Departing a firm ethically with grace

I get a lot of calls from associates and partners wanting to leave their current firm to pursue the opportunity of moving to another firm or to pursue the dream of opening their own law office. The PLF has a variety of helpful materials on this topic “Departing a Firm” including checklists, sample letters for notifying clients and getting the direction of what the client wishes to do, instructions for setting up email bouce-back notices and articles from our Oregon Bar Counsel Helen Hierschbiel, General Counsel, and Amber Hollister, Deputy GC. There are many good CLEs held on this topic. This past week I attended a CLE from Bloomberg BNA on this topic called, “Lawyer Mobility: Ethical Issues Arising From Lateral Hires, Partner Withdrawals and Law Firm Dissolutions.” You may be able to watch this 90 minute on-demand by contacting Bloomberg BNA Professional Learning. www.bna.com

Here are some of the issues you need to consider before acting: you have a duty to your clients to communicate. Oregon RPC 1.4 Communication (a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information. (b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation. The fact that you will be leaving the firm impacts your clients. They came to you for help in solving a legal problem. No matter your personal feelings of disenchantment with your firm, do not drag your clients into the middle of any conflicts.

Here are some frequent questions that cause anxiety:

“When can I ethically tell my clients I am planning to leave?” The common sense answer: “Tell your clients after you tell your firm.” That’s right, after. You get this one wrong and your relationship with your present firm is damaged. If you are a partner, you have a duty to your fellow partners and to the firm. If you are an associate, you have a contractual relationship with your employer.

“When do you need to tell your firm you are planning to leave?” If you are a partner, look to your partnership agreement. Remember you are withdrawing from the partnership. If you are an associate, look to your employment contract or personnel manual.

“What if my firm does not have anything in writing?” If there is nothing in writing to guide you, most professionals provide at least 30 days notice if not 60 days notice. You don’t want to damage your firm, merely move on. If you are in a general partnership, see the Oregon Revised Partnership Act, ORS 67 for governing provisions. If you are in a Limited Liability Partnership, LLP, see the Uniform Limited Partnership Act, ORS 70 for governing provisions.

“What about getting information for my conflicts of interest database?” If you have billed on a client matter, you have knowledge of client information that means a potential conflict of interest going forward.Some firms supply year-end and month-end reports of your billing matters. If not, you will want to ask your firm for this information.

“What about when I tell my firm about my plans?” Take the time to plan how this event will take place. Preparing an annotated status report of client maters you are responsible for or have been working on is important and appreciated. Additionally, you may want to have a packet of materials with you when you notify your firm: client status report, proposed letter to clients, copy of article addressing ethical guidelines, proposed timeline of your exit and transition of remaining clients to another attorney in the firm. Be sure to make a copy for yourself which will be important if the firm tells you to leave immediately or by the end of the day or week.

“What about forms and sample documents I’ve used or even created while at the firm?” Consult a lawyer about this. Generally speaking, if something was created during your employment by a firm, it belongs to the firm. Most firms have monitoring provisions in place, or the ability to do so. Your efforts to download documents from your firm’s server is not under the radar. There are records of this and there may be consequences if you help yourself to property of the firm with the intention of converting it to your own use at your next firm. You wouldn’t dream of collecting office supplies. Consider that the firm’s form bank is far more valuable than post-it notes and paper clips!

Finally, to ensure that you are going to exit your firm ethically and gracefully, consider seeking ethics advice from the Oregon State Bar Ethic Counsel or hire outside ethics counsel to guide you through your situation. Whether you are a partner or an associate, you are an Oregon attorney-at-law, a professional. Conduct yourself accordingly. Good luck in your future endeavor.

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15 Resolutions for a More Rewarding Law Practice in 2015

15 resolutions you may want to adopt for your own:

1. Check email in the morning and sort into three folders: Do, Delegate, Delete; you want to use email as a tool not get swallowed up by it.

2. Unless urgent, return calls at 11:00 a.m. and 4:00 p.m. daily; you’ll save time batch calling.

3. Have a Work in Process (WIP) meeting Monday mornings for reviewing and updating status of all open matters; you will catch what would otherwise slip through the cracks.

4. Call a different client each day off the clock to check in about how the client is doing; you’ll be rewarded from this simple action.

5. Plan time for a health break daily for a brisk walk, meditation, or yoga session; you’ll perform better if well-balanced.

6. Learn to say “no” to cases that you don’t want to do; your time is a valuable resource to invest wisely.

7. Send a handwritten thank you note when a matter is finished and enclose two business cards; appreciation is contagious.

8.  Monitor your financials: receivables, expenses, profitability; your clients need you to succeed.

9. Dust off your business plan and review quarterly; make it dynamic.

10. Plan regular networking breakfasts with colleagues and potential referral sources; don’t become isolated or overlooked.

11. Pick up the phone if a client is 45 days late in paying the bill; find out if there a problem tobe solved.

12. Use clearly written fee agreements; keep your client relationships positive.

13. Do an office audit to identify any inefficiencies and potential sources of malpractice claims and ethics complaints; call a PMA for help.

