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November 2005

The Client whose Mouth is Bigger than their Stomach

I have to admit these last several weeks I have been thinking a lot about such issues as client budgets, how to end up with a client base full of perfect clients, how to fire a client, and whether or not a lawyer has a duty to represent a client who has clear rights, but, the lawyer just simply does not want to represent. I have also been thinking a lot about what a large percentage of society simply can't afford legal services let alone litigation.

As I review my client lists and my payable report, I tried to think a little bit about which of these clients really can't afford the legal services that they say they  want. Despite efforts to talk about client budgets, and to insure that clients fully understand what the total cost can be in a piece of litigation, I still find myself on occasion dealing with a client who, despite full disclosure, can't seem to make that third legal bill get paid. I addressed one such client the other day who basically pled change of circumstance. This is the same client who I spent more time with than I ever have in the history of all of my clients making sure they understood and could afford the fairly limited litigation action they were requesting.

Did the client simply forget prior discussions? Do they simply take advantage of the situation? Does an alternative billing policy imply that some clients will be making payments over time?

These are the questions I have today. I will try to weigh in on the answers in my coming posts.

Lawyers are in many ways Victim of a System which discourages Innovation and Creativity

      Dennis Kennedy for the future of legal services in the UK. You can find the link here.

      It is clear that in the UK, they are moving the legal system in the opposite direction of where the American legal system has been and appears to be headed into the indefinite future. In the UK, they want to change the regulatory framework to promote competition, innovation, in an efficient and effective legal sector. In the United States, there is no emphasis on promoting competition or innovation. From my point of view, the entire system and state regulations are devoted to maintaining the status quo and squashing any innovation.

      In the UK, there is an emphasis on putting a system in place that is "no more restrictive or burdensome than is clearly justified." In the United States, our system has all kinds of restrictions and burdens which are justified on the premise that "that's the way it has always been."

      Dennis wonders what the contrast is between our system and the one in the UK especially in terms of state based regulation. As you can guess, my view is that American lawyers live in fifty separate state systems which clearly emphasize the preservation of the status quo. States enforce ethics rules from the viewpoint of the status quo.  Until we create a legal system which actually encourages diversification, creativity, and innovation, those of us on the fringes of innovation will be pushing against the powers that be. I wonder when and where I will be when someone steps up and challenges my business model as "unethical." I can see the argument now. Because I don't push everything into litigation, I am not aggressively representing the interests of my client. Because I give my clients choices about what issues and arguments they will pursue, and actively encourage them to work within their limited budgets, I am not aggressively representing the clients interests. Because I encourage parties to resolve disputes as opposed to litigate them, I am presented with a conflict of interest of one sort or another. Because I use alternative advertising, and constantly push against the hourly billing system I am unfairly comparing myself to others and therefore am engaging in unethical advertising practices.

      I had a husband and wife come to me the other day and ask me to represent them both in their divorce. I know that in my state there is no ethics ruling directly on point and that there are waiver provisions which would arguably cover this. Of course, I would have to indicate that I am presenting neither of them with legal representation in terms of advocacy. I would only be guiding them through the legal process based on their view that they are in an un-contested divorce and will resolve all of their differences between themselves. But, I know that this raises ethical issues which most attorneys are very uncomfortable with, and I don't know how the Bar Association would approach the matter. More importantly, I am stuck on why it would be bad for me to help marshal a couple that wants an amicable resolution of their divorce through the legal system with adequate waivers and disclosures in place. In that instance, the system is encouraging the parties to fight, rather than allowing them to get to the end zone they both desire.

Opinionistas Outs BigLaw

There is a great blog out there called Opinionistas.  Who is Opinionistas?  No one knows for sure.  He/She is anonymous (like me!).  But it is a great look inside BigLaw bullshit.  He/she was recently written about in a  New York Times article. And what a great example of the benefits of being anonymous.  She/he can expose the bullshit from within, without getting fired (at least for now) . Here are some highlights:

  • Crossing the Line - a post about the kiss ass associates and those who refuse to suck up.
  • The Partner Mystique - a post about the fallacy of making partner at BigLaw.
  • Media Love - all the links from the traditional media referring to her/his blog.
  • Once in a Lifetime - a post about .. well, how the hell did we end up being lawyers?

If more BigLaw lawyers came out of the closet and posted about the realities of BigLaw life, many more top law students would realize what many of us top law students took a while to figure out...  BigLaw life is not all it is cracked up to be.  Consider the alternatives before you jump at the big pay check.  You might do better taking a little less now, and making a lot more and having a much better life along the way.

Saving Lawyers from the Destructive Six-Minute Increment

As I enter my office and prepare for my day occurs to me how different the beginning of my day is compared to when I worked in a traditional guerrilla hourly billing model. I get my laptop set up on my laptop stand. I dig through my laptop backpack for my power cord and get it plugged in. I find my SIRIUS satellite radio in my pocket and put it into my JVC SIRIUS satellite boom box (I usually listen to a station called Jamon which plays Grateful Dead, Bob Marley and Phish). I grab my coffee cup and cruise across the parking lot to the coffee shop located on site where I am a member of the coffee club. I pick up my coffee and chit-chat with some of the neighbors that I see there every day. I come back into my office and start into my workload.

