Huge News for Solos: Wanna Be Bought Out By Skadden? Now you can!
Last week, Larry Bodine posted here on a New Jersey ethics ruling that allows a law firm to own another law firm as a wholly-owned subsidiary. I haven't had time to read the decision closely or focus on the implications, which I believe are mixed, but here is Larry's view on what the decision could mean:
• Law firms can buy and sell other law firms as investments.
• Law firms can hire a pinpoint boutique to handle a spike in client demand, and then sell it off or shut it down when the demand falls off. The owner firm wouldn’t have to fire any of its own staff, as happened when the technology bubble burst.
• The owner law firm can acquire a smaller firm without having to charge big-firm rates or pay big-firm salaries. A large firm could own, for example, an insurance defense firm, pay the lawyers bottom dollar, and be able to bill out at $100 an hour. This means big law firms won’t leave money on the table.
• Owner law firms can acquire less glamorous practices, like collection law firms (which are very profitable and make a 40% commission on debts collected) without having to sully its own reputation. This can be very handy when the big firm has a bank as a client, and is happy to do its securities and acquisition work, but doesn’t want to foreclose on mortgages. It makes the owner law firm a full-service firm.
• Big firms can get into profitable areas they won’t touch now – like matrimonial law and plaintiff’s personal injury law – without having to have their own lawyers do the work. Of course, the subsidiary PI firm would be conflicted out of suing clients of its owner.
• Law firms can market themselves like General Motors, and have separately branded divisions, like Cadillac, Chevrolet, Pontiac and Buick.
• Or, law firms can market themselves like General Mills, with individual brands like Betty Crocker, Pillsbury, Green Giant and Häagen-Dazs.
So what's the value for solos...?
Think about it. If you're a solo offering a niche that's of value to a large firm, you could seek a buy out. You'd gain the stability of the large firm practice without having to take on all the overhead. You'd gain the cache of affiliation with a "name brand" which for some fields (like energy regulatory or other biglaw practices) could help marketing. In many ways, the law firm subsidiary arrangement could function as a more stable "of counsel" relationship.
At the same time, a large firm affiliation could have drawbacks as well. You might face conflicts or pressure to do things the firm's way, which as we solo and small firm lawyers know, is not always appealing to clients.
I'll post more on this development as I have a chance to mull over its significance further. In the meantime, I'll mark this post - because I guarantee, that a year from now, this will be a topic of further discussion.
Isn't This A Great Compliment?
Dan Hull highlights this great compliment from a client that came to him via Patrick Lamb. "We don't have their phone number, we have their DNA" is the compliment. Though some of use might prefer a hefty monetary bonus for excellent service, let's not forget that this kind of endorsement (particularly one making its rounds on the blogs) is worth its weight in gold many times over with the referrals and future business that it will help generation.
Please Don't Call This Pro Bono
Why is it that when small firm attorneys represent court appointed indigents at rates equivalent to one third of market that the work is not classified as "pro bono," but when a large firm takes a bath on fees for representing the former governor of Illinois, an ABA committee chair recognizes that as pro bono? Why is it that when a solo lawyer runs a blog on some aspect of legal practice that provides first rate substantive information at no cost (as in here or here or here to name a few of dozens of examples) it's called marketing, but when a large firm provides substantive information at no cost, it's deemed pro bono?
You might ask, "what's in a name?" and why it matters whether we classify some free work as pro bono or not. Well, here's why it's so significant. Every so often, various state bar associations float the idea of mandatory pro bono requirements. Like many solos, I'm opposed to this requirement because I believe that it's more of a burden for solos to meet than our biglaw counterparts. But even more, I'm concerned that large firms will be able to meet pro bono requirements by classifying as pro bono efforts such as free representation of well known politicians or work on cutting edge issues for high profile non-profits. This would mean that large firms could meet pro bono obligations by handling matters that they'd handle anyway for publicity or marketing purposes, while solos who are frequently stiffed by poor clients or accept cases at low costs would be required to take on even more non-fee matters to meet pro bono requirements.
We live in a country where the legal needs of the poor and lower middle class still go unmet. Representing a famous politician or doing work for free to gain entre into a new market don't address those needs that many solos help to meet every day of their practices.
