New Orleans Solos, One Year Later
A year ago, Hurricane Katrina reminded all of us solos of the somber side of solo practice; how everything we've worked to build can be wiped out in an instant. Sad to say, a year later, some solos are still struggling to get back on their feet, as reported in Uneasy Times for Lawyers in the Big Easy, National Law Journal (8/30/06). (h/t to Ernie the Attorney).
From the article:
Small-firm practitioner Bill Rittenberg is also dismayed by the speed of rebuilding. He is earning about 60 percent of what he was making at Rittenberg & Samuel prior to Katrina, he said, adding that for eight months after the storm he did not pay himself anything. But Rittenberg hastens to say that he feels fortunate to be working as a lawyer. A fellow New Orleans attorney he knows is working as a short-order cook, he said, and several lawyer-acquaintances have left the area because they could not support their practices.
"The good news is I'm home with my friends. The bad news is that people are still leaving," he said. Rittenberg and his wife evacuated New Orleans on Aug. 28 last year with two days' worth of clothes. They were on the road for two months, staying with various friends before they could return home. While he was gone, his 93-year-old mother died, after having been evacuated from two different facilities following the storm.
Today, Rittenberg said he is "in much better shape," but he is exasperated by the lack of progress in his hometown. "The country seems to have forgotten about us," he said.
Still other firms are beginning to recover, and some have even added new attorneys. Perhaps in another year, business will return to normal for more small firm lawyers.
You Get the Clients You Market For
Via Ernie the Attorney comes this link to a provocative You Tube ad by Florida divorce attorney Steve Miller (posted at Denise Howell's new fun blog). After insulting paralegals, overpriced downtown lawyers and court clerks, Miller invites clients who want to escape "the hellhole they call a marriage" to visit his website, pay up and "get on your way to getting rid of that vermin you call a spouse."
Personally, I'm not sure why Miller chose to market to angry or disgruntled clients, because he doesn't have to. As Miller's website makes clear, Miller competes aggressively on price which I've always believed is both a credible and necessary approach not just for lawyers, but for clients priced out of the legal services market. But by attempting to appeal to people who call their spouse "vermin" or refer to their marriage as a "hell hole," Miller virtually guarantees that he's going to attract clients who are unreasonable and uncompromising. These clients may think of their spouses as vermin when they call to retain Miller, but I'm guessing that by the end of the case, they'll be referring to Miller as vermin as well. Sometimes you get the clients you deserve.
Still, though Miller's approach isn't one I'd adopt, I don't advocate regulation or restrictions on his ads. The ads aren't deceptive; consumers who hire Miller know exactly what they're getting, which is more than can be said for many other types of law firm advertising. Let the market decide the fate of Miller's ad campaign (presumably, Miller will pull the ads if ineffective), not the bar.
What Makes A Fee Unreasonable?
Many lawyers (with this notable exception) believe that the 1/3 contingency fee is reasonable and that any fee agreed to between a willing client and an attorney is also reasonable. But in this recent story, Attorney's 9/11 Fee Called "Shocking, Unconscionable" (law.com 8/28/06), lawyer Tom Troiano had a valid retainer agreement that provided for 1/3 contingency fee for settlement of his client's 9-11 claim. Yet many lawyers, including Ken Feinberg, Master of the 9/11 fund, have vocally criticized Troiano's fee as unreasonable.
Here are the details behind the story. When Laura Balemian's husband was killed in the World Trade Center attack, she called Tom Troiano, a lawyer and trusted family friend for assistance. Troiano claims he took charge of the family's numerous legal affairs, without seeking compensation. But he did have Balemian sign a retainer agreement on Oct. 15, 2001 with respect to representation of her claims in the 9-11 fund. Eventually, Troiano recovered over $6 million for Balemian, double the $3 million cap. And in February 2004, per the terms of the retainer, he collected his 1/3 share of the amount recovered.
Fast forward to 2006, in the probate proceeding over Balemian's husband's estate. A guardian appointed by the court challenged Troiano's fee as excessive and not in the best interests of Ms. Balemian's four children. In response, Troiano brought an action for declaratory judgment approving his fees.
Troiano argues that he deserves the fee because the client agreed and his extraordinary results justified his $2 million fee. Kenneth Feinberg, Special Master of the 9-11 Fund, commented that the fee was excessive; the fund recommended that attorneys collect no more than 5 percent. Feinberg also stated in an affidavit that:
I find it difficult to understand how any lawyer can request a 30 percent fee for simply filing a claim with the 9/11 fund," he said. "It's a non-adversarial process where the special master was working with families and family lawyers to find a way to legitimately give them this money."
Hearings that led to higher awards were a routine part of the process, said Mr. Feinberg. In his affidavit, he noted that 68 percent of the claims involving deaths had a hearing at which evidence was presented.
