Most standard law practice management programs counsel against discounts. When given up front, they accustom clients to bargain rates, and if applied at the end of the project, they show a willingness to settle for less than what’s owed, thus setting in motion a tradition of haggling for future cases. And now, a recent study suggests that there’s a correlation between discounts and collections problems, thus further reinforcing that discounting fees is a bad idea.
But Devil’s Advocate John Toothman, a lawyer who’s built a career on legal fee management, is appalled by advisors who diss discounts. At his blog, Civilian’s Guide to Lawyers, Toothman argues that the reason that many firms wind up giving discounts to begin with is because they never offered clients an estimate of the likely fee to begin with:
For months, we talked to counsel about our prospects in the case. He was sanguine:
“There’s nothing to worry about here. The plaintiff put a huge number in its prayer for relief, but you can’t possibly lose that much. Plaintiff’s liability case is thin, and the damages are inflated. You’ll probably win. If you lose, you’d lose no more than $1 million on an average day. On the worst day known to man, you can’t even theoretically lose more than $5 million. I wouldn’t offer more than a couple hundred grand to settle.”
A few months before trial, we ask counsel to put some skin in the game: “It’ll be expensive to try this case, and you feel good about our prospects. We’d like you to propose an alternative fee agreement that aligns your interests with ours. We’d like to pay you less than your ordinary hourly rates in the months leading up to trial, but we’ll give you a success fee if we win. Please think about it, and let us know if you have any ideas.”
A couple of weeks pass, as counsel discusses the case with his firm’s “senior management.” When the alternative fee proposal arrives, the goalposts have miraculously moved! In the course of just two uneventful weeks, our prospects for success have changed entirely!
* Which Supreme Court justices missed out on the State of the Union address last night? Three of the usual suspects (Scalia, Thomas, and Alito), plus Justice Sonia Sotomayor. RBG was there most of the time, except for naptime. [Legal Times]
* You’re doin’ fine, Oklahoma! Oklahoma O.K.! The Tenth Circuit announced it’s going to fast-track Oklahoma’s same-sex marriage appeal, and it’ll be heard by the same panel of judges presiding over a very similar appeal from Utah. [News OK]
* The American Legal Institute just named Ricky Revesz, the former dean of NYU Law School, as its new director. He’ll be “clarifying, modernizing and improving the law,” just like he kind of / sort of did with NYU’s 3L curriculum, but not really. [National Law Journal]
* Law students, say hello to the Immigrant Justice Corps, a job opportunity brought to you by Chief Justice Robert Katzmann of the Second Circuit. Hey, the pay is pretty decent for public interest. [New York Times]
* The results of the latest Law School Survey of Student Engagement reveal to us 1Ls are morons. Seventy percent of them are thrilled with career services, but only 45% of 3Ls feel the same way. [WSJ Law Blog]
* She’s no George Zimmerman: Jodi Arias has a racked up a legal tab of more than $2 million, but because her artwork isn’t as hot as she is, the bill will be footed by Arizona taxpayers. [Associated Press]
The court will not countenance the gross overreaching evidenced under the facts and circumstances of this case in which the client is not even being billed for legal services. To move any court to put its imprimatur of approval on such practices is simply intolerable.
– Judge Frank Nervo, denying a Biglaw firm’s request for more than $126,000 in attorneys’ fees in a lawsuit over a $6,400 security deposit. Judge Nervo added that the firm spent “a grossly unnecessary amount of time” on simple tasks, including “research on the most basic and banal legal principles.”
(Which firm was on the receiving end of this benchslap? Find out after the jump, where we’ve posted the full opinion.)
* After its patent battle in the courts, Apple wants Samsung to pay for a portion of MoFo’s legal fees. When you think of it, $15.7 million is a rather piddling amount when full freight is $60 million. [The Recorder]
* Say goodbye to your pensions! As it turns out, law review articles aren’t so useless after all. Detroit’s foray into Chapter 9 eligibility is the brainchild of a Jones Day partner and associate duo. [Am Law Daily]
* It must be really stressful to plan a wedding when your defamation victory is on appeal to the Sixth Circuit. The latest chapter in the Sarah Jones v. TheDirty.com case could mean curtains for online speech. [AP]
* When it comes to their credit ratings, stand-alone law schools are getting screwed due to their inability to put asses in their empty seats. Four out of five schools profiled could be in big trouble. Which ones? [WSJ Law Blog (sub. req.)]
* “You need to not dress like that.” TMZ’s attorney, Jason Beckerman, is an alumnus of Kirkland & Ellis, and he was quickly advised by a producer that he needed to lose his lawyer duds. [California Lawyer]
* Trouble in paradise, so soon? The proposed merger between Dentons and McKenna Long & Aldridge has been delayed. McKenna has postponed its partnership vote, and Dentons says no partnership vote was ever planned. [Daily Report]
* Wherein a firm fails to Latham an ex-employee’s baby mama drama: a legal secretary who was allegedly told her pregnancy complications “were not [the director of HR's] problem” will see her case against L&W move forward. [Blog of Legal Times]
* You know that relations have grown bitter between opposing counsel when attorneys from one firm refer to lawyers from the other as “Monday Morning Quarterbacks.” The legal fee dispute in the BARBRI antitrust case rages on at the Ninth Circuit. [National Law Journal]
* Paging ProudCooleyGrad: Kurzon Strauss, the firm that sued Cooley Law over its allegedly deceptive job stats, is trying to get records unsealed in the school’s defamation case that’s now on appeal. [MLive.com]
* Convicted murderer and jailhouse hottie Jodi Arias is accepting donations for her appeals fund. It could be worth your while — if you donate enough, maybe she’ll consider turning you into her next victim. [HLN TV]
Use of the verein structure: all the Biglaw cool kids are doing it. Okay, well maybe not the coolest kids, at least if “cool” is tied to profits per partner and prestige. But there’s no doubt that the verein structure is spreading rapidly throughout Biglaw.