Free Technology For Louisiana Lawyers
Eight months after Hurricane Katrina, the legal community remains affected by these types of impacts. But lawyers have not forgotten their Louisiana colleagues. Efforts include those by the Indiana Bar , which held its spring getaway meeting in New Orleans and this free technology assistance offered by several bar associations to assist Louisiana attorneys and firms in rebuilding its practice. Ernie the Attorney will be speaking at the second event which he describes as being aimed at solo and small firm attorneys.
MyShingle would love to hear from Louisiana lawyers impacted by Katrina to learn more about whether you've made it back on track. If you'd be interested in guest posting, please email me at firstname.lastname@example.org.
What Do Romance Novelists and New Lawyers and Bloggers Have in Common?
What do romance novelists and new solo lawyers and bloggers have in common? All have within them the potential to catapult to success as the result of Internet technology. Whereas back in the mid-1990s, the Internet and the dotcom boom turned many ordinary folks into gazillionaires in unbelievably short periods of time, today the Internet is now responsible for taking some writers - and potentially lawyers - who toil in obscurity - and making them stars as reported in this article, Romance, Writ Large from today's issue of the Washington Post. Listen to this story from the article:
Here again, technology has had an impact. MaryJanice Davidson, a 36-year-old Minnesota writer, described her career as going "from the trailer park to the New York Times bestseller list in zero to 60." She had been trying to sell her manuscripts since she was 21, and "was tired of being told that no one was interested in paranormal or really sexy books." So she turned to e-publishing. Her first book, "Adventures of the Teen Furies," was a young adult fantasy about a group of teenagers who were into gaming and their gaming personalities took over. It was published by e-book publisher Hard Shell Word Factory. "Little did I know," Davidson said, "that the New York publishers were keeping an eye on the e-books." In 2003, Cindy Hwang, then senior editor for Berkley Books, read Davidson's novel "Undead and Unwed" online and called her, seeking to buy the print rights and offering her a three-book contract. It was, Davidson acknowledges, "like winning the lottery." The series, which has transitioned into hardcover, is about a secretary named Betsy Taylor who, in Davidson's words, "is turned into a vampire and fired on the same day. She has to find a new job and figure out where she is going to live. . . .
The Internet allows established publishing houses to see how a book "plays in Peoria" before publishing it. And the Internet gives lawyers access to a nationwide audience through weblogs and online publications where clients can get a taste of their work before making the hire. Moreover, if you're this kind of a lawyer blogger, you may be plucked from anonymity to write a book.
How can you use the Internet to shine a light on your practice and take it to the next level? These days, it's not just a daydream, but a real question and a goal that might demand a serious strategy.
Landing Thos First Clients
It's one thing to go solo with a portfolio of business, but quite another to start from scratch. Yet, many lawyers, including me, have started firms without any business to speak of. And this article, Solos' First Step: Converting Contacts into Clients , Douglas S. Malan The Connecticut Law Tribune (April 27, 2006) shares stories of how other lawyers found their first client. One recent grad, Matthew Brovender, built a practice through referrals that he generated as a result of a contacst he met through a judicial clerkship. He's also got a pen with a great tagline: "The call is free. Will you be?"
Other solos have milked contacts and experience from their earlier career lives, such as formal social worker turned lawyer, Laura Caldwell-Gaines or from serving as pro bono counsel to a youth hockey team, for Eric Opin.
How did you find your first client? One of these days, I'll share my own story.
More on the Joys of Law Libraries
Like Barry Kaufman, I'm a huge fan of the law library and recognize that it's an indispensable tool for solo practitioners. Which is why I'm thrilled to be able to offer this Guest Post, Eight Reasons Solo Lawyers Should Use Law Libraries from Mary Whisner, the assistant librarian for reference services at the Gallagher Law Library of the University of Washington School of Law. Mary also runs Trial Ad Notes, a blog about trial advocacy.
Eight Reasons Solo Lawyers Should Use Law Libraries
* Libraries employ people whose job is to help you use the library and figure out your research puzzles. Law librarians specialize in legal materials and the needs of legal researchers. Many are legally trained. We keep up with new sources and techniques and can often save you hours in your research. What’s more important to you than your time?
