The Ethics of Law

Expanding Your Practice with "Of Counsel" Relationships

In this age of change, with large law firms laying off partners and associates, I have to wonder about the future of the of counsel relationship.  As a result of technology and the internet, large corporate law firms which dominate the market based on sheer size are going to start seeing real competition from boutique and small firms.  It also seems to me that lawyers and firms will start forming looser associations as they look to service their clients in distinct, but related, practice areas.  Will these associations take on an "of counsel" flavor?

I would be interested to hear your thoughts about whether or not the of counsel relationship will grow over the next few years.  Further, I would be interested to know whether or not you see ethical limitations on the of counsel relationship which will limit the ability of law firms and lawyers to develop relationships short of partnership.

Alleged Hourly Billing Fraud against Wilmer Law Firm: This Is What Happens When Legal Budgets Are Not Reviewed and Approved Ahead of Time by the Client

My friend Patrick Lamb over at the In Search Of Perfect Client Service blog has an interesting post “Both Sides: You Reap What You Sow.” 

Patrick is commenting on an article at noting McAfee Sues WilmerHale for over $12 Million in Legal Fees.

It is hard to imagine any client entering into a legal services agreement with a law firm without first identifying the budget.  Obviously, litigation is more challenging to budget.  However, it certainly appears that the Wilmer law firm and McAfee failed to discuss expectations going in.  A law firm can always, consistent with the ethical duties of protecting the client’s interest, scale up or down its activities consistent with the budget expectation from the client.  Hourly billing is ripe with possibility of overbilling allegations since it is a system built around simply “paying whatever it costs” after the work is done and after the bill arrives. 

90% of the work that we do at Traverse Legal is on a flat fee basis.  We set forth defined deliverables and a flat fee cost for the client to review and approve.  As noted in the previous post, our retainer agreement is simply an email exchange between us and the potential client.  There is very little room for problems because the client’s expectations and fee are approved before the project even begins. 

The above allegations of attorney fraud and hourly overbilling are yet another example illustrating why hourly billing is bad for both law firms and clients. 

With an Extranet, Communication Has Never Been So Easy.

I was recently reading an article in the January/February 2008 ABA GP Solo Magazine (Volume 25, Number 1) by Timothy J. Gephart entitled “Malpractice: What We Have Here is a Failure to Communicate.”  The article does a great job of outlining the fact that an ever-increasing number of claims against attorneys are based off of violations of ABA Model Rule 1.4, or the communication rule.  Simply put, the rule requires that a lawyer keep the client informed, consult with the client about ways to accomplish the goals, keep the client reasonable informed about status, reply to requests for information, and consult with the client regarding ethical limitations of the attorney.  It sounds simple.  However, more than ever, clients are grieving and/or suing their attorneys for violating this particular rule.  The fact of the matter is that there is an easy and readily available solution to avoid this type of problem.

An extranet can help you satisfy all of the rule requirements.  It allows you to keep a running track record of all communications with the client.  It tracks deliverables, encourages collaboration and discussion of issues important in the case as well as limitations for the lawyer, and is the means through which status updates and actual documents can be provided.  Should the attorney-client relationship ever break down, what better way to show that the lawyer met all of his ethical obligations then by referring to the extranet where the client and lawyer actively engaged in dialog, discussed the points of attack, outlined risks and rewards, and ultimately decided upon a course of action.  If the extranet can serve as a built-in protection against even one malpractice claim, it is worth its weight in gold.  Lawyers who fear having an extranet and an open relationship with their clients will lead to malpractice claims rather than prevent them could not be more wrong.  Moreover, would you want a lawyer with such a concern representing you?  Brian