Category: General Management

ABA Provides Resource Center for Solo and Small Firm Lawyers

Most PA attorneys are not members of ABA, in my experience. That’s likely a result of the fact that most firms are solos/smalls, and paying dues at the local and/or state level is daunting enough, leaving little room in the budget for dues at the national level.   But that doesn’t mean you can’t take advantage of much of ABA’s vast wealth of resources.  I have participated in their LawTech Listserv for years, and find the information flow and available expertise invaluable. Although I am a member in good standing now, I participated in the Listserv for many years before taking the leap.  You should take time to check out the vast wealth of resources yourself.

New PA Bar Institute president, Sara Austin, recently brought to my attention the relatively new ABA Solo and Small Firm Resource Center.  It is in its infancy, but is growing and maturing rapidly.  It contains information on practice management and career services, technology, products, CLE, news and articles.  All appropriate for solo and small firms.  Check it out.  And don’t forget, if you’re a PA Bar Association member, our members-only Law Practice Management Section has a considerable array of resources, too.

Why Your Firm Needs a Written Partnership / Shareholder Agreement

We know the adage about the shoemaker’s children running barefoot.  In the law firm the equivalent is a firm built on a handshake and nod, without the benefit of a written agreement.  The result?  Just as dangerous as those shoemaker’s children running around barefoot on a bed of broken glass and rusty nails.  Aw comeon, you’re thinking, we’ve operated that way for years and it’s working just fine.  Hey, good for you.  The problem is what happens when you’re not getting along just fine.

The time to agree about things is when everyone is feeling agreeable.  When times are good.  That’s when people are most likely to be reasonable.  And that’s when you should nail down details that will be vital should things devolve into something less agreeable.  Let’s be honest, we are seeing a decided uptick in law firm dissolutions, defections, implosions, explosions, and outright financial failures.  Without a written agreement which spells out some critical actions, you will likely end up in court, or at least in the newspapers.

For example, read this recent article from the ABA Journal Law News Now entitled “Suit Claims Former Partners of Dissolved Law Firm Won’t Leave.”  I admit I laughed out loud when attorney Ronald Minkoff, a partner at Frankfurt Kurnit Klein & Selz who represents lawyers in partnership disputes, was quoted as saying that it is “unusual in this day and age” not to have a partnership agreement.  Ok, remember back in law school when you were told to look to your left, and to your right, and realize that by the end of 3 years only one of you would be remaining and passing the bar?  Same exercise, only this time it’s less than one of you will have a written agreement with your business partners.

You may be wondering what the big deal is . . . we’ll just go our own way, right?  Nope.  In all likelihood it will be getting nasty fairly quickly.  You may find yourself in the headlines.  You will certainly lose tons of time and energy which could be better used transitioning your clients to a new practice with you.  It will cost you legal fees in addition to emotional trauma.  And you may wind up with disciplinary issues and/or malpractice claims to boot.  Need examples of the issues which crop up the most?

Malpractice insurance coverage after the lights go out. 

Many of you immediately recognize we’re talking about “the tail” or what is otherwise known as an Extended Reporting Period Endorsement.  Malpractice insurance policies for lawyers are almost exclusively written on a “claims-made” basis.  This means that if you don’t report a claim within your policy period, or an act, error, or omission which you know about which may reasonably give rise to a claim in the future, you will have no coverage if a claim arises after the policy period expires.  For many lawyers, it is a rude awakening to find out that their new law firm home may have a policy which excludes prior acts coverage.  If you wind up on your own, you may not be able to afford a policy with full prior acts coverage.  The best policy for all concerned is to require the dissolving firm to purchase the tail, in order to protect everyone going forward.  However, absent a written requirement, I can assure you that it rarely happens, as those departing refuse to pay their fair portion of the premium.

Retention and disposition of remaining client files.

This is a complex and problematic area.  Just because a law firm closes doesn’t mean the firm is relieved of its obligation under Rule 1.15 [Safekeeping Client Property].  In fact, those obligations continue and can — and have in the past — impacted even former partners of a dissolved firm with disciplinary action if ignored. 

A few years ago I read about a dissolving New York firm which could not get the partners to agree to pay for a storage facility for all the closed client files.  The debate became heated.  No one wanted to pay to store files for former partners, let alone their own former clients.  Eventually, the few partners who stayed behind, responsible for winding things down, became sufficiently disgusted and literally threw away all the files. Ultimately, all partners who had left files behind, even those who had departed before the closing of the firm was announced, were disciplined for failure to properly safeguard client property. 