* Librarians also create online guides to help you with your research. See my library’s collection of guides, for instance. So we can help you with your research without ever meeting you – even at 2:00 a.m., if that’s when you’re looking for some research pointers.
* You’ve got a limited budget and limited office space, so you don’t buy every practice manual, looseleaf service, formbook, or treatise that might come in handy. Your local law library is a great resource. (If you find the book or set is really useful, then you can order it for your office collection.)
* Even if you are very comfortable using online research, some sources are easier to use in print. Many people find it helpful to use annotated codes in print because of their layout. Sometimes you might use a database to find a source, but sit down with the print when it comes time to skim the whole chapter you need.
* And remember that not everything is online (and certainly not everything is online free!).
* Many public law libraries subscribe to databases that lawyers and often members of the public can use free. Say you subscribe to a thrifty Westlaw or LexisNexis package that gives you access to your own state’s laws and cases. When you need to research some other state’s law, wouldn’t it be great to be able to use the law library’s subscription?
o Some law libraries make databases available without charge.
o Others charge on a cost-recovery basis. (Usually that’s still a lot cheaper than getting your own subscription for occasional use.)
* Some of the databases popular with the lawyers who use the law school library where I work are:
o LegalTrac, an index of legal periodical articles, 1980-present.
o Hein Online, a collection of pdf documents from a variety of sources. It includes hundreds of law journals (from the nineteenth century on!), Statutes at Large, the Federal Register, treaties, and federal legislative histories.
o KeyCite, the component of Westlaw that enables researchers to check the history of a case, statute, or other document and find citing references.
o RIA CheckPoint, a rich source of tax and accounting material.
o BNA, a wide range of newsletters and databases, including BNA publications in tax, labor, and health.
o Nonlegal databases. Ever need economics, business, scientific, or medical information? The law library might have access. If not, your public library or local university library is a great source for nonlegal information.
* You can test drive databases before you decide to subscribe.
Four. Audiovisual materials.
* Want a DVD on cross-examination? How about an audiotape to review a subject while you’re in your car? Many law libraries have them.
* Some law libraries (e.g., the State Law Library of Montana)
maintain collections of AV materials you can use for CLE credit.
* One attraction of solo practice is getting to work in your own special space and wear your bathrobe while you’re drafting motions. But what if you want a change of scenery? The law library provides you with a fresh place to work – and maybe a fresh outlook.
* Many county law libraries also have conference rooms that you can reserve for meetings with clients or colleagues. Pretty neat if you don’t want them to see your ironing board and that lunatic cat in your home office.
* Location, location, location. Most county law libraries are right in the courthouse. What a great place to gather your thoughts before you argue your motion.
* When you’re in a firm or a government agency, you often pick up a lot at the water cooler. You can bounce ideas off your colleagues and hear what projects they’re involved with. That’s a little harder for solo practitioners. But at the law library, you’ll run into law school classmates, former coworkers, and other acquaintances in the legal community.
* Who knows? The contacts you keep up might even lead to referrals for you.
Seven. Services at a Distance.
* Law libraries also offer other services when you’re away from the library, such as telephone or email reference (or even instant messaging reference). The law library can help you even when you’re in your office or on the road.
* Many law libraries offer a document delivery service, and can
send you copies of material for a fee. If it would take an hour of your
time to drive here to get the document, it’s a bargain to pay $20 to
have it faxed to you.
* Many law libraries offer training, sometimes with CLE credits.
* For instance, the King County Law Library offers classes on Casemaker, Loislaw, LexisNexis, Westlaw, Word, using the Internet for legal research, skip tracing, and more.
Where do you go?
* Many counties have county law libraries whose mission is to serve the public and the bar. Generally, the bigger cities have bigger libraries with bigger staffs and more services.
* Each state has a state law library (serving state agencies and courts, but often serving attorneys in the state as well).
* Some federal court law libraries are open to attorneys or the public as a courtesy of the judges.
* Some law school libraries (like mine) are open to the public.
* Some law school libraries are open to attorneys or alumni of the school, sometimes for a membership fee.
* Some cities are served by members-only (“subscription”) law libraries, such at the Social Law Library in Boston.
Follow the librarian credo: Just ask! You might be surprised what the public law library can do for you!
