Law firm marketing is comprised of many different elements. The analysis of your firm in law practice management can be complex, however, lets begin with a key success variable - your current client base. Managing your client base is the most important aspect of your law firm marketing efforts. I suggest you begin with grading your clients.
The ABCD Solution
In looking at your client base for law firm marketing purposes, you can use a time-tested method of analysis. This is the key concept of "ABCD clients". Service professionals of many types use this method to accurately rate and organize their client base. And for effective marketing for law firms, this method is priceless. By the way it is not just about marketing. It is also about serving your clients better than ever.
As you certainly know in schools we use the letter grading system to rank the students in order of how well they perform on papers, tests, quizzes, etc. Similarly we will "grade" our clients. So think of your client grading system for law firm marketing as summing up all the aspects of a good client.
A client who gets an "A" would be one who has reasonable expectations, follows your instructions, is grateful for the work you do as well as courteous and professional in their demeanor with both you and in particular your staff. In fact if you are ever wondering if someone is an "A" client or a "D" client just ask your staff. The "A" client sends you referrals that turn into "A" clients as well. The "A" client is never concerned with the fees you charge since they know your services are worth the cost. They pay their bills on time all the time. And finally, their cases are interesting and substantial matters. Now isn't this the kind of client you are aiming for in your law firm marketing in the first place? Additionally, have you ever heard the old saying "birds of a feather flock together"? This means your "A" clients know a lot of other "A" clients who they can refer to you if you play your cards right.
Of course a client with a "B" grade would have many of the same qualities of the "A" client, but not all. A client with a "C" grade would be closer to a "D" client. A client with a "D" grade is the complete opposite of all the characteristics of an "A" client. They don't have reasonable expectations, they pay their bills late (some not at all), try to negotiate lower fees or retainers, don't follow your instructions (may even think they know better than you do), are rude or unprofessional, they do not send referrals (or if they do they are also "C or D" clients), their matters are not substantial and interesting, and they often complain about normal fees. Not a pretty picture these "D" clients. Let your competitors have them!
In targeting your law firm marketing, "C & D" clients are not the kind of client you want to attract. Most firms find that "C & D" clients take up between sixty to eighty percent of their time and efforts, while only bringing in twenty to forty percent of the firm's revenue. Does it make sense to cultivate this type "C & D" business? Of course not. You need to stop taking "C & D" business and "fire" (ethically of course) any "C & D" business that you can. Even if you only begin with the "Ds" it is a beginning. Quite liberating as well my clients report to fire these folks.
Effective marketing for law firms includes a realistic look at what will bring the best benefit for the best clients. Ridding yourself of clients who are graded a "C or D" is one of the best things you can do for your "A & B" clients. Without spending all your time on the "C & D" problems and concerns, you can pour your attention into your "A & B" clients (moving their matters to conclusion faster thus you can do more of them). Thus the "A & B" clients will be even more satisfied, resulting in more referrals and more business from them. Clearly a "win/win" for all.
Another big, big advantage of spending less or no time on your "C & D" business is you can focus more time on developing your "A & B" referral network. Your increased marketing time and more focused law firm marketing will result in more quality "A & B" business.
What I have found working individually with over 500 attorneys is most of you will need to limit your practice areas to one, two or maybe (and I do mean maybe) three practice areas in order to drop your "C & D" cases. Too many attorneys are practicing "threshold law" that is defined as taking anything that comes across the threshold of your office. In selecting your practice areas try to incorporate cross-salable areas, such as wills and trusts, real estate, and/or estate planning for example. Select the most lucrative practice areas you have and then pour your law firm marketing efforts into those targeted practice areas while focusing on "A & B" clients and referral sources. This may be a bit frightening at first and in the long run you will be extremely glad you did.
Sunday, December 28, 2008
Sunday, December 7, 2008
How to Write Bills Clients Rush to Pay
By Andrew C. Simpson
If your car mechanic handed you a bill that read “fixed car – $1,000” you’d probably question it, even if the car was running great. You might even drive off and delay paying the bill. Or wait for the mechanic to call to ask about it.
Often we forget that our clients examine our bills in the same manner. We want the mechanic to justify the $1,000: How much for parts? Why did it take so long? A paragraph of explanation goes a long way towards getting the bill paid.
Lawyers are in a more difficult situation. We expect payment regardless of results. Often we’re unable or unwilling to seek payment in advance. And ethical rules may preclude holding the file hostage. It’s important, then, that your invoice helps the client understand the true value of your work.
A lawyer’s invoice should provide a detailed accounting of services rendered. If you bill by the hour, specify the date and amount of time spent and the services provided during that time billed. Describe the services with particularity. If a motion for summary judgment takes 40 hours to draft, never submit a bill that simply lists five entry dates of “Work on motion for summary judgment – 8 hours.” Break it into smaller increments with descriptive detail for each increment. For example, Day 1 might read:
• Reviewed key evidentiary documents and deposition testimony; began drafting statement of facts section of motion for summary judgment – 3.4 hrs
• Drafted “Statement of Uncontested Facts” as required by Local Rule 56.3 – .9 hrs
• Outlined argument – .5 hrs
• Begin draft argument regarding plaintiff’s easement by implication claim – 2.4 hrs
Provide similar detail even if you flat-fee bill, though there’s no need to break it down by date and amount of time. Remember, your bill is also a marketing tool. You want the client to be so pleased to have gotten so much value for the money that he or she returns for later work, or brag to others about the amount of work you did and your reasonable fees.
Here are two more tips. 1) List the time and expenses that you normally write off as “no charge.” I practice insurance defense and many items are considered overhead by insurance companies. I list them at “no charge” on my bill. I’ve had clients call to say they’ve never before received anything free from a lawyer! 2) Email bills as PDFs. I receive some checks within a week rather than the 30 days’ wait with a paper invoice.
Your bottom line? Treat clients the way you want to be treated. Write a bill that you would want to pay, and your clients will pay promptly.
Andrew C. Simpson is a lawyer in Christiansted, U.S. Virgin Islands. Contact him at asimpson@viaccess.net or visit www.coralbrief.com.
Copyright 2007
If your car mechanic handed you a bill that read “fixed car – $1,000” you’d probably question it, even if the car was running great. You might even drive off and delay paying the bill. Or wait for the mechanic to call to ask about it.
Often we forget that our clients examine our bills in the same manner. We want the mechanic to justify the $1,000: How much for parts? Why did it take so long? A paragraph of explanation goes a long way towards getting the bill paid.
Lawyers are in a more difficult situation. We expect payment regardless of results. Often we’re unable or unwilling to seek payment in advance. And ethical rules may preclude holding the file hostage. It’s important, then, that your invoice helps the client understand the true value of your work.
A lawyer’s invoice should provide a detailed accounting of services rendered. If you bill by the hour, specify the date and amount of time spent and the services provided during that time billed. Describe the services with particularity. If a motion for summary judgment takes 40 hours to draft, never submit a bill that simply lists five entry dates of “Work on motion for summary judgment – 8 hours.” Break it into smaller increments with descriptive detail for each increment. For example, Day 1 might read:
• Reviewed key evidentiary documents and deposition testimony; began drafting statement of facts section of motion for summary judgment – 3.4 hrs
• Drafted “Statement of Uncontested Facts” as required by Local Rule 56.3 – .9 hrs
• Outlined argument – .5 hrs
• Begin draft argument regarding plaintiff’s easement by implication claim – 2.4 hrs
Provide similar detail even if you flat-fee bill, though there’s no need to break it down by date and amount of time. Remember, your bill is also a marketing tool. You want the client to be so pleased to have gotten so much value for the money that he or she returns for later work, or brag to others about the amount of work you did and your reasonable fees.
Here are two more tips. 1) List the time and expenses that you normally write off as “no charge.” I practice insurance defense and many items are considered overhead by insurance companies. I list them at “no charge” on my bill. I’ve had clients call to say they’ve never before received anything free from a lawyer! 2) Email bills as PDFs. I receive some checks within a week rather than the 30 days’ wait with a paper invoice.
Your bottom line? Treat clients the way you want to be treated. Write a bill that you would want to pay, and your clients will pay promptly.
Andrew C. Simpson is a lawyer in Christiansted, U.S. Virgin Islands. Contact him at asimpson@viaccess.net or visit www.coralbrief.com.
Copyright 2007
Sunday, November 23, 2008
Forming a business structure for your Firm
Procedure
1. Fill out form from SOS website (I have a word formatted version if you are interested email me for a copy), remember you need to put the "P" in front of the LLC as you are a professional limited liability company. Additionally you can not use names like Legal, Professionals, Services, You may use your name or Law Offices those are safe bets. Example: Law office of Attorney A, PLLC; or A Law Firm, PLLC are fine. But A Legal Professionals is not ok.
2. Send it to the bar and pay about $150 to have them approve your name, they will give you a certificate that you need to give to SOS.
3. Send the certificate and llc papers to SOS with another $125.00 for their processing fee.
This should all take two weeks.
PLLC Vs. Sole Proprietorship
1. Same tax benefits get taxed once and not twice as you would if you were a corp
2. Sole Proprietorship --you can do nothing and that is what you would be classified.
3. PLLC affords you liability protection against lawsuits and malpractice. if you are sued all they can sue is the business and not attack your personal assets. By the way your malpractice insurance premium will be lower if you are PLLC vs. sole proprietorship, in fact some insurance companies wont insure you if are not an LLC or Corporation.
4. If you form the LLC you will need to get a tax ID from irs. Very easy to IRS website put in your approved LLC name and they will mail you one, otherwise you put your personal social on w-9 forms if you are sole proprietorship.
5. You will also have to have a privilege license whether you are sole proprietorship or an LLC you will need to go the NC Dept Revenue website and fill out a form and send in the $50 fee.
6. Although lending institutions generally look at the credit of the owner, particularly when its a start-up, banks are more willing to loan to LLC and Corps than to a sole proprietorship.
Hope this makes sense. Good luck!
1. Fill out form from SOS website (I have a word formatted version if you are interested email me for a copy), remember you need to put the "P" in front of the LLC as you are a professional limited liability company. Additionally you can not use names like Legal, Professionals, Services, You may use your name or Law Offices those are safe bets. Example: Law office of Attorney A, PLLC; or A Law Firm, PLLC are fine. But A Legal Professionals is not ok.
2. Send it to the bar and pay about $150 to have them approve your name, they will give you a certificate that you need to give to SOS.
3. Send the certificate and llc papers to SOS with another $125.00 for their processing fee.
This should all take two weeks.
PLLC Vs. Sole Proprietorship
1. Same tax benefits get taxed once and not twice as you would if you were a corp
2. Sole Proprietorship --you can do nothing and that is what you would be classified.
3. PLLC affords you liability protection against lawsuits and malpractice. if you are sued all they can sue is the business and not attack your personal assets. By the way your malpractice insurance premium will be lower if you are PLLC vs. sole proprietorship, in fact some insurance companies wont insure you if are not an LLC or Corporation.
4. If you form the LLC you will need to get a tax ID from irs. Very easy to IRS website put in your approved LLC name and they will mail you one, otherwise you put your personal social on w-9 forms if you are sole proprietorship.
5. You will also have to have a privilege license whether you are sole proprietorship or an LLC you will need to go the NC Dept Revenue website and fill out a form and send in the $50 fee.
6. Although lending institutions generally look at the credit of the owner, particularly when its a start-up, banks are more willing to loan to LLC and Corps than to a sole proprietorship.
Hope this makes sense. Good luck!
Benefits of retaining a sole practitioner
Benefits of retaining a sole practitioner
The law office of Barry Zalma, Inc. is a sole practice law firm. Barry Zalma is the only lawyer in the firm and has more than 40-years of experience in insurance and insurance coverage issues. The following is presented for the assistance of clients and potential clients of the benefits available to those who retain the services of sole practitioner Barry Zalma rather than a large firm.
Responsiveness and flexibility. A large law firm, like any large organization, is eventually "captured" by its own bureaucracy. Over time, it becomes inflexible and tends to operate more and more for the benefit and convenience of its bureaucracy, rather than the benefit and convenience of its customers. A sole practitioner is relatively immune from that phenomenon and, therefore, can provide service that is more responsive and better-tailored to each client's needs.
Efficiency. At a typical large firm, documents and issues often are repeatedly revised by redundant layers of junior associates, mid-level associates, senior associates, and junior partners, before getting the imprimatur of a senior partner. That is slow, inefficient, and expensive. The large firm makes money: by leveraging the billable hours of its professional staff. A sole practitioner is unable to do that.
You Are a Big Fish. In a large firm, many clients will find they are rather small fish in the firm's pond, and are treated accordingly. In a mega-firm, even a Fortune 500 company may not be a particularly big fish. A sole practitioner has no small fish in his pond. Every client is important and is treated accordingly.
Access. Solos are usually happy to have clients contact them, day or night. I give clients as many ways to contact me as I can think of: mail, e-mail, fax, Web site, office phone, and cell phone. My office phone call forwards to my cell phone which also gets e-mail. Wherever I am, in my back yard or across the world, I am available. I wan to be contacted, and often am, even when I am on vacation. I want my clients to call me. If you use a larger firm, when is the last time one of the lawyers there gave you a number where he or she could be reached at any time of day, seven days a week?
Lower cost for a like kind and quality of work. The bills presented by a sole practitioner are for work done by a single lawyer for the client. Large firms can give their staffs a lot: high salaries, bonuses, beautiful offices in "class A" space, catered food at meetings, golf outings at expensive country clubs, limo service home for anyone working late, in-house cafeterias, in-house gyms, expense accounts, etc. Well, who do you think is paying for that? An experienced and knowledgeable sole practitioner can perform legal tasks in less time than required by a law firm bureaucracy. You pay for the work of one lawyer not many.
A Sole Practitioner is more likely to be independent. Because large law firms have many clients, they will more likely have conflicts of interest. Generally, a law firm cannot handle a legal matter when it gives rise to a conflict of interest between clients of the firm that they are not wiling to waive the conflict. Depending on the size of your community, the larger the law firm, the more likely there may be conflicts of interest.
There are no cross-selling pressures from a sole practitioner. Large firms have an understandable interest in selling additional services to their clients, even if the clients fail to share that interest.
No hidden billing pressures. The dirty, not-so-little secret of life in many law firms is billing and the compulsion to meet minimum numbers of billable hours daily. Whether they call them "expectations," "guidelines," "standards," or "requirements," most firms try to get their staffs to bill at least certain minimum amounts, each and every day, week, month, or year. At many firms, the professional staff is bombarded with ceaseless exhortations to bill. Some firms even offer monthly cash bounties to lawyers who bill in excess of a required minimum, or penalize lawyers who fail to record the minimum number of hours. Too often, the result is obvious and easily predictable: lawyers and paralegals feel constant pressure to inflate their bills, so that's what they do. Sole practitioners like to make money just as much as the next guy (I sure do), but no one is pressuring us to inflate bills.
Your matters will not be used to train inexperienced lawyers. In larger firms, all but the most serious matters are delegated to junior lawyers for day-to-day handling. From the firm's perspective, this not only gives the junior lawyers something to do (and to bill for), but allows them to get experience at clients' expense. The reality is that inexperienced lawyers, no matter how bright and well-educated they are, have little or no idea how to be lawyers. They lack the maturity, judgment, seasoning, experience, and specialized knowledge that come only after years of actual practice. As a result, they spend an inordinate amount of time to produce work that a more experienced lawyer could have done better, in less time, and at lower cost to the client. Experienced sole practitioners do not need to train junior lawyers at clients' expense: they have no junior lawyers.
A more informal working relationship. You are likely to get to know everyone in your lawyer’s office if he or she is a sole practitioner. This can lead to a better one-on-one working relationship, which may make you feel more comfortable.
The law office of Barry Zalma, Inc. is a sole practice law firm. Barry Zalma is the only lawyer in the firm and has more than 40-years of experience in insurance and insurance coverage issues. The following is presented for the assistance of clients and potential clients of the benefits available to those who retain the services of sole practitioner Barry Zalma rather than a large firm.
Responsiveness and flexibility. A large law firm, like any large organization, is eventually "captured" by its own bureaucracy. Over time, it becomes inflexible and tends to operate more and more for the benefit and convenience of its bureaucracy, rather than the benefit and convenience of its customers. A sole practitioner is relatively immune from that phenomenon and, therefore, can provide service that is more responsive and better-tailored to each client's needs.
Efficiency. At a typical large firm, documents and issues often are repeatedly revised by redundant layers of junior associates, mid-level associates, senior associates, and junior partners, before getting the imprimatur of a senior partner. That is slow, inefficient, and expensive. The large firm makes money: by leveraging the billable hours of its professional staff. A sole practitioner is unable to do that.
You Are a Big Fish. In a large firm, many clients will find they are rather small fish in the firm's pond, and are treated accordingly. In a mega-firm, even a Fortune 500 company may not be a particularly big fish. A sole practitioner has no small fish in his pond. Every client is important and is treated accordingly.
Access. Solos are usually happy to have clients contact them, day or night. I give clients as many ways to contact me as I can think of: mail, e-mail, fax, Web site, office phone, and cell phone. My office phone call forwards to my cell phone which also gets e-mail. Wherever I am, in my back yard or across the world, I am available. I wan to be contacted, and often am, even when I am on vacation. I want my clients to call me. If you use a larger firm, when is the last time one of the lawyers there gave you a number where he or she could be reached at any time of day, seven days a week?