One key question that was not addressed by the article, is why Troiano's client waited to challenge the fees. According to the article, Balemian now argues that Troiano collected too much. But Balemian paid the fees in January 2004 and apparently, nothing was mentioned about them until March 2005 when the guardian first took issue with the fees on behalf of Balemian's children. (see order here) To me, the answer to that question dictates the appropriate result. If Troiano told Balemian what other attorneys recovering for 9-11 litigation, explained that the risk of loss was low and that the fund had recommended a 5 percent fee and Balemian still agreed to pay 1/3, then I'd have to say that the fee is reasonable and Balemian should be stuck with the result. If, on the other hand (and what I suspect is the case), Troiano portrayed the 9-11 litigation as a standard contingency case and never told Balemian how other lawyers were handling the matter - and Balemian never figured that out until the guardian raised the issue - then, in my view, Troiano doesn't deserve a fee at all, because he breached his fiduciary duty to his client. In my view, the end result Troiano achieved does not justify the means if he did not fully disclose to Balemian all of her other options.
So readers, what do you think about this one? And how would you have handled the situation?
Real Sisters In Law
Sisters don't have to marry a pair of brothers to become sisters in law to each other. As this article, Sisters in law: Siblings Keep legal matters all in the family (Arizona Business Gazette 8/24/06), sisters Hope Kirsch and Lori Kirsch-Goodwin became sisters in law (or sisters at law) when they decided to hang out their own shingle together.
We're all familiar with law practices comprised of parent and son or daughters and there are other sibling firms as well, such as this one I mentioned years ago. Any other readers involved in a family practice (not counting spouses). Send your comments below and let us know whether it's something you would recommend.
Small Is The New Big and Chat With Seth Godin
I haven't yet read Seth Godin's new book, Small Is the New Big, though of course, I linked to Godin's article of the same name when it came out. Next week, Type Pad will release the August 22 chat with Godin via Podcast. If any readers participated, I'd love to hear the scoop in the comment section or by email.
Great Advertising for Small Firms
If you want to sell a small business on using your small firm instead of a large, impersonal firm, I can think of no better marketing than this post from Ed Wesemann who describes, bluntly, what small clients really mean to big firms.
You Can Take It [Biglaw Practice] With You
Many large firm lawyers think that if they hang a shingle. they'll have to throw away their biglaw specialities, like securities regulation or merger practice and trade it in for more general practice fare, like family law or criminal practice. But at least one solo attorney, Walter James, of the newly created Environmental Crimes Blog shows us that it doesn't have to be this way, with a post about how some of the best environmental work (traditionally regarded as the domain of biglaw) is being handled by solos and small firms.
The benefits of going with a small firm? Lots of expertise for a lower price.
So if you're toiling at a large firm, dreaming of the solo life, think of ways that you can take your $400/hour expertise (of which you may see 25 percent, if that much) and transplant it at your own law firm.
Finding a Way to Do What You Love, Even If What You Love Is Watching TV
This isn't a post that directly relates to solo practice, though the lessons that it offers will apply. Instead, it's about the serendipitous way that your passions can lead you to a job that truly fits - which is something that many of us have in fact found in solo practice.
Consider this New York Times profile of Thomas Rogers, a former biglaw attorney who is the president of Tivo. The profile describes that when he was a kid, he was such a huge TV fan that his parents bought him a subscription to TV Guide. In addition to the TV listings, the section about the FCC caught his interest as well. Rogers went on to law school, but turned down an FCC position for biglaw practice. But TV stayed on his mind and helped him catch his first big break:
In early 1981, I read that Timothy Wirth of Colorado had been named head of the House Subcommittee on Telecommunications, Consumer Protection and Finance. I wrote him, and his staff invited me for an interview. I told a top aide the story about reading TV Guide and she said, “At least that’s different.” I became one of four lawyers on the staff.
From the Hill, Rogers went in house to a cable division of NBC and then on to Tivo, where he became President and CEO.
Sometimes, you need to leave the law to follow your passion. But perhaps, like Rogers, you can also find a way to marry what you love with your legal practice.
How Continuing Legal Education Can Continue To Help You Make Money?
The problem with having less time to write blog posts also means that I have less time to read them. Which is a shame, because in just a few days off the aggregator, I miss so much, including the recent, terrific string of postings by Peter Olson of Solo in Chicago. One neat idea that he offered a few weeks back is to use CLE as a profit center
[CLE] might be a profit center for you. I honestly don't know but it must not be that difficult to get certified by the Supreme Court to qualify. I just got a mailing for a family law seminar put on by former ISBA President Bob Downs, Joseph Gitlin and a handful of others coming up. Not to be too cynical, but why should any of the fairly prominant lawyers in various practice areas speak for any of the bar association CLEs at this point when they can just form a small business of their own and profit from it?
The reason that Olson's idea is so ingenious is that by offering CLE, you're essentially paid to market. You collect revenue from teaching the CLE courses, but you also get yourself in front of other lawyers who might refer cases to you and establish yourself as an expert in the field. Why lose revenue marketing when with something like CLE, you can get paid for it?