Blame the Help: Law firm escapes sanctions thanks to associate’s tragedy

help wantedIn theory, a law firm is responsible for all the actions (and omissions) of all its lawyers, all its staff, and even its temps and contract staff (lawyers, paralegals, or whatever).  And, also in theory, the client is bound by the law firm’s actions on its behalf, with rare exceptions.  Even if everyone knows that mistakes can be made, including errors in supervising staff or miscommunications, the implications of allowing a client to distance itself from its law firm or allowing law firms to distance themselves from their lawyers and other staff could lead to chaos:  The court, opponents, and others wouldn’t be able to rely on anything they said, did, or didn’t do if they could just blame it on someone they are supposed to supervise.  Basically, the legal system has to treat these “mistakes” as binding or we wouldn’t be able to rely on anything ever being “final,” especially in those situations where someone pleads guilty or admits some important fact without recognizing the repercussions until later.

If the lawyer makes a serious enough mistake, the client’s remedy is to sue for malpractice or perhaps file a bar complaint (though that rarely helps the client).  Within the law firm, the rule is that more senior lawyers are supposed to supervise everyone below them, right on down the chain of command to the staff, temps, whatever.  Most firms carry legal malpractice insurance to cover some of this, but it gets complicated with multiple law firms for the same client.

All this works fairly predictably for the most part, until you get to sanctions, like the infamous “Rule 11″ sanctions in federal court or discovery sanctions — anything that can be used as a cudgel against an opponent, including opposing counsel.  Rule 11 gives the court authority to sanction the client, or the lawyer, or both, which means it’s a great way to distract attention from the merits and mess with the lawyer-client relationship, e.g., by letting the lawyer blame the client.  Rule 11 is supposed to discourage inappropriate behavior in litigation by attaching a price tag for playing out of bounds.  Of course, it didn’t take long for the lawyers Rule 11 was supposed to curb to turn it around into just another weapon to abuse. Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Ethics, In-House Lawyer Notes, Lawyer Management, Legal Bill Reviews, Legal Commentary, Legal Fees, Legal Fees: Law & Management, Legal News Notes, Trial Practice Checklists 2d | Tagged , , , , , , , , , , | Comments Off

Kardashian Effect: So what if lateral partners destabilize ambitious law firms?

lateral passFor those who obsess about “biglaw” as though it were the ultimate in legal practice, rather than just a mutation, the increasingly destabilizing impact of vanity lateral partners with wads of portable business is troubling.  Firms aspiring to grow don’t have time to nurture a batch of partners and allow them to bear fruit in 15 or 20 years.  Instead, they bid against one another for lateral partners, with big signing bonuses (eight figures in the serious cases), who often fizzle out and sometimes pay off, for awhile.  It took down Dewey, but also puts many firms that seem healthy just one bad year away from a mass exodus of the portable business, followed by a slow death for the excess staff and office space they fed.

To maximize hourly billing, the firms used to add billable employees, including associates and paralegals, who worked the matters to death, but could only do so much damage, even with the occasional 25 hour day and ever-incredible hourly rates.  The days are long gone when a big money law firm can survive on a pyramid of partner track associates and toiling paralegals billing 2,500+ hours per year at rates ranging from $300 to $1,000+ for lawyers:  The math just won’t work year after year.  Hiring, training, and housing these people added to overhead, and mass layoffs create bad PR, which can kill in a bad year.  So most of these “ultimate” law firms are now shells of actual, practicing lawyers on top of many layers of contract or temp lawyers, doing document review, marked up by ten or twenty times what they cost.  There are way too many law firms whose financial success depends entirely on abusing discovery these days.

Vanity partners with naive clients can swing a package of business wherever they go — but only because their clients are willing to be treated like veal — thereby allowing these partners to demand special, guaranteed and growing deals in exchange for letting firms feed on these naive clients.  This only works if the clients erroneously believe that any particular lawyer has unique value, but the law is a static “technology” with no miracle cures.  If these clients ever revolt, many law firms will also crumble. Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Firing a Lawyer, Hiring a lawyer, In-House Lawyer Notes, Lawyer Advertising, Lawyer Management, Legal Bill Reviews, Legal Commentary, Legal Fees, Legal Fees: Law & Management, Legal News Notes | Tagged , , , , , , , , | Comments Off

Stop The Madness: Bring commonsense to the table

angel investorThere are many areas of the law and many types of skills lawyers might acquire.  But there are basically two types of lawyer in the larger sense:  Transactional lawyers and litigation or court lawyers.  Lawyers who go to court may do criminal or civil cases, administrative agency proceedings, arbitrations, or whatever, but they are engaged in an adversarial process that can be open-ended, even for “routine” social security disability, bankruptcies, or small claims cases.

Transactional lawyers give advice on compliance with laws, negotiate business deals, document everything from Wills to filing tax returns to writing corporate by-laws to taking a corporation public to drafting employment contracts, and so on.  They may work with litigation lawyers, and some lawyers do both.

