Some law firms are late to the starting gate. Some firms continue to hang on to the "old ways" of running their practice. There are only a few alternative paths:Hang on with the old and wait for the world to catch up, or change as the world changes, making the tough decisions on a current basis.
In recent days, there have been several articles about large law firms cutting equity partners and staff in order to bring their financial affairs into focus. The reality is that they have found that the "eat what you kill" mentality works only so long before dissension and dissatisfaction sets in amongst the rank and file. Becoming more collaborative, cross selling the expertise of the firm and its individual members can create greater firm revenue. And paraphrasing former Pres. Kennedy, as the ocean rises, so do all the ships in the ocean.
In addition, the firms must identify their strengths and play to them. There are very few organizations that can be "all things to all people." With limited resources available, it is important to husband those resources and expend them in a focused manner for greatest benefit to the firm and its clients. Knowing who you are and what you want to be is essential to one’s success.
The catalyst to change is often money. With a cushion from past successes, there is little motive to change. When a cushion narrows or evaporates entirely, and when collections become an issue because clients with their own financial problems fail to pay your legal billings, motivation to review your operations and make appropriate changes rises to the surface.
Under current law, clients’ trust accounts are protected under the IOLTA program. The FDIC provides unlimited insurance coverage.
However, unless extended by Congress, beginning January 1, 2013, such unlimited coverage will terminate and the new limit will once again be $250,000 per depositor. All funds held in such trust accounts as well as all funds held, personally, by the same client in the same institution will be considered in the $250,000 limit.
Be careful and review your bank’s regulations and the funds you are holding for the benefit of your clients. Watch Congress for any "lame duck" laws on this and the FDIC and its responsive regulations. You may have to split clients’ funds into two or more banking institutions in order to keep his/her money insured. And you may once again have the responsibility of checking on the financial soundness of the banking institution in which you maintain your clients’ trust account.
“With these lawsuits,” Law School Transparency says, “nearly 10 percent of all ABA-approved law schools across eight states will be accused of tortiously misrepresenting job placement statistics and violating state consumer protection laws.”
The complaint says, among other things, that law schools’ employment figures include work outside the law. And Senator Barbara Boxer of California wants the ABA to require all law schools to better determine where their graduates go after school and what kind of employment they get.
In a recent teleseminar I conducted, recent graduates were angry that they spent so much of their money (and incurred so much debt) to receive an education in a profession that does not offer them employment opportunities. They considered it fraudulent for the schools to have taken their money.
Those feelings and this law suit are different. On the one hand, the students want jobs and feel the schools have an obligation to help them get jobs. On the other hand, the current spate of law suits merely wants information — consumer information — to be accurate and available to law school entrants.
What is the obligation of the law school? How could anyone have predicted the shifts in our economy and the disruption of the profession? Not even senior partners are safe in their firm positions. Why should students be protected? We need to watch these developments as the profession continues to change … caused by the economy … and perhaps more significantly, caused by technology.
If you haven’t already, I suggest reading “Personal Best” by Atul Gawande on newyorker.com. Dr. Gawande examines the need for and nature of coaching for professionals of all walks of life.
Musicians and singers, he points out, think of their coaches as “outside eyes and ears”. They hear and see things that even the best performers can’t detect about their own performances. In endurance coaching, anyone can design hard workouts. Anyone can make you tired and push you into the darkness. In coaching lawyers, anyone can tell you what to do even if it is beyond your comfort zone.
But a good coach will help you understand where you want to go, devise a plan that is within your comfort zone and that will get you there, and then be your mentor and accountability partner to assure your success.
Who is your coach? Is it your colleague, your spouse or significant other or a professional whose career is devoted to helping others like you to succeed? Whomever it may be, we all succeed sooner and stay on top longer when we have a coach, our "outside eyes and ears."
Ed discusses the factors that influence collection success. Client selection: you have to get the right client. You must understand the wants and the needs of the client. You have to get confirmation of the arrangement between you and the client in writing, and check the client’s credit.
In most states, strict compliance with trust accounting regulations is required. Where such regulations require a paper trail that includes retaining canceled checks and other features of an older era, lawyers are inadvertently out of compliance. How? Why?
The banking industry has moved on. They are into the electronic age and we have not kept up. For example, few banking institutions, if any, still return canceled checks. They send photocopies and, after a short time, destroy the canceled checks. See the federal Check Clearing for the 21st Century Act.
In August, 2010, the American Bar Association’s House of Delegates adopted the new Model Rules for Client Trust Account Records to replace the Model Rules on Financial Recordkeeping, in effect since 1993. The ABA rules now enable lawyers to use electronic tools to comply with Model Rule 1.15 concerning holding clients funds and property.
Check your State rules — not all states have updated their regulations.
Mimi Donaldson is a football fan (who knew?), but a major fan! She was glued to the television and, while the game was on, came up with the following life’s lessons from the game:
What do we do for money right now?
Here are 3 tips we can learn from last Sunday’s Super Bowl to help us manage in these troubled times.
Ben Roethlisberger, the winning quarterback, extended many plays with tremendous focus and presence of mind. Larry Fitzgerald, a brilliant wide receiver, turned the game around with a long touchdown run because he looked for an opening and never looked back.
Lesson – We need to focus on the value of our product and service, stay calm in the face of doubters, and look for an opening for success — and never look back!
At the end of the first half, James Harrison intercepted the ball and returned it 100 yards (the length of the field) for a touchdown with the longest run in Super Bowl history. The interception changed the context of the game and shifted the momentum.
Lesson – This is not in the traditional job description of a linebacker (he needed oxygen afterwards). In our businesses, we need to do something different now; attend a meeting you’ve never attended; look for an opportunity in a non-traditional place.
#3 – WHEN THE WHISTLE BLOWS, THE PLAY IS OVER!
Santonio Holmes caught the winning touchdown. But he had dropped a sure touchdown pass just moments before. He begged his quarterback for one more chance – telling him, “Please let me get this game for you.” Each man respected the finality of the play before. They did not allow it to affect the next play.
Lesson – We need to shake off our past mistakes and the alarming economic forecast, and recognize that each moment is a new moment of now.
Anna T. Collins, Esq. (Portland, Maine) writes an article in The GlassHammer about the gap in compensation between men and women in the legal profession. Her issues are well-taken. See below for quotes from our author and coach, Ed Poll.
The California State Bar Board of Governors last week adopted a new professional rule of conduct. Lawyers must now advise their clients in writing when they do not carry malpractice insurance, either in their engagement agreement or in a separate document.
The rule is flawed, as I’ve argued in more than one past post. Since lawyers are skilled in finding loopholes, I suspect that this new rule will be honored in its breach … and therefore not provide meaningful protection to clients.
There are creative alternatives the 30,000 sole and small firm lawyers impacted by this rule may take to avoid the intent of the Board and its new rule: (more…)
Adam Smith echoes my philosophy — and discusses the importance of the intake procedure. Collecting Your Fee from Intake to Invoice further echoes the importance of the intake process. I maintain that you can tell at the beginning, from the intake interview, whether you will get paid at the end!