Lower cost for a like kind and quality of work. The bills presented by a sole practitioner are for work done by a single lawyer for the client. Large firms can give their staffs a lot: high salaries, bonuses, beautiful offices in "class A" space, catered food at meetings, golf outings at expensive country clubs, limo service home for anyone working late, in-house cafeterias, in-house gyms, expense accounts, etc. Well, who do you think is paying for that? An experienced and knowledgeable sole practitioner can perform legal tasks in less time than required by a law firm bureaucracy. You pay for the work of one lawyer not many.
A Sole Practitioner is more likely to be independent. Because large law firms have many clients, they will more likely have conflicts of interest. Generally, a law firm cannot handle a legal matter when it gives rise to a conflict of interest between clients of the firm that they are not wiling to waive the conflict. Depending on the size of your community, the larger the law firm, the more likely there may be conflicts of interest.
There are no cross-selling pressures from a sole practitioner. Large firms have an understandable interest in selling additional services to their clients, even if the clients fail to share that interest.
No hidden billing pressures. The dirty, not-so-little secret of life in many law firms is billing and the compulsion to meet minimum numbers of billable hours daily. Whether they call them "expectations," "guidelines," "standards," or "requirements," most firms try to get their staffs to bill at least certain minimum amounts, each and every day, week, month, or year. At many firms, the professional staff is bombarded with ceaseless exhortations to bill. Some firms even offer monthly cash bounties to lawyers who bill in excess of a required minimum, or penalize lawyers who fail to record the minimum number of hours. Too often, the result is obvious and easily predictable: lawyers and paralegals feel constant pressure to inflate their bills, so that's what they do. Sole practitioners like to make money just as much as the next guy (I sure do), but no one is pressuring us to inflate bills.
Your matters will not be used to train inexperienced lawyers. In larger firms, all but the most serious matters are delegated to junior lawyers for day-to-day handling. From the firm's perspective, this not only gives the junior lawyers something to do (and to bill for), but allows them to get experience at clients' expense. The reality is that inexperienced lawyers, no matter how bright and well-educated they are, have little or no idea how to be lawyers. They lack the maturity, judgment, seasoning, experience, and specialized knowledge that come only after years of actual practice. As a result, they spend an inordinate amount of time to produce work that a more experienced lawyer could have done better, in less time, and at lower cost to the client. Experienced sole practitioners do not need to train junior lawyers at clients' expense: they have no junior lawyers.
A more informal working relationship. You are likely to get to know everyone in your lawyer’s office if he or she is a sole practitioner. This can lead to a better one-on-one working relationship, which may make you feel more comfortable.
Wednesday, October 29, 2008
So for those Attorneys Looking for Jobs here are some sites
by Charlotte Attorney
http://indeed.com
http://www.lawjobs.com/
http://www.pslawnet.com/
www.lawyersweekly.com/jobs
http://www.careerbuilder.com/
http://www.theposselist.com/home.php?page=about join the appropriate list serv (scroll down)
http://www.usajobs.gov/ (government)
http://www.osp.state.nc.us/jobs/ (NC State Jobs) ---Also do individual search by county and city
http://www.ncesc.com/individual/jobSearch/jobSearchmain.asp (NC employment comission)
http://www.charlottejobs.com/
http://www.jobsincharlotte.com/
http://careers.findlaw.com/
http://www.lawjobs.com/recruiter_directory.asp (list of recruiters)
Go to Job Fairs
Check the newspaper
Ask Everyone if there company or firm is hiring
Check the universities and colleges job sites to see if they are hiring
Go to Social Mixers/ Happy Hour/ Networking Events and have cards made out so you can pass them out. Have a link to your resume on the card.
If all else fails get on the court appointed list while you wait...
Good Luck!
http://indeed.com
http://www.lawjobs.com/
http://www.pslawnet.com/
www.lawyersweekly.com/jobs
http://www.careerbuilder.com/
http://www.theposselist.com/home.php?page=about join the appropriate list serv (scroll down)
http://www.usajobs.gov/ (government)
http://www.osp.state.nc.us/jobs/ (NC State Jobs) ---Also do individual search by county and city
http://www.ncesc.com/individual/jobSearch/jobSearchmain.asp (NC employment comission)
http://www.charlottejobs.com/
http://www.jobsincharlotte.com/
http://careers.findlaw.com/
http://www.lawjobs.com/recruiter_directory.asp (list of recruiters)
Go to Job Fairs
Check the newspaper
Ask Everyone if there company or firm is hiring
Check the universities and colleges job sites to see if they are hiring
Go to Social Mixers/ Happy Hour/ Networking Events and have cards made out so you can pass them out. Have a link to your resume on the card.
If all else fails get on the court appointed list while you wait...
Good Luck!
Avoiding Complaints in the First Place
Disciplinary Actions When Bad Things Happen to Good Lawyers
By Cydney Batchelor
Now, as promised, here are my suggestions for how to avoid most disciplinary complaints—but remember, some will be filed no matter what you do.
1. Hold your law license very close. Attorneys are all too trusting of others. Remember how hard you worked for your license, and don’t give anyone else permission to take it away from you. Supervise your staff scrupulously. Don’t let them write checks, accept money, give legal advice, or lie to cover for you.
2. Never go it alone. This does not mean that you cannot or should not be a sole practitioner. My father was a sole practitioner, and he loved every minute of it. What it does mean, however, is that you need another attorney to consult when the need arises. You need someone to give you a reality check and someone who’ll cover for you if disaster strikes. Disaster for a sole practitioner can be as small as a three-week bout of the flu with no other attorney available to step into the breech.
3. Develop business skills and savvy if you don’t already have them; work smarter, not harder. Embrace the technological benefits of practicing law in the twenty-first century. There are a plethora of computer programs that will do the administrative tasks in a law office in record time. These tools have the additional salutary effect of providing a paper trail if you are ever questioned by the bar. Most state and local bar associations have a law and technology section, and the American Bar Association has a wealth of information in this regard. Avail yourself of the tools you need to minimize your nonlegal work so that you can focus on the substantive issues.
4. Have a law practice management plan and follow it. Equally important, have your employees read and follow it. Again, state and local bar associations always have information for their members about this aspect of practicing, as does the ABA. This is not rocket science, and you don’t need to reinvent this wheel. The materials are there for the asking (and your licensing agency will be very impressed with your professionalism if a complaint is ever lodged against you).
5. Keep your client trust accounting responsibilities at the very top of your priority list. You would be astounded at how many attorneys delegate this important task to their office staff (including spouses and relatives who work in the office). Whether or not your jurisdiction has a rule against allowing nonlawyers to write checks on your trust account, never, ever allow anyone else to do so. Also, you must reconcile your trust account records—personally—on a monthly basis. You can have an accountant manage your trust account record keeping (and many times, errant respondents are required to have a CPA certify their records on an ongoing basis), and you can have your employees do the basic bookkeeping, but the ultimate responsibility for your client trust account is a non-delegable duty.
6. Document, document, document all the work you do. When a client employs you, look to the worst-case scenario and protect yourself proactively by having a paper record of all communications with them. If you follow tip number three above, you’ll find out that there are wonderful computer programs that will set up forms for you requiring very little effort on the part of you and your staff but yielding huge benefits for your practice. The best-case scenario when the bar inquires is to have a two-inch stack of paper documenting your position. Believe me.
7. Respond to every telephone call within 48 hours. This is the number-one reason that clients complain to our state bar. If you are employed by a large firm and your client can’t get you on the telephone, then the receptionist can transfer the call around until some attorney can take it. No such luck for sole practitioners and small firms. Accordingly, clients call your licensing agency. It’s much easier to return a client’s call than to have to respond to one from the bar.
8. Remember that no lie (or fib) is ever worth the potential consequences. We frequently see this in connection with tip number seven. Attorneys adhere to rule seven but then are embarrassed about not having progressed as far as they expected (here’s that shame again) and make up a little fib, telling the client that the matter is proceeding nicely. That little fib turns a low-level disciplinary offense (not returning calls) into a major one (moral turpitude). All of us have those files that never seem to get attention—the credenza queens gathering dust across the room. If you really can’t or won’t get to the file after multiple inquiries from the client, then you may need to withdraw. Anything except lie to a client.
9. Read all the disciplinary decisions on a monthly basis (whether you want to or not). Remember how for years after you passed the bar you continued to read the subsequent bar exam questions (well, at least I did) to remind yourself how glad you were that it was behind you? You should read the discipline decisions for the same reason—to remind yourself on an ongoing basis that your license is a privilege that must be carefully safeguarded. Some jurisdictions— California included—have ethics classes and client trust accounting schools at nominal cost. These, too, can be valuable resources for you. Again, keep your eyes on the prize—avoid complaints against your license to the full extent possible.
10. If you find that your “bump in the road” includes alcohol, drug, or mental health problems, get help before it affects your license. Immediately after I started working for the state bar discipline office, I discovered that a significant number of licensing matters involved attorneys who were suffering some kind of impairment. Whenever possible, I immediately referred these people to our lawyers-helping-lawyers organization, called “The Other Bar,” with great results. More recently, we’ve added to our ability to reach impaired attorneys with a full-time, professional lawyer assistance program (LAP) staffed by licensed mental health clinicians. The services of The Other Bar are always 100 percent confidential, and the services of our LAP are always 100 percent confidential unless attorneys specifically waive confidentiality to have their participation considered as a mitigating factor in their disciplinary matters. Fortunately, every state in the United States has some form of a professional LAP and/or an organization of lawyers helping lawyers (and sometimes judges). If you take away no other thought from this article, please, please, please consult one of these organizations if you find yourself in need of its services. If you’re not clear about the organization in your jurisdiction, please call the ABA toll-free number (800/238-2667), and the Commission on Lawyer Assistance Programs (CoLAP) will provide you the contact information and support that you need.
I wish you well in your practice, and I applaud your courage in working as a sole practitioner or in a small firm. I know from watching my father that this is the hardest way to practice law. My father always said that it was also the most rewarding. I hope that is true for you.
Cydney Batchelor has been a California State Bar prosecutor for the past 15 years. For the last five, her practice has been limited to cases in which attorneys with discipline complaints have drug, alcohol, or mental health problems. She can be reached at cydney.batchelor@calbar.ca.gov.
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By Cydney Batchelor
Now, as promised, here are my suggestions for how to avoid most disciplinary complaints—but remember, some will be filed no matter what you do.
1. Hold your law license very close. Attorneys are all too trusting of others. Remember how hard you worked for your license, and don’t give anyone else permission to take it away from you. Supervise your staff scrupulously. Don’t let them write checks, accept money, give legal advice, or lie to cover for you.
2. Never go it alone. This does not mean that you cannot or should not be a sole practitioner. My father was a sole practitioner, and he loved every minute of it. What it does mean, however, is that you need another attorney to consult when the need arises. You need someone to give you a reality check and someone who’ll cover for you if disaster strikes. Disaster for a sole practitioner can be as small as a three-week bout of the flu with no other attorney available to step into the breech.
3. Develop business skills and savvy if you don’t already have them; work smarter, not harder. Embrace the technological benefits of practicing law in the twenty-first century. There are a plethora of computer programs that will do the administrative tasks in a law office in record time. These tools have the additional salutary effect of providing a paper trail if you are ever questioned by the bar. Most state and local bar associations have a law and technology section, and the American Bar Association has a wealth of information in this regard. Avail yourself of the tools you need to minimize your nonlegal work so that you can focus on the substantive issues.
4. Have a law practice management plan and follow it. Equally important, have your employees read and follow it. Again, state and local bar associations always have information for their members about this aspect of practicing, as does the ABA. This is not rocket science, and you don’t need to reinvent this wheel. The materials are there for the asking (and your licensing agency will be very impressed with your professionalism if a complaint is ever lodged against you).
5. Keep your client trust accounting responsibilities at the very top of your priority list. You would be astounded at how many attorneys delegate this important task to their office staff (including spouses and relatives who work in the office). Whether or not your jurisdiction has a rule against allowing nonlawyers to write checks on your trust account, never, ever allow anyone else to do so. Also, you must reconcile your trust account records—personally—on a monthly basis. You can have an accountant manage your trust account record keeping (and many times, errant respondents are required to have a CPA certify their records on an ongoing basis), and you can have your employees do the basic bookkeeping, but the ultimate responsibility for your client trust account is a non-delegable duty.
6. Document, document, document all the work you do. When a client employs you, look to the worst-case scenario and protect yourself proactively by having a paper record of all communications with them. If you follow tip number three above, you’ll find out that there are wonderful computer programs that will set up forms for you requiring very little effort on the part of you and your staff but yielding huge benefits for your practice. The best-case scenario when the bar inquires is to have a two-inch stack of paper documenting your position. Believe me.
7. Respond to every telephone call within 48 hours. This is the number-one reason that clients complain to our state bar. If you are employed by a large firm and your client can’t get you on the telephone, then the receptionist can transfer the call around until some attorney can take it. No such luck for sole practitioners and small firms. Accordingly, clients call your licensing agency. It’s much easier to return a client’s call than to have to respond to one from the bar.
8. Remember that no lie (or fib) is ever worth the potential consequences. We frequently see this in connection with tip number seven. Attorneys adhere to rule seven but then are embarrassed about not having progressed as far as they expected (here’s that shame again) and make up a little fib, telling the client that the matter is proceeding nicely. That little fib turns a low-level disciplinary offense (not returning calls) into a major one (moral turpitude). All of us have those files that never seem to get attention—the credenza queens gathering dust across the room. If you really can’t or won’t get to the file after multiple inquiries from the client, then you may need to withdraw. Anything except lie to a client.
9. Read all the disciplinary decisions on a monthly basis (whether you want to or not). Remember how for years after you passed the bar you continued to read the subsequent bar exam questions (well, at least I did) to remind yourself how glad you were that it was behind you? You should read the discipline decisions for the same reason—to remind yourself on an ongoing basis that your license is a privilege that must be carefully safeguarded. Some jurisdictions— California included—have ethics classes and client trust accounting schools at nominal cost. These, too, can be valuable resources for you. Again, keep your eyes on the prize—avoid complaints against your license to the full extent possible.
10. If you find that your “bump in the road” includes alcohol, drug, or mental health problems, get help before it affects your license. Immediately after I started working for the state bar discipline office, I discovered that a significant number of licensing matters involved attorneys who were suffering some kind of impairment. Whenever possible, I immediately referred these people to our lawyers-helping-lawyers organization, called “The Other Bar,” with great results. More recently, we’ve added to our ability to reach impaired attorneys with a full-time, professional lawyer assistance program (LAP) staffed by licensed mental health clinicians. The services of The Other Bar are always 100 percent confidential, and the services of our LAP are always 100 percent confidential unless attorneys specifically waive confidentiality to have their participation considered as a mitigating factor in their disciplinary matters. Fortunately, every state in the United States has some form of a professional LAP and/or an organization of lawyers helping lawyers (and sometimes judges). If you take away no other thought from this article, please, please, please consult one of these organizations if you find yourself in need of its services. If you’re not clear about the organization in your jurisdiction, please call the ABA toll-free number (800/238-2667), and the Commission on Lawyer Assistance Programs (CoLAP) will provide you the contact information and support that you need.
I wish you well in your practice, and I applaud your courage in working as a sole practitioner or in a small firm. I know from watching my father that this is the hardest way to practice law. My father always said that it was also the most rewarding. I hope that is true for you.
Cydney Batchelor has been a California State Bar prosecutor for the past 15 years. For the last five, her practice has been limited to cases in which attorneys with discipline complaints have drug, alcohol, or mental health problems. She can be reached at cydney.batchelor@calbar.ca.gov.
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Top Ten Ethics Traps
Top 10 Ethics Traps
November 2007 Issue By Stephanie Francis Ward
POSTED BYNovember 2007 Issue By Stephanie Francis Ward
THE TRAP: Stumbling into a Lawyer-Client Relationship
Phoenix attorney Douglas L. Irish represented Motorola Inc. in a legal dispute over the possible sale of its machine shop to another company.
But M. Dean Corley, a retired Motorola employee who had managed the shop, believed that Irish and his firm, Lewis and Roca, also represented him. And when Corley said as much in a deposition, Irish didn’t correct him.
When Motorola threatened to sue Corley for talking to the prospective buyer about working with the company after the sale, he tried to disqualify Irish and his firm from representing Motorola.
Irish responded that he had never represented Corley, but by then it was too late. U.S. Magistrate Judge Lawrence O. Anderson ruled that Corley had shared confidential information with Irish in the belief he was Corley’s lawyer, and that Irish had a conflict of interest.
The judge allowed the firm to continue representing Motorola, subject to court-imposed safeguards to protect Corley’s interests. Advanced Manufacturing Technologies Inc. v. Motorola Inc., No. CIV99-01219PH XMHMLOA (D. Ariz. July 2, 2002).
THE WAY OUT: Don’t Be Vague
BY MICHAEL DOWNEY
Virtually everyone is a potential client. If a lawyer isn’t careful, someone may inadvertently become an actual client—or think he or she is—often with grave consequences.
While the ABA Model Rules of Professional Conduct are silent on the formation of a lawyer-client relationship, the Restatement (Third) of the Law Governing Lawyers provides in section 14 that the relationship is formed when a person manifests an intent that a lawyer provide legal services, and the lawyer either (a) manifests consent or (b) fails to manifest lack of consent and knows or reasonably should know the person reasonably relied on the lawyer to provide the services.