Many law firms have both transactional and litigation lawyers so they can do both for their clients, though some law firms do just one or the other.  One business problem is that transactional work tends not to be as time-intensive as “modern” litigation, though transactional work lends itself to flat fees, especially if the lawyer can recycle much of the work and documentation from one client to the next, just by changing the details — billing by the hour means you can’t “enhance” the actual time spent, although many transactional lawyers do so:  Otherwise they can’t keep up with the hourly billing of their litigation partners. Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Hiring a lawyer, In-House Lawyer Notes, Lawyer Management, Legal Bill Reviews, Legal Commentary, Legal Fees, Legal Fees: Law & Management, Legal News Notes | Tagged , , , , , , | Comments Off

Miracles of Hourly Billing: “Biglaw” hours down but fees up

Survey imageSurveys are often used as an excuse for an article on a slow news day.  Here’s an example of a common theme in legal and some business publications:  Speculation on the health of the legal profession based on self-selected data from a few dozen firms.  (In this case, the data is skimmed off by a billing software company exploiting customers for some PR — another example of insecurity in the “cloud.”)

Projecting the health of a profession from a skewed sample, especially skewed not only toward larger law firms but based on data for just 70 “large corporate” clients, may be good for business, but not fair to the law.  At least this sample, unlike so many others, is based on what clients were actually billed  — surveys of law firms are always skewed by their quoted rates, before discounting and writeoffs. Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Hiring a lawyer, In-House Lawyer Notes, Lawyer Management, Legal Bill Reviews, Legal Commentary, Legal Fees, Legal Fees: Law & Management, Legal News Notes, Trial Practice Checklists 2d | Tagged , , , , , , , , , , | Comments Off

Too Sexy For The Court: Female law students advised to lower heels and stow the cleavage.

seersuckerSometimes internal memos are leaked and become a big deal primarily because, when taken out of their original, implicit internal context, they sound outrageous, silly, embarrassing, or whatever.  The following memo was issued by a law school preparing its students to represent the school in various “externships” or internships.  The topics included some reminders about dress.

But the memo leaked to the larger internet, out of context, as a lecture to young women in particular.  There probably are some law students who don’t know how to show up for work the first time, but in my day, the big problem was that students usually cannot afford a full professional or “conservative” wardrobe, especially for a non-paying temporary job.  I spent a long, hot summer in DC shuffling two cheap suits and a blazer, pants ensemble back in the late 1970s, so I know.

One thing I’ve noticed — having been at this a few decades now all over the country — is that most people understand that one should dress “professionally” or “conservatively” for court or business, but some people don’t have the same definition of “professional.”  For some people, professional’s the same as “Sunday best,” or how you might dress for a funeral — but in some forms, that’s too formal, beyond business, or not conservative by others’ standards (think Easter Sunday outfits).  And for other people, even conservative may include some distractions for others, like suspenders, bow ties, three piece suits, and so on. Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Lawyer Management, Legal Commentary, Legal News Notes, Trial Practice Checklists 2d | Tagged , , , , , | Comments Off

Crumby Fight: Class action defendants want plaintiffs’ unclaimed dollars

toasted-bread-crumbsThere are plenty of problems with class actions because they rarely accomplish much for the actual victims, if there are any, but instead generate gigantic fees for defense lawyers and plaintiff class action lawyers.  In a “coupon” settlement, the plaintiff lawyers get their fees (often all the cash paid by the defendants), the defendants agree not to object to their fees, but class members only get coupons to buy something new from the defendant company — not serious cash.

These class actions exist because of extensive lobbying in state and federal legislatures, and because they are better than the alternatives:  Allowing defendants to get away with massive illegal conduct or paying the taxes to rebuild the government consumer watchdogs that used to police many of these problems.  States with no relief for consumers become havens for consumer abuse. Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Lawyer Management, Legal Commentary, Legal Fees: Law & Management, Legal News Notes, Trial Practice Checklists 2d | Tagged , , , , , , , | Comments Off

Make It Rain: Aspiring rainmakers advised to be dominant, obsessed, risk takers

divining-rodAs with any business, law firms depend on obtaining new clients not just to grow, but to replace clients who leave or — perish the thought — resolve their legal needs.  Some firms attract business through advertising, and now websites, but most depend upon personal relationships and networking to locate and land new clients.  That may be through direct contact with the potential client, but also by gaining recognition among your peers, who might then refer you business, sometimes for a piece of the action and sometimes not.

