Flat Fee Arrangements Promote a Winning Practice

The Practice of Law - Fee AgreementsFlat fee arrangements are amazingly liberating.

Most of my fellow litigators won't take a case on a flat fee, either because they are concerned that they will grossly underestimate the time the case is going to take and end up with an effective hourly rate of $25, or simply because they think they'll make more on a straight hourly basis.

I acknolwedge that some cases just do not lend themselves to a flat fee because of the unknown factors, but when you have a case with a reasonably predictable time factor, a flat fee is a fantastic way to go, not because it earns you more (although it can), but because it allows you to do more.

This may be counterintuitive to some, and probably blaphemous to attorneys that are only in it for the money, but I'm in it to win and a flat fee gives me greater freedom to do what I need to do to win.

Say you have a case that is crying out for a demurrer. On a straight hourly arrangement, your discussion with the client goes something like this:

You:  “I really think we should bring a demurrer. The third cause of action for breach of contract fails to allege performance, and here they really can't honestly allege performance, so I think that will get rid of that cause of action.”

Client:  “So if you bring this motion the case is over?”

You:  “No, it will just get rid of that one cause of action if we prevail.”

Client:  “How much will the motion cost?”

You:  “With the motion, the reply and going to court, I can probably do it all in ten hours, so $4,500.”

Client: “So I pay you $4,500 and the motion may not work and even if it does it doesn't end the action it just gets rid of one cause of action?”

And what the client is thinking is: “Damn attorneys, he's just trying to run up the bill.”

With a flat fee, all those conversations are eliminated. If I think a demurrer is needed, I bring it. If I think more discovery is needed, I propound it.

And this isn't pure altruism. Yes, I do this to win, but being free to do everything I want to do on a case may allow me to prevail on the action much more quickly, making the flat fee a winning bet for me financially.

A few tips for flat fees: Continue reading

“Freemiums” are a Great Law Firm Marketing Tool

Use Freemiums to Market your own law firm
“Freemium” is a business model that works by offering a product or service free of charge (typically digital offerings such as eBooks) while charging a premium for advanced features, functionality, or related products and services. The word “freemium” is a portmanteau* combining the two aspects of the business model: “free” and “premium”.  Thanks Wikipedia.

Freemiums are a great way to promote a law firm.  A potential client visits your blog and is greeted with an offer of an essential report for free.  And why would you do that? Because you must capture the client's email address in order to provide the free report.  This allows you to follow up with the potential client, and the report with all your contact information remains in the hands of the potential client so he or she can contact you when ready.

Clients shop for attorneys. Hopefully your website will be enough to generate a call, but that may not seal the deal. On many occasions a potential client has called, I've wowed them with my fount of knowledge, and sent them back to my assistant to schedule an appointment. A few minutes later, the phone rings again, and it is the same client calling to discuss the case, not realizing she is calling the same firm. She is just working her way down the Google results and calling every attorney she finds.  A freemium can distinguish you from the pack of attorneys clients are going to call. Continue reading

Don’t Let the Client’s Problems Create Problems for You

Starting your own law firm, ClientsBeing actively concerned about your clients’ problems will naturally come with the territory if you have a heart. When you are representing someone who is about to lose their home due to fraud, or lose visitation of a child through a custody battle, you can’t help but be awed by the life-altering nature of your representation.

I still lose sleep worrying about my clients’ cases. Sometimes the stakes are just so high I shudder at the potential outcome. I have complete confidence in my own abilities, backed by a great success rate, but you can never eliminate all the vagaries of litigation.

However, I now have fewer sleepless nights because I eventually realized that the stress was coming from two directions, and a roadblock could be placed in one of those paths. There is the unavoidable stress that is going to come from any litigation because you want your client to prevail and are concerned that the judge or jury will reach the wrong conclusion.  But there is often another source of stress created by the client. That stress can be eliminated if you are firm with the client. Continue reading

Student Debt? What Student Debt?

Student Debt - Starting your own firmWith the downturn in the economy and the upturn in law school tuition, the perfect storm was created for a bumper crop of extremely dissatisfied law school grads, saddled with debt and finding only poor job prospects.  On my Internet Defamation Blog, I wrote about the law student from Thomas M. Cooley Law School who was not happy with that institution, and started a blog called Thomas M. Cooley Law School Scam, telling tales of wrongdoing.  (The school is not happy and is attempting to sue the student for defamation.)  Like many newly minted lawyers, he feels the law school lied about the employment opportunities he would find after graduation.  (Resentment toward your school after running up big debt and not being able to do anything with the degree is not limited to law school.  Read the insightful article, How a Dog Walker Paid off a 37K Student Loan in 6 Years, about the author's “naïve mistake of getting an MFA in creative writing . . . .”)

Today I came across another posting on the topic, although far less vitriolic, on the Above the Law blog, which was in turn reporting on an article in the National Law Journal by Jim Chen.  Chen, Dean of the Louisville School of Law, has come up with a formula for determining whether law school was a wise investment.  Chen uses qualification for a home loan while paying off student debt as his criteria for “financial viability”.  He suggests that your starting salary at your first position after law school should be no less than three times your annual law school tuition if you want “adequate financial viability”. If you want to achieve a “good” level of financial viability, then you need to land a job paying six times the annual tuition.  If your job only pays twice your annual tuition, then you have only “marginal” financial viability, according to Chen.  All of these calculations are based only on your law school debt; if you have undergraduate debt, then you need to adjust accordingly.

I can only chuckle when I read articles such as this, because they are based on what I consider to be false assumptions. Continue reading

Thank God I was only offboarded!

Terminated Attorney - The Practice of Law

Now what do I do?

It has long been the case that law firms never admit to terminating lawyers for financial reasons. Many big companies, the lifeblood of large law firms, want to feel like they have a big, bad law firm working for them. If a firm doesn’t have enough business to keep its lawyers busy, that must mean companies have taken their work to other firms that are bigger and badder. At the first sign of contraction at a law firm, companies may take their business elsewhere.

To avoid this perception, law firms will go to great lengths to characterize terminations as anything other than a reduction in force. Most often they will kick an entire group of attorneys to the curb, claiming they were terminated for poor work performance. The efforts are sometimes so successful that even the remaining attorneys don’t know the truth. I once spoke to an attorney at a firm that had axed over 40 attorneys, and he was absolutely convinced that they were all terminated for work performance.

But this approach is not limited to law firms. With half a million terminations just last month, U.S. companies are becoming very creative with their euphemisms for terminations. For some time, “downsizing” has been replaced by “rightsizing.” The latter gives the impression that the company isn’t contracting, only correcting. In a November press release, Nokia fired 9,000 employees, and referred to it as a “synergy-related headcount adjustment goal.” I’m sure the fired employees feel much better about that.

In October, eBay didn’t fire 1,600; instead it took “actions to simplify our organization.” Many companies use the terms “offboarding” and “reduction in force.” The latter term has been reduced to an acronym, as in, “What’s the RIF going to be this month?”

My personal favorite for job cuts is “surplusing”. The implication is that you are taking a paid employee, and holding him in reserve as an unpaid commodity. When things turn around, you can take him down off the shelf and put him back to work. Also good is “de-verticalization”. I’m not sure what that means, but that’s the point.

Control your own destiny. Work for yourself lest you be offboarded.