbone of the success and survival of a law firm. And knowledge management needs enhanced technology to be effective and readily available. As I’ve said before, I believe law firms of the future will grow or die based on their effective implementation of knowledge management.
Q: As a lawyer who runs her own practice, it seems like everything I do revolves around trying to make more money. Is it professional to always be concerned about turning a profit? Or should I focus more on other things?
In his column, Fire Wire, John Tredennick, writes the most extensive and articulate article on the subject of outsourcing I’ve read.