In other words, if a person asks a legal question, and a lawyer answers or says he or she will look into it, a lawyer-client relationship may result. There’s no need to sign an agreement, shake hands, discuss rates or send an engagement letter.
Once a person becomes a client—even inadvertently—it triggers all the obligations of the attorney-client relationship: loyalty, competency, diligence and confidentiality. Further, under ABA Model Rule 1.10, an inadvertent client relationship imputes to the lawyer’s firm, not just to the lawyer.
In Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686 (Minn. 1980), the court upheld nearly $650,000 in judgments against a firm that thought it had declined a representation. The court ruled that an inadvertent lawyer-client relationship had been created, and thus the firm should have advised the plaintiff about the statute of limitations that governed her original claim.
Lawyers who aren’t careful to avoid inadvertent clients may face malpractice claims, disqualification—or worse.
Michael Downey is a partner at Hinshaw & Culbertson in St. Louis. He chairs the Ethics and Technology Committee in the ABA Center for Professional Responsibility.
THE TRAP: Overlooking the Marketing Rules
A North Carolina lawyer who markets and provides legal services over the Internet under the name Virtual Law Firm sought the advice of the state bar on how certain professional conduct rules applied to it.
The resulting ethics opinion states that, while there is no prohibition against lawyers using the Internet for communication purposes, “Cyberlawyers have no control over their target audience or where their marketing information will be viewed. Lawyers who appear to be soliciting clients from other states may be asking for trouble.”
At a minimum, the Virtual Law Firm must comply with North Carolina’s rules for lawyer advertising, the opinion states. That means the site must list an actual office address, identify the lawyer or lawyers primarily responsible for the Web site, and identify the jurisdictional limits of the practice.
“A prudent lawyer may want to research other jurisdictions’ restrictions on advertising and cross-border practice to ensure compliance before aggressively marketing and providing legal services via the Internet.” North Carolina State Bar, 2005 Formal Ethics Opinion 10 (Jan. 26, 2006).
THE WAY OUT: Translate for the Internet
BY DIANE L. KARPMAN
Thirty years ago, in Bates v. State Bar of Arizona, 433 U.S. 350 (1977), the U.S. Supreme Court laid out the fundamentals of acceptable lawyer advertising: It must not be false, deceptive or misleading. From these three simple ideas, all 50 states have crafted increasingly byzantine rules.
It is nearly impossible to comply, especially on the Internet. States have different retention policies, label requirements and even rules for type size. Rules regulate content like testimonials, comparisons and monikers (“pit bulls,” “heavy hitters”). Recently New York attempted to prohibit pop-ups in electronic advertising. Alexander v. Cahill, No. 5:07-CV-117 (N.D.N.Y. July 23, 2007).
These advertising rules for lawyers were designed for print media and never anticipated YouTube or Second Life. Half the lawyer ads on YouTube spoof the profession. But parody and satire are inherently confusing unless you “get it.” And poking fun at yourself could be confusing to a consumer.
Reportedly, the Internet is the first place people look for lawyers. How can you take advantage of that amazing marketing potential?
Obviously, comply with your home state’s regulations. Include whatever disclaimers should appear. It’s a good idea to state that the ad does not create an attorney-client relationship or protect any confidential information until a written agreement is signed. (But see Barton v. U.S. District Court for the Central District of California, 410 F.3d 1104 [9th Cir. 2005], for a different approach.) Note that it is void where prohibited by law so you don’t run afoul of other state rules.
Remember that Bates acknowledges a public need to be able to find a lawyer, obtain accurate information and make informed decisions about legal services. You can truthfully communicate facts about your professional services and still have a sense of humor. But be careful. The father of commercial spam—a lawyer named Laurence Canter—was disbarred for using the technique for (among other things) promoting his immigration practice. You can check it out on the Internet.
Diane L. Karpman is principal at Karpman & Associates in Los Angeles, where her focus is on legal ethics and professional responsibility. She is a member of the ABA Standing Committee on Professionalism.
THE TRAP: My Boss Made Me Do It
When John B. Bowden started work as a managing associate for the Forquer Law Firm in Greenville, S.C., he was in for an unpleasant surprise. Bowden discovered that the firm was inflating government recording fees on settlement statements for HUD-1 real estate transactions. When he asked his boss in the Charlotte, N.C., office about it, Robert Forquer told him the practice was legal and ethical.
Wrong answer. The South Carolina Office of Disciplinary Counsel informed Bowden that the firm’s Greenville office failed to keep sufficient records of recording fee charges and failed to track client funds relating to those fees. Even worse, Forquer was apparently using excess fees to cover office expenses and make various payments to himself, according to a ruling by the South Carolina Supreme Court in a disciplinary action against Bowden.
Fortunately for Bowden, he wasn’t aware of the misuse of funds. But in an agreement with the ODC that resulted in a reprimand by the court, Bowden acknowledged that it was his duty to tell clients that their bills were inflated and to assure that HUD-1 forms were accurate in closings he supervised. He also acknowledged an ethical duty to assure that other lawyers in his office complied with state ethics rules. In the Matter of John B. Bowden, No. 25978 (May 9, 2005).
THE WAY OUT: Report Even if it Hurts You
BY KATHRYN A. THOMPSON
Rule 5.2(a) of the ABA Model Rules of Professional Conduct is emphatic: A lawyer is bound by the ethics rules “notwithstanding that the lawyer acted at the direction of another person.” The single exception to this rule is when the lawyer acts in accordance with a supervisory lawyer’s “reasonable resolution of an arguable question of professional duty.”
It’s not enough for a subordinate lawyer to refuse to comply with any unethical directives from supervisors. The lawyer also is bound by ABA Model Rule 8.3 to report the supervisor to an appropriate disciplinary agency if he or she “knows” the other lawyer has committed an ethics violation that raises a “substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer.” This requirement applies even when, as in Bowden, the reporting lawyer risks implicating him- or herself in an ethics breach.
There’s one more thing: Subordinate lawyers also must contend with their obligations toward affected clients under ABA Model Rule 1.6. That rule prohibits lawyers from revealing information about representations unless clients give informed consent or the information falls within an enumerated exception to the rule. And Model Rule 8.3 specifically states that lawyers are not required to disclose information that is otherwise protected by Rule 1.6.
Thus, in reporting the conduct of a supervisor to a disciplinary authority, the lawyer has to take into account what information must be revealed to support the charge. If the information is confidential for purposes of Model Rule 1.6, client consent is generally required before the information may be revealed. To complicate matters, the standard of disclosure may vary from state to state. A recent ethics opinion in Ohio held that a lawyer had a duty to report any misconduct stemming from unprivileged information. Opinion 2007-01, Ohio Supreme Court Board of Commissioners on Grievances and Discipline (Feb. 9, 2007). By contrast, the broader scope of Model Rule 1.6 protects the disclosure of any information relating to the representation (subject to specific exceptions).
This much is certain: Subordinate lawyers who are dragged into the fray when their bosses flout the ethics rules cannot assume their second-chair status excuses them from their professional obligations.
Kathryn A. Thompson is research counsel for ETHICSearch, a service of the ABA Center for Professional Responsibility.
THE TRAP: Law Firm Breakups
When two lawyers left the Chicago firm of Dowd & Dowd in 1990, it triggered a legal battle that was still going on 14 years later.
The primary issues in the case were whether the departing lawyers breached their fiduciary duties to their former employers by using confidential information to help arrange financing for their new venture and by soliciting one of the firm’s clients—a subsidiary of Allstate Insurance Co.—before they resigned.
When the legal dust settled, the Illinois Appellate Court upheld a trial court’s assessment of nearly $2.5 million in compensatory damages, plus $200,000 in punitive damages.
The appellate court noted that lawyers may use lists of clients expected to leave a firm to help obtain financing for their new practice. But in this case, the court stated in its opinion, “The evidence leads to the reasonable inference that the partners actually solicited the Allstate business, secured a commitment from Allstate for future business, and obtained financing based on that commitment—not a mere expectation.” Dowd & Dowd Ltd. v. Gleason, 816 N.E.2d 754 (2004); appeal den., 823 N.E.2d 964 (Ill. 2004).
THE WAY OUT: Defer to the Client’s Wishes
BY EILEEN LIBBY
When a law firm breaks up, things can be every bit as acrimonious as the worst War of the Roses marital splits. But who gets custody of the clients?
Rule 1.16 of the ABA Model Rules of Professional Conduct gives the client the unfettered right to choose whether to stay with the original firm or move on with the departing lawyer. Model
Rule 1.4 requires that a lawyer keep the client reasonably informed about the status of the matter, but ethics opinions at the state level differ on whether a lawyer is obligated to inform clients that he or she is leaving the firm.
There is no prohibition in the ABA Model Rules against a departing lawyer advising clients that he or she intends to leave the firm. The nature of the communication is the major concern.
Model Rule 7.3 prohibits a lawyer from soliciting a prospective client either in person or by telephone, but it makes an exception for people with whom the lawyer has had a “prior professional relationship.” In ABA Formal Opinion 99-414 (Sept. 8, 1999), the Standing Committee on Ethics and Professional Responsibility explained that such a relationship does not exist where the departing lawyer had merely worked on a matter “in a way that afforded little or no direct contact with the client.”
Pursuant to rules 7.1 and 7.3, communications by the departing lawyer must not be misleading or overreaching. The communications should not urge the client to sever a relationship with the original firm or disparage that firm. The requirement under Rule 7.3 that written communications to prospective clients be labeled as advertising material do not apply, however, to “neutral” communications that merely notify people with whom the departing lawyer has had a prior professional relationship that the lawyer is changing employment and provide the lawyer’s new address.
Ideally, a departing lawyer and the firm can agree on the content of a joint announcement. The Model Rules do not prescribe the timing of such an announcement, nor do they address the substantive law relating to fiduciaries, “winding up” of partnerships, property and unfair competition. Whether the lawyer can take client lists, continuing legal education materials, practice forms or computer files may turn on principles of property and trade secret law.
Eileen Libby is associate ethics counsel in the ABA Center for Professional Responsibility.
THE TRAP: Communicating by E-Mail
A law firm in Massachusetts maintained a Web site that contained a link allowing visitors to send e-mails directly to lawyers at the firm. But the site contained no warning or disclaimer regarding the confidentiality of the information sent.
So when a company—call it ABC Corp.—sent an e-mail to one of the firm’s lawyers regarding a possible legal action against XYZ Corp., the firm suddenly faced an ethical dilemma because it represented XYZ on another matter.
When the firm sought advice from the Massachusetts Bar Association’s Committee on Professional Ethics, the news wasn’t good. Opinion 07-01 (May 23, 2007).
First, because the firm failed to provide necessary disclaimers, the committee said the lawyer who received the e-mail must maintain the confidentiality of the information furnished by ABC Corp.
And second, the firm may not continue representing XYZ Corp. if protecting ABC Corp.’s confidential information materially limits its ability to represent XYZ.
In this case, a marketing tool intended to help attract clients appears to have lost a firm two of them.
THE WAY OUT: Respect Each E-Mail
BY LAWRENCE J. FOX
E-mails: The greatest of modern conveniences. You can write three while billing someone else.
E-mails: The bane of our existence. Step away from your desk or ignore your BlackBerry for an hour, and 15 more have arrived—all demanding instant responses. For further proof of this mixed blessing, consider these e-mail ethics traps waiting for lawyers and clients.
One way to protect the attorney-client privilege is to add the “attorney-client privileged” label to all communications we think are privileged. Of course, most of us automatically label every e-mail we send that way, just to make sure. Even the order to the deli for five corned beef sandwiches with Russian dressing. If you really want to protect an e-mail, don’t rely on the automatic legend. Label the message itself. Then a judge will know you actually thought about it.
E-mails permit instantaneous communication. It’s way too easy to hit forward and let the whole gang know. They can forward a message on to hundreds more through long strings that add (but rarely subtract) addressees. We know our obligation to protect a client’s confidentiality. So share e-mails only with client representatives who need to know. Watch where your privileged message is going, and make sure your clients do, too.
E-mails accumulate by the millions. Destruction is essential so hard drives don’t crash under an e-mail tsunami. As a result, companies institute policies for discarding the damned things. But when litigation is credibly threatened, a “hold” must be issued, and the deletions must stop. It’s up to lawyers to warn clients when this must occur. The consequences of post-threat destruction are severe indeed, for both client and lawyer.
Lawrence J. Fox is a partner at Drinker Biddle & Reath in Philadelphia. He serves on the ABA Task Force on Attorney-Client Privilege and is a past chair of the Section of Litigation and the Standing Committee on Ethics and Professional Responsibility.
THE TRAP: Failing to Communicate with Clients
In 1997, French lawyer Francois Marland hired the New York City firm of Reid & Priest to represent him in a qui tam action alleging a French bank illegally acquired the assets of an insolvent U.S. insurance company. (The firm, through mergers, became Thelen Reid & Priest; it is now Thelen Reid Brown Raysman & Steiner.) Later, the California Department of Insurance asked the firm to handle its own action against the French bank.
Marland dropped his suit after agreeing to accept a percentage of any fees Thelen Reid got from the California suit. But in 2006, he initiated an arbitration proceeding against the firm claiming that the agreement—under which he received $19 million—was unfair and unenforceable, and that the firm had rushed him into it. Thelen Reid filed its own action in U.S. District Court seeking to enjoin Marland from pursuing his action.
In February, a district judge ruled that Thelen Reid must produce documents the firm had sought to protect on grounds that they related to its representation of the insurance department.
District Judge Vaughn R. Walker of San Francisco emphasized that the documents related to the firm’s representation of Marland, even though they stemmed from internal discussions after the firm asked its own in-house counsel how to proceed. “As a result, all of these documents implicate or affect Marland’s interests, and Thelen’s fiduciary relationship with Marland as a client lifts the lid on these communications,” Walker wrote in his order. Thelen Reid & Priest v. Marland, No. C 06-2071 (N.D. Cal. Feb. 21, 2007).
THE WAY OUT: Do More Than Just Return Phone Calls
BY SUSAN R. MARTYN
The duty to communicate is essential to every aspect of the fiduciary duty a lawyer owes to the client. That duty assures the client’s interests are properly identified and well-served by the lawyer.
Failure to communicate with one of two clients resulted in malpractice liability in dePape v. Trinity Health Systems Inc., 242 F. Supp. 2d 585 (N.D. Iowa 2003). Failure to clarify the scope of an agent’s authority meant professional discipline in Machado v. Statewide Grievance Committee, 890 A.2d 622 (Conn. App. 2006). And in Maritrans GP Inc. v. Pepper, Hamilton & Scheetz, 602 A.2d 1277 (Pa. 1992), failure to communicate a conflict to an ex-client resulted in disqualification to prevent disclosure of client confidences.
Remember to initiate communications on six key occasions: (1) When decisions require client consent about the objectives of the representation, such as the decision to settle or appeal. (2) When seeking any waiver of a client fiduciary obligation, especially confidentiality and conflicts of interest. (3) When decisions require client consent about the means to be used to accomplish client objectives, such as whether to litigate, arbitrate or mediate a matter; or whether to stipulate to a set of facts. (4) When clients should be updated on the status of a matter, especially information about developments in the representation itself, such as a serious illness of the lawyer or merger with another firm. (5) When the client requests information. (6) When the client expects assistance the lawyer cannot provide, such as counsel in committing crimes.
The duty to communicate with clients is simple enough. What’s difficult is carrying out that duty under many different, and often complex, circumstances.
Susan R. Martyn is a professor at the University of Toledo College of Law. She is a member of the ABA Standing Committee on Ethics and Professional Responsibility.
THE TRAP: Doing Business with Clients
New York City attorney Vincent I. Eke-Nweke drew up a lease for a building on Staten Island. It had some problems—enough for the document to come under the scrutiny of a U.S. District Court.
To start with, the transaction involved Eke-Nweke’s own lease of a building owned by one of his clients. But contrary to New York requirements, Eke-Nweke never advised the client to seek independent counsel, nor was the lease written or explained in terms she could reasonably understand.
When client/landlord Judi Anne McMahon filed a lawsuit alleging that Eke-Nweke had breached his fiduciary duty to her, even the judge said he found the terms of the lease hard to follow.
“There is a disparity in bargaining power when an attorney bargains with an unrepresented client, especially where the terms of the contract are so ambiguous that they may not accurately represent the intentions of the parties,” wrote Judge Jack B. Weinstein in his Aug. 31 order denying Eke-Nweke’s motion to dismiss. McMahon v. Eke-Nweke, No. 06-CV-5762 (E.D.N.Y.).
THE WAY OUT: Say It in Writing
BY LYNDA C. SHELY
A lawyer’s fiduciary duty to the client is so essential to their relationship that a lawyer doing business with a client is held to a much higher standard of conduct than anyone else.
Rule 1.8(a) of the ABA Model Rules of Professional Conduct, for instance, imposes strict disclosure requirements on a lawyer who engages in a business transaction with a client.
First, the terms of the transaction must be fair and reasonable for the client; and the lawyer must explain them, in writing, in a way that is reasonably comprehensible to the client.
Second, the lawyer must inform the client, in writing, that it is advisable to consult with another lawyer about the transaction—and give the client a reasonable opportunity to do so.
Third, the client must sign an informed consent to the transaction disclosing that the lawyer is representing the client in the deal.
Failure to comply completely with all these requirements may result in the lawyer’s suspension or disbarment—even if the deal is to the client’s benefit.