By the way, public law libraries welcome your support, financial and otherwise. If you benefit from your local law library, consider making a donation. If you decide to weed your shelves of some CLE materials and handbooks, make a call to see if the law library could use them.
Clients As Pals: Almost As Bad as the Client from Hell
Talk to any solo, and invariably, he or she will share a story of a client from hell. You know who I'm talking about: the one who won't pay the bills, who calls at all hours, who wonders why a 20 page motion took 10 hours to draft or who complains about how lawyers are money grubbers. But just as troublesome as the client from hell are the clients who are your pals. As I describe below, it's these guys, the friendly clients, who pull you in too close, to the point where you may compromise your professional judgment. And then these clients who you thought were friends and colleagues revert back to ordinary clients, they'll be the first to turn on you when you need their support.
Take these two seemingly disparate examples - Lynne Stewart, the criminal defense attorney convicted for actions in connection with her representation of Sheik Abdel Rahman who conspired to blow up the World Trade Center the first time, and Enron's former chairman, Ken Lay. Norm Pattis of Crime and Federalism addresses the Lynne Stewart conviction here, describing how the political views that she shared with the Sheik brought her dangerously close to her client so as to cloud her judgment:
Stewart's downfall was not in providing aggressive defense to the Sheik. Her downfall was letting her politics cloud her judgment. She has long spoken out in favor of "directed violence" as a means of combatting policy objectives she dislikes. When she represented the Sheik, she was, in effect, representing views to which she subscribed. Her judgment was clouded[...] Stewart became part of the case she was defending. She became a tool of the Sheik because it suited her private views. She let her representation of the Sheik become personal.
Ken Lay's case is another example of how ties between an outside firm and a client subject to investigation can bring the firm down later on. In his testimony at the Enron trial, Lay blamed plenty of folks for Enron's demise, including its law firm, Vinson and Elkins. Lay described that he took initial complaints about Enron seriously enough to call in outside counsel and relied on their representation that Enron was acting within the law. (Skilling made the same claims during his testimony, as reported in more detail here in Trial probes Enron's Cozy Ties with Law Firm) Though V&E may have been gentler than it should have out of a financial motive to keep a deep pocketed client, given the revolving door between V&E and Enron lawyers, a general camaraderie likely existed as well, making it harder for V&E to serve as the bearer of bad news.
Norm Pattis offers the best advice for lawyer client relations in his post:
I find it far easier to represent folks with whom I share little common ground. All this prattle about "loving" your client and "walking in his shoes" obscures the attorney-client relationship. We defend folks in need and are their advocates within the rule of law.
Just as parents should not strive for friendship with their children, lawyers should always remember the line between professional responsibility and camaraderie with clients. Sure, clients from hell are no fun, but at least they don't bring any surprises; you know that they're likely to grieve you, so you proceed with caution. By contrast, if you're drinking buddies with your client, the way Lay and Skilling likely were with V&E, it's too easy to let your guard down. And if you do, like V&E, you may find yourself blamed in the national media for the alleged criminal conduct by your former client.
Advice from Shinglers Across the Pond
Human Lawyer, a UK Blogger, posts about an article by Susan Singleton in this quarter's issue of the Solicitors Sole Practitoners Group Quarterly Magazine that talks about how to save money off big legal publishers and stay current with developments in your field." The list includes these tips:
* Subscribe to nothing unless there is a major business case for it
* Write for as many publications as you can
* Join relevant legal committees for areas where you are involved
* Never buy any product which is free or available on the internet elsewhere
* Do not assume that because another firm or many firms have a product that a sole practice "has to have it."
This list works well for my energy regulatory practice, which subscription fees can be exhorbitant. But I've managed to avoid paying out money in part because I've done many of the things that Singleton recommends.
Happy 3rd Birthday Benefits Blog
Solo Janell Grenier celebrated her Third Blogoversary over at Benefits Blog and shares her impressive visitor stats, though not her secrets of how she's managed to keep up her efforts for so long. Benefits Blog's popularity does not surprise me. Even though I know nothing about "tax, benefits or ERISA," the subject of her blog, I can tell that her site is incredibly thorough and packed with substance and often, I read it just for the pleasure of the analysis and the obvious effort that goes into it.