On top of these issues, firms must be concerned about discovery and possible accusations of spoliation if client records are dealt with inconsistently.  When it is left to individual attorneys to determine what gets saved and what gets destroyed at a given interval, every inconsistency becomes suspect under the bright glare of litigation discovery.

Future liabilities and audits.

When a firm winds down, unpaid liabilities can rear their ugly head.  While not every nuance can be anticipated, you want to make sure that any departed partners remain liable for their share of any back taxes, penalties and interest, defaulted loan payments, unpaid vendor bills, or whatever later arises from a period in which they were a member of the firm.  Gone should never mean off the hook for these obligations.  Look to your partnership or shareholder agreement to make this obligation clear.

These represent just three examples off the top of my head of what can — and frequently does — rear its ugly head in the absence of a written partnership agreement, when a firm dissolves.  If I didn’t have a backlog of work calling my name right now, I’d delve even into how a firm’s ability to nimbly realign and implement change in response to an evolving marketplace can be seriously hampered when there is no partnership agreement spelling out how decisions get made.  If you’re relying on 100% consensus to accomplish everything, you better hope you never disagree.  Because when you do (notice I didn’t say if) you will be thwarted by decision paralysis.

If you’re not convinced, search Google News for past headlines regarding law firm dissolutions and the thorny and ugly issues which emerged. You will find a common theme in most — the lack of a written agreement between members of the firm.  Don’t let your future follow a similar path.

Why PA Needs CLE Credit for Practice Management Education

I have been asserting that PA should provide full CLE credit for practice management education since I joined the PA Bar Association in 1999.  Here’s just a bit more proof of why.  Take a look at this recent blog post by highly-respected marketing consultant Dustin Cole, entitled “Of the Top 10 Causes of Malpractice & Grievances — 8 Are Sloppy Housekeeping!”  From his post, here are the top 8 of 10 reasons for malpractice / grievance claims in Florida:

1. Failure to manage time/procrastination
2. Failure to docket – identify/document deadlines
3. Failure to manage information
4. Failure to obtain client consent
5. Failure to file documents timely
6. Missed or unresolved Conflict of Interest
7. Poor communications with client
8. Failure to follow client instructions

Any of this look familiar?  Yep, if you look at the top causes of claims in PA, you will see the same causes, perhaps labeled slightly differently, or in different order.  The truth is that most attorneys and law firms get themselves in trouble because of poor business practices, including disorganization, lack of follow-up, absence of codified procedures, inadequate internal training and oversight, and often an absence of any semblance of good customer service practices. 

Really smart and talented lawyers can look like fools to clients, when they lack savvy on the business side of the practice.  Really smart and talented lawyers lose clients when they fail to provide high-quality customer service.  What is that?  Responding to telephone calls and emails promptly.  Keeping the client informed.  Letting the client know what’s happening before they have to pick up the phone and ask.

Right now, most states will provide CLE credit for any education which improves an attorney’s legal skills OR practice management skills.  But in PA, the only way to obtain CLE credit is for substantive practice skill education, or ethical / malpractice avoidance training.  I have managed to create a wealth of seminars over the years which qualify for ethics credit, but I can’t say it’s not difficult and very limiting in terms of the content I can present.  How I long to present a seminar for CLE credit which is about nothing more than nuts and bolts of how to properly manage aspects of ones practice.

I guarantee that lawyers would enjoy their practice more, be more profitable, and most importantly, avoid getting themselves in disciplinary trouble inadvertently.  I know that “some day” the CLE rules in PA will change.  It’s inevitable.  I just had to let off a little steam about this, because I’ve been waiting for 14 years, and there is still no change in sight.  Do you agree with my perspective?

Checklist to Make Sure Your Firm Isn’t Dewey

Every once in a while I read a blog post or article which is so spot-on I am compelled to share it.  That’s the case with “A (Don’t Be) Dewey Dozen: Use This Checklist to Make Sure Your Firm Isn’t Dewey” which was written by Paul Lippe.  It appeared in ABA Journal Law News Now.  If you’re wondering why Lippe’s name is familiar, he’s the guy that worked hard to get Gary Hart elected President — twice.  The insightful comments at the end of his post  (over 25) add much food for thought on top of this excellent post.  No matter what the size of your firm, this should be on your must read list.  Following I highlight and comment on a couple of points I feel strongly about.

4. Do mergers and acquisitions advance the strategy? Whether it’s merging with another firm or bringing in a lateral partner, law firms are constantly engaged in some form of M&A. When I was running M&A for my old company, our one-question test was” “What do we say to our top 20 customers the morning after the deal is announced explaining how they are better off?”