Doing business with a client includes such things as loaning money (a particularly bad idea), obtaining an ownership interest in a corporate client, joining in a business venture for a client, and receiving a security interest in client property to protect your fees.
Exceptions include such transactions as buying dinner at a client’s restaurant or obtaining medical services from a client doctor. In McMahon, the attorney should have provided the Rule 1.8(a) disclosures to his client because the lease agreement did not constitute a regular commercial transaction.
A lawyer may also be required by Model Rule 5.7 (Responsibilities Regarding Law-Related Services) to make disclosures under Model Rule 1.8(a) if the lawyer refers a client to an ancillary business of the lawyer. Also, making substantive changes to an existing fee arrangement with a client may cause it to be treated as a business transaction. In re Hefron, 771 N.E.2d 1157 (Ind. 2002).
One final consideration is that many professional liability policies will not provide coverage if the lawyer has a financial interest in the client. Doing business with clients is like having sex with clients—it just isn’t a good idea, even with their consent.
Lynda C. Shely of the Shely Firm in Scottsdale, Ariz., provides professional conduct and risk management services to lawyers. She serves on the Strategic Development Committee for the ABA Center for Professional Responsibility.
THE TRAP: Not Knowing the Ethics Issues
When attorneys Scott G. Lindvall and Patricia J. Clarke worked at Darby & Darby in New York City, their primary task was representing Ivax Corp., one of several defendants in the gabapentin action, a multidistrict patent infringement case. Under a joint defense agreement, they attended confidential meetings with other defendants in which evidence and strategies were discussed in detail.
Lindvall left Darby & Darby in 2003 and ultimately became a partner at Kaye Scholer, another New York firm, and Clarke joined him there. A few months later, Pfizer Corp., a plaintiff in the gabapentin action, notified the court that it intended to replace its attorneys with Kaye Scholer. A defense motion to bar Kaye Scholer followed almost immediately.
Kaye Scholer contended that it had dealt with the potential conflicts before taking on Pfizer, and that Lindvall and Clarke had even obtained a written waiver of conflicts from Ivax.
Not enough, said U.S. District Judge John J. Lifland in Newark, N.J. The joint defense agreement had created an implied attorney-client relationship between Lindvall and Clarke and all the other defendants in the gabapentin action, so conflict waivers should have been sought from those other defendants, too. Lifland barred Kaye Scholer from representing Pfizer. In re Gabapentin Patent Litigation, 407 F. Supp. 2d 607 (D.N.J. 2005).
THE WAY OUT: Know—or Learn—the Law
BY STEPHEN GILLERS
If I had a quarter for every time I heard about a firm that got itself in a pickle because of a failure to anticipate conflicts, I could buy dinner for eight at a top Manhattan restaurant. With wine. Good wine.
Kaye Scholer did try to plan ahead in the gabapentin action, and there are good arguments why consent from Ivax should have sufficed. I think Judge Lifland’s decision to find an implied attorney-client relationship between Lindvall and Clarke and the other defendants was wrong. But he’s the judge, and his ruling did not come out of left field. It was foreseeable.
The trouble is—and here’s the lesson—lawyers may assume they know more than they do about complex legal ethics questions like this one, and they make fatal errors as a result. They would never do that in any other field of law. Would an antitrust lawyer who ran into a complicated intellectual property question make an educated guess at the answer? No! He or she would consult an IP lawyer or do some serious research. Doing neither would be malpractice.
Yet for some reason, lawyers assume that when the specialized field is lawyer ethics, they’ll reach the right answer intuitively. Based on what? The legal ethics class they took 10 or 20 years ago in law school?
Maybe correct intuitive answers were possible in the 1970s or ’80s. But those days are long gone. The law and ethics of lawyering is a specialty and, like other fields, it is constantly changing. When the consequences of error can be unpleasant (or worse) for you or your client, and you haven’t got the time or inclination to research a question, consult an expert.
Stephen Gillers is a professor at New York University School of Law. He chairs the Policy Implementation Committee in the ABA Center for Professional Responsibility.
THE TRAP: Fee Agreements
Harry Issler was listed as counsel of record on a medical-malpractice case, even though he referred the case to Greg Starr. The two New York lawyers entered into a fee-sharing agreement in 1999, when they shared office space. Their work relationship soured in 2001, when Issler lost his lease and would not sublet space to Starr at his new office.
The malpractice case settled for $135,000 and Issler claimed half the fee. Starr argued that the clients had named him sole counsel in the case, and that Issler should receive a quantum meruit amount that he estimated at only 4 percent of the fee.
Judge Dianne T. Renwick rejected Starr’s quantum meruit claim because he offered no proof that the substitution of attorneys had met statutory requirements that Issler consent or that a court order be obtained.
The court also rejected Starr’s argument that the fee-sharing agreement violated the New York Code of Professional Responsibility. The state code says, in effect, that unaffiliated lawyers may share fees proportional to their actual work or by terms of a written client agreement assigning “joint responsibility.”
Renwick held that, under the New York ethics code, joint responsibility essentially means that the referring lawyer—in this case, Issler—assumes joint and several liability for any act of malpractice, even if he or she has no ethical obligation to supervise the work of the lawyer to whom the case was referred. The judge ruled that the language of their fee agreement met that requirement.
THE WAY OUT: Be Clear on Responsibilities
BY PETER H. GERAGHTY
Like New York’s code, ABA Model Rule 1.5 permits lawyers who are not in the same firm to share fees in either of two ways: first, on the basis of the amount of work each lawyer performs in the matter; or second, if by written agreement with the client, each lawyer assumes joint responsibility for the matter.
The Comment to Rule 1.5 states: “Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership.”
The ABA House of Delegates added that definition to the Comment in 2002 to clarify that lawyers who share fees on a joint responsibility basis in effect become partners for purposes of the representation, and assume financial, legal and ethical responsibility for the matter that would also presumably include a duty to supervise under Model Rule 5.1 See also, ABA Informal Opinion 85-1514 (1985), which is still widely used.
State ethics opinions do not agree on what is meant by joint responsibility. The State Bar of Wisconsin (Opinion E-00-01) found in 2000 that the referring lawyer has a duty to make competent referrals, must remain sufficiently aware of the performance of the lawyer to whom the matter was referred, and must assume financial responsibility for the matter. But Arizona Bar Association Opinion 04-02 (2004) states that the requirement is satisfied if a lawyer assumes financial responsibility for any malpractice.
Before agreeing to share fees on a joint responsibility basis, lawyers would be well-advised to check their jurisdictions’ rules of professional conduct, ethics opinions and case law to fully understand the extent of their ethical and legal obligations.
Peter H. Geraghty is director of ETHICSearch in the ABA Center of Professional Responsibility.
THE TRAP: Ending the Lawyer-Client Relationship
When lawyers at Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim in Tacoma, Wash., were asked to help represent Rabanco Ltd. employees in a suit against the company, they jumped right in. They did not think an earlier representation of a wholly owned subsidiary of the company disqualified them.
But a U.S. District Court in Seattle saw things differently. Judge Marsha J. Pechman granted the defendants’ motion that the firm be disqualified.
The firm argued no one from Rabanco nor its subsidiaries had contacted it in three-plus years. But Pechman noted that the firm had open files on matters involving the Rabanco family of companies, was listed as receiving notices in a settlement agreement, and continued to store documents from the earlier case. Jones v. Rabanco Ltd., No. C03-3195P (W.D. Wash. Aug. 3, 2006).
THE WAY OUT: Don’t Rely on Your Assumptions
BY STEPHEN GILLERS
Jones v. Rabanco is a pretty aggressive opinion. Many courts would have ruled differently. Lawyers can do much to insulate themselves from decisions like this one, but only if they know how the rules treat current and former clients differently, and they inform the client that it has moved from the first category to the second if the transition is not clear.
First, the conflict rules are less strict in defining the duty owed to former clients. Most important, under Rule 1.9(a) of the ABA Model Rules of Professional Conduct, the duty to former clients exists only to avoid subsequent adverse representation in substantially related matters. On the other hand, a firm may not ordinarily be adverse to a current client on any matter without informed consent. See ABA Model Rule 1.7(a)(2).
Second, Model Rule 1.4, along with fiduciary duty and malpractice law, requires lawyers to keep current clients informed about factual and legal developments related to their matters. This duty is not ordinarily owed to former clients unless the lawyer promises otherwise. See Lama Holding Co. v. Shearman & Sterling, 758 F. Supp. 159 (S.D.N.Y. 1991), in which the court refused to dismiss a complaint alleging that the firm failed to apprise a former client of tax law changes despite a promise to do so.
Of course, whether a client is current or former is not always within your power to control. You can’t drop a client simply to enjoy the more generous former-client conflict rules. But if the work is done, the firm can make that fact clear to the client, rather than leave things vague.
When I explain this to lawyers, they often admit that they prefer to leave things vague because that means the client will likely think of them as “my lawyer,” which increases the chance for new work. Fine. That’s a business decision, but it comes at a price.
Phoenix attorney Douglas L. Irish represented Motorola Inc. in a legal dispute over the possible sale of its machine shop to another company.
But M. Dean Corley, a retired Motorola employee who had managed the shop, believed that Irish and his firm, Lewis and Roca, also represented him. And when Corley said as much in a deposition, Irish didn’t correct him.
When Motorola threatened to sue Corley for talking to the prospective buyer about working with the company after the sale, he tried to disqualify Irish and his firm from representing Motorola.
Irish responded that he had never represented Corley, but by then it was too late. U.S. Magistrate Judge Lawrence O. Anderson ruled that Corley had shared confidential information with Irish in the belief he was Corley’s lawyer, and that Irish had a conflict of interest.
The judge allowed the firm to continue representing Motorola, subject to court-imposed safeguards to protect Corley’s interests. Advanced Manufacturing Technologies Inc. v. Motorola Inc., No. CIV99-01219PH XMHMLOA (D. Ariz. July 2, 2002).
THE WAY OUT: Don’t Be Vague
BY MICHAEL DOWNEY
Virtually everyone is a potential client. If a lawyer isn’t careful, someone may inadvertently become an actual client—or think he or she is—often with grave consequences.
While the ABA Model Rules of Professional Conduct are silent on the formation of a lawyer-client relationship, the Restatement (Third) of the Law Governing Lawyers provides in section 14 that the relationship is formed when a person manifests an intent that a lawyer provide legal services, and the lawyer either (a) manifests consent or (b) fails to manifest lack of consent and knows or reasonably should know the person reasonably relied on the lawyer to provide the services.
In other words, if a person asks a legal question, and a lawyer answers or says he or she will look into it, a lawyer-client relationship may result. There’s no need to sign an agreement, shake hands, discuss rates or send an engagement letter.
Once a person becomes a client—even inadvertently—it triggers all the obligations of the attorney-client relationship: loyalty, competency, diligence and confidentiality. Further, under ABA Model Rule 1.10, an inadvertent client relationship imputes to the lawyer’s firm, not just to the lawyer.
In Togstad v. Vesely, Otto, Miller & Keefe, 291 N.W.2d 686 (Minn. 1980), the court upheld nearly $650,000 in judgments against a firm that thought it had declined a representation. The court ruled that an inadvertent lawyer-client relationship had been created, and thus the firm should have advised the plaintiff about the statute of limitations that governed her original claim.
Lawyers who aren’t careful to avoid inadvertent clients may face malpractice claims, disqualification—or worse.
Michael Downey is a partner at Hinshaw & Culbertson in St. Louis. He chairs the Ethics and Technology Committee in the ABA Center for Professional Responsibility.
THE TRAP: Overlooking the Marketing Rules
A North Carolina lawyer who markets and provides legal services over the Internet under the name Virtual Law Firm sought the advice of the state bar on how certain professional conduct rules applied to it.
The resulting ethics opinion states that, while there is no prohibition against lawyers using the Internet for communication purposes, “Cyberlawyers have no control over their target audience or where their marketing information will be viewed. Lawyers who appear to be soliciting clients from other states may be asking for trouble.”
At a minimum, the Virtual Law Firm must comply with North Carolina’s rules for lawyer advertising, the opinion states. That means the site must list an actual office address, identify the lawyer or lawyers primarily responsible for the Web site, and identify the jurisdictional limits of the practice.
“A prudent lawyer may want to research other jurisdictions’ restrictions on advertising and cross-border practice to ensure compliance before aggressively marketing and providing legal services via the Internet.” North Carolina State Bar, 2005 Formal Ethics Opinion 10 (Jan. 26, 2006).
THE WAY OUT: Translate for the Internet
BY DIANE L. KARPMAN
Thirty years ago, in Bates v. State Bar of Arizona, 433 U.S. 350 (1977), the U.S. Supreme Court laid out the fundamentals of acceptable lawyer advertising: It must not be false, deceptive or misleading. From these three simple ideas, all 50 states have crafted increasingly byzantine rules.
It is nearly impossible to comply, especially on the Internet. States have different retention policies, label requirements and even rules for type size. Rules regulate content like testimonials, comparisons and monikers (“pit bulls,” “heavy hitters”). Recently New York attempted to prohibit pop-ups in electronic advertising. Alexander v. Cahill, No. 5:07-CV-117 (N.D.N.Y. July 23, 2007).
These advertising rules for lawyers were designed for print media and never anticipated YouTube or Second Life. Half the lawyer ads on YouTube spoof the profession. But parody and satire are inherently confusing unless you “get it.” And poking fun at yourself could be confusing to a consumer.
Reportedly, the Internet is the first place people look for lawyers. How can you take advantage of that amazing marketing potential?
Obviously, comply with your home state’s regulations. Include whatever disclaimers should appear. It’s a good idea to state that the ad does not create an attorney-client relationship or protect any confidential information until a written agreement is signed. (But see Barton v. U.S. District Court for the Central District of California, 410 F.3d 1104 [9th Cir. 2005], for a different approach.) Note that it is void where prohibited by law so you don’t run afoul of other state rules.
Remember that Bates acknowledges a public need to be able to find a lawyer, obtain accurate information and make informed decisions about legal services. You can truthfully communicate facts about your professional services and still have a sense of humor. But be careful. The father of commercial spam—a lawyer named Laurence Canter—was disbarred for using the technique for (among other things) promoting his immigration practice. You can check it out on the Internet.
Diane L. Karpman is principal at Karpman & Associates in Los Angeles, where her focus is on legal ethics and professional responsibility. She is a member of the ABA Standing Committee on Professionalism.
THE TRAP: My Boss Made Me Do It
When John B. Bowden started work as a managing associate for the Forquer Law Firm in Greenville, S.C., he was in for an unpleasant surprise. Bowden discovered that the firm was inflating government recording fees on settlement statements for HUD-1 real estate transactions. When he asked his boss in the Charlotte, N.C., office about it, Robert Forquer told him the practice was legal and ethical.
Wrong answer. The South Carolina Office of Disciplinary Counsel informed Bowden that the firm’s Greenville office failed to keep sufficient records of recording fee charges and failed to track client funds relating to those fees. Even worse, Forquer was apparently using excess fees to cover office expenses and make various payments to himself, according to a ruling by the South Carolina Supreme Court in a disciplinary action against Bowden.
Fortunately for Bowden, he wasn’t aware of the misuse of funds. But in an agreement with the ODC that resulted in a reprimand by the court, Bowden acknowledged that it was his duty to tell clients that their bills were inflated and to assure that HUD-1 forms were accurate in closings he supervised. He also acknowledged an ethical duty to assure that other lawyers in his office complied with state ethics rules. In the Matter of John B. Bowden, No. 25978 (May 9, 2005).
THE WAY OUT: Report Even if it Hurts You
BY KATHRYN A. THOMPSON
Rule 5.2(a) of the ABA Model Rules of Professional Conduct is emphatic: A lawyer is bound by the ethics rules “notwithstanding that the lawyer acted at the direction of another person.” The single exception to this rule is when the lawyer acts in accordance with a supervisory lawyer’s “reasonable resolution of an arguable question of professional duty.”
It’s not enough for a subordinate lawyer to refuse to comply with any unethical directives from supervisors. The lawyer also is bound by ABA Model Rule 8.3 to report the supervisor to an appropriate disciplinary agency if he or she “knows” the other lawyer has committed an ethics violation that raises a “substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer.” This requirement applies even when, as in Bowden, the reporting lawyer risks implicating him- or herself in an ethics breach.
There’s one more thing: Subordinate lawyers also must contend with their obligations toward affected clients under ABA Model Rule 1.6. That rule prohibits lawyers from revealing information about representations unless clients give informed consent or the information falls within an enumerated exception to the rule. And Model Rule 8.3 specifically states that lawyers are not required to disclose information that is otherwise protected by Rule 1.6.
Thus, in reporting the conduct of a supervisor to a disciplinary authority, the lawyer has to take into account what information must be revealed to support the charge. If the information is confidential for purposes of Model Rule 1.6, client consent is generally required before the information may be revealed. To complicate matters, the standard of disclosure may vary from state to state. A recent ethics opinion in Ohio held that a lawyer had a duty to report any misconduct stemming from unprivileged information. Opinion 2007-01, Ohio Supreme Court Board of Commissioners on Grievances and Discipline (Feb. 9, 2007). By contrast, the broader scope of Model Rule 1.6 protects the disclosure of any information relating to the representation (subject to specific exceptions).
This much is certain: Subordinate lawyers who are dragged into the fray when their bosses flout the ethics rules cannot assume their second-chair status excuses them from their professional obligations.
