Category: Loss Prevention In Law Firms

Lawyers Get Old Also

9/2/2014

     I had a very talented law partner who retired at age 64 to take an appointment by the Governor for a six-year term on the Public Service Commission. He works just as hard as always, but for less money in government service. When I discussed it with him, he said he wanted to do something different and to go out on top — and that he did.

     The days of the magic retirement age of “X” and a gold watch are over. (See August 2013 Post.) For each it is a personal decision and for the poor planners, a necessary delayed requirement. As the very large group of post-World War II children age up, it becomes a legal issue worth revisiting. I officially “retired” at 65, but daily actively practice law and intend to do so. It is just a bit more fun doing it on your own terms, as opposed to that strong fiduciary duty to your other partners to provide full hours, manage a business, feed work to others, and be part of your professional and local communities. As I said before, no lawyer ever went to the Pearly Gates and said: “Damn, I wish I had billed some more hours.”

     We are talking valuable experienced legal resources here. Firms should have every interest in using their talents productively as long as their lawyers wish to do so. However, on the other side, you do not want to be the older person the younger partners always complain being gone or not engaged. They do not take kindly to the “I earned it” approach. It is more like “what have you been doing lately” approach. So, do like my friend did — go out on top is my thought. Work out your own deal with your firm and be happy. The Earl of Elkview, a local colorful lawyer, advocates “Festive Living” with livable rather than billable hours. There are many variables to be considered. See, Jim Cotterman (Cotterman on Compensation) May 14, 2014.

     There is a legal point where the retirement and aging issue transcends what is right, or what you want to do with your legal career. Do not get to the point where your train of thought leaves the station without you.

     Having served on a statewide Alzheimer’s Board, I feel somewhat better attuned to the aging process issues which will statistically hit the Boomers in a big way. Absent a cure, aging issues will most definitely affect boomer lawyers and their law firms. So as your law partners’ keeper, you must watch for all the many things induced by the stressful life of a lawyer, and now add cognitive degeneration to that watch list. Before 401K plans, lawyers never retired and others did pay attention to this, but not so much in the last thirty (30) years. Now I see an early ethics opinion on this very subject.

     Kansas Bar Association Legal Ethics Opinion No. 14-01 “Duty to report attorney memory lapses” tells its lawyers to refer memory lapses, cognitive deteriorations, or other potentially disabling conditions to the Kansas Lawyers Assistance Program, or other suitable service. If this problem resulted in acts or omissions constituting actual violations, then another lawyer would have the duty to report it. I see this as an early recognition that this coming impairment is a larger issue to be regarded in the legal community due to its potential volume. Well, there you have it. Have we discussed this before?

     As a good friend of mine always closes: “Remember, life is too short for boring briefs.”

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Those Pesky Clients- Part Deux

7/7/2014

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     You may have heard me say how much fun the practice of law would be without dealing with clients. (See June 2013 Post). They always seem to need something from you right now and, by the way, don’t always want to pay full price for on-demand services. Well, perhaps clients as the consumers of legal services have a point. Currently there are plenty of good lawyers around, even more than there is of good legal work to do. Perhaps there are now more lawyers than there is demand and the clients have experienced a shift in this balance.

     More companies use inside General Counsel who act as the new trusted advisors to the companies, but with a business budget line to control. So, many trends and changes are afoot in the delivery of legal services and firms need to adapt. Things that can be done cheaper than using lawyers are simply outsourced. Young lawyers cannot be billed in some cases until they have some experience. More and more technology is required by clients to meet their needs, and the costs of that are not recoverable by the law firms. As they say, “it is what it is” and lawyers who want to be successful in the future must adapt and improve the delivery of their services to be competitive.

     Routinely advocating change and the ability to adapt, I still push back at the commodity procurement driven approach of many companies — buying legal services like buying pipes. Cost cutting driven by the Finance and HR portions of companies sometimes result in “guidelines” that seem written by non-lawyers and have more restrictions than the professional rules. Caution is urged at this point, regardless of the market.

     One speaker at the 40th ABA National Conference on Professional Responsibility referred to these company-imposed guidelines as a source of private regulation. He pointed out two main areas of concern: (1) client identity and (2) conflicts of interest. Some corporate guidelines say you will represent all of our affiliates and a conflict would exist as to each. Often we lawyers do not know and cannot determine who these hundreds of related parties may be. The guidelines views of what they say is a conflict may exceed both the case law and the professional rules.

     Watch also these corporate guidelines for other hefty duties such as:

          • Data security audits and other type random audits.

          • Different file destruction requirements.

          • Disaster recovery plans for firms.

          • Breach notifications procedures and damages.

          • Personnel background checks on all employees.

          • Indemnity clauses that can cause coverage issues.

     There is no cookie cutter response to these. I very much advocate a measured discussion and written exceptions to the guidelines when needed and possible. Some will throw their weight around and put the firm in a take-or-no take situation. Generally however, reasonable discussions can produce workable exceptions. Since the firm’s engagement letter is intended to meet its professional responsibility where it practices, a procedure that states the General Counsel and the firm’s designated lawyer agree to resolve any differences between the guidelines and the engagement letter seems fair. Placing the various affiliates in the firm conflict base for information and discussion purposes, but only representing the defined client in this matter may be a good compromise on the one-equals-all problem with regard to conflicts.

