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Solo In Chicago

...empowering the Second City's entrepreneurial legal community

Saturday, December 20, 2008

What's in a Name...and More

A nice review in the Bar Journal's monthly Loss Prevention column. Some key points for sole practitioners:

What's your name?

Me - a name I call myself. - "Do Re Mi"2

Let's start with your firm's name, which, like all communications about you and your services, must not be "false or misleading." RPC 7.1.

One of the easiest ways to create a false and misleading name (if for some reason you want to do that) is to imply partnership where it doesn't exist. RPC 7.5(d) states that "[l]awyers may state or imply that they practice in partnership or other organization only when that is the fact." Here are a few common scenarios.

Imaginary Partners. Sometimes it's lonely to be a solo. But don't yield to the temptation to add "imaginary friends" to your letterhead. If Linda Lonewolf is a sole practitioner, she may not call her firm "Linda Lonewolf & Associates" because the "Associates" don't exist...

Unjustified expectations. A communication is false or misleading if it "is likely to create an unjustified expectation about results the lawyer can achieve." An ad stating "We'll get you a settlement - fast," by itself, suggests that the lawyer can do so in every case.

A former judge who joins a personal injury practice may not refer to herself as "Judge" in a business context, because this may lead to unjustified expectations about the results she can achieve for her clients. Note that it's fine for her to be called "Judge" in a social context. ISBA Ethics Op 92-10...

What do you do?

An Illinois lawyer may state that she "concentrates" or "limits" her practice of law to a particular area or areas of practice. She may also give other information about her practice "which a reasonable person might regard as relevant in determining whether to seek the services offered." RPC 7.4(a). And of course, this is also subject to the "false and misleading" test of RPC 7.1.

Goal-Setting with a Purpose

I must say my focus has been on really finishing '08 out strong as I hurry to close-up shop before heading out of town on Christmas Eve but I saw this over at Consumerism Commentary...9 Tips for Choosing and Achieving a Purpose in Life. Sort of a kick-off to your '09 goal setting.

Long-Term Care Consumer Information

Saw this little nugget recently:

Elder care. Public Act 95-823 requires long- term care facilities to complete annual “Consumer Choice Information Reports” and make them available to the public, including posting them on the internet and giving them to prospective residents and their families. These reports must include information on ownership, medical care, services, staffing, safety, security, meals, rooms, furnishings, family and volunteer support, visitation and special services and amenities. The Department of Aging, working in collaboration with the Attorney General, has the authority to verify the accuracy of the information. Violation of this Act constitutes an unlawful practice under the Consumer Fraud and Deceptive Business Practices Act. Effective Jan. 1, 2009.

If you have sort of a family practice like me, nursing home and long-term care calls are plentiful. Now you have a resource. Here's the full Act.

Recession = “Force Majeure”??

I don’t think I’ve dealt with a force majeure issue since first year Contracts but I am always on the lookout for some old fashion creative lawyering. And I found some reported recently regarding the new Trump development on the Chicago river

Those assertions are made in a fascinating lawsuit filed by Mr. Trump, the real estate developer, television personality and best-selling author, in an effort to avoid paying $40 million that he personally guaranteed on a construction loan that Deutsche Bank says is due and payable.

Rather than have to pay the $40 million, Mr. Trump thinks the bank should pay him $3 billion for undermining the project and damaging his reputation.

He points to a “force majeure” clause in the lending agreement that allows the borrower to delay completion of the building if construction is hampered by such things as riots, floods or strikes. That clause has a catch-all section covering “any other event or circumstance not within the reasonable control of the borrower,” and Mr. Trump figures that lets him out, even though construction is continuing.

Wednesday, December 10, 2008

The Governor and I

Did I ever mention that I used to work at a law firm that had also previously employed our fair Governor Blagojevich? In lieu of the current state of affairs I thought a brief mention might be appropriate. Yep, it was actually the last place I worked prior to starting my current practice. It's a nice little general practice with a real estate focus in northwest suburban Elk Grove Village. I still keep in pretty close touch with one of the partners there.

Well, Rod had also worked as an associate there in the past, prior to his marriage into the powerful Mell family in Chicago. One of the assistant's at the Firm said Rod once bought a fur coat and charged the Firm saying it was important for his and the Firm's image.

Big Firm "Bill Padding"

Over the last several months we've had a case against a fairly large Chicago firm regarding a dissolution of marriage and it has been fairly eye-opening and borderline laughable to view first-hand the techniques they use to run up legal fees against their client (unnecessarily I would say). The two most blatant techniques:

1. Send 2 attorneys to each court date. Look, I've tried cases a couple times where I had a second chair attorney. For a certain breed of trial with great complexity this is surely appropriate. But sending two attorneys to each court date many of which are just status hearings to get a new date? Come, come.

2. Draft letters to confirm what a court order says. I was most aghast at this one. As a simple example, we'd have a court date and say a court order got entered that read "Father shall have visitation on Tuesdays from 3pm to 9pm." I'm not the sharpest mind grant you but I have a decent grasp of the English language and the words of that Order are clear. But lo-and-behold, 1-2 days after court we'd get an extensive letter faxed over that in short will state something like, "we're writing just to confirm that Father will have visitation on Tuesdays from 3pm to 9pm." Bam, another hour billed!

So if you're looking for a good attorney and you're attracted to that big firm pedigree with the penthouse office space, fine, but just be on notice about how all those expenses will impact your bottom-line as client each month!

Thursday, December 04, 2008

Don’t Be Afraid to Get Paid!

That’s the title of a great piece from a recent ISBA Illinois Bar Journal article. It looks like it’s accessible without a password so that’s a nice policy change by ISBA.

Seriously, it might be the best and most relevant article I’ve ever read in a legal publication! It includes great advice from legal consultant Ellen Freedman about the most critical issue for legal services business owners: getting your customers to pay you.

Billing early and consistently is critical.

Freedman proceeds to look at receivables that have aged for just three months. At that point, she says, studies show that about 30 percent of those monies will never be collected. Allow those accounts to age as much as a year, and you can expect to collect only around thirty percent.

“If you had a prospective client that walked in your door and asked you for a 70 percent discount on your bill,” she rhetorically asks, “how many of you would be inclined to say yes?” You wouldn’t, of course, she answers herself. “But by allowing that receivable to get to be a year old, that’s what you’ve done. You’ve effectively accepted 30 cents on the dollar.” At two years, collections fall to a measly 12.5 percent - not even enough to pay for the postage for a reminder letter, she sniffs.

Make it part of your initial client meeting.

Freedman advocates that lawyers make an inquiry into their clients’ financial status and treatment of their prior lawyers a standard part of the initial client interview. To that end, she recommends, lawyers should ask clients some direct and specific questions.

“Tell me how you are going to pay me” is a good way to start, she suggests. In addition to finding out where the client works, find out about the client’s cash flow and assets, she urges. Will a third party be providing the client with the initial retainer fee? If so, find that out - and inquire further how the client can be assured of obtaining the funds necessary to pay the lawyer’s bills once the retainer fee is used up.

Maybe the best tip: Freedman suggests having clients execute an authorization to charge their credit card if their unpaid balance reaches a certain level at the same time they sign the retainer agreement.

Learn your client’s billing cycle

Most businesses, she notes, pay their bills on a designated day of the month, so that all bills that come in by a certain day each month are paid on that day. Bills that come in even a day later are normally set aside for the next payment cycle. Well-organized individuals - Freedman included - may pay their bills in a similar fashion, perhaps setting some aside the day after their paychecks are deposited.

What if a client has legitimate financial problems?

Even good clients sometimes encounter misfortunes that render them unable to pay their bills, Freedman notes. When that happens, she says, it’s up to lawyers to present those clients with options, including payment schedules. “Have your antennae up. Don’t wait for your client to ask you.” The lawyer’s ability to accept credit cards, together with an appropriately crafted provision in the engagement agreement, can come in very handy when these circumstances occur, she observes.

Revenge can be sweet

Despite your best efforts, some clients may never pay their bills. So, “When all else fails - REVENGE IS SWEET!” reads one of Freedman’s presentation slides. Explaining, she suggests, “Wait until the statute of limitations for malpractice claims has passed, and then wait until November 15th.”

Then, she continues, you can send your debtor client a letter saying it’s clear that, despite your pleas to discuss the matter, that the client has no intention of paying your bill and, therefore, has left you with no alternative but to forgive the debt. “We will be sending you a 1099 for the value of the services and the costs that we are removing from our books.” On receiving such a letter, she says, many people will be so scared that they will actually send the lawyer a check.

Draconian Cuts but Some Nice New Copiers at 32 W. Randolph

Well, from the way Todd Stroger's talking 1/4 of Cook County's employees might get cut if the Cook County Board doesn't agree to his proposal to borrow some $700 million. But, I did see some nice new copy machines up on the 14th Floor at 32 W. Randolph outside the parentage courtrooms.
Why are those copies there anyways?

The Six Habits of Highly Respectful Physicians, er ah, Attorneys

Saw this in the Times regarding so-called "etiquette based medicine." The author recommended six steps for physicians to use at an initial patient meeting...I think the steps could be helpful for an initial attorney-client meeting:

• Ask permission to enter the room; wait for an answer.

--Hopefully we can skip this step. I hope your clients aren't changing into a white gown in your office. If so, you may want to glance at the Rules for Professional Conduct.

• Introduce yourself; show your ID badge.

--Absolutely, first names surely create intimacy and warmth.

• Shake hands.

• Sit down. Smile if appropriate.

• Explain your role on the health care team.

--Explain how your firm works. Explain the process of the legal matter in question. Too often clients get surprised and have unrealistic expectations...and then they don't pay your bills.

• Ask how the patient feels about being in the hospital.

--I'm hoping coming to see me isn't as bad as having your tonsils taken out but in reality some legal issues we deal with are fairly life shattering and dealing with emotions is part of the package.