Holiday Rate Increases

Posted on December 8, 2012 by The Legal Reformer
Holiday lights

Holiday lights (Photo credit: davidyuweb)

Ah, the holidays, full of festivities, lots of cheer, good will . . . and a letter from your attorneys advising you of their New Year rate increases . . . or in many cases, higher rates in the new year’s bills without any announcement (take a look at your retainer agreement — it’s in there).

Susan Hackett, CEO and CLO of Legal Executive Leadership, LLC and former senior vice president and general counsel of Association of Corporate Counsel, recently published her annual “rant” on law firm rate increases in Corporate Counsel, titled Ending the Holiday Tradition of Outside Counsel Rate-Increase Letters. In her article, Ms. Hackett adeptly addresses the inadvisability of these letters and poses this inquiry to both sides:

Here’s my question for both general counsel and law firm managing partners: how’s this annual process of arguing over rate increases going for ya?

  • Firm Leaders: are you feeling pretty good about the odds that your most valued assets—your clients and your top relationship partners—are going to find this an overall productive and happy set of conversations that will leave everyone feeling better about the firm?

  • In-House Counsel: even if you “win” and your firms agree that you won’t be billed at higher rates (or maybe even that you’ll even receive lower rates), would you care to bet on whether the all-in cost of services provided by your firms this year will go up or down?

In response to her own questions, Ms. Hackett implores both law firms and clients to understand that “[t]here are better ways to handle this issue. What both sides want is for firms to profit well from delivering what clients value most: predictable, controlled costs, better staffing options, and measurable results that matter.”  To make her case, she gives the firms “5 Reasons Your Law Firm Must Not Mail that Rate-Increase Letter,” and the clients “A Word to Clients About their Role in Perpetrating this Annual Nonsense.”

Ms. Hackett ultimately concludes that there is a “better path to firm profitability and client satisfaction” and advises the firms to consult with their clients and work together to become more efficient and thus more profitable rather than relying on raising rates to increase profits.  After all:

The value of what a law firm offers is not just the sum of the hours they spent doing it—it must be based on its value to the client, rather than just its value to the individual lawyers who did the work.

Ms. Hackett’s advise is wise indeed and should be heeded by all law firms and clients, large and small.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970. 

 

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Legal Consumer Tip #5 – Evaluating Settlement Issues

Posted on December 1, 2012 by The Legal Reformer
Copy of Illustration from Novel "Bleak Ho...

Copy of Illustration from Novel “Bleak House” (Photo credit: Wikipedia)

In September 2012, we blogged about a Colorado jury’s $2 million verdict against a law firm that pressured a client to settle a contingency fee case for less than it was worth. In that post, we noted that settlement comes up in virtually every case that is in or bound for litigation, and often attorneys pressure clients to settle. The question we posed for legal consumers is . . . is the attorney pushing settlement in the client’s best interest or in the attorney’s best interest?

There are a number of things legal consumers should consider when faced with an attorney pushing settlement. These include:

  • Why is the attorney pressuring me/us to settle?
  • What is the attorney’s assessment of the case and reasons for recommending settlement?
  • What are the pros and cons of embarking on, continuing or ending litigation?
  • What are the chances of winning/losing?
  • What is considered winning/losing?
  • What was the outcome in similar cases?
  • What are the terms of the proposed settlement?
  • What are the pros and cons of each proposed settlement term?
  • What does each proposed settlement term mean?
  • How does each proposed settlement term operate initially and in the future?
  • Will/should the settlement agreement have a confidentiality provision and will that be any problem in the future?
  • How long will litigation take?
  • How much will litigation cost?
  • How does litigation cost compare to the outcome/recovery?
  • What are the benefits for the attorney if I/we settle (monetary, recognition, etc.)?
  •  Is there anything else specific to my case/situation that I should be considering?