     Despite being an advocate of law firms changing to adapt, there have been times when the guidelines were just so bad or unreasonable that I have said: “We do not deserve to be your lawyers.” Most however are workable. Just be very aware of what you are agreeing to by way of guidelines since a court may well conclude they were contract terms, despite being more than required in the law or rules.

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THE SENSORY PRACTICE OF LAW~

6/10/2014

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     When you do a whiskey or wine tasting, all your senses are used to evaluate the product. The sense of smell is one of the biggest factors in whether you will ultimately like the taste of the product.   If you have not learned it yet, some prospective clients smell bad also, in the figurative sense. Learn to trust all your instincts and do the full evaluation before you jump in and take a new client. Everyone wants new business, but the pain of a bad choice will change your approach to new client intake.

     In the initial interview with lawyers I am defending, the most repetitive comment is: “I never should have taken that client.” So, stop doing that. Stinky clients, aggressive and unreasonably demanding clients, irrational clients, shady clients, and clients who just don’t pay their bills lead to no good for the lawyers representing them.

     Every firm should develop a rigidly followed and routine conflicts check that is done every time and always documented in the file. In a very small office, it could be a sign-off by each lawyer; as you get larger, you need computer-assisted checks. Requiring each lawyer to immediately open a file for conflicts recordation purposes is critical. Working off the books without opening a file in your conflicts system will certainly cause you problems and will definitely cause you conflicts. But by this point, you need to be smelling using your instincts.

     The worldwide web can be a good thing and a bad thing. Use it to search the names of potential clients and companies to help weed out those who have public information that would make you not take them as a client. When things go sour with either a crooked or just bankrupt client, the solvent lawyer becomes the target and the claim will be that you “aided and abetted” the wrongdoer, who no doubt has fled the scene or has no assets, or both. A simple internet run by you or a staff person may tip you to a recognized bad actor and prevent you from being their alleged partner in the bad venture.

     Clients that decline to pay you a reasonable retainer might well alert you that they would also decline to pay your reasonable bill at the end. Overly aggressive and demanding clients, unreasonably so, can be problems. Lawyers who get in trouble with that type of client typically do not stand up to them or tell them that they are the professional and will abide by the rules regardless of what the client wants. Instead, they knuckle under for fear of losing the money. I submit that is shortsighted and dangerous.

     How many times have you heard the saying that your first instinct is often right. Even if that is not the case, look at the prospective client and evaluate all you have and note the “smell” of something not quite right. Occasionally you will be wrong, but at many other times you can say: “We do not deserve to be your lawyers” and be better off for it.

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SITUATIONAL AWARENESS

4/9/2014

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                   In a recent car commercial, the driver accelerates some new style engine in the car in order to bring the three passengers’ heads up from their devices to make them discuss where to go to lunch. Everywhere you go, you see people preoccupied with something and not paying attention. We all go about our pattern behavior without really looking around and seeing our situation. Lots of trips and slips of all types can be avoided by effectively looking, a concept long recognized in negligence case law.

                    For fun, I took a handgun safety class once. During all nine hours of the class, the former Marine captain made us do every maneuver only after first looking around us to develop “situational awareness”. I had never made myself regularly do that as a habit. I now look around parking areas and walkways, as a habit, because his comments made real sense. Be aware of where you are and what is around you. You will see things quite literally and avoid many issues by having your head up and looking around.

                    This same concept really applies in law offices where you want to avoid personnel or client problems. When there is a big issue of these types, you usually find after the fact that someone had knowledge, or was generally aware that something was not right. They just did nothing about it. They did not pay enough attention. So, I am now preaching situational awareness to you in the loss prevention business for lawyers. (See November 2013 Post for examples to look for and consider.)

                    A lawyer from Ames & Gough, an insurance broker specializing in law firm coverage, recently shared with me their article on Enterprise Risk Management (ERM), a recognized method of evaluating and eliminating risk in an organization. They argue that its use in the law firm setting starts with the education of senior leadership and management acceptance and then moves out in the firm. A group within the firm organizes the effort to list their known risks and keeps track of them and how they deal with them. They suggest a formal approach to accomplish this and to evaluate the risks, manage, and measure them.

                    In many modern larger law firms this is done through the General Counsel function. If you are not to that point in your firm, you may want to consider forming a small group to do this on a formal basis. I submit it is worth your time and will then allow you to use basic situational awareness to avoid problems. Paying attention to developing problems will save you later grief, as well as money.

See Ames & Gough Winter 2014 Information Alert,

citing Fraser and Simpkins Enterprise Risk Management: Today’s Leading Research and Best Practices for Tomorrow’s Executives

Wiley & Sons, Inc. 2010

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Lawyers Get Old Also

Those Pesky Clients- Part Deux

THE SENSORY PRACTICE OF LAW~

SITUATIONAL AWARENESS

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