Clients

The 2012 Biglaw numbers are starting to trickle in. The American Lawyer (and the rest of the legal press) follows a near-uniform format in reporting them. Revenues — up or down x percent. Profits per partner — slightly to moderately up (if your executive committee was unable to generate higher profits, via financial sophistry or good-old de-equitizations or stealth layoffs, I am very sorry). Revenue-per-lawyer, slightly up. Feel-good comment by managing partner. Slightly passive-aggressive commentary by a “legal consultant.” Repeat, on a daily basis for about a month, until the Am Law 100 (and “interesting” Am Law 200 firms as well) is covered.

As a partner, you obviously hope your firm is reporting good news, even though the likelihood of that news reflecting on your personal situation is pretty low for most Biglaw partners. No one wants to be associated (or own the obligations of) a loser, and when everyone is proclaiming “modest” or “respectable” growth, the peer pressure can be tremendous. Especially where the Biglaw death spiral is a recognized phenomenon, and firms who report poor performance in a generally positive climate are quickly judged negatively, like a figure skater stuck doing double lutzes when everyone else is knocking out triples. Outliers, for good, but mostly for bad, stick out, and their ignominy is frequently paraded on these pages. With bonus Lat commentary for additional effect.

I for one, enjoy reading this kind of reportage…..

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Young lawyers just starting out with their own practice usually tell me the type of work they’re doing is “whatever comes in the door.” Of course the pedigree Biglaw types criticize that type of practice, but probably don’t know that when the now dead founders of their firm started, they probably had a similar type of practice. They did real estate work, wrote a will, and maybe even (God forbid) found themselves defending a client in criminal court. At some point, they developed a practice and became known for a certain type of lawyering.

What I see today is lawyers doing any kind of work in order to eat, and lawyers who are lucky enough to have a niche, but are still taking cases in which they have no idea what they are doing. It’s like the lawyer whose niche is probate, but has never stepped foot in a probate litigation case, or the lawyer who handles misdemeanor cases taking on a complex white collar case because “it’s a good fee.”

Those of us who suffer through lawyer e-mail listservs see these lawyers all the time. “Has anyone filed a motion for ____________ who can send me a copy?” That same lawyer asks for multiple documents in a period of several weeks and then asks about procedure and whether anyone knows opposing counsel. They’ve never handled a case like this, and worse, have no idea what they are doing. They’ll never realize how pathetic they look to everyone else on the list, many of whom will have an opportunity to refer a case, and will remember not to send it to them.

There’s nothing wrong with learning, unless you are learning to the detriment of the client. There’s no doubt we’ve unknowingly been on an airplane with a pilot who is in the captain’s chair for the first time, but there’s also someone sitting to the right of him.

This post isn’t simply about asking for help, it’s also about determining whether the case is something you should take. When you’re starting out, or struggling, and someone comes in with more money than you received in the last three months, you’re all too eager to pretend you know how to handle the client’s case. You’ll just take the retainer and start typing away on the listserv, or fake it and hope you can figure it out. You also hope the client will never know that they’ve hired a lawyer that has no idea what to do.

I’m not saying you shouldn’t take these cases; I’m saying you should protect your client, and yourself, in that order….

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Last week, I focused on the stupidity of competing on price as opposed to competing on quality and service. And I understand, young lawyers believe all they have is the ability to compete on price. More experienced lawyers believe they have to compete on price because today’s clients don’t care about anything but price.

You can convince yourself of anything. As for price, convince yourself of this — continue to compete on price and you’ll spend your career becoming the cheapest lawyer in town.

Now let’s talk about using the competition as a resource….

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A plumber once told me, “There’s price, quality, and service — I can only give two. Pick which ones you want.”

In the service business there are those that focus on beating the competition the easy way — price. Quality and service are often assumed by unknowing clients who believe that a $500 lawyer is going to offer the quality and service of the $5,000 lawyer (sometimes that’s true). You find out your “competition” quoted a flat fee of $10,000 for the representation, so you’ll do it for $7,500.00. You’ve determined the client is only hiring on price, and you’re good at price. You would never think to tell the client that your fee is $15,000.00. You don’t feel confident in your quality or service, nor that the client cares. You’re just trying to compete at the lowest common denominator.

Focusing on the competition is a waste of time. I see it over and over again. A group of lawyers start a niche and there is a standard fee no matter who you hire. Then some young broke stud jumps in and charges $20 less. A few years later, everyone is charging 60 percent less. No one is making money, except those that aren’t focused on the competition….

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Ed. note: This is the fourth installment in a new series of posts from the ATL Career Center’s team of expert contributors. Today, we have some great advice for newly minted attorneys from Joshua Stein, the principal of Joshua Stein PLLC, a prominent commercial real estate law practice in Manhattan.

It’s your first year as a new lawyer. What do you need to know? How can you not screw it up? Here are some suggestions, based on more than 30 years of experience — as an associate at two firms, then a brief time as an associate at a third firm, followed by 20+ years as a partner at that third firm. These suggestions reflect my own experiences, lessons learned along the way, and what I’ve seen and heard from others. Nothing here applies specifically or uniquely to any firm where I worked.