Kathryn A. Thompson is research counsel for ETHICSearch, a service of the ABA Center for Professional Responsibility.
THE TRAP: Law Firm Breakups
When two lawyers left the Chicago firm of Dowd & Dowd in 1990, it triggered a legal battle that was still going on 14 years later.
The primary issues in the case were whether the departing lawyers breached their fiduciary duties to their former employers by using confidential information to help arrange financing for their new venture and by soliciting one of the firm’s clients—a subsidiary of Allstate Insurance Co.—before they resigned.
When the legal dust settled, the Illinois Appellate Court upheld a trial court’s assessment of nearly $2.5 million in compensatory damages, plus $200,000 in punitive damages.
The appellate court noted that lawyers may use lists of clients expected to leave a firm to help obtain financing for their new practice. But in this case, the court stated in its opinion, “The evidence leads to the reasonable inference that the partners actually solicited the Allstate business, secured a commitment from Allstate for future business, and obtained financing based on that commitment—not a mere expectation.” Dowd & Dowd Ltd. v. Gleason, 816 N.E.2d 754 (2004); appeal den., 823 N.E.2d 964 (Ill. 2004).
THE WAY OUT: Defer to the Client’s Wishes
BY EILEEN LIBBY
When a law firm breaks up, things can be every bit as acrimonious as the worst War of the Roses marital splits. But who gets custody of the clients?
Rule 1.16 of the ABA Model Rules of Professional Conduct gives the client the unfettered right to choose whether to stay with the original firm or move on with the departing lawyer. Model
Rule 1.4 requires that a lawyer keep the client reasonably informed about the status of the matter, but ethics opinions at the state level differ on whether a lawyer is obligated to inform clients that he or she is leaving the firm.
There is no prohibition in the ABA Model Rules against a departing lawyer advising clients that he or she intends to leave the firm. The nature of the communication is the major concern.
Model Rule 7.3 prohibits a lawyer from soliciting a prospective client either in person or by telephone, but it makes an exception for people with whom the lawyer has had a “prior professional relationship.” In ABA Formal Opinion 99-414 (Sept. 8, 1999), the Standing Committee on Ethics and Professional Responsibility explained that such a relationship does not exist where the departing lawyer had merely worked on a matter “in a way that afforded little or no direct contact with the client.”
Pursuant to rules 7.1 and 7.3, communications by the departing lawyer must not be misleading or overreaching. The communications should not urge the client to sever a relationship with the original firm or disparage that firm. The requirement under Rule 7.3 that written communications to prospective clients be labeled as advertising material do not apply, however, to “neutral” communications that merely notify people with whom the departing lawyer has had a prior professional relationship that the lawyer is changing employment and provide the lawyer’s new address.
Ideally, a departing lawyer and the firm can agree on the content of a joint announcement. The Model Rules do not prescribe the timing of such an announcement, nor do they address the substantive law relating to fiduciaries, “winding up” of partnerships, property and unfair competition. Whether the lawyer can take client lists, continuing legal education materials, practice forms or computer files may turn on principles of property and trade secret law.
Eileen Libby is associate ethics counsel in the ABA Center for Professional Responsibility.
THE TRAP: Communicating by E-Mail
A law firm in Massachusetts maintained a Web site that contained a link allowing visitors to send e-mails directly to lawyers at the firm. But the site contained no warning or disclaimer regarding the confidentiality of the information sent.
So when a company—call it ABC Corp.—sent an e-mail to one of the firm’s lawyers regarding a possible legal action against XYZ Corp., the firm suddenly faced an ethical dilemma because it represented XYZ on another matter.
When the firm sought advice from the Massachusetts Bar Association’s Committee on Professional Ethics, the news wasn’t good. Opinion 07-01 (May 23, 2007).
First, because the firm failed to provide necessary disclaimers, the committee said the lawyer who received the e-mail must maintain the confidentiality of the information furnished by ABC Corp.
And second, the firm may not continue representing XYZ Corp. if protecting ABC Corp.’s confidential information materially limits its ability to represent XYZ.
In this case, a marketing tool intended to help attract clients appears to have lost a firm two of them.
THE WAY OUT: Respect Each E-Mail
BY LAWRENCE J. FOX
E-mails: The greatest of modern conveniences. You can write three while billing someone else.
E-mails: The bane of our existence. Step away from your desk or ignore your BlackBerry for an hour, and 15 more have arrived—all demanding instant responses. For further proof of this mixed blessing, consider these e-mail ethics traps waiting for lawyers and clients.
One way to protect the attorney-client privilege is to add the “attorney-client privileged” label to all communications we think are privileged. Of course, most of us automatically label every e-mail we send that way, just to make sure. Even the order to the deli for five corned beef sandwiches with Russian dressing. If you really want to protect an e-mail, don’t rely on the automatic legend. Label the message itself. Then a judge will know you actually thought about it.
E-mails permit instantaneous communication. It’s way too easy to hit forward and let the whole gang know. They can forward a message on to hundreds more through long strings that add (but rarely subtract) addressees. We know our obligation to protect a client’s confidentiality. So share e-mails only with client representatives who need to know. Watch where your privileged message is going, and make sure your clients do, too.
E-mails accumulate by the millions. Destruction is essential so hard drives don’t crash under an e-mail tsunami. As a result, companies institute policies for discarding the damned things. But when litigation is credibly threatened, a “hold” must be issued, and the deletions must stop. It’s up to lawyers to warn clients when this must occur. The consequences of post-threat destruction are severe indeed, for both client and lawyer.
Lawrence J. Fox is a partner at Drinker Biddle & Reath in Philadelphia. He serves on the ABA Task Force on Attorney-Client Privilege and is a past chair of the Section of Litigation and the Standing Committee on Ethics and Professional Responsibility.
THE TRAP: Failing to Communicate with Clients
In 1997, French lawyer Francois Marland hired the New York City firm of Reid & Priest to represent him in a qui tam action alleging a French bank illegally acquired the assets of an insolvent U.S. insurance company. (The firm, through mergers, became Thelen Reid & Priest; it is now Thelen Reid Brown Raysman & Steiner.) Later, the California Department of Insurance asked the firm to handle its own action against the French bank.
Marland dropped his suit after agreeing to accept a percentage of any fees Thelen Reid got from the California suit. But in 2006, he initiated an arbitration proceeding against the firm claiming that the agreement—under which he received $19 million—was unfair and unenforceable, and that the firm had rushed him into it. Thelen Reid filed its own action in U.S. District Court seeking to enjoin Marland from pursuing his action.
In February, a district judge ruled that Thelen Reid must produce documents the firm had sought to protect on grounds that they related to its representation of the insurance department.
District Judge Vaughn R. Walker of San Francisco emphasized that the documents related to the firm’s representation of Marland, even though they stemmed from internal discussions after the firm asked its own in-house counsel how to proceed. “As a result, all of these documents implicate or affect Marland’s interests, and Thelen’s fiduciary relationship with Marland as a client lifts the lid on these communications,” Walker wrote in his order. Thelen Reid & Priest v. Marland, No. C 06-2071 (N.D. Cal. Feb. 21, 2007).
THE WAY OUT: Do More Than Just Return Phone Calls
BY SUSAN R. MARTYN
The duty to communicate is essential to every aspect of the fiduciary duty a lawyer owes to the client. That duty assures the client’s interests are properly identified and well-served by the lawyer.
Failure to communicate with one of two clients resulted in malpractice liability in dePape v. Trinity Health Systems Inc., 242 F. Supp. 2d 585 (N.D. Iowa 2003). Failure to clarify the scope of an agent’s authority meant professional discipline in Machado v. Statewide Grievance Committee, 890 A.2d 622 (Conn. App. 2006). And in Maritrans GP Inc. v. Pepper, Hamilton & Scheetz, 602 A.2d 1277 (Pa. 1992), failure to communicate a conflict to an ex-client resulted in disqualification to prevent disclosure of client confidences.
Remember to initiate communications on six key occasions: (1) When decisions require client consent about the objectives of the representation, such as the decision to settle or appeal. (2) When seeking any waiver of a client fiduciary obligation, especially confidentiality and conflicts of interest. (3) When decisions require client consent about the means to be used to accomplish client objectives, such as whether to litigate, arbitrate or mediate a matter; or whether to stipulate to a set of facts. (4) When clients should be updated on the status of a matter, especially information about developments in the representation itself, such as a serious illness of the lawyer or merger with another firm. (5) When the client requests information. (6) When the client expects assistance the lawyer cannot provide, such as counsel in committing crimes.
The duty to communicate with clients is simple enough. What’s difficult is carrying out that duty under many different, and often complex, circumstances.
Susan R. Martyn is a professor at the University of Toledo College of Law. She is a member of the ABA Standing Committee on Ethics and Professional Responsibility.
THE TRAP: Doing Business with Clients
New York City attorney Vincent I. Eke-Nweke drew up a lease for a building on Staten Island. It had some problems—enough for the document to come under the scrutiny of a U.S. District Court.
To start with, the transaction involved Eke-Nweke’s own lease of a building owned by one of his clients. But contrary to New York requirements, Eke-Nweke never advised the client to seek independent counsel, nor was the lease written or explained in terms she could reasonably understand.
When client/landlord Judi Anne McMahon filed a lawsuit alleging that Eke-Nweke had breached his fiduciary duty to her, even the judge said he found the terms of the lease hard to follow.
“There is a disparity in bargaining power when an attorney bargains with an unrepresented client, especially where the terms of the contract are so ambiguous that they may not accurately represent the intentions of the parties,” wrote Judge Jack B. Weinstein in his Aug. 31 order denying Eke-Nweke’s motion to dismiss. McMahon v. Eke-Nweke, No. 06-CV-5762 (E.D.N.Y.).
THE WAY OUT: Say It in Writing
BY LYNDA C. SHELY
A lawyer’s fiduciary duty to the client is so essential to their relationship that a lawyer doing business with a client is held to a much higher standard of conduct than anyone else.
Rule 1.8(a) of the ABA Model Rules of Professional Conduct, for instance, imposes strict disclosure requirements on a lawyer who engages in a business transaction with a client.
First, the terms of the transaction must be fair and reasonable for the client; and the lawyer must explain them, in writing, in a way that is reasonably comprehensible to the client.
Second, the lawyer must inform the client, in writing, that it is advisable to consult with another lawyer about the transaction—and give the client a reasonable opportunity to do so.
Third, the client must sign an informed consent to the transaction disclosing that the lawyer is representing the client in the deal.
Failure to comply completely with all these requirements may result in the lawyer’s suspension or disbarment—even if the deal is to the client’s benefit.
Doing business with a client includes such things as loaning money (a particularly bad idea), obtaining an ownership interest in a corporate client, joining in a business venture for a client, and receiving a security interest in client property to protect your fees.
Exceptions include such transactions as buying dinner at a client’s restaurant or obtaining medical services from a client doctor. In McMahon, the attorney should have provided the Rule 1.8(a) disclosures to his client because the lease agreement did not constitute a regular commercial transaction.
A lawyer may also be required by Model Rule 5.7 (Responsibilities Regarding Law-Related Services) to make disclosures under Model Rule 1.8(a) if the lawyer refers a client to an ancillary business of the lawyer. Also, making substantive changes to an existing fee arrangement with a client may cause it to be treated as a business transaction. In re Hefron, 771 N.E.2d 1157 (Ind. 2002).
One final consideration is that many professional liability policies will not provide coverage if the lawyer has a financial interest in the client. Doing business with clients is like having sex with clients—it just isn’t a good idea, even with their consent.
Lynda C. Shely of the Shely Firm in Scottsdale, Ariz., provides professional conduct and risk management services to lawyers. She serves on the Strategic Development Committee for the ABA Center for Professional Responsibility.
THE TRAP: Not Knowing the Ethics Issues
When attorneys Scott G. Lindvall and Patricia J. Clarke worked at Darby & Darby in New York City, their primary task was representing Ivax Corp., one of several defendants in the gabapentin action, a multidistrict patent infringement case. Under a joint defense agreement, they attended confidential meetings with other defendants in which evidence and strategies were discussed in detail.
Lindvall left Darby & Darby in 2003 and ultimately became a partner at Kaye Scholer, another New York firm, and Clarke joined him there. A few months later, Pfizer Corp., a plaintiff in the gabapentin action, notified the court that it intended to replace its attorneys with Kaye Scholer. A defense motion to bar Kaye Scholer followed almost immediately.
Kaye Scholer contended that it had dealt with the potential conflicts before taking on Pfizer, and that Lindvall and Clarke had even obtained a written waiver of conflicts from Ivax.
Not enough, said U.S. District Judge John J. Lifland in Newark, N.J. The joint defense agreement had created an implied attorney-client relationship between Lindvall and Clarke and all the other defendants in the gabapentin action, so conflict waivers should have been sought from those other defendants, too. Lifland barred Kaye Scholer from representing Pfizer. In re Gabapentin Patent Litigation, 407 F. Supp. 2d 607 (D.N.J. 2005).
THE WAY OUT: Know—or Learn—the Law
BY STEPHEN GILLERS
If I had a quarter for every time I heard about a firm that got itself in a pickle because of a failure to anticipate conflicts, I could buy dinner for eight at a top Manhattan restaurant. With wine. Good wine.
Kaye Scholer did try to plan ahead in the gabapentin action, and there are good arguments why consent from Ivax should have sufficed. I think Judge Lifland’s decision to find an implied attorney-client relationship between Lindvall and Clarke and the other defendants was wrong. But he’s the judge, and his ruling did not come out of left field. It was foreseeable.
The trouble is—and here’s the lesson—lawyers may assume they know more than they do about complex legal ethics questions like this one, and they make fatal errors as a result. They would never do that in any other field of law. Would an antitrust lawyer who ran into a complicated intellectual property question make an educated guess at the answer? No! He or she would consult an IP lawyer or do some serious research. Doing neither would be malpractice.
Yet for some reason, lawyers assume that when the specialized field is lawyer ethics, they’ll reach the right answer intuitively. Based on what? The legal ethics class they took 10 or 20 years ago in law school?
Maybe correct intuitive answers were possible in the 1970s or ’80s. But those days are long gone. The law and ethics of lawyering is a specialty and, like other fields, it is constantly changing. When the consequences of error can be unpleasant (or worse) for you or your client, and you haven’t got the time or inclination to research a question, consult an expert.
Stephen Gillers is a professor at New York University School of Law. He chairs the Policy Implementation Committee in the ABA Center for Professional Responsibility.
THE TRAP: Fee Agreements
Harry Issler was listed as counsel of record on a medical-malpractice case, even though he referred the case to Greg Starr. The two New York lawyers entered into a fee-sharing agreement in 1999, when they shared office space. Their work relationship soured in 2001, when Issler lost his lease and would not sublet space to Starr at his new office.
The malpractice case settled for $135,000 and Issler claimed half the fee. Starr argued that the clients had named him sole counsel in the case, and that Issler should receive a quantum meruit amount that he estimated at only 4 percent of the fee.
Judge Dianne T. Renwick rejected Starr’s quantum meruit claim because he offered no proof that the substitution of attorneys had met statutory requirements that Issler consent or that a court order be obtained.
The court also rejected Starr’s argument that the fee-sharing agreement violated the New York Code of Professional Responsibility. The state code says, in effect, that unaffiliated lawyers may share fees proportional to their actual work or by terms of a written client agreement assigning “joint responsibility.”
Renwick held that, under the New York ethics code, joint responsibility essentially means that the referring lawyer—in this case, Issler—assumes joint and several liability for any act of malpractice, even if he or she has no ethical obligation to supervise the work of the lawyer to whom the case was referred. The judge ruled that the language of their fee agreement met that requirement.
THE WAY OUT: Be Clear on Responsibilities
BY PETER H. GERAGHTY
Like New York’s code, ABA Model Rule 1.5 permits lawyers who are not in the same firm to share fees in either of two ways: first, on the basis of the amount of work each lawyer performs in the matter; or second, if by written agreement with the client, each lawyer assumes joint responsibility for the matter.
The Comment to Rule 1.5 states: “Joint responsibility for the representation entails financial and ethical responsibility for the representation as if the lawyers were associated in a partnership.”
The ABA House of Delegates added that definition to the Comment in 2002 to clarify that lawyers who share fees on a joint responsibility basis in effect become partners for purposes of the representation, and assume financial, legal and ethical responsibility for the matter that would also presumably include a duty to supervise under Model Rule 5.1 See also, ABA Informal Opinion 85-1514 (1985), which is still widely used.
State ethics opinions do not agree on what is meant by joint responsibility. The State Bar of Wisconsin (Opinion E-00-01) found in 2000 that the referring lawyer has a duty to make competent referrals, must remain sufficiently aware of the performance of the lawyer to whom the matter was referred, and must assume financial responsibility for the matter. But Arizona Bar Association Opinion 04-02 (2004) states that the requirement is satisfied if a lawyer assumes financial responsibility for any malpractice.
Before agreeing to share fees on a joint responsibility basis, lawyers would be well-advised to check their jurisdictions’ rules of professional conduct, ethics opinions and case law to fully understand the extent of their ethical and legal obligations.
Peter H. Geraghty is director of ETHICSearch in the ABA Center of Professional Responsibility.
THE TRAP: Ending the Lawyer-Client Relationship
When lawyers at Gordon, Thomas, Honeywell, Malanca, Peterson & Daheim in Tacoma, Wash., were asked to help represent Rabanco Ltd. employees in a suit against the company, they jumped right in. They did not think an earlier representation of a wholly owned subsidiary of the company disqualified them.