This list is by no means exhaustive. The ultimate question is whether you will benefit from a settlement or be sorry you settled. Ask your attorney these and other questions specific to your case or situation to be sure you are making an informed decision. If you don’t understand any aspect of your case or your attorney’s answers to your questions, probe him/her further until you feel comfortable that you understand every aspect of the issues bearing on the settlement decision. And, if you can, consider getting a second opinion. Remember, an educated legal consumer makes better decisions and is more likely to be a satisfied client.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970. 

 

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Thankful on Thanksgiving

Posted on November 23, 2012 by The Legal Reformer
Thanksgiving Turkey

Thanksgiving Turkey (Photo credit: Wikipedia)

LPR is closed this Thanksgiving week, but we wanted to take this opportunity to thank all attorneys who provide respectful and competent services at a fair and reasonable fee and all legal consumers who expect no less. Working together to spread the word and expectations, we can effect legal practice reform.

Happy Thanksgiving everyone.

LPR

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Education – The Path to Fair Fees

Posted on November 17, 2012 by The Legal Reformer
Legal research

Legal research (Photo credit: gwilmore)

The ABA Journal posted an article on Wednesday titled Firms Wave Goodbye to Billing for Research Costs by Rachael M. Zahorsky.  Ms. Zahorsky reports that law firms increasingly are taking legal research costs off of client invoices:

With clients increasingly primed to demand discounts, balk at hourly rates and refuse to pay for associate lawyers, a greater number of law firms have found themselves absorbing legal research costs as a way to shrink their clients’ tabs.

More and more billing partners are knocking research costs off invoices before they’re even submitted to clients, [according to] legal consultant Rob Mattern of Mattern & Associates.

Citing clients’ distrust that law firms are billing more for legal research than it actually costs them, Mattern & Associates sees a trend of “clients who either balked at or outright refused to pay for legal research.”  Ms. Zahorsky notes that some law firms have policies to charge clients their actual research costs, while others absorb such costs in their bottom lines. According to a Bloomberg Law survey (97 firms from 50 to over 400 attorneys), 43% of law firms now absorb more legal research costs than in 2010, and more in transactional matters than in litigation.

Noting that “the cat’s out of the bag,” Mr. Mattern suggests that:

The firms that do a good job of collecting and documenting [legal research costs] and have a defensible legal research policy will be fine . . . . But the cat’s out of the bag. Clients are more educated, and the attorneys billing will be asking their firms, ‘Is this a fair recovery?’

The lesson to be learned? Make sure to address legal research billing up front. Inquire what your attorney’s policy is for billing legal research costs. What is s/he charged by Westlaw, Lexis, or any other legal research vendors, and whether/how is that cost passed on to you?

Demonstrate to your attorney that you are an educated legal consumer. It is truly the path to fair fees.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970. 

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Value-Fee Agreements – Issues for Legal Consumers and Attorneys to Consider

Posted on November 9, 2012 by The Legal Reformer

Patrick J. Lamb posted an article on the Legal Rebels’ section of the abajournal.com website on November 7, 2012 titled: Prepping a Value-Fee Engagement Letter? Consider These 13 Issues First. He is a founding member of Valorem Law Group, author of Alternative Fee Arrangements: Value Fees and the Changing Legal Market, and blogs at In Search of Perfect Client Service. In his post, Mr. Lamb identifies 13 issues that attorneys preparing alternative fee arrangement letters should cover:

  1. Set a specific fee structure.
  2. Define staffing.
  3. Specify amounts of payments, and when payments will be billed and paid.
  4. Specify the assumptions on which the fee agreement is based.
  5. Specify work to be performed and any work not to be performed.
  6. Identify the criteria for change order approval.
  7. Require that the company approve any spending outside the fee agreement.
  8. Early case assessments are required and must be updated.
  9. Basic “what-ifs” should be addressed.
  10. Specify whether local counsel fees are included or excluded.
  11. Specify whether expert fees are included or excluded.
  12. Be clear about whether fees for trial and trial preparation are included.
  13. Consider whether a general retainer agreement providing volume discount is in place.