It’s a Business. As much as we might all want law firms to be kind and gentle, remember that client demands are not kind and gentle. Also remember that a firm’s profitability — the ultimate main event — depends on buying a lot of legal expertise wholesale, converting it into as many hours of billable legal work as possible, then selling those hours at retail. That isn’t going to go away. Get used to it. That’s the business you’re in. If you don’t want to be in it, go find some other business to be in.

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Landing a corporate client is usually a happy time for any law firm, big or small. Now, the representation may not be a day in the park — after all, there are many, many ways for general counsel to drive outside counsel absolutely nuts. But even so, this kind of a client is another notch in your firm’s belt, no matter how difficult the relationship. Especially given today’s economy, this is a client that your firm will want to keep for as long as possible.

But regardless of everyone’s efforts, your firm just couldn’t seem to get it right. Your firm’s lawyers tried to placate the legal department’s every whim, to apparently no avail. Perhaps the proposed budget was a little too high. Perhaps an attorney from your firm was just a bit too snippy with in-house counsel. Whatever the case may have been, your firm got fired.

Why does this keep happening, and how can you make it stop?

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As lawyers, we often look past obvious signals when we’re about to get a new client. The client comes in, decides to hire “me” (yes, me!), and pays. What could be bad?

That the client showed up an hour late with no excuse or apology, or spent the hour with you talking about how his friend’s case worked out, or the opinion of his cousin who is a lawyer in another state is of no matter. We have a new client, a new check, and that’s all that we need.

I believe in the philosophy that sometimes the best client is the one you turn down. I’ll end a meeting after 10 minutes because the client’s expectations are only met through unethical behavior or by going to see the wizard. Or after meeting with the client, I’ll decline representation because even though the client can pay, I believe I’m not a good fit in terms of the client’s needs as far as time outside of the representation. Of course, then there’s the high fee you quote a client you just don’t want to represent who says (oops) “OK.”

Then there’s the client where everything seems great, until the day after you are retained….

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How to drive partners nuts. How to drive associates nuts. How to drive your boss nuts. How to drive clients nuts.

What’s left? Today’s topic: How to drive outside counsel nuts.

I’d say that I’ve been thinking long and hard about this subject to permit me to draft this column, but that wouldn’t be true. I’m a natural at this!

How do you drive outside counsel nuts?

First: Insist that outside counsel prepare a budget for every matter. Then complain that the budget is too high; tell counsel to reduce it. Complain that your business will never accept even the revised budget, and tell counsel to cut the estimate further. When you get the second revision, gin up some reason why even that’s too high, and have counsel cut the budget again.

Six months later, when counsel has blown through the budget, refuse to pay the bill! “You told me you could handle this case for damn near nothing. And now you want all this money? This is far more than what you budgeted. There’s no way we’re paying this!”

See? I told you that I was a natural. And I’m just getting warmed up . . . .

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Tom Wallerstein

I’ve heard that a hungry dog hunts best. I don’t know if that’s actually true because my pugs were always hungry, and yet they could not have caught a three-legged turtle. But the saying makes sense, and I do know that staying hungry — but not desperate — is an important concept for law firms.

One way a young firm should stay hungry is to always search for new business. There are good reasons that I constantly harp on the importance of business development. Even if you are fortunate enough to be busy, you never know when your current workload may dry up. This is particularly true in litigation because any case can always settle or otherwise resolve unexpectedly. No matter how busy you are, you should constantly seek out new work and new clients.

But seeking out new work comes at a potential cost to your current cases and clients. You can’t be so desperate to grow that you spend so much time on business development that you ignore your current clients or let your current caseload suffer. Some lawyers take a churn and burn approach, trying to maximize their short-term return from every engagement, with no concern for the longer-term client relationship. To form a practice that’s built to last, you need to work hard to maintain those relationships, and that means you can’t neglect your current clients while constantly fishing for newer ones….

double red triangle arrows Continue reading “From Biglaw to Boutique: Stay Hungry, Not Desperate”

* Will consultation with victims’ families determine whether James Holmes deserves the death penalty? You could probably consult with a wall to make that determination and get the same result. [PrawfsBlawg]

* Just like that, with incredible ninja-like speed, someone has already filed a negligence suit against the Aurora Century 16 Theater where the shootings took place. [Gawker]

* And no, sorry to disappoint you, but notwithstanding his self-admitted teeny peeny, we don’t think that James Holmes decided to go on a shooting spree because he got rejected by a few women on Adult Friend Finder. [Jezebel]

* While we’re talking about gun violence, Mike Bloomberg has got a great idea: all police officers should go on strike until legislators push through stricter gun laws. How is a nanny state supposed to work properly when all the governesses are off duty? [Gothamist]

* Knowledge is power in the hands of a client, especially when the knowledge you’ve given them is just another tool to piss off opposing counsel during a deposition. [Popehat]

* Personal responsibility fail: allowing your 13-year-old to drive you home because you’re wasted. Fathering fail: believing that was a good idea in the first place. [Legal Juice]

* A fake TV show starring a wheelchair-bound paraplegic paralegal? You know you’d watch this. [The Onion]

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