This is partly because firms that use the verein form are fond of combining with other firms. If the talks between Dentons and McKenna Long bear fruit, the resulting entity will surely be a verein, like Dentons and its constituent firms.
But does the verein structure present ethical problems for the firms that employ it? Two observers of the legal profession believe it does….
Is the slowdown in Biglaw that we’ve seen since the Great Recession a long-term trend or just a temporary blip? Only time will tell, but in the meantime, the debate rages on. (The latest salvo: New Republic editor Noam Scheiber’s response to critics of his controversial article, The Last Days of Big Law.)
Because of its power, prestige, and profitability, Biglaw gets a big proportion of the media coverage that’s aimed at law firms. But let’s not overlook small firms and solo practitioners, who make up about 70 percent of American lawyers in private practice.
One often hears stories about small firms, especially boutiques formed by ex-Biglaw attorneys, that are thriving. The tales are inspiring; the small-firm lawyers talk about how they enjoy their practice more, have greater autonomy, and make the same or even more money than they did back in Biglaw.
But such information is anecdotal. How are small law firms doing compared to bigger firms on a broader level? A new survey has some answers….
Biglaw competition is getting intense. Everyone is chasing the same clients, while also deploying rearguard actions to protect institutional clients from being poached. Forget about lateral partners taking clients for a moment. I am talking about overt approaches from competing firms regarding existing matters, bearing promises of handling things more cheaply and more efficiently. In-house lawyers, under pressure to contain costs, almost have to listen. They may not act right away, but with each such approach another dent has been made in the Biglaw client-maintenance bumper.
It is no secret that in the face of declining overall demand (especially for the profit-pumping activities like mega-document reviews that were Biglaw’s joy to perform in the past), firms need to aggressively protect market share. While also seeking to grow market share. In an environment where more and more large clients are either (1) reducing the number of firms that they are willing to assign work to or (2) embracing an approach that finds no beauty contest too distasteful to engage in. So partners, at least those tasked with finding work for everyone to do, are falling back on a tried-and-true “sales approach” — putting things on sale.
Average law school debt for graduates of private universities hovered around $122,000 last year. With only 57% of new attorneys actually obtaining real lawyer jobs, recent graduates have a lot to consider when it comes to managing their student loan payments. Thanks to our friends at SoFi, today’s infographic takes a look at student loan debt, including the possible benefits of refinancing for JDs…
Kinney Recruiting’sEvan Jowers is currently in Hong Kong for client meetings and still has a few slots available through October 22. Evan will also be in Hong Kong November 14 to December 15. Further, Robert Kinney has been in Frankfurt and Munich this week and is available for meetings with our Germany based readers.
One of our key law firm clients has referred us to one of their important clients in the US, Europe and China – a leading global technology supplier for the auto industry – in order to handle their search for a new Asia General Counsel and Asia Chief Compliance Officer.
Kinney is exclusively handling this in-house search.
This position will have a lot of responsibility and include supervision of eight attorneys underneath them in the Asia in-house team. The new hire will report directly to the global general counsel and global chief compliance officer, who is based in the US. The new hire’s ability to make judgement calls is going to be as important as their technical skill set background.
The position is based in Shanghai and will deal with the company’s operations all over Asia and also in India, including frequent acquisitions in the region.
It is expected that the new hire will come from a top US firm’s Shanghai, Beijing or Hong Kong offices, currently in a top flight corporate practice at the senior associate, counsel or partner level. Of course, the candidate can be currently in a relevant in-house role.
The JOBS Act created new tools for companies to publicly advertise securities deals online. As a result, thousands of new deals have hit the market and hundreds of millions in capital has been raised, spurring a wealth of new business development opportunities for attorneys.
Fund deals, startup capital raises, PIPE deals and loan syndicates are just a handful of the transactions benefiting from the JOBS Act. InvestorID FirmTM is a platform designed to help attorneys equip their clients with the workflow, marketing and compliance tools to publicly solicit a securities offering online. By providing clients with the tools to painlessly navigate the regulatory landscape of general solicitation, InvestorID FirmTM helps attorneys add value above just legal services.
The Jumpstart Our Business Startups Act (JOBS Act) went into effect in 2013 and permits Regulation D offerings of securities to be advertised publicly. This means that funds and companies can now use social media, emails and web sites to market transactions to new “accredited” investors.
However, with these new powers come new pain points. InvestorID FirmTM provides a secure, fully hosted, cloud-based platform with a breadth of tools for your clients, including: