MyShingle : Solo and Small Law Firm Management and Marketing

As we at MyShingle have said many times, a retainer agreement is one of the most important tools that we lawyers have to protect ourselves from unscrupulous or troublesome clients.  It should be obvious though that lawyers can't use the retainer agreement to protect themselves by cutting off their clients' rights to file a grievance.  And yet, as reported in  Legal Ethics Panel Votes to Disbar Richard Lee, Rob Perez, Star Bulletin (2/25/05), that's what a Hawaii attorney did in at least 160 of his retainer agreements - and then tried to justify his action by claiming that the bar's prohibition of this practice constituted unjustified intervention in fee practices, tantamount to price fixing.

According to the article, attorney Richard Lee (also a former state judge), included a standard provision in retainer agreements that required clients to pay Lee $2000 if the disciplinary committee became involved in a fee dispute before an attempt was made to resolve the dispute via arbitration.  The bar believed that the purpose of the provision was to intimidate clients from filing an ethics action against Lee.  Apparently, Lee kept the provision in his retainer agreements for at least a year after the bar ordered it removed.

It's hard to imagine how an attorney could believe that a provision in a retainer agreement cutting off clients' rights to file an ethics complaint would ever withstand scrutiny.  And it's even harder still to imagine that an attorney would keep the provision in after receiving warning from the bar.  But Lee apparently tried to defend his retainer agreement, saying (according to the article), that the bar's interference in fee disputes is unwarranted and amounts to price fixing.

There's so much wrong with Lee's retainer agreement that I hardly know where to begin.  The agreement attempts to extract an unreasonable $2000 fee, punishes clientsfor exercising legal rights and places the attorney's interest over that of the individual client as well as the public at large, which is entitled to learn about a lawyer's unethical actions through the grievance process.  The only lesson here is that if you think Lee's retainer agreement is appropriate, then you should probably leave the legal profession now, while you can do so voluntarily - because with judgment like that, it's only a matter of time before you'll be ordered to go.

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Kudos to the Texas Young Lawyers Association for this innovative project, tenminutementor.com, an online library of video presentations on topics like substantive law (mostly Texas, but some, like the talk on Ten Tips for Federal Court, can apply more broadly), ethics, building a firm and personal development.  Here's the Press Release (2/28/05) that further describes the project.

What's really remarkable about this project is that given the time that went into preparing it, the prsentations are available for FREE, even to non-bar members.  The press release reports that:

This online mentoring effort is unique in its range and depth. For months, a film crew criss-crossed the state to tape the first wave of more than 60 video lectures by luminaries, including Harry Reasoner of Vinson & Elkins, LLP, "King of Torts" Joe Jamail and Mike Boone, co-founder of Haynes and Boone LLP of Dallas. When the website officially launches March 1, nearly 100 presentations will be available at the click of a mouse.

Of course, keeping the resource free is important given the educational purpose behind the program:

The numbers tell the story," says Mr. McAtee. "With more and more lawyers entering the market each year, it has become more and more difficult for our profession's wisest leaders to mentor the next generation."

An overall rise in billable hours and heightened expectations of demanding clients have exacerbated the problem, McAtee says. "And, when law school graduates move first into the market -- especially if they choose to join smaller firms -- it's often impossible to obtain the kind of mentoring once enjoyed by those who preceded them."

The only possible improvement that I could suggest to this amazing service is to consider a podcast format.  That way, lawyers could pop those presentations onto an MP3 player and listen to them over and over again en route to work or at the gym or while waiting in court.   But even as a computer-based service, this project is amazing.   Thank you to the Texas Young Lawyers division for thinking as big as...the state of Texas!

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October marks the Supreme Court's return to the bench after summer recess.  But for the past four years, it's also marked the Supreme Court group admission of roughly thirty solo attorney from all over the country and members of the ABA's Solosez  listserve.  The group event was devised by Maryland solo, Terry Berger who continues to organize it each year.  ABA Journal writer Meg Tebo describes the 2004 swearing in ceremony in this article, Admit One, ABA Journal (February 2005).

I  was fortunate enough to be part of the first group admission back in October 2001.  The experience of meeting my fellow solos from all over the country and standing a few feet before the nine justices for the swearing in gave me a sense of belonging to both the lineage of attorneys who took that oath before me and to the "firm" of solos standing beside me.  (of course, I should note that despite these warm feelings, I did cringe during the swearing in itself because I could hear my then two year old, who'd been banned from the chamber, screaming audibly all the way down the hallway)  Even if you think that you may never argue a case before the Supreme Court, if you should experience the in person swearing in process if you ever have the opportunity.