14. Focus on improving service to clients and increasing job satisfaction; don’t settle for mediocrity.

15. Create a case timeline, case budget, and scope of representation for clients before beginning work; keep the focus sharp.

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Tech When an Upgrade isn’t an Upgrade

I recently went through tech trauma that I want to share with you so you don’t need to repeat my experience. I had an iPhone 4S. Yes, I know, old technology replaced by cool technology I wasn’t yet ready to pay for. I knew I wanted to hold out for iPhone 6 and was waiting for Verizon to make me an offer I couldn’t refuse. Meanwhile, I dutifully upgraded iOS until coming up against messages that I lacked sufficient storage size. The lure of promised “security fixes” compelled me to action. Darn! After awhile, I finally sighed and proceeded to dump apps and photos and anything that I could delete so I could download the memory-hogging upgrade. My battery life became shorter. Then my charging cord didn’t seem to work well. Tried other outlets, other charging cords. Puttered on.

Last week I flew down to see my family in California. While watching Breaking Bad on Netflix with my sister who is evidently the only one in her house who didn’t see it, I noticed my iPhone was completely out of juice. So plugged it in. Red skinny bar. Showed charging zag but obviously something wrong. Tried various charging methods. Next morning still no juice. Made trip to Verizon. Verizon let me know that the upgrade messed up my battery. Nice Apple! How about telling us that we can’t upgrade the older 4 iPhone with the newer 8.12 iOS as we take your word that we need to upgrade. But I digress.

The Verizon store could examine my phone but would need new battery to do so. $99 to look at what is wrong with phone or $199 to buy new iPhone 6. Not much of a decision dilemma! Traveling without iPhone, felt like I was near amnesiac in a foreign country! Verizon only had an iPhone 6 Plus which was ridiculous to hold for phone in my hand. Couldn’t switch to any other Droid phones because I am too locked up in Apple. So off to Apple Store.

Meanwhile, I am stressing because this has changed from a “quick errand” before heading to a comedy show with my sister to a major time consuming process as Apple Store filled with post-storm Christmas shoppers wanting to get their Apple goodies or kill time. Big problem. When I get stressed, my memory winks out. What is my password? What is my Apple ID? Everything important was saved in my eWallet app on the dead iPhone 4s. Yes, I have another eWallet on my MacBook Air and iPad which are home in Oregon. Husband at work so no one could help.

Got reunited with Apple ID. Went over to another Apple Care Station to download a restore of my old phone’s data from the iCloud. Can’t believe my luck! I will have a better phone and all my old phone stuff including that eWallet app with the keys to my digital life in there. But, the storm affected the iCloud per the Apple munchkins. So after 4 attempts they sent me off with a iPhone 6 with my phone number. The attempted restores from iCloud put older contacts and apps on phone. Good enough until I could get home to Portland to safely wipe new phone and attempt to do a full restore from the iCloud. Happy to report success! It worked and everything back. Thank you, God of Technology!

But some lessons. That eWallet app to store passwords and user names is nice BUT if it is on a phone that becomes inaccessible due to dead battery or damage or being lost or stolen, you are out-of-luck. Yes, I had it on 2 other locations – lap top and iPad–but the problem is what if you don’t have access to those other things? Or there is some urgency? My sister has all her passwords written down. A jumble. Not a good solution either in my opinion but she’s my older sister and I can’t convince her. There are other apps that include access to your passwords via the internet. Might help. But then again, might have lack of internet. So think about your own situation. Gives you a headache doesn’t it?

So the lesson I started with is that upgrade may not be an upgrade for you. Especially if you don’t have the latest device. Maybe check suitability before hitting the “Upgrade Now” button lest it be the last thing you see on your tech tool. Maybe just go have an eggnog and be glad with me that I am home with a new phone with old important stuff on it thanks to backing it up.

Happy holidays!

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Tis’ the Season for Embezzlement

Embezzlement season is upon us. Why? Because the Holidays are a time of overspending and stress from trying to meet expectations. More, more, more. How to pay for it may sadly be with your firm’s money.

Here is a checklist to help you prevent Fraud and Embezzlement:

All law firms should adopt an effective, documented system of internal controls to protect against acts of dishonest lawyers and staff. Incorporating the following procedures can greatly narrow if not eliminate windows of opportunity for wrongdoers.

Bank and credit card statements can be delivered to the managing partner at a home or separate address for the MP’s personal review.

Checks and debit memorandum should be reviewed with the statements.

Checks and wire transfers should require two signatures and signatures should be verified.

A copy of the bank reconciliation should be attached to each monthly bank statement and reviewed by two parties.

Finance or accounting personnel should not be signers on all bank accounts.

Checks received in the mail should be immediately endorsed by a two-person team who opens and processes the mail.

After checks are properly endorsed, the accounting or bookkeeping department should take charge of the checks for deposit.

Whenever possible, a check-protector machine should be used for entering the amount on the firm’s checks.