But a U.S. District Court in Seattle saw things differently. Judge Marsha J. Pechman granted the defendants’ motion that the firm be disqualified.
The firm argued no one from Rabanco nor its subsidiaries had contacted it in three-plus years. But Pechman noted that the firm had open files on matters involving the Rabanco family of companies, was listed as receiving notices in a settlement agreement, and continued to store documents from the earlier case. Jones v. Rabanco Ltd., No. C03-3195P (W.D. Wash. Aug. 3, 2006).
THE WAY OUT: Don’t Rely on Your Assumptions
BY STEPHEN GILLERS
Jones v. Rabanco is a pretty aggressive opinion. Many courts would have ruled differently. Lawyers can do much to insulate themselves from decisions like this one, but only if they know how the rules treat current and former clients differently, and they inform the client that it has moved from the first category to the second if the transition is not clear.
First, the conflict rules are less strict in defining the duty owed to former clients. Most important, under Rule 1.9(a) of the ABA Model Rules of Professional Conduct, the duty to former clients exists only to avoid subsequent adverse representation in substantially related matters. On the other hand, a firm may not ordinarily be adverse to a current client on any matter without informed consent. See ABA Model Rule 1.7(a)(2).
Second, Model Rule 1.4, along with fiduciary duty and malpractice law, requires lawyers to keep current clients informed about factual and legal developments related to their matters. This duty is not ordinarily owed to former clients unless the lawyer promises otherwise. See Lama Holding Co. v. Shearman & Sterling, 758 F. Supp. 159 (S.D.N.Y. 1991), in which the court refused to dismiss a complaint alleging that the firm failed to apprise a former client of tax law changes despite a promise to do so.
Of course, whether a client is current or former is not always within your power to control. You can’t drop a client simply to enjoy the more generous former-client conflict rules. But if the work is done, the firm can make that fact clear to the client, rather than leave things vague.
When I explain this to lawyers, they often admit that they prefer to leave things vague because that means the client will likely think of them as “my lawyer,” which increases the chance for new work. Fine. That’s a business decision, but it comes at a price.
Monday, October 6, 2008
Tips on searching for Office Space
POSTED BYQuestions you want to ask when looking at a space
Rent per month (year):
Size: Square feet, Are you sharing a suite?
Amenities: (Are they included) All utilities + fax line + telephone line (local calls) + reception + Furnished + shared kitchen area + parking deck (free for me and clients) + professinal cleaning
Neighborhood: 1. Are your clients likely to come to this area (location is key), 2. Safety (remember your a lawyer thats slang for workaholic) you want to be able to go to your car late at night, 3. Centrally located are you near restaurants, gas station, stores.
Pros: Weigh these facors
Con: Weigh these factors
Other Factors: Distance from court house, Distance from Highway, Windows in the office, Conference room (is there one, are you limited by use).
1. Make a little sheet with these factors and fill out for each location.
2. bring a camera (or your camera phone) with you and take pictures of each place you visit. So when you are looking back at your choices you can look at the pictures along with your analysis of the space.
3. Narrow down your results to 5-6 places and visit no more than 6-10, but no less than three locations.
Rent per month (year):
Size: Square feet, Are you sharing a suite?
Amenities: (Are they included) All utilities + fax line + telephone line (local calls) + reception + Furnished + shared kitchen area + parking deck (free for me and clients) + professinal cleaning
Neighborhood: 1. Are your clients likely to come to this area (location is key), 2. Safety (remember your a lawyer thats slang for workaholic) you want to be able to go to your car late at night, 3. Centrally located are you near restaurants, gas station, stores.
Pros: Weigh these facors
Con: Weigh these factors
Other Factors: Distance from court house, Distance from Highway, Windows in the office, Conference room (is there one, are you limited by use).
1. Make a little sheet with these factors and fill out for each location.
2. bring a camera (or your camera phone) with you and take pictures of each place you visit. So when you are looking back at your choices you can look at the pictures along with your analysis of the space.
3. Narrow down your results to 5-6 places and visit no more than 6-10, but no less than three locations.
Thursday, October 2, 2008
Beware of Scams
posted by Charlotte Attorney
A guy named will call you today fromsaying he was calling from the Law office of XXXX. I returned the call only to find out he was trying to offer me a referral plan.
How it works:
1. People go on their site and fill information
2. They email you the lead
3. They charge you $70 bucks per lead.
As you know, i have posted several free referral lists. Even if a referral list charges you, it suppose to be one flat fee in the beginning or per year not per lead. Be careful fellow practitioners. Be very careful.
A guy named will call you today fromsaying he was calling from the Law office of XXXX. I returned the call only to find out he was trying to offer me a referral plan.
How it works:
1. People go on their site and fill information
2. They email you the lead
3. They charge you $70 bucks per lead.
As you know, i have posted several free referral lists. Even if a referral list charges you, it suppose to be one flat fee in the beginning or per year not per lead. Be careful fellow practitioners. Be very careful.
Thursday, September 18, 2008
Managing Client Expectations and Avoiding Fee Disputes
By Bankruptcy Attorney
Managing Client Expectations and Avoiding Fee Disputes
Presented at Ethics and Your Practice 2003, November 11, 2003.
Steven A. Mitchell Professionals Direct, Inc. Grand Rapids
I. Communication, Communication, Communication
A. Introduction
Communication—this is what managing client expectation is really all about. Lawyers are trained communicators who have it within their power to make certain that their clients understand what they need to understand in a timely fashion. In fact, communication is a lawyer’s professional obligation pursuant to MRPC 1.4. Effective communication between lawyer and client strengthens and solidifies the relationship, ensures that no misunderstandings arise and that the parties are not working at cross-purposes. Perhaps more importantly, it protects the lawyer from fee disputes, grievances and malpractice claims.
B. Begin the Representation with a Written Fee Agreement
A written fee agreement is the lawyer’s best evidence of fulfillment of the separate duty to keep the client reasonably informed pursuant to MRPC 1.4. In addition to setting forth and describing the scope of the representation, the agreement should:
set forth the objectives of the representation;
describe the general means through which the objective(s) will be pursued;
estimate the likelihood of success, disclaiming any particular result;
detail the method or basis for calculating the fee and costs;
provide an estimate of the time to be expended upon the task(s), including an estimate of the fees and costs; and
offer an open and continuing invitation to the client to inquire if any questions arise concerning the handling of their matter.
C. Define and Limit the Scope of the Representation
A written fee agreement, carefully drafted, reviewed by the client, and executed at or near the commencement of the representation is the lawyer’s best opportunity to define and limit the scope of the representation. Limiting the scope of the representation is permissible pursuant to MRPC 1.2, and under certain circumstances, it is necessary. In Formal Ethics Opinion, R-11, the syllabus provides in pertinent part:
“Where a contingency fee agreement is silent or ambiguous concerning the taking of an appeal, a lawyer in a contingent fee matter is required to file notice of appeal of a client’s case at the client’s request, as long as the appeal is not frivolous and does not assist fraudulent or illegal act of the client.
Where a contingency fee agreement is silent or ambiguous concerning an additional fee for taking an appeal, a lawyer may not charge an additional fee for taking the appeal.”
Therefore, what is set forth in a written fee agreement regarding what you do not agree to do, is as important as setting forth what you do agree to do.
In contingent fee cases, plaintiff’s lawyers may wish to break the representation into even more discreet segments. In most cases, plaintiff’s lawyers fulfill their ethics responsibility by entering into a written contingent fee agreement at the commencement of the representation. Contingent fee agreements require a written contract pursuant to MRPC 1.5 (c). While this is professionally responsible, it may not be a good business practice. Often, at the time the agreement is entered into, the lawyer only has the client’s side of the story. Investigation must be performed to learn the weaknesses of the merits of the case, as well as to determine potential damages. A case that looked promising when the fee agreement was signed, may turn out to be without merit for economic reasons, or even frivolous. Yet, from the client’s perspective, the lawyer has agreed to “take” the case. To the client, this usually means that the lawyer has agreed to file suit on their behalf, and indeed that is what the client expects.
In order to avoid an economic trap and potential misunderstanding between lawyer and client, the lawyer can conduct the representation in stages, or make clear in the contingent fee agreement that the decision to file suit is discretionary upon timely completion of the initial investigation. Of course, if the latter course is chosen, it requires diligence and timely follow up by the lawyer, as well as subsequent communication informing the client of the lawyer’s decision in the matter. This communication should be in writing if the lawyer decides not to file suit.
On the other hand, if the representation is conducted in stages, it affords the lawyer an opportunity to determine the merits of the case as well as the potential damages without committing the lawyer to filing suit. Separate and discreet fee agreements or a mixed fee agreement may be appropriate in these circumstances. Mixed fee agreements, that is agreements that provide for some combination of an hourly rate or flat fee or percentage of an anticipated net recovery must clearly set forth the basis for calculating the fee in writing. See Informal Ethics Opinion, RI-6 in this regard. The rationale behind requiring a writing for such fee agreements is that the calculation of the fee can be somewhat complex in relation to the relative level of sophistication between the lawyer (and probable drafter of the agreement) and the client. However, these techniques must be considered on a case by case basis, since the process of investigation may be impacted by a pending statute of limitations.
Accordingly, lawyers have it within their control to define and limit the scope of the representation in the written fee agreement. It is an opportunity to establish good communication with the client, ensuring that their expectations remain reasonable, and that the outcome will at least be understandable and acceptable, favorable or otherwise.
D. Explaining the Fee (and Explaining It Again)
Be direct, explicit and thorough when explaining the basis of your fees to the client. Although this seems self-evident, many lawyers are uncomfortable about discussing fees, and attempt to avoid the discomfort by neglecting to tackle the issue head on. This is a mistake. Anticipate and discuss every aspect of any cost and expense that you expect to levy against the client. If you charge a contingent fee, explain to the client the concept of shared risk in relation to the number of hours you expect to invest in their cause. If you charge an hourly rate, explain the rate in relation to your level of education, skill and experience in handling the matter. If you charge a minimum or rounded fee in increments of tenths of hours for certain services, be sure to explain that to the client. If you anticipate flying to Miami or elsewhere to conduct a witness deposition, be sure that the client understands that they will be responsible for the cost of travel, if that is expected. If the witness is an expert, be certain that the client understands that they will be responsible for compensating them for their expertise. If you pass on elements of your business overhead to the client, make sure that it is adequately explained in the fee agreement, and is not a separate profit center for the business. In other words, if copies will be billed to the client at the rate of .10 cents per page, it had better cost you no less than .10 cents per page. It is unethical to seek to make a profit on this aspect of the fee agreement, except in very limited circumstances. See Informal Ethics opinion, RI-241 in this regard.
Send bills to clients on a monthly basis. This ensures monthly contact with the client concerning a frequent problem area in the lawyer-client relationship. Use detailed, line item billing summaries. Inform the client of any time you spend working on their matter that you did not bill them for. Always invite the client to contact you should they have any questions or concerns about the bill. This promotes the relationship and cuts down on receivables.
II. Anatomy of a Model Fee Agreement
A. Introduction
There are many kinds of fee agreements and many ways to draft them. ICLE’s Attorney Fee Agreements in Michigan, (2nd Ed. 2002) is the definitive resource for this purpose. There is detailed discussion regarding the rules of conduct and ethics opinions with pertinent citations to authority. Plus, there are forms with a computer disk for loading the forms into your word processor. However, each representation is different and a “one size fits all” approach is not prudent in the use of fee agreements. Therefore, even the forms need to be tailored to each client’s circumstance and care must be taken to customize each and every fee agreement. With the sophistication of today’s computer programs there is no excuse for using a fill-in-the-blank form. However, if you do use such a form, make sure the blanks are all filled in.
B. Non-Refundable Fee Agreements (The Fee Agreement You Should Generally Not Use)
Every lawyer would like to receive their fee up front. Indeed, there are certain situations where the failure to obtain the fee up front virtually guarantees that the lawyer will not get paid. Lawyers in these situations, and others, are tempted to resort to the practice of utilizing what are erroneously referred to as non-refundable fee agreements. However, there is a great distinction between receiving the entire fee as a deposit in trust, to be debited as and when earned, and the payment of already earned fees for services not yet performed. This latter practice of accounting for the fee is fraught with peril to the unwary practitioner’s license to practice law.
Non-refundable fee agreements are characterized by the complexity of the matter and likelihood that the representation will cause the lawyer to turn down new work, as well as prevent the lawyer from performing work on behalf of other existing clients. Essentially, the lawyer is being compensated for time that can not be recaptured to take on other matters. Such an agreement must set forth the client’s specific expectations as well as a description of what the lawyer is providing in addition to a fixed number of hours. A non-refundable fee must not be placed in the lawyer’s trust account. The ability to enter into such an agreement presupposes that the client is of sufficient intelligence and maturity to understand the agreement as well as the fact that the fee is non-refundable. Finally, the lawyer must in fact set aside a block of time, turn down other work, and otherwise, martial the resources of the firm in reliance on a non-refundable retainer agreement. Otherwise, this type of fee agreement may not be employed. If challenged, the lawyer will be required to demonstrate that the fee in fact fulfills the requirements of a non-refundable agreement as described in Informal Ethics Opinions, RI-10 and RI-69. At least one lawyer has been suspended for the inappropriate use of a so-called non-refundable fee agreement. See ADB Case No. 96-236-GA (1999).
C. Elements of a Model Fee Agreement
Each written fee agreement should:
clearly identify the client(s);
identify the lawyer primarily responsible for handling the file and the person responsible for handling billing questions or concerns;
set forth in detail the nature and the scope of the representation;
detail the objectives of the representation;
describe the basis for calculating the fee;
describe and delineate the responsibility for paying costs;
describe the method, manner and frequency of billing, including the disposition of any pre-paid funds in trust;
estimate the amount of fees, costs, and the likelihood of success;
make disclaimer as to any guarantee of results;
set forth the process for dealing with unpaid bills, including possible termination of the representation;
inform the client of the manner, method and timing of file storage and disposition at the conclusion or termination of the representation; and
invite the client to call or contact the responsible handling lawyer at any time with any questions or concerns.
There are certain provisions that can be included in a fee agreement that a lawyer may or may not want to utilize for personal or professional reasons. These include provisions for charging interest on unpaid balances, the use of security to protect fees, and the use of an arbitration clause to resolve fee disputes. To be sure, if these types of provisions are contemplated, they must be in writing, and additional disclosures must be made, including the right to seek independent counsel.\ before entering into the agreement.
III. Terminating the Lawyer-Client Relationship
A. Introduction
Termination of the lawyer-client relationship is commonplace. However, it is not an uncomplicated process, and ill done, can result in harmful consequences for the lawyer.
B. Lawyer Initiated Termination
A lawyer may seek termination of the relationship for any number of reasons. Once the decision to terminate a client has been made, the lawyer must take great care to be certain that the relationship is severed correctly. The lawyer-client relationship is more than merely contractual. The lawyer owes a duty of loyalty to the client; and in fact, the lawyer is the client’s fiduciary. Kukla v. Perry, 361 Mich 311 (1960); Rippey v. Wilson, 280 Mich 233 (1937).
The Michigan Rules of Professional Conduct, Rule 1.16(b) sets forth the circumstances under which a lawyer may withdraw from the relationship:
“(b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interests of the client, or if:
(1) the client persists in a course of action involving the lawyer’s services that the lawyer reasonably believes is criminal or fraudulent;
(2) the client has used the lawyer’s services to perpetrate a crime or fraud;
(3) the client insists upon pursuing an objective that the lawyer considers repugnant or imprudent;
(4) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;
(5) the representation will result in an unreasonable burden on the lawyer or has been rendered unreasonably difficult by the client; or
(6) other good cause for withdrawal exists.”
Although the rule is written broadly, careful analysis must be undertaken with respect to the particular facts and circumstances regarding each client’s situation. Generally, withdrawal is permissible if it “can be accomplished without material adverse effect on the interests of the client”. But even if it cannot, there is a list of criteria under which withdrawal can be legitimately accomplished alternatively. MRPC 1.16 (b). In any event, one should analyze the potential for adverse effect upon a particular client’s interests, and perhaps even document an analysis which concludes that no material adverse consequences will flow from the withdrawal before terminating the relationship.
Of course, if the client is involved in criminal or fraudulent behavior, or uses the lawyer’s services to perpetrate those ends, withdrawal can (and should) be effected. No lawyer should permit themselves to be used in such a fashion.
The lawyer may also consider termination of the relationship when the client “insists upon pursuing an objective that the lawyer considers repugnant or imprudent”. But what is a repugnant or imprudent objective? The “objectives” of representation are discussed in MRPC 1.2 (a), Scope of Representation:
“(a) A lawyer shall seek the lawful objectives of a client through reasonably available means permitted by law and these rules...”
The comments to the rule distinguish the “objectives” of representation from the “means” used to attain those objectives.
“A clear distinction between objectives and means sometimes cannot be drawn, and in many cases the client-lawyer relationship partakes of a joint undertaking...” MRPC 1.2 Comment
Furthermore, the objectives to be attained may be limited by agreement, usually set forth expressly in the fee agreement. Usually, the objectives of the representation deal with its overall purpose. The means to be employed in attaining those objectives usually refer to the tactics employed by the lawyer to attain the objectives. Accordingly, the repugnance or imprudence considered by the lawyer in an analysis of MRPC 1.16(b)(3) relates to the overall purpose of the representation, which is a more general concept, than the employment of particular tactics or techniques used by the lawyer to attain those objectives.