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In this bizarre story, Attorney Punished for False Promises, Adam Kovac, Daily Herald (2/26/05) concerning a disciplinary action brought against attorney Cynthia Sutherin who duped her co-workers into joining what turned out to be a fictitious law firm, I couldn't help wondering whether the wrong attorney had been charged.  After all, if  Sutherin's conduct, i.e., her lack of truthfulness, would disqualify her from legal practice, why shouldn't the other attorneys' conduct, i.e., failure to engage in due diligence before quitting their jobs to join Sutherin's firm, disqualify them from practice as well?

According to the article, here's what happened.  [Editor's note - we have not yet been able to access the underlying opinino] Cynthia Sutherin, formerly an attorney in the Kane County Public Defender's Office told colleagues that she had $5.2 million to fund her new law firm and had procured contracts with two cities to prosecute misdemeanors.  Also according to the article, Sutherin promised colleageues to salaries and expensive cars in exchange for coming on board.  When the firm that Sutherin had described failed to materialize, she claimed that she'd been diagnosed with cancer which prevented her from going through with starting a firm.

Though the article doesn't so state, I'm guessing that Sutherin's disgruntled colleagues turned her into the bar.  The disciplinary arm of the court recommended a two year suspension but is allowing Sutherin to work as an attorney while she remains on probation and receives counseling and complies with other conditions of the court order.

I have to admit that I'm not quite sure how Sutherin's conduct reached the disciplinary level to begin with.  When employers want to make hires, we often exaggerate - for example, if I want to hire a law clerk, I'll focus on the interesting and exciting matters that my firm handles and avoid details of the grunt work that a clerk will likely receive.  Now, Sutherin's exaggerations appear to have been outright lies - but where do lawyers cross that line from puffery to falsehood?  And why should the the bar draw that line anyway in situations where clients aren't involved.  Personally, I view bar intervention as warranted only where an attorney's lies in a non-client context are of such a pathological nature or comprise part of a constant pattern of deception that they can be used as evidence that the attorney is so prone to dishonest conduct that he or she would eventually do harm to a client. 

But here's my real beef.  If dishonesty, outside the context of an attorney-client relationship is grounds for disbarment, why isn't greed and incompetence?  After all, what were those lawyers who left their job thinking when a former public defender claimed to have $5.2 million to start a firm?  Did those lawyers think it was a wise business move to work for an attorney who offered to buy them them BMW's rather than reinvesting the money back in the firm?  Did the lawyers ask whether Sutherin had a business plan for further growth of the firm or office space or even a website?   Were they at all concerned that a former public defender who I'm assuming had no previous experience running a law firm would be capable of launching a practice that would succeed from the start?   Did they try to negotiate some kind of written employment agreement?   At best, the duped attorneys were guilty of simple incompetence in failing to protect their own interests and at worst, of allowing the lure of fancy cars and high salaries to obscure their good judgment.  Surely, we don't want that kind of attorney in practice any more than a dishonest one.  So why weren't those attorneys subject to discipline also?

As a final note, if you read between the lines (something that we at MyShingle do for you!) this article reveals an important lesson for attorneys starting out on their own.  As you investigate your options in solo practice, you may be confronted by unscrupulous attorneys who'll promise all kinds of overflow work if you rent the pricy office in their suite or  will offer you a "sure thing" contingency (in exchange for a 20% referral fee) that turns out to be a dog.   Examine all of the possibilities that come your way as diligently and thoroughly as if you were doing it for your client.  If an opportunity sounds too good to be true - as was the case here - sadly, it probably is. 

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Matt Homann at The Nonbillable Hour had this recent post about the potentially emerging field of Retirement Services (which might range from errand running services for older people, consulting on new career opportunities and fund management and legal services) to address the needs of the country's older population.  Along those lines, here's an article, Elder Law Is Soaring as Boomers Age, Erica Sagon, Arizona Republic (2/22/05) that discusses the fast growing field of elder law.  As the article reports:

Elder lawyers, as they are called, are among the fastest-growing groups of legal specialists.The reason: In the coming decades, more than 70 million baby boomers will flood the legal system. The rapid rise of the elderly population will bring about a surge in issues involving guardianship, conservatorship and planning for long-term care. Other cases involve financial exploitation and negligence and abuse at nursing homes.

Attorneys will handle many clients who seek out attorneys on behalf of their aging parents.

Elder lawyers should expect their caseload to multiply, said Laury Gelardi, president of the National Academy of Elder Law Attorneys, based in Tucson.

"There is going to be more work than all the attorneys together can handle," Gelardi said.

In particular, Arizona is described as "a hotbed" for elder law because of its reputation as a destination for retirees.  But even if you don't practice in a state like Arizona or Florida, with a large senior population, investigating elder care law as a practice area may prove worth your while.