LPR urges legal consumers and attorneys alike to look at these issues and others when entering into alternative fee agreements. After all, educated legal consumers are more likely to obtain value and satisfaction from their attorneys, which ultimately benefits the attorneys as well.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970. 

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“Reality Check for Law Firms” – A Panel Discussion

Posted on November 3, 2012 by The Legal Reformer

Last week, Legal Marketing Association held a panel discussion entitled “Reality Check for Law Firms,” during which in-house counsel from MetLife, Elizabeth Arden Inc., and Coby Electronics Corporation “dished on the good, the bad, and the ugly of doing business with outside lawyers and firms.” These “billing preferences, pet peeves, and what makes for a sound in-house/outside counsel match” included the following:

  • Good project management and no budget surprises
  • On time billing so they can be evaluated for context
  • Billing appropriate number of office conferences
  • Not loading associates on matters
  • Effective monitoring of associates and not billing for educating them
  • Law firm responsiveness regarding client billing concerns
  • Giving 100% effort even on flat fee arrangements
  • Respect, personality fit, and willingness to partner with client

Whether you are in-house counsel, a small business owner or an individual, you should expect the same respect, competence, and value as these big companies.  Anything less is simply unacceptable.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970. 

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New Federal Agency CFPB to Oversee Debt Collectors — Including Lawyers and Law Firms

Posted on October 26, 2012 by The Legal Reformer
cfpb

cfpb (Photo credit: afagen)

The Washington Post reported on October 23, 2012 that the Consumer Financial Protection Bureau (CFPB), a new federal “watchdog agency,” will be overseeing debt collection firms with receipts of more than $10 million, and that the collection firms overseen will include lawyers and law firms:

The CFPB’s authority extends to three types of debt collectors: companies that buy defaulted debt and collect the proceeds for themselves; firms that recover defaulted debt owned by another company in return for a fee; and lawyers who collect through litigation.

The current federal consumer financial law requires debt collection firms to provide accurate information and disclosures to consumers, and they cannot harass or deceive consumers in an effort to collect debt. These firms often report collection status to the various credit bureaus, which if inaccurate, can have long term effects on consumer credit and the ability to obtain loans, including mortgages, car loans and credit cards.

So legal consumers who are being pursued by debt collectors can rest a little easier that treatment by the debt collectors will be fair . . . even if a law firm is in pursuit.

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Are State Bar Grievance Committees “Good Ol’ Boy Systems”?

Posted on October 19, 2012 by The Legal Reformer

Every practicing attorney in the U.S. is licensed by one or more state bar associations, and those licensing entities have grievance committees that address ethics complaints filed against attorneys they license.  What many legal consumers may not know is that the grievance committees are usually made up of local attorneys.  This raises the question whether the attorneys who are on the grievance committees protect their own.  The answer is: possibly.

In Bexar County, Texas, attorney Carl Kolb thinks the local grievance committee of the Texas Bar are “good ol’ boy[s],” that have failed legal consumers.  Mr. Kolb represented Isabel Sloan in a lawsuit against the attorney who represented her in a probate matter, Eric Turton, and the attorney who referred her to him, Oscar C. Gonzalez.  Mr. Turton misappropriated $75,000 of the $100,000 Ms. Sloan received in the probate matter.  In her suit against Mr. Turton and Mr. Gonzalez, the jury found both attorneys responsible for malice, fraud and theft by misappropriation, and found Mr. Gonzalez and his firm liable for gross negligence and false, misleading and deceptive acts and practices.  The jury awarded Ms. Sloan $867,000, which included an award of $290,366 for her attorney fees.

Ms. Sloan also filed complaints with the Texas state bar against Mr. Turton and Mr. Gonzalez.  Mr. Turton, who admitted to taking $75,000 of Ms. Sloan’s money, was disbarred.  It appears, however, that there was no disciplinary action taken against Mr. Gonzalez as the State Bar stated it had “no public record” of any discipline against him.  It was also reported that Mr. Gonzalez served on the local grievance committee in the late 1980s and early 1990s.  So, was Mr. Gonzalez given favorable treatment by the State Bar? The answer: we will never know.