Although the words “repugnant” and “imprudent” are not defined in the rules, their use for subjective consideration by the attorney considering withdrawal appears to encompass that degree of unprofessionalism or lack of wisdom that would cause a reasonable lawyer to hesitate to act under the circumstances given. In other words, a lawyer may not withdraw from representation simply because the client refuses to follow the lawyer’s advice on the issue of settlement of a civil lawsuit. In the criminal law context, a lawyer may not withdraw simply because the client refuses to follow the lawyer’s advice regarding the entry of a plea, the waiver of a jury trial, or the client’s right to testify. MRPC 1.2 (a).
The foregoing examples are not insignificant issues that arise during the course of a representation. They explicitly recognize the right of the client to make decisions, even tactical ones, in the face of the lawyer’s advice to the contrary. Accordingly, the line to be drawn in determining where and when a breakdown in the relationship takes place is blurred. It is clear, however, that the rule does not permit a lawyer to withdraw in each case where the client refuses to follow the advice of the lawyer.
“In, most if not, all attorney-client relationships, decision-making authority ultimately rests with the client. A client may, in apparent good faith, insist upon pressing the claim although the attorney has explained that it has no chance of succeeding. An attorney’s ability to withdraw from representation is limited if the client objects.” Friedman v. Dozorc, 412 Mich 1, 57; 312 N.W. 2d 585 (1981)
This analysis aside, a lawyer may withdraw for “good cause”. What constitutes “good cause”? In Ambrose v. Detroit Edison Company, 65 Mich App 484; 237 N.W. 2d 570 (1976), the Michigan Court of Appeals found that “a client’s total failure to cooperate is sufficient ‘good cause’ to allow an attorney to discontinue representing” the client. There, the court recounted two examples where the client refused to make decisions which he was legally obligated to do in spite of contrary advice from his lawyer, and refused to accept a settlement offer which constituted essentially all of the relief he was demanding in his complaint, and without expressing any rational reason for refusing to act.
Although “good cause” was found in this case, permitting the lawyer to withdraw, the court cautioned that the Ambrose scenario was one “embodying extreme circumstances”; and the court “emphatically” reasserted the precept that the client has control over the representation and its objectives, particularly as it pertains to the acceptance or rejection of a settlement offer. Ambrose, supra, 237 N.W. 2d at p. 523.
Accordingly, care must be taken in deciding whether good cause exists for termination of the representation without the permission of the court or client.
C. Client Initiated Termination
Generally, if the lawyer is “discharged” the lawyer must withdraw. Unfortunately however, that alone does not end the analysis. If the client is being represented in court, the lawyer must nevertheless seek leave to withdraw from the court in question. The decision to permit withdrawal lies within the court’s discretion, and the lawyer must take great care not to reveal information or material protected by MRPC 1.6. However, as a practical matter, if the client no longer wants the lawyer, the court will not force the issue.
Even after the termination of the representation, a lawyer must “take reasonable steps to protect a client’s interests”. These steps include providing reasonable notice, allowing time for the employment of new counsel, turning over files and client property, and refunding any unearned fees. Under certain circumstances, a lawyer may assert a lien as to certain client property, but such rights are separate and distinct from a lawyer’s continuing obligation to make certain that the termination causes no “material adverse effect” upon the client’s interests.
As this discussion demonstrates, it is not an uncomplicated matter to sever the lawyer-client relationship. Analysis of the particular facts and circumstances within the context of the lawyer’s needs, as well as the lawyer’s duties to the client both during, at, and after termination pursuant to the parameters of MRPC 1.16 must all be taken into account in order to avoid subsequent problems for the lawyer. Otherwise, the termination of the relationship between a lawyer and a “problem client” may not be the end of the lawyer’s problem.
Managing Client Expectations and Avoiding Fee Disputes
Presented at Ethics and Your Practice 2003, November 11, 2003.
Steven A. Mitchell Professionals Direct, Inc. Grand Rapids
I. Communication, Communication, Communication
A. Introduction
Communication—this is what managing client expectation is really all about. Lawyers are trained communicators who have it within their power to make certain that their clients understand what they need to understand in a timely fashion. In fact, communication is a lawyer’s professional obligation pursuant to MRPC 1.4. Effective communication between lawyer and client strengthens and solidifies the relationship, ensures that no misunderstandings arise and that the parties are not working at cross-purposes. Perhaps more importantly, it protects the lawyer from fee disputes, grievances and malpractice claims.
B. Begin the Representation with a Written Fee Agreement
A written fee agreement is the lawyer’s best evidence of fulfillment of the separate duty to keep the client reasonably informed pursuant to MRPC 1.4. In addition to setting forth and describing the scope of the representation, the agreement should:
set forth the objectives of the representation;
describe the general means through which the objective(s) will be pursued;
estimate the likelihood of success, disclaiming any particular result;
detail the method or basis for calculating the fee and costs;
provide an estimate of the time to be expended upon the task(s), including an estimate of the fees and costs; and
offer an open and continuing invitation to the client to inquire if any questions arise concerning the handling of their matter.
C. Define and Limit the Scope of the Representation
A written fee agreement, carefully drafted, reviewed by the client, and executed at or near the commencement of the representation is the lawyer’s best opportunity to define and limit the scope of the representation. Limiting the scope of the representation is permissible pursuant to MRPC 1.2, and under certain circumstances, it is necessary. In Formal Ethics Opinion, R-11, the syllabus provides in pertinent part:
“Where a contingency fee agreement is silent or ambiguous concerning the taking of an appeal, a lawyer in a contingent fee matter is required to file notice of appeal of a client’s case at the client’s request, as long as the appeal is not frivolous and does not assist fraudulent or illegal act of the client.
Where a contingency fee agreement is silent or ambiguous concerning an additional fee for taking an appeal, a lawyer may not charge an additional fee for taking the appeal.”
Therefore, what is set forth in a written fee agreement regarding what you do not agree to do, is as important as setting forth what you do agree to do.
In contingent fee cases, plaintiff’s lawyers may wish to break the representation into even more discreet segments. In most cases, plaintiff’s lawyers fulfill their ethics responsibility by entering into a written contingent fee agreement at the commencement of the representation. Contingent fee agreements require a written contract pursuant to MRPC 1.5 (c). While this is professionally responsible, it may not be a good business practice. Often, at the time the agreement is entered into, the lawyer only has the client’s side of the story. Investigation must be performed to learn the weaknesses of the merits of the case, as well as to determine potential damages. A case that looked promising when the fee agreement was signed, may turn out to be without merit for economic reasons, or even frivolous. Yet, from the client’s perspective, the lawyer has agreed to “take” the case. To the client, this usually means that the lawyer has agreed to file suit on their behalf, and indeed that is what the client expects.
In order to avoid an economic trap and potential misunderstanding between lawyer and client, the lawyer can conduct the representation in stages, or make clear in the contingent fee agreement that the decision to file suit is discretionary upon timely completion of the initial investigation. Of course, if the latter course is chosen, it requires diligence and timely follow up by the lawyer, as well as subsequent communication informing the client of the lawyer’s decision in the matter. This communication should be in writing if the lawyer decides not to file suit.
On the other hand, if the representation is conducted in stages, it affords the lawyer an opportunity to determine the merits of the case as well as the potential damages without committing the lawyer to filing suit. Separate and discreet fee agreements or a mixed fee agreement may be appropriate in these circumstances. Mixed fee agreements, that is agreements that provide for some combination of an hourly rate or flat fee or percentage of an anticipated net recovery must clearly set forth the basis for calculating the fee in writing. See Informal Ethics Opinion, RI-6 in this regard. The rationale behind requiring a writing for such fee agreements is that the calculation of the fee can be somewhat complex in relation to the relative level of sophistication between the lawyer (and probable drafter of the agreement) and the client. However, these techniques must be considered on a case by case basis, since the process of investigation may be impacted by a pending statute of limitations.
Accordingly, lawyers have it within their control to define and limit the scope of the representation in the written fee agreement. It is an opportunity to establish good communication with the client, ensuring that their expectations remain reasonable, and that the outcome will at least be understandable and acceptable, favorable or otherwise.
D. Explaining the Fee (and Explaining It Again)
Be direct, explicit and thorough when explaining the basis of your fees to the client. Although this seems self-evident, many lawyers are uncomfortable about discussing fees, and attempt to avoid the discomfort by neglecting to tackle the issue head on. This is a mistake. Anticipate and discuss every aspect of any cost and expense that you expect to levy against the client. If you charge a contingent fee, explain to the client the concept of shared risk in relation to the number of hours you expect to invest in their cause. If you charge an hourly rate, explain the rate in relation to your level of education, skill and experience in handling the matter. If you charge a minimum or rounded fee in increments of tenths of hours for certain services, be sure to explain that to the client. If you anticipate flying to Miami or elsewhere to conduct a witness deposition, be sure that the client understands that they will be responsible for the cost of travel, if that is expected. If the witness is an expert, be certain that the client understands that they will be responsible for compensating them for their expertise. If you pass on elements of your business overhead to the client, make sure that it is adequately explained in the fee agreement, and is not a separate profit center for the business. In other words, if copies will be billed to the client at the rate of .10 cents per page, it had better cost you no less than .10 cents per page. It is unethical to seek to make a profit on this aspect of the fee agreement, except in very limited circumstances. See Informal Ethics opinion, RI-241 in this regard.
Send bills to clients on a monthly basis. This ensures monthly contact with the client concerning a frequent problem area in the lawyer-client relationship. Use detailed, line item billing summaries. Inform the client of any time you spend working on their matter that you did not bill them for. Always invite the client to contact you should they have any questions or concerns about the bill. This promotes the relationship and cuts down on receivables.
II. Anatomy of a Model Fee Agreement
A. Introduction
There are many kinds of fee agreements and many ways to draft them. ICLE’s Attorney Fee Agreements in Michigan, (2nd Ed. 2002) is the definitive resource for this purpose. There is detailed discussion regarding the rules of conduct and ethics opinions with pertinent citations to authority. Plus, there are forms with a computer disk for loading the forms into your word processor. However, each representation is different and a “one size fits all” approach is not prudent in the use of fee agreements. Therefore, even the forms need to be tailored to each client’s circumstance and care must be taken to customize each and every fee agreement. With the sophistication of today’s computer programs there is no excuse for using a fill-in-the-blank form. However, if you do use such a form, make sure the blanks are all filled in.
B. Non-Refundable Fee Agreements (The Fee Agreement You Should Generally Not Use)
Every lawyer would like to receive their fee up front. Indeed, there are certain situations where the failure to obtain the fee up front virtually guarantees that the lawyer will not get paid. Lawyers in these situations, and others, are tempted to resort to the practice of utilizing what are erroneously referred to as non-refundable fee agreements. However, there is a great distinction between receiving the entire fee as a deposit in trust, to be debited as and when earned, and the payment of already earned fees for services not yet performed. This latter practice of accounting for the fee is fraught with peril to the unwary practitioner’s license to practice law.
Non-refundable fee agreements are characterized by the complexity of the matter and likelihood that the representation will cause the lawyer to turn down new work, as well as prevent the lawyer from performing work on behalf of other existing clients. Essentially, the lawyer is being compensated for time that can not be recaptured to take on other matters. Such an agreement must set forth the client’s specific expectations as well as a description of what the lawyer is providing in addition to a fixed number of hours. A non-refundable fee must not be placed in the lawyer’s trust account. The ability to enter into such an agreement presupposes that the client is of sufficient intelligence and maturity to understand the agreement as well as the fact that the fee is non-refundable. Finally, the lawyer must in fact set aside a block of time, turn down other work, and otherwise, martial the resources of the firm in reliance on a non-refundable retainer agreement. Otherwise, this type of fee agreement may not be employed. If challenged, the lawyer will be required to demonstrate that the fee in fact fulfills the requirements of a non-refundable agreement as described in Informal Ethics Opinions, RI-10 and RI-69. At least one lawyer has been suspended for the inappropriate use of a so-called non-refundable fee agreement. See ADB Case No. 96-236-GA (1999).
C. Elements of a Model Fee Agreement
Each written fee agreement should:
clearly identify the client(s);
identify the lawyer primarily responsible for handling the file and the person responsible for handling billing questions or concerns;
set forth in detail the nature and the scope of the representation;
detail the objectives of the representation;
describe the basis for calculating the fee;
describe and delineate the responsibility for paying costs;
describe the method, manner and frequency of billing, including the disposition of any pre-paid funds in trust;
estimate the amount of fees, costs, and the likelihood of success;
make disclaimer as to any guarantee of results;
set forth the process for dealing with unpaid bills, including possible termination of the representation;
inform the client of the manner, method and timing of file storage and disposition at the conclusion or termination of the representation; and
invite the client to call or contact the responsible handling lawyer at any time with any questions or concerns.
There are certain provisions that can be included in a fee agreement that a lawyer may or may not want to utilize for personal or professional reasons. These include provisions for charging interest on unpaid balances, the use of security to protect fees, and the use of an arbitration clause to resolve fee disputes. To be sure, if these types of provisions are contemplated, they must be in writing, and additional disclosures must be made, including the right to seek independent counsel.\ before entering into the agreement.
III. Terminating the Lawyer-Client Relationship
A. Introduction
Termination of the lawyer-client relationship is commonplace. However, it is not an uncomplicated process, and ill done, can result in harmful consequences for the lawyer.
B. Lawyer Initiated Termination
A lawyer may seek termination of the relationship for any number of reasons. Once the decision to terminate a client has been made, the lawyer must take great care to be certain that the relationship is severed correctly. The lawyer-client relationship is more than merely contractual. The lawyer owes a duty of loyalty to the client; and in fact, the lawyer is the client’s fiduciary. Kukla v. Perry, 361 Mich 311 (1960); Rippey v. Wilson, 280 Mich 233 (1937).
The Michigan Rules of Professional Conduct, Rule 1.16(b) sets forth the circumstances under which a lawyer may withdraw from the relationship:
“(b) Except as stated in paragraph (c), a lawyer may withdraw from representing a client if withdrawal can be accomplished without material adverse effect on the interests of the client, or if:
(1) the client persists in a course of action involving the lawyer’s services that the lawyer reasonably believes is criminal or fraudulent;
(2) the client has used the lawyer’s services to perpetrate a crime or fraud;
(3) the client insists upon pursuing an objective that the lawyer considers repugnant or imprudent;
(4) the client fails substantially to fulfill an obligation to the lawyer regarding the lawyer’s services and has been given reasonable warning that the lawyer will withdraw unless the obligation is fulfilled;
(5) the representation will result in an unreasonable burden on the lawyer or has been rendered unreasonably difficult by the client; or
(6) other good cause for withdrawal exists.”
Although the rule is written broadly, careful analysis must be undertaken with respect to the particular facts and circumstances regarding each client’s situation. Generally, withdrawal is permissible if it “can be accomplished without material adverse effect on the interests of the client”. But even if it cannot, there is a list of criteria under which withdrawal can be legitimately accomplished alternatively. MRPC 1.16 (b). In any event, one should analyze the potential for adverse effect upon a particular client’s interests, and perhaps even document an analysis which concludes that no material adverse consequences will flow from the withdrawal before terminating the relationship.
Of course, if the client is involved in criminal or fraudulent behavior, or uses the lawyer’s services to perpetrate those ends, withdrawal can (and should) be effected. No lawyer should permit themselves to be used in such a fashion.
The lawyer may also consider termination of the relationship when the client “insists upon pursuing an objective that the lawyer considers repugnant or imprudent”. But what is a repugnant or imprudent objective? The “objectives” of representation are discussed in MRPC 1.2 (a), Scope of Representation:
“(a) A lawyer shall seek the lawful objectives of a client through reasonably available means permitted by law and these rules...”
The comments to the rule distinguish the “objectives” of representation from the “means” used to attain those objectives.
“A clear distinction between objectives and means sometimes cannot be drawn, and in many cases the client-lawyer relationship partakes of a joint undertaking...” MRPC 1.2 Comment
Furthermore, the objectives to be attained may be limited by agreement, usually set forth expressly in the fee agreement. Usually, the objectives of the representation deal with its overall purpose. The means to be employed in attaining those objectives usually refer to the tactics employed by the lawyer to attain the objectives. Accordingly, the repugnance or imprudence considered by the lawyer in an analysis of MRPC 1.16(b)(3) relates to the overall purpose of the representation, which is a more general concept, than the employment of particular tactics or techniques used by the lawyer to attain those objectives.
Although the words “repugnant” and “imprudent” are not defined in the rules, their use for subjective consideration by the attorney considering withdrawal appears to encompass that degree of unprofessionalism or lack of wisdom that would cause a reasonable lawyer to hesitate to act under the circumstances given. In other words, a lawyer may not withdraw from representation simply because the client refuses to follow the lawyer’s advice on the issue of settlement of a civil lawsuit. In the criminal law context, a lawyer may not withdraw simply because the client refuses to follow the lawyer’s advice regarding the entry of a plea, the waiver of a jury trial, or the client’s right to testify. MRPC 1.2 (a).
The foregoing examples are not insignificant issues that arise during the course of a representation. They explicitly recognize the right of the client to make decisions, even tactical ones, in the face of the lawyer’s advice to the contrary. Accordingly, the line to be drawn in determining where and when a breakdown in the relationship takes place is blurred. It is clear, however, that the rule does not permit a lawyer to withdraw in each case where the client refuses to follow the advice of the lawyer.