Larger, diversified firms aim to channel this demand for referrals inside the firm, even if the in-house referral is a poor choice, e.g., inexperienced or overpriced — this is where many billing disputes start.  Many rainmakers are not cut out to be good client-service lawyers from the client’s perspective because they are basically hucksters, who say and do anything to get the client in the door.  Often this leads to clients with fractured budgets who are dealing with swarms of inexperienced, even incompetent lawyers (even temps) they never met in the courtship process — the rainmaker is long gone except for an occasional lunch or phone call. Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Hiring a lawyer, In-House Lawyer Notes, Lawyer Advertising, Lawyer Management, Legal Bill Reviews, Legal Commentary, Legal Fees, Legal Fees: Law & Management, Legal News Notes, Trial Practice Checklists 2d | Tagged , , , , , , , , , | Comments Off

Lien On You: Anti-consumer advice disguised as free consumer advice

lien formIn exchange for having a monopoly on the practice of law, lawyers are supposed to help the public understand the law and help those who cannot afford to pay a lawyer.  Lawyers like to consider themselves professionals, and these are among the burdens of being a true professional.  While it’s likely to surprise most people, including most lawyers, practicing law is not supposed to be all about the money — it’s not supposed to be about the money at all.

But some lawyers don’t get that.  Instead of helping the general public and being honest about shortcomings of the law, or options that might help the lay person, they use every chance they get to advocate for their “side” of every question, which is usually the side that benefits their current clients, or the potential clients they want to attract.  Not surprisingly, this means most legal questions discussed in the press, for example, attract many lawyers falling all over themselves to justify the “money side” of every question, but not many making the case for the side that’s not going to attract paying clients.

Honest, good lawyers know there are two or more sides to every question, or a spectrum of options, but even an honest lawyer may go out of his or her way to avoid a public position contrary to where the money or popular opinion are.  (This idiocy was recently raised to bizarre heights by the US Congress, a collection of some of the weakest lawyers in America, when a nominee for a position in the US Department of Justice was shot down because he had been tangentially involved in supporting NAACP appeals.  Good luck finding appointees willing to take unpopular positions after that.) Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Hiring a lawyer, Lawyer Advertising, Lawyer Management, Legal Commentary, Legal Fees, Legal Fees: Law & Management, Legal News Notes | Tagged , , , , , , , | Comments Off

Incremental Justice: Lawyer sanctioned by bar for excessive quarter-hour time entries

quarter hourAlthough legal fees are required to be reasonable — and it’s unethical to charge an unreasonable fee in most jurisdictions — this rule is not enforced literally.  Most bars shunt ethics complaints about fees into fee arbitration and ignore or reject all complaints, except the most egregious examples.  As a practical matter, the bars pretty much have to do this — fee complaints would swamp the bars and make lawyers (who usually pay dues that fund the bar) very unhappy.

Here’s a rare example of a lawyer who was sanctioned by a state supreme court, acting as the head of the state’s legal ethics system, for inappropriate billing practices.  The types of billing issues found here are quite common for anyone managing legal fees, as we do.  These practices are a problem, but they are rarely challenged as ethics violations.  Even for a fee dispute that is litigated, there are plenty of lawyers who still try to bill in the same fashion that got this particular lawyer in trouble — and many lawyers get away with these tricks, especially if the client fails to object or change lawyers. Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Ethics, In-House Lawyer Notes, Lawyer Management, Legal Bill Reviews, Legal Commentary, Legal Fees, Legal Fees: Law & Management, Legal News Notes, Trial Practice Checklists 2d | Tagged , , , , , , , | Comments Off

Bigger Than Life: Exaggerated self-promotion touted as solution to waning legal business

big eyeThere’s been a panic among some law firms looking for clients capable of paying seven figure and larger legal fees, annually.  This has led as well to a great commotion in the legal press (and sometimes the business press) the last few years over several aspects of the legal profession, which some people think are connected with a perceived decline in the legal services business:  A perceived flattening in profits or income for lawyers, low demand for hiring junior lawyers right out of law school, and a perceived vulnerability among the largest law firms (sometimes called “big law,” which is the part of the profession that gets the most press and lay attention).  How these issues are understood and explained usually depends on who is trying to make some point using this data (consisting mostly of gossip and statistically phony surveys).  But these alleged factual observations are based on skimpy information and poor analysis to begin with, so the conclusions being reached have all the validity of Chicken Little’s.

Obviously the Great Recession might have quite a bit to do with this, and it tends to hit all lawyers, along with everyone else.  (There are some counter-cyclical parts of the law, like bankruptcy work.)  Every recession has had some impact on law firms, though some are worse than others depending on which areas of the economy are hit hardest.  The tech bubble, for example, killed a few more firms in California than usual. Continue reading

Posted in All CGL, Civilian's Guide to Lawyers, Client Tips, Devil's Advocate, Ethics, Firing a Lawyer, Hiring a lawyer, In-House Lawyer Notes, Lawyer Advertising, Lawyer Management, Legal Bill Reviews, Legal Commentary, Legal Fees, Legal Fees: Law & Management, Legal News Notes | Tagged , , , , , , , , , , , , , | Comments Off