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There's plenty written - both at MyShingle and elsewhere - about the right way to start a law practice.  But there's also a right way to close one down when a solo decides to move on to another position.  The attorney described in this article, State details misconduct charges, Rick Hepp, Star Ledger (2/23/2005) took the wrong approach when she continued to run her private law practice while employed as chief of staff for a New Jersey State Commerce Commision.  The attorney, Lesly Deveraux, has now been indicted for misconduct, theft and various other charges.

According to the article:

[Deveraux]  carried on her private law practice from her state office, and even hired her former law secretary to a $45,000-a-year state job to help handle her clients, state prosecutors asserted yesterday...[P]rosecutors said Devereaux had her state-paid secretary do everything from personal shopping and picking up mail to drafting legal documents and working on real estate transactions for her law practice.

"Instead of simply leaving that practice, she actually hired that secretary as a public employee and paid her illegally with commerce funds," said Deputy Attorney General Robert Czepiel. The secretary has agreed to cooperate with authorities investigating the case.

Defense attorney Walter Timpone denied during the hearing that Devereaux did any legal work beyond finishing a few cases that she had listed in her disclosure forms when she took the state job. He also claimed prosecutors were exaggerating when they said Devereaux's use of the secretary cost taxpayers $90,000.

When leaving solo practice, particularly for a state position, close out or transfer casefiles before you leave.  The money you'll forego in giving up the cases is far less than the potential liability you might face if you don't.

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Hey readers, I'm dispatching this post from a computer at the Washington College of Law Library of American University in Washington D.C.  I'm posting from here just to show that I can but also to make this point.  For solo and small firm lawyers, the law library can serve as an antidote to the isolation and loneliness that many of us experience toiling alone in a home office or behind closed doors in an anonymous suite.  Even if you don't talk to anyone while you're here (and perhaps you're better off not, as I've been hit up for legal services by some pretty odd ducks), you're surrounded by people with purpose - students scrambling to get a paper in on time or strutting about in business attire for the first time, en route to a job interview or moot court.  Up in the cafeteria, I might run into law faculty lunching with spouses and small children and daydream about whether academia might be a preferable career option (assuming of course, that a practicing attorney who was never on law review could ever be hired to begin with!)  Taking a break, I browse the stacks and the law reviews, seeing what new ideas are taking hold or wondering why some of the articles were ever written at all.  Sometimes it's a wonder that I ever get any work done here what with all the distractions but at some point, the urgency kicks in and my malaise slips away.  Being in the midst of all of these young people eager to start or law professors embedded in scholarship and remembering the excitement and promise that I felt back when I was a law student myself (16 years ago, now) rejunivates me enough to get back to my day job (just can't be blogging all the time).  That's where I'm headed now.

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With so many large firms starting to jump on the blog bandwagon, I often feel discouraged about the prospects for solo and small firm lawyers' ability to keep up.  After all, though we may be experts in our practice area and have knowlege to share, we simply don't have the associate manpower of a larger shop.  Dennis Kennedy has put many of my concerns to rest in this post, Is There Still room for Small Firm or Solo Lawyer Blogs?  Dennis comments that in the blog world, personality and voice account for much - and solo and small firm lawyers have more latitude to let personality shine through than at the larger shops.  Also, Dennis notes that many large firm blogs have a tendency to post many times a day, thus inundating readers without selecting content.  This detracts from the blog's value.  Finally, Dennis isn't convinced that large firm blogs are here to stay any more than the last trend, the quarterly newsletter.  Dennis offers plenty of other observations, so be sure to read his actual post on this topic if you're thinking about diving into the blogosphere.

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Bob Ambrogi reports here on the pro bono work of a two attorney firm, Moran and Gottlieb and links to this story about the firm in the Poughkeepsie Journal.  Subsidizing their pro bono work with revenues from paying clients, Moran and Gottlieb maintain a free telephone hotline to field questions from anyone who cares to call them.   And once a week, Gottlieb dispenses free legal advice at a local homeless shelter.   Moran and Gottlieb's efforts should inspire other solo and small firm lawyers to do our share as well.

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Via Jim Calloway comes a link to  Dave Swanner's guest post at Legal Underground entitled "Twelve Ways Technology Can Make You A Better Trial Lawyer."  There's some great advice here for both new and seasoned attorneys who have full time litigation practices or just dabble in trial work from time to time.

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I'm never more mortified than when I see lawyers trying to shut down legal document preparation services like We the People which purportedly compete with lawyers - as the Illinois Bar is doing.  See Lawyers Protest Expanding Legal Document Preparers, Chicago Sun times (2/21/05).   I can't understand why attorneys, who offer a valuable service, feel the need to put glorified typing services like We the People out of business.

