Tag Archive: Practice

Selling Your Practice

Will you be one of the 400,000 lawyers retiring in the next 10 years? Today, Ed discusses what can be done when it’s time to move on.

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Alternative law firm business model

From Lawyers USA, we learn that the American Bar’s Ethics Commission has recommended that states rules be changed to allow non-lawyers to own up to 25% of law firms. 

Rules against lawyers sharing fees with non-lawyers might need to be loosened to allow U.S. firms to compete globally. The proposal says that any firm with non-lawyer owners must have “as its sole purpose providing legal services to clients.”

This is the foot in the door.The next thing you’ll see is Latham & Watkins, or other billion dollar law firm opening offices in Wal-Mart or Target stores for curbside service. This is not necessarily a bad thing. It will certainly bring the law to the people … And it will certainly change the perception of the law.

I’ve always maintained that the rules of professional conduct are controlled by the large firms, AmLaw 100 and 250.  When their economic needs change, the rules get changed and the sole and small firm practitioners have to adapt accordingly.  In other words, the rules are not made in a vacuum, not made because of their inherent righteousness or goodness. They change and are made to serve the economic interests of the few … oh, if the public is served, so much the better.

But if you’re a solo, watch out … your interests may not matter. Such has been the case in recent times when solos’ interests were not protected, in fact hurt, by changes in the rules .. But, here, to allow the larger firms to complete on a global scale, we see the rules begin to change and allow allied professions to join in the ownership of law firms, not merely as allied professionals independently serving the same client.

Economics control .. as always … even here in the rules of professional conduct.

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Today’s law firms are struggling to pay for their 3 most importance expenses: labor, rent, and insurance. This week, Ed offers tips to help you manage your cash flow so that paying the bills doesn’t break the bank.

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Raising Legal Fees

Ed recognizes that raising your legal fees just doesn’t "fly". This week, he offers some tips to raise the revenue of your firm without necessarily raising your fees.

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Succession is uppermost in the minds of majority of lawyers

More than 23% of the Washington State Bar Association, a mandatory bar, are 60 years or older. Several years ago, the American Bar Association, a voluntary bar, estimated that 400,000 lawyers would retire in the next 10 years.  For the ABA, that’s equal to its entire membership. And that’s equal to about 40% of all lawyers and a majority of private practitioners.


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Can non-lawyers own a law firm?

Yes, say some.

Only a short time ago, we believed that non-lawyers would be able to participate in the ownership of American law firms. The pressure, so we believed, would come from the British Empire. Australia already allows this and it will soon be permitted in England. But, not the U.S. … until now.

The District of Columbia permits non-lawyer ownership to the extent of 25% interest in a law firm. And, now, North Carolina has a bill before its Senate that would allow 49% non-lawyer ownership.

One argument is that law firms have expanded and are now very large organizations. In order to grow, they need additional capital … and capital is best raised in the capital markets, not from individual partners of law firms … and that means non-lawyer ownership. While large law firms are looking more and more like their corporate clients, it is still a stretch to suggest that law firms should raise outside capital.

Do law firms need to grow? Why can’t corporate clients’ interests be served well by smaller regional law firms? Why does the corporate law firm have to be as large as the client? We saw unions grow in both size and power in response to corporate and management  growth and power. And we now see unions fighting to stay alive. Will that also happen to large law firms of the future? Will technology enable small groups of lawyers to be effective in large corporate representation? 

Some argue that the rules of professional conduct wouldn’t bind non-lawyers in matters of confidentiality and charging reasonable fees. Further, the very independence of lawyer’s judgment might come into question. But, the rules have been bent, if not changed or discarded entirely, when large firms’ economic interests were at stake. So, it will be fascinating to see who argues on which side and how this issue develops.

Is it possible that this issue will finally cause the break up of the mandatory (integrated) bar association into State licensing agencies on the one hand and voluntary bar associations on the other hand … with the latter being the home of sole and small firm practitioners banding together to serve their own economic interests?

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