The Greatest American Lawyer

2008 Report on Law Firm Billing Practices

Raintoday.com has published a report analyzing law firm billing practices.  The 2008 Report titled Fees and Pricing Benchmark Report: Law Firms & Legal Services Industry 2008, outlines the key elements for growing your law firm.  It provides keen insight into what the most successful law firms are doing with regard to hourly billing rates, alternative billing methods and other related billing practices.

Here are a few key insights from the report that may be of interest to your firm:

What is a domain name worth? Just back from the T.R.A.F.F.I.C. Conference in Orlando

I remember when I first launched this blog about three and a half years ago that the whole concept of blogging was still relatively new.  How far we have come in such a short period of time…

Our law firm has been built around blogging, first amendment rights, technology companies and, beyond all else, the domain name market.  This includes the registration and trademark issues related to domain names, domain valuation, transfer contracts and cybersquatting disputes.

The amazing domain name game would probably shock many people.  From PPC advertising on parked pages to the sale of domain names such as iReport.com for $750,000.00 or the current auction for America.com where the price is already hovering somewhere north of $1 million.

Battle of the Blog

Kevin O’keefe over at the Real Lawyers Have Blogs site recently posted that "lawyer blogs are not advertising." Several commentators, chipping in on this issue, point out that blogs are a way for lawyers to voice their personal opinions. Despite the overlap with traditional notions of "marketing," blogs take up a unique space on the Internet. Web sites are oftentimes clearly advertising. But the primary function of blogs is to provide information. That information is provided from the viewpoint of the author of each post. The author provides information and a viewpoint (bias) about that information. It is extremely personal. Here’s what David Curtin, chief disciplinary counsel of the Rhode Island Supreme Court Disciplinary Counsel in the Providence Business News:

An attorney has a right, just like anyone else, to publicly express his or her opinion, and without government regulation. Whether a blog is [considered] an advertisement would depend on the content of the blog.If an attorney’s blog were to bolster his firm’s services in a particular area, that might be considered advertising......If a potential client contacts a lawyer after reading a blog, there is nothing wrong with that.

This interesting issue keeps popping up in the blogosphere. Those who say that the ethics rules should control lawyer blogging either fail to realize or intentionally want to keep information from the general public. We have to remember that most firms are built around the concept of secrecy. They would never want mass information to get out to the public. For heaven sake, that’s free legal advice!

Take one of my sites over at Traverselegal.com. I have a domain name dispute blog that provides tremendous amounts of free information to anyone wanting to learn about cybersquatting.

While there is a marketing component to my site, the thrust of the content is to provide information. The overwhelming majority of people who visit this particular blog simply use the free information and opinions of the author (me) for their own purposes. In many instances, these blog visitors may decide not to retain an attorney because they already have the answer to their question.

There are certainly lawyers, law firms, and professional organizations out there who see this model as a threat. There are firms that want an educated client. There are firms who want to keep their client in the dark in order to bolster their own expertise. Regardless, blogs are far more about information than they are marketing. If a client decides to retain an attorney after visiting their blog, all the better. But that doesn’t change the essential nature blogging.

Dividing Profits Among Partners: A New Approach

Our firm is now a three partner entity.  We are fortunate enough to be in a position to disburse profits throughout the year, in addition to our salaries.  Like everything else at Traverse Legal, we did not blindly follow the path of other firms in deciding how profits would be shared.

I have been involved with law firms who had very simple formulas for profit sharing.  Many of them simply add up all the collected billable hours and thereafter provide a multiplier based on origination.  The incentive in most firms is to bill as many hours as you possibly can and originate work which is billed by other lawyers in the firm.  While this approach is relatively simple to apply, it hardly provides the correct incentives from either the firm’s point of view, or the client’s point of view.

Blogging Trends

Dominik Mueller at the Domain Name Blog has a fascinating post on “Blogging Trends” which is definitely worth reading and includes a video from ProBlogger’s Darren Rowse.  Blogging is still the easiest way to generate content on the web.  Those of us who have been around a long time certainly realize that blogging takes a lot of time and energy.  It will be fascinating to see how blogs continue to develop and evolve.  My prediction is that someone will come up with a much more cost-effective way to generate category-killer content within the blogs niche area (actually, we have launched a company which achieves these exact goals. The launch is scheduled in three weeks).

Just watched an interesting video post from ProBlogger on the future of blogging. ProBlogger’s Darren Rowse was asked what he thought would be emerging trends in blogging. He said that there were five important trends he had been observing, namely:

• Multiple-author blogs
• Multi-topic blogs
• Blogs converging with other types of sites
• Portal-like design
• Indirect monetization

As you will see, the bigger domain industry blogs are already following some of these trends. For example, DomainNews.com and DomainNameNews.com are multi-author blogs, most domain blogs are converging with web 2.0 sites too, and a couple of bloggers are indirectly monetizing their blogs by offering their own services and expertise to readers.

Here's the video:

Attorney Collaboration? Yes, attorneys in the same office can work together

One of the downsides of hourly billing is the disincentive to collaborate. Clients don’t want to see multiple lawyers showing up on their hourly bill. Law firms and lawyers are sensitive to having collaborative work sessions where multiple people might show up on the time sheet.

We are doing a project for a start up company which involved approximately $20,000.00 worth of drafting projects, including license agreements, intellectual property creation and intellectual property protection. Our deliverables included a list of specific documents. The client had hired other firms over the last several years to achieve the deployment of the business model which he was tinkering with. But none of the lawyers were able to capture the business model with any specificity, and he simply threw out the documents paid for on an hourly basis.

On Friday, the three partners of our law firm sat in a conference room together with the client and collaborated over the first draft of our master licensing agreement. We had already had several face-to-face meetings with the client, had visited the client’s initial deployment in order to better understand the software itself and had been working within the extranet to identify key issues. We had developed a master Mind Map document identifying all the different stakeholders, potential licensees and intellectual property hurdles.

It occurred to me during the middle of this brainstorming session designed to spit out a solid first draft of the master licensing agreement that collaborative brainstorming sessions almost never happen in a traditional hourly billing law firm. And yet the value of that meeting and the key issues we identified and resolved can not be understated. On a flat fee basis, the firm has an incentive as a group to perform the promised deliverables in as efficient manner as possible. The hourly billing model treats collaboration as inefficient. The flat fee billing model treats collaboration as a valuable approach to focusing on and deciding key issues.

At the end of the meeting, we asked the client whether or not we were outperforming his prior law firms. He noted that the business model and approach of the firm was delivering exactly as promised. He stated his belief that our business model was in fact the one that would prevail in the market in the end because it is the one that made perfect sense. The client wasn’t blowing smoke. Everyone in the room knew that value had not only been promised but was being delivered.

Blawg Review # 158

Read this week's Blawg Review hosted by The Mommy Blawger at The Mommy Blawg-The Intersection of Mommyhood and the Law.