I remember when I first started working as an independent practitioner that I actually felt anxious about taking the time to plug in my laptop computer each day. It just seemed like it took an inordinate amount of time to accomplish that simple task. It felt as if I was wasting time or losing minutes. I remember back to my hourly life. At the old firm, I would get into my office and make time to go grab a cup of coffee, hurrying down the hall careful not to get sidetracked by conversation with anyone else and hurry back to my desk. I maybe took a minute or three to get into my hourly billing mode, to start tracking time on my time-sheet.

I have said this before and I will say it again hourly billing is just not healthy. It is destructive to the lawyers who are subjected to it. I have always felt that in general that lawyers are a sorry lot. They are anxious, tense and many drink way too much. And, I have always been struck that for all of their power and might that lawyers as a group are phenomenally insecure. I think that a lot of these attributes come out of the culture, not the pressure of being a lawyer. I started out thinking that we needed to change hourly billing for our clients but I am now convinced that we need to overhaul the system for ourselves.

Why Don't Law Firms Treat Customers Like Vegas Resorts Treat Customers?

     I was watching public television last night and they were doing a series on Las Vegas. Effectively they were running through the history of Vegas from its inception until present. One of the segments involved a training session of employees where the instructor was advising the employees about customer service. She was evangelizing to the workers that they were there to serve the guests, to make the guests feel at home, to get the guests everything that they could ever hope or dream of receiving in terms of service and generally how to maintain this positive and high spirited "can do" approach in dealing with guests. I thought it was interesting because I thought it really captured the essence of what law firms really are not. So much of the time, we dread client phone calls and take pains to avoid a client contact. In Vegas, workers constantly engage the customer trying to find out how they want their eggs cooked and any other special needs they may have. They basically were taking the hospitality attitude to a whole new level.

       In law, we do not take a hospitality approach to our customers. I wonder what would happen if we did?

My Santa Wish-List

      It is November 16, 2005. The first snow flakes are falling from the sky. The outside temperature reads thirty-two degrees from the inside of my car. Breakfast with Santa is scheduled for this saturday. Here is the Christmas list that I am going to put out:

  1. Inspiration, creativity and motivation to take my ten month old firm to the next level as we set out to change the way law is practiced.
  2. Inspired workers to help me turn the legal world upside down and cuase other attornies, clients and the world in general to rethink what it means to be a good lawyer.
  3. A solid client base of good people who understand what we are trying to achieve and support our efforts.
  4. Lots and lots of fun technology to bring efficiency and focus to our daily practice.
  5. Time and motivation to strap on my snow shoes and head into the back trails behind my office once winter really sets in.
  6. Intelligence and rational thought to supprt my decisions on my own behalf, as well as on the behalf of my clients.

Make that Twelve Inches of Snow

       I posted just a little while ago about the first snow of the year. I need to note that that was the first snow storm of the year dumping an initial twelve inches on our small tourist town. I have always loved changes of weather because... well... I have always loved change. I like it when the wind blows hard, I call it the winds of change. They remind me to challenge myself to change, to become better and not to stagnate. When the entire landscape outside your door changes from fall to a winter wonderland overnight, it reminds me that the fundamental rule of all things is change.

      We spend most of our lives fighting off change, trying to control as much around us as we can. When I turned thirty which is now eleven years ago I decided to embrace change. Instead of trying to control the world or otherwise impress my ego, I decided to let the world take the lead. I always analogize this to being in a river. I could pretend that I am stronger then the river and try to swim upstream or try to change the rivers direction. Or I could flow with the river, taking advantage of its power, energy and direction. Yet, I am not at the rivers mercy. I could swim from edge to edge. I could stop to take rests. I could go feet first, head first, on my back or face down. But, I don't delude myself about the relative powers between myself and the water flowing around me.

      As I head to work this morning, my goal is to get it, strap on my snowshoes and head out onto the trails. On a day where the world has recreated itself into something brand new, I would be swimming upstream if I ignored it or spent the day inside insulated from it. It is clear to me that today is a day to jump in; to immerse myself in the power of nature and the universe around me, tap into that power and learn from the messages and lessons which are there to be had for anyone who cares to look.

Technology can be used for both Good and Evil by Law Firms

      Many bloggers including Dennis Kennedy at The Dennis Kennedy Blog have been evangelizing the role which technology will play in bringing efficiency and focus to legal practice. Being a paperless office, I see those efficiencies every day. I have to provide a response to a settlement offer in an injury case and I know that I want to leverage key medical records as an attachment to the letter. In the old paper file world, I would have had to have file pulled from the shelf, riffled through a mountain of medical records all in attempt to find the several that would be helpful. In a high-tech world, I simply draft an email response to the offer and attach the files directly from my file server which are already categorized in a 'Key Medical' folder. I did this all without leaving my desk.