HALT.org (Help Abolish Legal Tyranny) conducted a study of state bar associations’ secrecy in handling attorney ethical complaints.  HALT’s results:

[M]ost states conceal critical information about ethics charges against lawyers, routinely ignoring consumers’ right to know about current and previous transgressions of an attorney they are considering hiring.

For more on HALT, this study, and their work for transparency in attorney discipline, see our July 20, 2012 post, It’s 2012, Do You Know If The Attorney You Are Choosing Has A Disciplinary History?

Legal consumers deserve to know the disciplinary history of their attorneys and any attorney they seek to retain.  The bar associations and their grievance committees should be protecting the legal consumers, they should not be “good ol’ boy systems” that protect the attorneys.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970. 

Related articles – LPR advises to read all articles with a critical eye
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Reasons Big Corporations Fire Law Firms – Consumers and Law Firms Take Note

Posted on October 13, 2012 by The Legal Reformer

Aric Press of The American Lawyer recently reported on a survey released by Acritas, a U.K.–based market research firm, detailing the reasons thousands of blue-chip corporations have fired their outside law firms.  Acritas cited four recurring reasons:

  • too expensive (21 percent)
  • bad advice or no expertise (18 percent)
  • poor service (15 percent)
  • lost a key lawyer (11 percent)

Acritas also provided quotes from select general counsel’s interviewed.  These comments show that big or small, all legal consumers face the same issues with their lawyers:

Sometimes the problem is personal. ‘[The lawyer] did not know how to play nice with others, so we don’t use the firm anymore,’ said the $6 billion insurance company client. Sometimes it’s systemic. ‘[We stopped using them] mostly because of cost and efficiency,’ said the billion-dollar health care client. ‘They put their own interests ahead of their client’s interests.’

(Emphasis added)

Mr. Press’ article and the comments and statistics he includes provide individual consumers and small companies a peek into issues big companies face with their counsel and how they deal with these issues: They fire the offending attorneys.

For attorneys and law firms, Mr. Press’ article provides a cautionary tale.  Do good work, charge a reasonable fee, and think of your client, not yourself.

LPR has said before and will continue to say: Attorneys work for their clients, not the other way around.  Clients pay for attorney services and should expect their attorneys to be knowledgeable, competent, charge a fair and reasonable fee for their work, and most of all, conduct themselves with their clients’ best interests in mind.

Anything less – consider the axe.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970. 

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$220K in Legal Fees to Fight 11-Year $2K Dispute!

Posted on October 5, 2012 by The Legal Reformer

Does $222,000 sound like an unbelievable amount to spend on legal fees to fight a homeowner’s association’s lawsuit over a $2,212 bill for lawn re-sodding?  That’s exactly what happened to a retired Tampa, Florida couple when they refused to pay the total sodding bill because it included sod laid on county property.  The HOA sued the homeowners, and 11 years, six judges, one jury, three appeals, and $222,000 in legal fees later, the homeowner’s were vindicated.  The court will later rule on whether the HOA must reimburse the couple for their legal fees, and if so, how much.

S0 how did such a simple case go on for so long?  LPR sees this case as a teaching moment for all legal consumers.  What at first appears to be a simple case that should resolve quickly, may not end up being so simple or quick.  Sometimes your opponent engages in scorched earth litigation.  Sometimes one (or more) of the lawyers keep the litigation going.  Sometimes the judge denies pre-trial motions that allow a simple case to drag on.  And sometimes there is an appeal, which can take years in some jurisdictions.

Before you embark on a lawsuit – either as a plaintiff or a defendant – take a moment to consider that the case could take on a life of its own.  And remember, the longer a case is in litigation, the more attorney’s fees will rack up — maybe way more than the amount you’re fighting over and way more than you can afford.

You’ve got options.  The Center for Legal Practice Reform can help you navigate the attorney/client relationship and level the playing field.  Call LPR today for a free consultation – (301) 351-7970. 

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