“In, most if not, all attorney-client relationships, decision-making authority ultimately rests with the client. A client may, in apparent good faith, insist upon pressing the claim although the attorney has explained that it has no chance of succeeding. An attorney’s ability to withdraw from representation is limited if the client objects.” Friedman v. Dozorc, 412 Mich 1, 57; 312 N.W. 2d 585 (1981)
This analysis aside, a lawyer may withdraw for “good cause”. What constitutes “good cause”? In Ambrose v. Detroit Edison Company, 65 Mich App 484; 237 N.W. 2d 570 (1976), the Michigan Court of Appeals found that “a client’s total failure to cooperate is sufficient ‘good cause’ to allow an attorney to discontinue representing” the client. There, the court recounted two examples where the client refused to make decisions which he was legally obligated to do in spite of contrary advice from his lawyer, and refused to accept a settlement offer which constituted essentially all of the relief he was demanding in his complaint, and without expressing any rational reason for refusing to act.
Although “good cause” was found in this case, permitting the lawyer to withdraw, the court cautioned that the Ambrose scenario was one “embodying extreme circumstances”; and the court “emphatically” reasserted the precept that the client has control over the representation and its objectives, particularly as it pertains to the acceptance or rejection of a settlement offer. Ambrose, supra, 237 N.W. 2d at p. 523.
Accordingly, care must be taken in deciding whether good cause exists for termination of the representation without the permission of the court or client.
C. Client Initiated Termination
Generally, if the lawyer is “discharged” the lawyer must withdraw. Unfortunately however, that alone does not end the analysis. If the client is being represented in court, the lawyer must nevertheless seek leave to withdraw from the court in question. The decision to permit withdrawal lies within the court’s discretion, and the lawyer must take great care not to reveal information or material protected by MRPC 1.6. However, as a practical matter, if the client no longer wants the lawyer, the court will not force the issue.
Even after the termination of the representation, a lawyer must “take reasonable steps to protect a client’s interests”. These steps include providing reasonable notice, allowing time for the employment of new counsel, turning over files and client property, and refunding any unearned fees. Under certain circumstances, a lawyer may assert a lien as to certain client property, but such rights are separate and distinct from a lawyer’s continuing obligation to make certain that the termination causes no “material adverse effect” upon the client’s interests.
As this discussion demonstrates, it is not an uncomplicated matter to sever the lawyer-client relationship. Analysis of the particular facts and circumstances within the context of the lawyer’s needs, as well as the lawyer’s duties to the client both during, at, and after termination pursuant to the parameters of MRPC 1.16 must all be taken into account in order to avoid subsequent problems for the lawyer. Otherwise, the termination of the relationship between a lawyer and a “problem client” may not be the end of the lawyer’s problem.
Tuesday, September 9, 2008
Bankruptcy Think Long and hard before you consider taking a case
Bankruptcy Attorney
Considerations
1. You have to sworn in Federal Court (Mecklenburg County $250) In each district you practice.
2. You will need bankruptcy software totaling ($1000 per year)
3. You will need to run a complete check on the clients assets and property (Because guess what they lie and conceal things)
4. When filing out the schedules even with online software can be tedious and time consuming.
5. You will need to squeeze out of the client 1. Filing fees, 2. Credit Counseling fees, & 3. YOUR free. Its imperative you get your fee upfront because once the filing is complete your fee will be discharged and you will have no course of action.
6. The law on bankruptcy changes weekly.
I have decided that I will do the case I have signed up to do and no more using one time use software at cost $100 and with the assistance of a seasoned attorney. Bankruptcy filing is a new attorney's nightmare and I want no part of it.
Considerations
1. You have to sworn in Federal Court (Mecklenburg County $250) In each district you practice.
2. You will need bankruptcy software totaling ($1000 per year)
3. You will need to run a complete check on the clients assets and property (Because guess what they lie and conceal things)
4. When filing out the schedules even with online software can be tedious and time consuming.
5. You will need to squeeze out of the client 1. Filing fees, 2. Credit Counseling fees, & 3. YOUR free. Its imperative you get your fee upfront because once the filing is complete your fee will be discharged and you will have no course of action.
6. The law on bankruptcy changes weekly.
I have decided that I will do the case I have signed up to do and no more using one time use software at cost $100 and with the assistance of a seasoned attorney. Bankruptcy filing is a new attorney's nightmare and I want no part of it.
Sunday, August 17, 2008
Beware of the Bankruptcy Processing Companies
by Bankruptcy Attorney
Here's how it starts You either contact the main sales person or he contacts you. They often post this pitch of a bankruptcy hotline on craigslist or other newspapers to attract unsuspecting attorneys.
They claim there is no cost to you the attorney to be involved in this and this is a good way for you to make additional income, but here's how it goes:
1. They tell you can make money answering bankruptcy calls from calls from your state and other states (ethical implications possibly) who pay $499 to have their bankruptcy processed online.
2. Amcooperative takes $200 off the bat (for the use of their software to process the bankruptcy request), the call or online request is routed by a legal assistant who is not an Attorney who then hands it off to the first Level 1 Attorney who answers the call.
3. The level 1 attorney takes the clients information down and fills into a form and is suppose to receive $100 to paid by the level 2 Attorney once they are done.
4. Level 2 Attorney (who is supposed to be paid $100 themselves) is the one from the clients home state who goes over the forms and makes sure the client has received all the exemptions and information complies with bankruptcy filings within the state.
5. The level 2 Attorney must then pay the Level 1 and the legal Assistant who routed the calls. Not to mention if the level 2 Attorney, consults with an Consulting Attorney of Amcooperative about the forms and processing the clients bankruptcy there is potentially a fee for them as well. So you could be potentially splitting $200 bucks three or more ways.
This is a pyramid Scheme, you are better of joining a local referral list for bankruptcy and purchasing software at $200 bucks and processing bankruptcy in your area. There are way to many potential ethical violations as well as the threat of not being paid in such a situation is great.
Here's how it starts You either contact the main sales person or he contacts you. They often post this pitch of a bankruptcy hotline on craigslist or other newspapers to attract unsuspecting attorneys.
They claim there is no cost to you the attorney to be involved in this and this is a good way for you to make additional income, but here's how it goes:
1. They tell you can make money answering bankruptcy calls from calls from your state and other states (ethical implications possibly) who pay $499 to have their bankruptcy processed online.
2. Amcooperative takes $200 off the bat (for the use of their software to process the bankruptcy request), the call or online request is routed by a legal assistant who is not an Attorney who then hands it off to the first Level 1 Attorney who answers the call.
3. The level 1 attorney takes the clients information down and fills into a form and is suppose to receive $100 to paid by the level 2 Attorney once they are done.
4. Level 2 Attorney (who is supposed to be paid $100 themselves) is the one from the clients home state who goes over the forms and makes sure the client has received all the exemptions and information complies with bankruptcy filings within the state.
5. The level 2 Attorney must then pay the Level 1 and the legal Assistant who routed the calls. Not to mention if the level 2 Attorney, consults with an Consulting Attorney of Amcooperative about the forms and processing the clients bankruptcy there is potentially a fee for them as well. So you could be potentially splitting $200 bucks three or more ways.
This is a pyramid Scheme, you are better of joining a local referral list for bankruptcy and purchasing software at $200 bucks and processing bankruptcy in your area. There are way to many potential ethical violations as well as the threat of not being paid in such a situation is great.
Wednesday, August 13, 2008
Free Advertising
posted by Charlotte Traffic Attorney
www.yahoo.com
www.google.com/maps
www.bing.com
www.Yellowpages.com
http://www.merchantcircle.com/merchant
https://local.adcentral.yahoo.com/locallistings/us/i2
Peak Fitness is offering one month free advertising for business for members. Please email Kevin at info@myfitnesstv.com or info@myfitnesstv.com.
www.yahoo.com
www.google.com/maps
www.bing.com
www.Yellowpages.com
http://www.merchantcircle.com/merchant
https://local.adcentral.yahoo.com/locallistings/us/i2
Peak Fitness is offering one month free advertising for business for members. Please email Kevin at info@myfitnesstv.com or info@myfitnesstv.com.
Saturday, August 9, 2008
Prepaid and Group Plans
posted by charlotte bankruptcy attorney
Here is an ABA Partial listing of Prepaid Legal Plans you can join
http://www.aplsi.org/legal/legal_service_new.cfm
Here is an ABA Partial listing of Prepaid Legal Plans you can join
http://www.aplsi.org/legal/legal_service_new.cfm
Tuesday, August 5, 2008
Alternatives to Practicing Law
posted by bankruptcy attorney
Alternatives to Practicing Law
Given the dissatisfaction rampant in the legal profession and the problems inherent in creating a part-time schedule, man lawyers now face tremendously difficult decisions:· Do I give up the practice of law entirely?· Is there some way to combine my practice with my other, equally important interests?· Can I combine my practice with raising a family?· If I do give up my practice, what else can I do with a degree?· How much money will I earn?· How do I find a new job?These questions, which have become all too common, often lead to a state of panic from which no rational decision can be made. There are no Martindale-Hubbell listings for nontraditional or part-time lawyers. For lawyers trained in the highly structured law school environment where getting hired was almost part of the curriculum, the prospect of leaving the profession can be daunting.The good news for the lawyer pursuing alternative work arrangements is that what first appears as a murky road toward instability can be broken down systematically and logically into a series of viable options. Even more encouraging is the tremendous wealth of resource materials that have appeared in recent years. The world of nontraditional/alternative careers has developed into a veritable industry, ranging from books to newsletters to specialized career counseling consultants. As the industry evolves, these positions will become both more readily available and more “acceptable” in the eyes of the legal profession.In general, making the move out of a traditional legal position involves three components: self-assessment, analysis of possible options, and decision-making implementation. Examination of these components should not be treated in a simplistic manner. If you are dissatisfied with your practice, think about exactly why you are unhappy. Do you really dislike the practice of law? Or is it just that you hate writing briefs? Or that you hate working until 9:00 p.m. most nights and can't juggle work and family? Or that you hate living in a large urban environment?Since practice in the legal profession is preceded by a rigorous course of study most often extracting a three-year commitment of time, energy and financial resources, it is readily understandable that any lawyer would first give serious thought to the implications of making a major move. A comprehensive self-assessment to elicit the potential for change may include, among other things, one's tenure and progression in the legal profession, the skills and experience acquired that may be transferred to another setting, the compensation differentials that may accompany such a change, the substantive knowledge required, the impact on personal or family lifestyle, whether the change translates into short-term or long-term employment, and most important, whether making the change will bring success in achieving the lawyer's ultimate goal.After careful thought and analysis many lawyers realize it is not the practice of law in itself that bothers them. For example, one lawyer realized he was unhappy because he hated writing the memos and briefs necessary to litigation. He is now happily employed as a corporate lawyer with a large biomedical engineering company. Some lawyers, of course, do realize they were never intended to be lawyers in the first place and choose to make a gracious exit. Coming to an understanding of why they do not enjoy practicing law allows them to be firm in the knowledge that they have exhausted their options and frees them of guilt and doubt about leaving the profession. . . . NonLegal and Legally Related Job Titles:Although there is no magical "list" of jobs for lawyers (especially high paying jobs), the following job titles held by lawyers may serve as means for brainstorming. We either personally know or have heard about a lawyer transitioning into every job title listed.· Agent· Arbitrator· Assistant/ Associate Dean· Auditor· Author· Accountant· Bank Vice President· Bar Association Administrator· Career Counselor· Certified Financial Planner · Commercial Real Estate Agent· Computer Consultant· Corporate Trainer· Contract Attorney· Department Store Buyer · Designer/Developer of Trial Visual Aides· Deposition Videographer · Director of Career Services, Admissions or Alumni Affairs · Editor· Executive Director of Nonprofit Agencies· Fundraiser· Investment Banker· Journalist· Jury Consultant· Law Librarian· Law Professor· Legislative Analyst· Lobbyist· Management Consultant· Mediator· Legal Software Developer/Vendor· Legal Consultant· Legal Headhunter· Politician/Political Advisor · President of a Corporation · Psychologist· Real Estate Developer· Restaurant Owner· Screenwriter· Small Business Owner· Special Event/Conference Planner · Stockbroker· Title Examiner· Trust Officer/Estate AdministratorAs you begin to explore alternative career options, associations are an excellent place to start your research. Almost every industry has one or more associations analogous to the American Bar Association. Most associations can provide you with information, a calendar of events, a membership directory and committee roster, educational programming information and a newsletter, often containing job listings.Excerpted from Jobs for Lawyers by Hillary Jane Mantis & Kathleen Brady (Impact Publications 1996).
Hillary Mantis
Hillary Mantis, Esq., has been a career counselor for over 10 years and has authored career books, including Alternative Careers for Lawyers, and Jobs For Lawyers: Effective Techniques for Getting Hired in Today’s Legal Marketplace (published by Impact Publications). For more information about private career counseling, e mail altcareer@aol.com
Alternatives to Practicing Law
Given the dissatisfaction rampant in the legal profession and the problems inherent in creating a part-time schedule, man lawyers now face tremendously difficult decisions:· Do I give up the practice of law entirely?· Is there some way to combine my practice with my other, equally important interests?· Can I combine my practice with raising a family?· If I do give up my practice, what else can I do with a degree?· How much money will I earn?· How do I find a new job?These questions, which have become all too common, often lead to a state of panic from which no rational decision can be made. There are no Martindale-Hubbell listings for nontraditional or part-time lawyers. For lawyers trained in the highly structured law school environment where getting hired was almost part of the curriculum, the prospect of leaving the profession can be daunting.The good news for the lawyer pursuing alternative work arrangements is that what first appears as a murky road toward instability can be broken down systematically and logically into a series of viable options. Even more encouraging is the tremendous wealth of resource materials that have appeared in recent years. The world of nontraditional/alternative careers has developed into a veritable industry, ranging from books to newsletters to specialized career counseling consultants. As the industry evolves, these positions will become both more readily available and more “acceptable” in the eyes of the legal profession.In general, making the move out of a traditional legal position involves three components: self-assessment, analysis of possible options, and decision-making implementation. Examination of these components should not be treated in a simplistic manner. If you are dissatisfied with your practice, think about exactly why you are unhappy. Do you really dislike the practice of law? Or is it just that you hate writing briefs? Or that you hate working until 9:00 p.m. most nights and can't juggle work and family? Or that you hate living in a large urban environment?Since practice in the legal profession is preceded by a rigorous course of study most often extracting a three-year commitment of time, energy and financial resources, it is readily understandable that any lawyer would first give serious thought to the implications of making a major move. A comprehensive self-assessment to elicit the potential for change may include, among other things, one's tenure and progression in the legal profession, the skills and experience acquired that may be transferred to another setting, the compensation differentials that may accompany such a change, the substantive knowledge required, the impact on personal or family lifestyle, whether the change translates into short-term or long-term employment, and most important, whether making the change will bring success in achieving the lawyer's ultimate goal.After careful thought and analysis many lawyers realize it is not the practice of law in itself that bothers them. For example, one lawyer realized he was unhappy because he hated writing the memos and briefs necessary to litigation. He is now happily employed as a corporate lawyer with a large biomedical engineering company. Some lawyers, of course, do realize they were never intended to be lawyers in the first place and choose to make a gracious exit. Coming to an understanding of why they do not enjoy practicing law allows them to be firm in the knowledge that they have exhausted their options and frees them of guilt and doubt about leaving the profession. . . . NonLegal and Legally Related Job Titles:Although there is no magical "list" of jobs for lawyers (especially high paying jobs), the following job titles held by lawyers may serve as means for brainstorming. We either personally know or have heard about a lawyer transitioning into every job title listed.· Agent· Arbitrator· Assistant/ Associate Dean· Auditor· Author· Accountant· Bank Vice President· Bar Association Administrator· Career Counselor· Certified Financial Planner · Commercial Real Estate Agent· Computer Consultant· Corporate Trainer· Contract Attorney· Department Store Buyer · Designer/Developer of Trial Visual Aides· Deposition Videographer · Director of Career Services, Admissions or Alumni Affairs · Editor· Executive Director of Nonprofit Agencies· Fundraiser· Investment Banker· Journalist· Jury Consultant· Law Librarian· Law Professor· Legislative Analyst· Lobbyist· Management Consultant· Mediator· Legal Software Developer/Vendor· Legal Consultant· Legal Headhunter· Politician/Political Advisor · President of a Corporation · Psychologist· Real Estate Developer· Restaurant Owner· Screenwriter· Small Business Owner· Special Event/Conference Planner · Stockbroker· Title Examiner· Trust Officer/Estate AdministratorAs you begin to explore alternative career options, associations are an excellent place to start your research. Almost every industry has one or more associations analogous to the American Bar Association. Most associations can provide you with information, a calendar of events, a membership directory and committee roster, educational programming information and a newsletter, often containing job listings.Excerpted from Jobs for Lawyers by Hillary Jane Mantis & Kathleen Brady (Impact Publications 1996).
Hillary Mantis
Hillary Mantis, Esq., has been a career counselor for over 10 years and has authored career books, including Alternative Careers for Lawyers, and Jobs For Lawyers: Effective Techniques for Getting Hired in Today’s Legal Marketplace (published by Impact Publications). For more information about private career counseling, e mail altcareer@aol.com
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