      Did I save time? You bet. I took what would have been a forty-five minute task and  turned it into one that took fifteen minutes. As importantly, I also made that task more accessible and thus removed the barriers from actually preforming it. How many tasks do we leave undone simply because we do not want to go through the pains of doing it? Pulling a file of the shelf and riffling through it is a chore which is often avoided. What if the paralegal has pulled the medical records from the file and has them stowed somewhere in his or her office? What if an associate has pulled the file as part of the associates effort to prepare a motion? Now my forty five minute activity just became an hour and half long activity. More likely, as soon as I found the records missing, I would have simply abandoned the task and come back to it sometime later.

      So technology not only allows us to do more in less time. Technology also allows for tasks to be assigned and completed with allot less effort. We are removing the barriers for completing the tasks that move our cases forward and achieve our clients interests.

      Not enough could be said about the ability of technology and the role of technology in revolutionizing the legal practice. However, as with almost everything else, technology can be used for both good and evil. For many firms, technology just creates an ability to bill more. The increase in email between attorney and client creates another six minute billing activity for those law firms that actually bill for status or update information by email. The ability to access a file off of the file server creates the ability for the lawyer to waste time by accessing such information purely for billing purposes.

      If technology is truly going to have the positive effect that many lawyers expect, it must be buttressed by new practice and billing standards which all work to deliver value to the client and discourage wasted activity. I again implore law firms to stop billing for basic email and phone correspondence with their clients. I encourage law firms to go to a task and project based approach to their legal matters which specifically define deliverables and maintain constant focus on client goals. Without changing he mentality of the lawyer and the law firm which provides service, there is no doubt in my mind that technology will just be used as another tool to increase billing.

Nothing in Law or Life is Real

      As I snowshoe down the paths behind my office in what is now a winter wonderland of snow filled trees, gray sky and the quietness of gently falling snow, I find myself with a smile emblazoned upon my face. Why is that?

      My eldest son who is seven came out to help me shovel my car out this morning and was just alive with pleasure at the snow.  His excitement about being able to shovel and of course the snow day which will keep him home, was tangible. He was brimming with energy and excitement and amazement.

      Almost everyone approaches this first winter snow with wonder and excitement. The magic that brings the winter season to bear touches most everyone in a positive way. But then it occurred to me that come February people will groan when they look outside their windows in the morning and see twelve fresh inches of snow on their car. Which emotion is real? Which emotion is valid?

      One of the great things about starting my independent practice was the newness of it all. The excitement and wonder of jumping off the cliff and landing on my own two feet was beyond description. Just like the first winter snow, the energy of it all carries you down stream and it all feels positive.

      I am more and more convinced each day that life is purely what we make of it. We make our decisions as to how we view things, bad or good, positive or negative. We make decisions as to how we deal with people. We decide whether we are going to be antagonistic, grouchy, pessimistic or negative. Or, we take a conscious decision to take the opposite approach.

      I have concluded that neither the first day of winter with all its joyous emotional excitement, nor the last day of February with its down-trodden sigh is real. The only thing that is real is the decision that we make about how to approach each day, each person and our own lives. As we drift downstream on the current of the universe we must always be mindful that the one thing that we do control is our own attitude about the events around us. Yet, isn't that the most powerful and wonderful energy in the whole of the universe?

Have you ever considered waiving fees even when you did nothing wrong?

      I received a really nice email from a client today who ended up having his case dismissed on summary disposition because our states highest court reversed decades of its own prior precedent in order to reach the political result that it desired. Incredibly the court offered no retro-activity for those attorneys and clients who had relied on the prior court precedent in the handling of the statute of limitations issues which it addressed.

      Despite the outcome, the client sincerely appreciated the way that we handled the matter, including a waiver of several thousand dollars in fees at the end of the case once the state supreme court changed the law. There was certainly no requirement to waive those fees under the retainer agreement. It was not our fault that the states highest court over ruled its prior precedent. But, it did seem the right thing to do given our constant push to share a level of risk with the client. Many firms would be shocked by an approach which penalized the firm for essentially doing nothing wrong. I think that it is critical that attorneys always have some skin in the game, as they would if the matter was being handled purely on a contingency fee. The goal is not simply to collect as much money from the client as possible. The goal is to deliver results. When those results are not achieved, even when the lawyer has done their very best, there ought to be some sharing of the risk.

      The good will that was fostered with the client over our approach strengthens a relationship which I suppose should be broken at this point. A couple thousand dollars in fees which we voluntarily waived, I believe, will be made up down the line by the handling of further matters for the client, or referrals from the client. This would indeed be an unusual result if client referrals were generated from a client who ended up having his underlying case thrown out of court.

      The feedback I am getting from my clients over my approach tells me that our business model is working and is the only one that makes sense for us. By thinking outside the "hourly billing" box, we are able to achieve things in term of client relations that no traditional hourly billing firm could ever achieve.