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More About Money: “Don’t Just Ignore the Bills!”

I hear solos talking about the client who isn’t paying. Now usually this is a client who fell further and further behind on paying legal bills. Sometimes there was an initial retainer but that is usually long exhausted. The client is now ignoring your bills!

Assuming you feel you cannot “fire this client” for not paying you, I want to you if you have talked to your client about his or her client matter. Did you discuss a realistic appraisal of how long their case would be and how much it might cost based upon what your estimated fees and costs would be?

Communication about the likely expense of legal services is essential before setting forth on a client matter. But you may be saying, “it’s a little late now!” Not so. Sit down and review this client’s bills sent and not paid. How much is owing for how long? How much more fees and costs are likely to be be incurred? Does the client wish to pursue? Can you put your client onto a regular payment plan— such as $50 on the first and $50 on the fifteenth of the month. That is only $100 per month spread over the client’s two paychecks. Can you partially forgive the debt if the client can pay 50%-75% of what is owed to bring it current? Is this a client you are willing and able to help on a pro bono or partial pro bono basis? Can the client borrow money from a relative?

You may decide to do something yourself instead of ignoring your bills. Consider whether you can go forward in this representation. On the PLF website (www.osbplf.org) you’ll find an article, “How to Fire a Client.” See the practice aids and forms category on Disengagement Letters for the article and some sample disengagement letters. You will also see a sample agreement for charging a credit card which can be used for setting up a recurring charge to the client’s credit card in the category on fee agreements and engagement letters, “Fee Agreements: Authorization to Charge Credit Card.”

It is always wise to pick up the phone to check in with you client. If you feel uncomfortable, write out this telephone script and use some variation of it to get this situation resolved. At 45 days past the statement date, call your client and say, “Hello [CLIENT]. I just wanted to know if you got my monthly statement for [MONTH]? Is there some problem with the bill that is preventing you from paying it?” Then discuss your withdrawal, or offer a monthly payment plan or negotiate a settlement of whatever amount is past due. Remember the Oregon State Bar offers arbitration services for fee disputes. The important thing is not to ignore this situation.

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Billing Pointers That Can Improve Your Cash Flow

Lawyers enjoy practicing law. They rarely enjoying billing. Busy solos especially can find themselves struggling to get their bills out consistently month after month. One lawyer I met with recently discussed that there were a number of clients who weren’t paying their bill, month after month.

Here are some of the tips the lawyer implemented that improved cash flow.

1. Put a date on your billing statement and indicate when payment is due.

If you don’t have a due date on your bill, your client will be motivated to put your bill at the bottom of the stack of bills to be paid. Then next month, the client, repeats organizing bills to be paid by their due date. Again, your bill is moved to the bottom of the stack.

2. If your billing statement is due in 30 days of the billing statement date, consider offering a discount to your client if the bill is paid within 5 days.

People are motived by discounts! Put this to work for you. Be clever and memorable: “10 by the 10th!” Take a 10% discount if amount due is paid by the 10th.

   Age your receivables.

Do you know how old some of your accounts have been on your book? Age your receivables into these age categories:

0 – 30 days (Current)

31-45 days (Late. Call client to see if bill received and why not paid. Payment plan.)

46 days to 60 days (Collect. Contact client about terminating engagement.)

61 days to 90 days (Suspend work. Collection Agency)

91 days to 120 days (Negotiate Settlement such as 50 cents on the dollar.)

over 120 days (Write-off Debt)

Remember to apply client payments first to costs then to legal services, applying to oldest balance first. If you intend to turn your delinquent client accounts over to a collection agency, be sure to indicate this in your fee agreement signed by your client otherwise you are breaching the duty of confidentiality by disclosing this information to a third party. You should let your client know that you will terminate representation if they fall behind on paying their balance as agreed. If you come up to this point, send the client a letter with a copy of a Motion to Withdraw and indicate that you will file it payment of $xxx is not received by a set time on a set date. “Your account is 60 days past due. If 80% of the balance due is not paid by 4:00 p.m. on Aug. 29, 2014, the Motion to Withdraw will be filed with the court.”

4. Consider tracking the client balance  on the billing statement so that client realizes exactly how long you have not been paid.

Some clients are consumed with worrying about their legal problem and lose track of how far behind they have gotten with paying you. Imagine asking your clients if they would show up to work if they weren’t paid?

5. Consider dividing your client list in half and billing one half at mid-month and the other half at month-end.

Many if not all of your clients are paid on a bi-weekly basis. They likely pay their mortgage and rent payment at the first of the month. Some clients may even prefer to be billed bi-weekly. This can be especially helpful for family law clients who are struggling.

6. The easiest way to ensure cash flow is to get cash up front!

Ask for enough of a client retainer to cover the first part of the representation, but more than two months. To avoid running out of the retainer, use provision to have a set balance held in the retainer. This is called an Evergreen Retainer.

My favorite success story reported that by negotiating old client debt, money came into the firm sufficient to cover one month’s expenses! I hope that more of you will find your cash flow improving!

 

 

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