If you look at some of my past posts and articles regarding mergers, you’ll see me ruminating about this same point.  [See, for example, “Post Merger Economics“.]  It’s not simply about size or economies of scale when it comes to mergers; it’s about synergy.  One plus one better equal more than two, or the merger has no external value, and probably even less internal value.  Lippe really nails it with his one-question test.  Simple and eloquent.  He really says a  lot  in few words.  I’m thinking about printing this and adding it to the very few items on the tack-it board above my monitors — reserved for especially cogent thoughts.  I consider it my business haiku bulletin board.  Earning a spot on there means a lot.  I’m sure I will be sharing this one-question test with clients in the future.

6. Does management render unto Caesar? Lawyers use logic and reason to argue indeterminate facts, and they do it well. . . .but at minimum firms need to recognize that there are some inarguable facts. As my old boss Sen. Daniel P. Moynihan said: “Everyone is entitled to his own opinion, but not his own facts.”

The old adage, “figures lie, and liars figure” came immediately to mind when I read this.  I continue to encounter attorneys who somehow manage to dismiss what I find to be self-evident facts which are as plain as, well, the nose on their face.  It’s one thing to play devil’s advocate for love of the debate.  It’s great at the dinner table with cherished guests, during a round of golf, or over drinks at ones favorite establishment.  But it’s not so great when it’s a never-ending process at the firm.  It wears the heck out of your partners and administrative management.  It seriously impairs the firm’s ability to evolve and realign to a constantly changing marketplace.  It creates dissension and dissolves the glue between partners which many firms work so hard to develop. In short, it’s detrimental to the health and vitality of the firm. 

I’m not suggesting that you blindly accept numbers put in front of you.  Far from it.  But there has to be collaborative effort to allow and enable objective analysis, and let the chips fall where they may once that is done.  Stop arguing endlessly just because you don’t like the numbers.  Put that same energy into improving them through some innovative thinking,  difficult discussions and decisions, and an action plan to implement change.


Kudos to Best Buy for Making E-Waste Disposal Easy

We are all drowning in electronic trash.  Ok, maybe not all of us, but most of the people and businesses I know.  Old routers, cables, telephones, discarded laptops and CPUs.  Oh my! I had three big boxes filled with just cables, routers, headsets, and other paraphernalia.  On top of that, 3 dead laptops, 2 laptop cooling stands, and 4 dead CPUs crowded a corner of my office.  I wanted to dispose of these items in some responsible, environmentally-friendly manner. 

I didn’t want my old equipment tossed in a landfill.  In addition, I was under the distinct impression that I was required to dispose of my e-waste responsibly.  In fact, I was pretty sure I had blogged about new e-waste disposal rules years ago.  So I did some digging in my blog archives, and found out that, sure enough, I did blog about it back in November, 2005 in a post entitled “Disposing of Unwanted E-Equipment.”  What I had forgotten is that the EPA regulations applied only to businesses, and not to residences.  Since I operate on a virtual-office basis out of my home, it seems I have no requirement, at least Federally, to recycle electronic waste. 

The Federal eWaste site indicated that individual states may have requirements of their own.  That seemed to jog my defective memory a bit, so I looked to the National Electronics Recycling Infrastructure Clearinghouse to determine what is required in my native state of Pennsylvania.











As you can see from the map above, PA does not have any state-specific e-waste disposal requirements.  So it’s up to the conscience of each individual to do the right thing.  And that includes all those of us who have home-based business.  According to one resource, “The home office market will add nearly 2.0 million home-based businesses by 2015, with over 450,000 net new home-based businesses per year in 2013 and 2014. ”  Folks, we’re looking at a lot of e-waste here!

There are a lot of choices for e-cycling and disposal.  I know because I did a Google search to find them.  And while many are good solutions for business, most didn’t work for me.  But I finally found a convenient solution at the local “big box” store.  I walked into my local Best Buy, just minutes from my home. Right in the foyer were several recycling bins.  Each was labeled for appropriate content: batteries, cables, and so forth.  Intrigued, I went to their web site to find out more about their e-cycling program.  I was amazed to find that I could recycle almost everything I had, regardless of where or when it had been purchased.

By coincidence, my old Sony 27″ TV died right after I became aware of this service.  So with much labor, hubby and I managed to get it into the car, along with all the other “stuff” I had piled around the office.  They took everything with a smile and a thank you. I was back home within 15 minutes with a good feeling, and a lot of regained space in the office.

Kudos, Best Buy, for making my e-disposal quick and painless.  Keep up the good work.

Is Your Law Degree Worth the Paper It’s Printed On?

 There is quite a debate right now about the value of a law degree, law school debt, and the difficulty law school graduates experience in trying to find employment.  The tight job market has no doubt upped the amplification on this dialogue.  I recently came across a relatively new blog called “Inside the Law School Scam” written by a law school professor who describes himself simply as “a tenured mid-career faculty member at a Tier One school. ”

I found the blog posts highly insightful.  And the fact that almost 2,000 comments have already been added is a testament to the pent up emotions surrounding these issues: resentments of some, and the lack of sympathy from others, but an obvious point of interest to all.  

If you’re one of the thousands of law school graduates who 1) was unable to find a job at a law firm following graduation; 2) has been unable to earn the type of money which lured you into becoming a lawyer; 3) feels there are too many lawyers in proportion to prospective clients; 4) feels law school failed to prepare you for the realities of practice; 5) has found it nearly impossible to repay your law school debt; or 6) is making great money as a lawyer and doesn’t have a bit of sympathy for those who have failed to make the grade, you should visit the blog and weigh in with your comments.

The Run For The Door

We’ve all heard stories, watched it in action, or been in the middle of what I refer to as The Run For The Door — the point at which partners determine their firm no longer has sufficient mass to cover overhead and debt, and the mass exodus begins.  Those who move too slow are left to turn off the lights, and are often left holding the proverbial bag.  It’s an ugly thing to watch.  In some cases it’s led to some undesirable career detours.  In some cases it’s led to the loss of a special culture.

Let’s be frank.  Partners with a good reputation and solid book of business always land on their feet.  In fact, just rumors that a firm may be experiencing difficulty, even if only temporary, is seen as an opportunity by other firms; often leading to a sharp increase in activity by competitors who attempt to lure away some of the best and brightest.  When some of those recruiting efforts result in departures, even if only of a few key rainmakers, it can easily trigger “The Run” as remaining partners, particularly top earners, become concerned about the impact on their future compensation.

Such is the case with Howrey.  It’s partners voted on Wednesday, March 9th, to dissolve effective March 15th.  The vote required a supermajority of 85% of partner shares to carry the vote for dissolution.  The story appeared in AmLaw Daily.

’”Once you lose a certain mass, you just can’t get it back,” one partner says. “It’s just a matter of days right now.” Adds the second partner: “I did it with a heavy heart, but if we don’t vote for formal dissolution, if you think it’s chaos now, it’s just going to turn into a disaster. You don’t want it to be a situation where the last person turns out the lights.”

According to the article, the firm has seen more than 140 partners depart since April 2010.  They were smart enough to recognize the stampede was well underway, and take the vote which would insure the least damage for those still at the firm.  Hopefully, this will not be one of those failures which leaves creditors in hot pursuit, and generates lawsuits from and between former partners.

From time to time I advise firms about to draft partnership or shareholder agreements.  There are a number of the subjects I always have to put squarely on the table for discussion, and it always makes the principals squirm.  I do it because I know it’s necessary.  What are those subjects?

  1. Termination of partners.  Exactly what can trigger involuntary termination?  Arrest?  Conviction?  Public embarrassment to the firm?  Damage to the firm’s reputation?  Lapse in fiduciary responsibility?  If termination is to be considered, how realistic is a 100% vote to get the job done?  What is more realistic?  What is a terminated partner entitled to, and should it be different from a partner who leaves voluntarily?
  2. Firm dissolution.  The obvious question regards the vote required to evoke dissolution.  But beyond that, there are a whole host of issues which should be addressed.  For example, I believe that purchase of an unlimited-duration Extended Reporting Period Endorsement (“the tail”) on the firm’s professional liability insurance policy should be required in the event of dissolution, and that all stakeholders who were part of the firm in the fiscal year of dissolution should be required to pay their prorata share of the cost.Records retention and management issues also come into play big time.  There will be enormous number of files which are closed, many of which will belong to clients no longer with the firm, and developed by lawyers long gone as well.  They cannot just be thrown in the trash. (Although there have been some pretty awesome stories from time to time about the frustrated few partners left to turn off the lights who, in frustration caused by former partners who wouldn’t help and didn’t care, actually did throw files in the trash.  Sanctions were always harsh.)   Someone has to remain the custodian of the files, oversee destruction when the proper retention period has tolled, ensure proper authorization has been received beforehand if any original or valuable client property remains in the file, and pay for storage until all files have been properly returned to clients or destroyed in accordance with ethical requirements and Rule 1.15 [Safekeeping Property].

These are but two areas of concern which can cause a great deal of  acrimony, and even disciplinary action, if not taken into consideration beforehand.  And there are many more.

My point?  No matter how large or small, any firm, except for a solo firm, can experience a “run for the door”.  Be prepared for that eventuality, as awful and remote a possibility as it may seem.  Otherwise, precisely at a time when you may be trying to start anew, your past may be holding you back by distracting you and consuming your valuable time with squabbles and lawsuits.


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A Musical Interlude

This is completely off of any topic this blog normally covers.  But I had to share the video of a recent TV performance of a fine young man I have known since birth.  His new band really jams, and is starting to get serious traction.  The band is “BAM” and the young man I know – a University of Pennsylvania graduate who is smart and genuinely nice, obviously very talented, and the son of a girlfriend who dates back to overnight camp days in my life  – is Mitchell Beer.  (Look for the long wavy tresses;  I think I told him one too many Woodstock bedtime stories when he was growing up :-) )  Enjoy the performance, and if you do, please hit “Like” so we can help his band go viral.  I could not be more proud if I were his mother.

p.s.  It’s only fitting that this be on my blog.  When his mother called to let me know he would be on TV in 5 minutes, I was in the middle of posting to my blog.  I had just finished and was reaching for the remote when she called back to ask me what I thought — I was devastated to have missed his performance due to my blogging.  Hopefully this makes up for my misdirected attention, big time!


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A New Blog — You’ll Want to Subscribe to This One

Most of you are familiar with the excellent CLE courses which have been prepared by Jennifer Ellis at the PA Bar Institute, even if you don’t know Jennifer personally.  It’s a shame that most of the time she is in the background instead of on the podium, as her skill in bringing seminar ideas to fruition are clearly eclipsed by her vast knowledge and considerable presentation skills.  I have had the pleasure of sharing the podium with her on many an occasion, and it has always been a great experience for this speaker as well as those attending.

Jennifer just informed me that she has started a new blog.  The blog is titled, simply, Jennifer Ellis.  In this blog she will share her thoughts on technology, law, and law practice management.  Her most recent post, entitled “I am Begging You — Don’t Look Like an Idiot on the Web” is a must read. 

I, for one, will look forward to reading her future posts.  Congratulations, Jennifer.  And thanks for providing another excellent resource to the online community.


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WestlawNext — Has Electronic Research Taken a Giant Leap Forward?

I remember when electronic research was first introduced.  Like all new concepts which arrive at the door of a law firm, the greeting was cold at best.  I remember that there was only one attorney out of thirteen who was willing to even endure the demonstration.  He did it more to strut his “leading edge” technology knowledge than because of any genuine interest in enhancing his search capabilities.  Step forward many years to another firm which now offered both a traditional library and Westlaw.  Newly-minted lawyers gravitated toward the technology they learned and used in law school — Westlaw — while the rest of the lawyers of the firm ignored it, and mistrusted any research done on their cases which didn’t also incorporate good old-fashioned research in the text volumes. 

One day, the firm’s managing partner returned from a gruesome defeat in court, with a strong  message for all the firm’s attorneys and paralegals.  He had lost his case because his diligent research through the text volumes failed to reveal an important case which the opposition had found using that darned new-fangled electronic research tool.  The lesson:  electronic research became the primary, and ultimately in most cases, the only tool used from that point hence.

It was not a perfect solution.  Not everything can be researched successfully electronically.  It may not be there, depending on the area of law.  Or the key words for finding it may not be easily apparent.  And much of the indexing depended on what the reviewer felt was relevant.   But for most firms, it became the tool of attorneys who exercised reasonable care and diligence on behalf of clients.    Thankfully, publishers have kept their noses to the grindstone to maintain relevance by improving reviewing, indexing, and search capabilities. 

Westlaw’s newest product, WestlawNext, is out of beta.  One of the beta testers, Pete Haskel, an Assistant City Attorney at  the City of Dallas City Attorney’s Office, recently posted links on ABA’s LawTech listserv  to independent (not created through “West’s marketing machine” as he describes it) early reviews of this product.  With gratitude, I share them with you here.

Mary Cannon Veed reviewed WestlawNext for the ABA, available online as PDF download at , originally published in The Brief, Volume 39, Number 4, Summer 2010.  You will probably find this to be the most helpful introduction and overall explanation of the product.

University of Connecticut School of Law has collected some thoughtful short reviews:

 Law librarians’ early evaluations are collected at  Law Library Technology:

ABA Journal Tech had an early WLNext/Lexis next generation comparison: Exclusive: Inside the New Westlaw, Lexis & Bloomberg Platforms,  ABA Journal – Law News Now.

With the addition of some artificial intelligence-like capabilities, and the elimination of the somewhat artificial database structure (which helped in areas you were very knowledgeable in, but interfered where you were not) a new world of search results, with much greater likelihood of finding the rare needle in the haystack, may finally be available, and for possibly less than you are currently paying.


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