First, to say that document prep services even compete with what lawyers provide gives those services credibility that they don't deserve.  Document prep services don't offer clients a lawyer's expertise and legal knowlege.  Instead, they simply  take information from a form (completed by a client), generate a document - a living trust, a bankruptcy petition or uncontested divorce - and file it.   And for that, clients pay $199 (for bankruptcy) or $399 (for a living trust).   Agreed, these services generally charge less than attorneys - but not always.  However, they certainly cost more than if clients did the work themselves.

So why are lawyers threatened?   The bars (like ISBA) won't admit that they're trying to help lawyers preserve our own monopoly on legal service.   So the bars claim instead that document prep companies do a disservice to clients with shoddy work or improper advice.  Granted, that's a significant problem.  But rather than try to shut these companies down, it's our job as attorneys to persuade clients that the value that attorneys can add to living wills and bankruptcy petitions and uncontested divorces justify the added cost.   Moreover, client welfare can be preserved through less onerous means such as education or consumer protection claims.  Clients who believe that their cases were mishandled have sued We the People and the FTC has fined the company for deceptive advertising practices.  Those efforts should be sufficient to protect clients from the inadequacies of document prep services.

Moreover, in our haste to run non-legal professionals out of town, we lawyers forget that many of the clients who use these document service providers constitute business that we are never going to capture anyway because of cost considerations.  In the absence of these non-legal document services, many of these clients would probably handle their matters pro se.  Yet, according to this article in the Washington Post, a company like We the People generates $50 million in fees from 200,000 customers a year.  That's a lot of lost business for lawyers.  We ought to try to capture it for ourselves by competing with companies like We the People.

And how might we do that?  Lawyers can try to come up with ways to provide simple, routine services inexpensively.  Perhaps there's a way to automate the process - or to quickly review a form already prepared by a client.  Perhaps a lawyer could run a seminar on filing your own bankruptcy petition and charge $35.00 to a roomful of people who would then fill out the forms on the spot and have the option of filing them on their own - or paying an additional fee for a private consultation.  With podcasting now the rage, maybe a lawyer could put together a little MP3 on how to fill in a bankruptcy form that clients could download and listen to.   Clearly, there's a demand for cheaper service - $50 million worth - and it just bugs me to let it go to providers who've not gone to law school.  But getting rid of those people won't direct that $50 million pot towards attorneys - it will just result in fewer available options for lawyers who can't hire attorneys.

Finally, those of you who've visited my website may wonder what gives me, an energy regulatory practitioner, the credibility to comment on competition with non-legal providers.  Well, in my industry, the competition betweeen lawyers and non-legal providers is even more rampant.  The Federal Energy Regulatory Commission, one of the major regulatory fora where I practice permits non-lawyers to represent clients in agency proceedings.  And many times, non-lawyer economists or consultants initially negotiate the terms of power supply contracts and tariffs and handle uncontested project permitting without ever bringing a lawyer in the door.  I've had to mold my practice in such a way that I can provide added value that my non-legal competitors can't.  I did this partly by educating clients on the mess that can result by failing to use an attorney so as to adequately preserve one's rights (e.g., to protest a contract or seek rehearing)  - and partly by offering services like appellate work or representation at hearings - that non-attorneys either can't provide or are uncomfortable providing.  In short, if I've found ways to make my legal services vital in the energy regulatory field, surely my colleagues can do the same in the general practice area.

If you have any ideas on how to compete with non-legal document preparation providers or any success stories to share, we welcome your comments below - or cross posts at your web log.

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Many attorneys who practice criminal law believe that their malpractice exposure is minimal.  After all, it's hard to show that it's more likely than not that a client would have avoided conviction but for the attorney's negligence - it only because it's so hard to predict what juries might do.  But after reading this article, Man Deserves new Trial Because Lawyers Forced Him to Plead Guilty, zwire.com (2/19/05), I'm thinking there may be a legal malpractice action coming for the criminal defense attorneys involved. 

The article describes the circumstances that lead a judge to vacate a criminal defendant's guilty plea:

Last November, the state Superior Court granted a new trial for John Joseph Jescavage Jr., 40, formerly of Brookhaven, Delaware County.  Jescavage, who has been in prison for less than five years, appealed his guilty plea. He alleges that trial lawyers, Thomas Cometa and Joseph Yeager, coerced him.  He claimed he was pressured into pleading guilty to aggravated assault and aggravated indecent assault on Oct. 23, 2000, when Cometa and Yeager threatened to withdraw as his lawyers the night before his trial was scheduled to start.

Cometa and Yeager threatened not to represent Jescavage due to an unpaid balance of $10,000 to $15,000 of a $25,000 fee, according to the Superior Court's ruling...

The state appellate court agreed with Jescavage, ruling his guilty plea was ineffective and not voluntary. The court ruling said the threat by Cometa and Yeager should have been raised when he pleaded guilty.

These attorneys had a conflict - their desire to obtain payment for the case apparently  compromised their judgment and lead them to a hard sell of the plea bargain.  That neglect of duty may be just enough to bring a potential malpractice case over the threshhold.

There's much these lawyers should have done differently.  First, the lawyers should have ensured that their client retained sufficient funds in the trust account to bring the case to trial.   Second, they should have demanded  that the client replenish the trust well in advance of trial to avoid a midnight effort to withdraw.  Third, at a minimum, the lawyers should have made an attempt to file a motion to withdraw with the court to document the payment problems.  It's possible, though not likely, that the court would have allowed them to pull out.  Fourth, the lawyers should have committed their explanation of the guilty plea to writing and obtained the client's written agreement.  It may be that payment notwithstanding, that the plea deal was the best the client could do.  But the merits of the decision are now lost in the controversy over the compulsory nature of the plea agreement.

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David Swanner,  a South Carolina  solo weighs in with some good advice about starting a practice out of law school over here at his web log, South Carolina Trial Law.  David knows about going solo after law school first hand - because he's done it successfully.

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We've already had a lengthy discussion over the reasonableness of $30-$40/hour court appointed rates back here.   Now, there's an interesting development relating to court appointed rates out of Alabama as reported in  Lawyers for Poor Threaten Walkout, David Holden,  Huntsville Times (2/22/05).  According to the article, the state currently pays attorneys for indigent criminal clients $40/hour for work out of court and $60/hour for in court work.  But on February 1, 2005 an opinion by Attorney General Troy King said that payment or the lawyers' overhead expenses is illegal.  Lawyers will not receive overhead expenses on requests made after the opinion issued.  Now, according the article, Alabama defense attorneys are deciding whether to strike (in which case, they will have David Giacalone  to contend with!).

I've already said that fees of $40-$60 an hour aren't inherently unreasonable - and that lawyers should try to develop a diverse portfolio of work to wean themselves from reliance on lower fees.  But I especially don't agree with the idea of a separate overhead charge, if only because few attorneys track overhead closely enough to allow it to be allocated.  I see nothing wrong with repaying expenses incurred for investigation fees or even legal research like LEXIS - but it should be done on a cost basis and not as an added hourly charge.

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Arnie Herz of Legal Sanity discusses what it's like to work with a spouse and links to some other articles that discuss this issue.

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My D.C. colleague and Law Practice Management Advisor, Reid Trautz recently started blogging at Reid My Blog.  As I can personally attest (having started my firm before Reid came on board with the D.C. Bar), Reid has done an enormous amount to increase the resources available for D.C. attorneys who want to go solo.  And I'm sure that his blog will continue that tradition as well.

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Here's an article, Matrimonial Lawyers Have a Powerful Tool in the Internet, Jonathan Bick and Jonathan E. Von Kohorn, Small Firm Business (2/22/05) that offers a primer on how family law attorneys can use the Internet to research and investigate their clients' cases.  Potential uses include: identification and substantiation of claims and defenses; discovery of data that permits the parties to better evaluate their respective positions and an aid for the conduct of trial. 

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Here's another outrageous story of judicial heavyhandedness.  This story,  Attorneys Sanctioned for Representing Client's Challenges of Judicial Ethics (Empire Journal 2/14/05).  According to the article, the New York Appellate Division, First Department sanctioned two New York attorneys (to the tune of $2000 and $250 respectively) for "frivolous conduct" when they argued that a judge who had a financial stake in the defendant's company should have recused herself from the case.  Apparently, the court even agreed that the judge was required to disclose any financial interest, however small, but upheld the outcome of the case nonetheless.  See also this link at New York Lawyer. 

So how is it frivolous to raise an argument that the court ultimately accepts?  Only in the universe where judge's attempt to intimidate attorneys from exposing any negative conduct, I guess.

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I'm finding that it takes a strong stomach to blog about lawyers' ethics transgressions.  Even though I'm careful and try to do the right thing with every action I take, I often feel as if I'm just a breathe away from tipping over to the other side.  Maybe it would start with a small act of neglect because I'd be too busy, maybe a rationalization that a certain questionable situation was OK.  And before I'd know it, I would be in over  my head, tumbling down the ethical spiral and winding up like the lawyer in this article,  Lawyer's License Annulled, Martinsburg Herald (2/15/05).

The article describes the tale of a West Virginia lawyer Kevin Wheaton who apparently started his career with the noble goal of meeting the needs of the underserved African American population in Martinsburg.  But noble intentions aren't enough, I suppose, to keep lawyers from the darker side.  Likely soon, the realities of practice - and then fear or greed or who knows what other force took over and the lawyer found himself charged with a litany of ethics violations, including lying about case status, failing to establish a trust fund for clients' funds or keeping clients apprised of the status of their cases, failing to advise clients of settlement offers, did not distribute funds to third parties and lying in the past to members of the disciplinary counsel when questioned under oath, records state.  And two felony counts of writing worthless checks.  As a result of the violations, Wheaton's license will be annulled. 

What I wonder is whether this lawyer could have been saved?  Could bar programs and help from colleagues or other services prevented this downward spiral?  Or are some lawyers just inherently bad and prone to these types of temptation?  Let me know what you think.

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Next time you find yourself thinking about letting the retainer agreement requirement slide ("I trust the client," or "There's no time," are some excuses that might run through your mind), think again.  Lack of a retainer agreement one can cost you your entire fee.  That's what happened in the case desribed in this New York Lawyer article,  No Retainer = NY Firm: $0; Client: $205,000 (2/15/05). 

According to the article, client Bazerjian filed a pro se claim to the September 11th Victims Compensation Fund.   Disappointed with the amount he received, he subsequently decided to retain attorney Santucci to pursue an appeal.  A week after the initial meeting, Santucci represented Bazerjian at a hearing and recovered $205,000, $140,000 more than Bazerjian initially was given (as an aside to those who wonder whether lawyers actually add value, this is a perfect example that they do).   Subsequently, Santucci sought to collect from his client 25 percent of the increase or roughly $35,000. 

When his client would not pay, claiming that he was never given a retainer or told what the case would cost, Santucci sued.  The judge sided with the client, writing that: "Plaintiff's failure to provide a letter of engagement or a signed retainer was deliberate, and not a result of being 'impracticable,'..."Clearly, plaintiff has not complied with [the New York Codes, Rules and Regulations]." (Klein, Calderoni & Santucci v. Bazerjian, 22351/04.)  Santucci had argued that the short time between the initial client meeting and the hearing precluded a retainer, but the client stated that he never retained the attorney and "was uncomfortable" with his presence at a hearing.  In the absence of the retainer, the judge denied Santucci any recovery.

Personally, I find this result overly harsh.  I can certainly understand the judge denying a contingency recovery in the absence of a fee agreement.  A contingency arrangement needs to be explained in detail to clients.  And when clients don't understand all of the risks and alternatives, they may feel cheated down the line - as did this client.   Had Santucci committed the terms of the contingency to writing - that recovery would be based on the difference between what the client had recovered on his own and the appeal, that he would take 25 percent rather than the standard third, etc...the agreement would undoubtedly have been found reasonable.

But at the same time, I wonder what the client was thinking.  Did he really believe that an attorney would show up fully prepared for a hearing such that he could triple the award the client received pro se and not expect anything in return?  I would have liked to see the judge ask the client what he expected to pay.  And if the client claimed that he did not want the attorney at the hearing, I would have asked him why he didn't say so instead of letting the attorney represent him.  At the very least, I think the client ought to pay an hourly fee because retainer agreement or not, the attorney's participation in the case did confer a substantial benefit to the client.

The reason that there are retainer agreement requirements is to protect clients from overreaching attorneys.  But attorneys can't forget - retainers also protect us from overreaching clients.  My gut here (and again, it's not supported by any facts; I can't even find the court's opinion) is that this client was in fact advised of the terms of the contingency and conveniently "forgot them" when he saw how quickly the attorney dispatched his case.  The reason for my speculation?  First, the client had initially filed a pro se claim and thus, may have been more sophisticated than other attorneys.  Also, the language that the client used in his response to the court - "I never actually retained Mr. Santucci or his firm to represent me."  The term "actually" is a wiggly phrase - why didn't the client simply deny outright that he never hired the firm? 

Sure, there are many bad lawyers who'll claim clients agreed to terms that they didn't.  But we shouldn't forget that there are also bad clients who'll do the same.  And that reinforces the importance of the retainer:  because in one writing, it guards both groups, lawyers and clients, from the darker sides of each other.

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You'll want to go over to David Giacalone's f/k/a and read this post about presumably solo attorney Brad Margolis' (no other attorneys are listed at his website) marketing stunt giving away a free divorce for Valentine's Day.   The news story  that David links contains some discussion over whether the contest is tasteless.  David, however, takes issue with it for another reason:  Margolis represented that the value of the free divorce (uncontested, with no custody or property disputes) is roughly $1000 but his website offers an uncontested divorce for $375.  David further notes that Margolis does not mention that most people can easily obtain an uncontested divorce pro se using forms available from the court, thus further diminishing the value of the offered prize.

So far, I'm in agreement with this position.  But where I take issue is when David goes on to criticize Margolis' flat $375 dollar fee (costs not included, which according to the news story are @ $390) [as excessive:] Editor's correction:  note that David does NOT say that a $375 flat fee is excessive.   This is his full quote below and my revised commentary thereafter:

drawing down a retainer) is $158.00 per hour.  [That rate will sound low to many readers,Margolis' divorce fee agreement states that his hourly fee (for purposes of but recall that Margolis practices in central NYS, where lawyer income, like the whole economy, is depressed.]   At that hourly rate, Margolis would be paid for about 2.4 hours under the $375 flat fee -- a generous allotment of time. 

Personally, I really don't think that 2.4 hours to prepare a form is overly excessive reasonable.  First, you've got to meet with and interview the client to explain the process.  I'm guessing that could take at least a half hour to three quarters of an hour (it should, anyway!).  Then, you've got to open a file on the client, run a conflicts check and review the documents to make sure that a simple uncontested divorce will work for the case.  Then, there's the matter of filling in the information, proofing it and possibly running it by the client for review.   And yes, maybe there's a bit of premium built in above the $158/an hour, but I don't find that unreasonable.  It's because of Margolis' expertise that he can offer the flat rate.  Isn't that better than say a junior attorney charging $100 an hour but taking five hours to complete the petition?

As David points out, clients have a choice here as well.  They can learn about how to file a pro se divorce and figure out how to do so.  For a $10.00/hr hourly wage earners who have little in the way of savings or disposable income, it's probably worth it to miss a few hours of work to go down to the court to seek pro se assistance and spend a few more hours at night or on the weekend filling out the form.  For someone making $50/hr, the convenience of being able to delegate the work to someone else for $375 is worth the cost.  I know that there are many things that my husband or I can do ourselves around the house - yardwork or weekly housecleaning - that would be less costly than hiring others for those tasks.  In fact,  I don't really mind those tasks so much, but truth is, I'd rather spend what little spare time I have with my daughters.   My point is that just because pro se divorces can be obtained free, doesn't mean that everyone will necessarily want to avail themselves of that option.

I support any individual's right to handle a matter pro se.   And in some cases, it's an economic necessity to have this right available.  But I'm wondering whether any group like HALT has anyone ever run the numbers on how long it takes a non-lawyer to prepare a legal document on their own, be it a do-it-yourself will or divorce.  It's hard to compare the costs of a flat fee divorce versus an individual without knowing how much of their time is involved, since everyone's time has value.

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In this prior post, we discussed whether discounts given by solo and small firm lawyers on work performed for low income clients might count as pro bono.   For those who don't endorse that idea, consider this:  big law firm Skadden Arps wants to claim that its work to bring a school district into compliance with the American Disabilities Act is pro bono, not withstanding that the firm is seeking $9 million in attorneys fees.

According to the this article, Pro Bono Case May Bring Windfall, ABA e-report (2/4/05), Skadden and another civil rights firm in the case spent 20,000 hours in lawyer and paralegal time on the case and are seeking fees of $9 million.  I did the math and even subtracting $1 million for costs, $8 million over 20,000 hours comes to an average of $400/hour.  And that average presumably includes paralegal time.  In fact, the article notes that one of the Skadden partners involved in the case has a billing fee of $810 an hour.  Moreover, apparently, because of the amount of resources, the firm went all out in many of its pleadings, using a "cannon ball" to respond to a "tennis ball."

So how is $400 an hour pro bono whereas a solo charging $50 or $75 an hour is not?  If someone has an explanation, I'd love to hear it.

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A Connecticut solo Timothy Spayne recently paid the federal government $1.24 million to settle charges that he overbilled the Electric Boat corporation for representing the company's employees in workers compensation claims as reported in Billing for 94 Hour Day Nets Solo $1 Million Fraud Charge, Keith Griffin, Connecticut Law Journal (2/7/05).   According to the article,  Spayne's infractions included billing for a 94 hour day (where he supposedly reviewed 113 files, received 91 phone calls and wrote 72 letters), billed between 13 and 24 hours for a day's work 226 times and billed all time at his own rate though several non-attorneys worked in his office and presumably handled some of the work.  In addition, Spayne allegedly also opened separate files for each of multiple injuries incurred by workers rather than one file per work to increase his billings level. 

On its face, Spayne's case represents the tale of a greedy attorney (yes, a greedy solo, to be precise!) who took advantage of the workers comp system with what was presumably minimal oversight over billing statements and got caught.  But the case also teaches attorneys the importance of keeping detailed billing records - and raises the question of the appropriate level of compensation for repetive, routine work such as filling out workers comp claims.

First, to the lesson of the case.   It seems that Spayne's fraud may have initially started out as "lump" billing, whereby attorneys lump together many small tasks into a daily period rather than accounting for it precisely when it happened.  For instance, many of Spayne's 24 hour days may have been 24 hour periods that took place over the course of a week where he lumped the hours together.  Obviously, the lumping system went ridiculously out of control with an alleged 94 hour day but my guess is that's how it started.

Laywers can determine in advance with clients how they will bill.  Perhaps clients will agree to "lump" billing; most, however, will prefer detail itemizations of the date the work was performed.  But while "lump" billing may seem easy in that it doesn't require the same precision with records, it can make you careless - and then cavalier.  Pretty soon, you might find yourself in Spayne's position.  Better to take the time and document hours as they occur.

Same with time spent by staff.  Don't try to pass off work by staff as your own.  Bills for work performed by staff should be itemized separately and billed at a lower rate than the head attorney unless otherwise justified.

The other issue, here of course, is what's the appropriate way to bill for repetitive tasks like workers' comp claims.   By the time you handle your 10th or 11th form, most of the legal issues have been mastered and it's just a matter of filling in the facts which might only take an hour.  Still, is it reasonable for a client to pay for just an hour of your time and not your expertise which enabled you to prepare the form so quickly to begin with?  For some attorneys, the solution is higher hourly rates for others, it's a flat fee which rewards attorneys for efficiencies.  Personally, I'm not sure what the most equitable solution would be so as to fairly compensate the attorney and ensure that the client's fee is reasonable.  But until the bar can come up with a solution to address the matter of repetitive work and develop some guidelines, we will continue to perpetuate an environment where it's too easy for attorneys (whether unintentionally or by design) to charge more than what's reasonable.

I

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Ever make mistakes?   If you do, don't despair.  Mistakes give you two opportunities:  one to make the underlying correction and one to show what type of lawyer you really are.  That's the theme of my most recent Small Firm Business Column, When Lawyers Make Mistakes .

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One of our readers writes:

I graduated law school last year and am finishing
up another graduate degree...and am
taking the bar this summer.  For law students with
little "real world" legal training (some law
clerking), any advice on going solo out of law school?
I read on your site about attorneys getting $40/hr
court appointed cases, but I much prefer non-trial
work.

For starters (and even though my reader didn't ask this question), I harbor mixed feelings about attorneys going solo immediately after law school.   On the one hand, I absolutely believe that with enough determination and desire, going solo after law school can be done successfully (and when my archives return, I'll post to links to stories about where that has happened).  Moreover, for new graduates who've had careers prior ot law school and potential contacts through that experience, going solo right after law school may be the best way to capitalize on prior work experience. 

At the same time, however, I don't think going solo is an optimal situation for new graduates.  It's not so much because new grads lack legal experience but rather, they haven't yet developed contacts in the legal and business community.   Going solo is exhilerating, yes, but it can also be demanding and nervewracking.  It's tough enough to try to master new skills and run a business and market while at the same time havingthe added burden of introducing yourself to  other lawyers in the community and establishing some credibility with them. 

A post-law school job - even one that only lasts a year or two - can help a new grad establish presence and credibility and get paid for doing it.  For example, if you work for a judge after law school, you have an opportunity to meet the dozens of lawyers who appear before the court.  You also have a chance to join the local bar and perhaps organize CLEs or other events which is a great way to get to know colleagues.  All while you're collecting a paycheck.  Same is true for a post law school job at any firm big or small.  The second advantage of working for a spell before starting a firm is that your former employers can serve as references for the quality of your work if someone is thinking abour referring a matter.

Having said that - and getting to the point of the question - there's much that  new graduates with no interest in litigation can do to get a practice off the ground.  For starters, they can seek out contract work - either a large document review project or work for other attorneys.  If they're interested in probate matters, they might want to try to set up a relationship with a PI or immigration attorney and see if those attorneys will refer their clients for wills and estate matters.  New grads can also give talks on business start ups or T&E matters to community groups as a way to drum up business.  And to gain skills, many jurisdictions offer inexpensive or free pro bono training on a variety of areas, including bankruptcy, wills and guardianships which teach the basics.  Usually, the only cost is a commitment to take on a case or two pro bono.

This is just a quick answer - and not entirely comprehensive due to time constraints.  Therefore, I'd like some feedback from readers on tips you have on getting started after law school - and of course, any success stories you might be willing to share.  And of course, keep reading MyShingle.com (and our online guide) for new tips on starting a firm, as they emerge.

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