Using Contract Lawyers

Contract lawyers can play an essential role in managing workflow. Here are five quick tips from Law Practice Today on using freelancers effectively:

  • Get client consent.
  • Decide whether the contract lawyer will have client contact (if so, this affects the contract lawyer’s liability coverage status in Oregon).
  • Supervise! Overseeing the work of a contract lawyer is your ethical duty. Outsourcing lawyers should also be sensitive to the impression the contract lawyer makes on the client, particularly if they engage in client communication.
  • Beware of potential unauthorized practice of law. Ensure the contract lawyer is licensed to deliver services in the state of the client’s legal issue.
  • Don’t hesitate to bill for the contract lawyer’s services at prevailing market rates. I would add: include this cost (or fee) in your client engagement letter.

If you are considering hiring a contract lawyer (or want to offer your services on a contract basis), check out the following resources from the Professional Liability Fund:

  • Contract Lawyers Checklist
  • Contract Project – Letter of Understanding
  • Contract Project Intake Sheet
  • Independent Contractors or Employees
  • Letter Declining Contract Project

From the PLF home page, select Practice Management > Forms > Contract Lawyering. A number of CLEs are also available under the CLE > Past CLE heading:

  • Contract Lawyers CLE: Conflicts
  • Contract Attorneys: Managing Expectations and Getting Paid
  • Practical Contract Lawyering

To learn about Oregon malpractice coverage for contract lawyers and qualifying for a “supervised attorney” exemption, contact the PLF at 503.639.6911 or 800.452.1639 and ask for Jeff Crawford or Emilee Preble.

The Oregon Women Lawyers operate a Contract Lawyers Listserve for members. To join or use the service, visit the OWLS website.

All Rights Reserved – 2018 – Beverly Michaelis

Nonlawyer Ownership of Law Firms

A financial planner, a CPA, and a lawyer walk into a bar … to form a law firm. A joke, right? Two years from now, some version of this could be happening for real in California.

A state task force headed by a former law professor is expected to produce proposals in 2019. Presently, Rule of Professional Conduct 5.4 prohibits nonlawyers from acting as partners, corporate officers, or directors of a law firm. The same rule strictly regulates fee sharing and forbids nonlawyers from directing or controlling a lawyer’s professional judgment.

Why consider nonlawyer ownership?

Some view nonlawyer ownership as a means of boosting productivity, reducing costs, and improving access to justice. Others herald the benefits of outside investment and potential for greater innovation in the corporate legal market.

What we can expect from California

Your opinion may differ, but I believe the State Bar of California is ready to make this change. The purpose of the Task Force is to work out the issues.  I predict:

  • California will be the first state to allow nonlawyer ownership of a law firm.
  • Nonlawyer owners will be prohibited from controlling or directing the professional judgment of a lawyer in the course of providing professional services to a client.
  • Nonlawyer owners will be allowed to control or direct business affairs of the firm.
  • Fee sharing will be authorized, provided: (a) clients give informed consent in writing; and (b) the sharing of legal fees does not affect the lawyer’s professional judgment.
  • Receiving referral fees from nonlawyers will be permissible.
  • Disclaimers or disclosures may be required in firm advertising, marketing, engagement agreements, websites, etc.
  • Lawyers will be permitted to reveal confidential client information to nonlawyer owners and their staff in order to carry out representation.
  • Conflict of interest rules will expand to include nonlawyers as “members” of the firm – a conflict for one is a conflict for all.

Operational concerns

Anyone pondering formation of a future lawyer/nonlawyer union should think long and hard about all the issues involved in business formation. A business plan, mission statement, and written ownership agreement will be an absolute must. Thorough insurance coverage, including professional liability, will be a necessity.  Prepare to integrate office systems, record retention, and nonlawyer staff. This includes training!  If nonlawyer partners are beholden to regulatory agencies, know the ins and outs for your sake, but don’t fall into the trap of advising nonlawyer owners. Lastly, have a plan for departure. When a law partner leaves you high and dry, the repercussions aren’t pretty. But at least you can temporarily cover your partner’s legal cases. This isn’t likely to be true with a nonlawyer partner who has an area of expertise (and perhaps licensure) that you lack.

All Rights Reserved – Beverly Michaelis – 2018

MCLE Changes Coming

At its June/July 2018 board meetings the OSB Board of Governors voted to recommend a requirement for MCLE on mental health and substance use issues. The overall number of MCLE credits required in each reporting period will not change, as the proposed rule includes a reduction in general/practical skills requirements.

Why require education on substance abuse?

The pressure and stress inherent in the legal profession begins in law school and never fades away:

  • Lawyers are almost twice as likely to struggle with alcohol abuse when compared to the general population
  • In a 2016 study more than 1 in 5 lawyers reported that they felt that their use of alcohol or other drugs was problematic at some point in their lives
  • In the same study nearly 3 of 4 reported that their problematic use started after they joined law school.

Source: Indra Cidambi, M.D., “Drug and Alcohol Abuse in the Legal Profession: Why Lawyers Are at Increased Risk for Addiction,” Psychology Today (June 2017).

This may not be you, but it may be someone you know. A friend from law school, your partner, or a colleague. As the Psychology Today article points out, members of the legal profession are at increased risk and “need to be proactive in reaching out and leaning on their support system before they feel overwhelmed and trapped.” Getting educated on the topic is a start.

Mental health issues affect us all

Not only are lawyers more likely to struggle with alcohol abuse, we also suffer from disproportionately higher rates of mental health issues.

  • Many law students show signs of depression, anxiety, hostility and paranoia within 6 months of entering law school.
  • After the first year of law school, 40% of law students suffer from depression, which persists through law school and their careers.
  • Practicing lawyers find that they have to compromise their ethical principles or moral values, which creates a conflict in them.
  • They may also have to take and defend positions that are contrary to their belief system.
  • In the 2016 study referenced above, 6 of 10 participants reported anxiety, 1 of 2 reported depression, and nearly 1 in 8 reported ADHD. 1 in 9 reported suicidal thoughts at some point during their career.

Source: Indra Cidambi, M.D., “Drug and Alcohol Abuse in the Legal Profession: Why Lawyers Are at Increased Risk for Addiction,” Psychology Today (June 2017).

Getting help now

The Oregon Attorney Assistance Program provides assistance with and referral for problem alcohol, drug, and/or other substance use; stress management; time management; career transition; compulsive disorders (including problem gambling); relationships; depression; anxiety; and other issues that affect the ability of a lawyer or judge to function effectively. Services extend to Oregon law students and are free and confidential. If you or someone you know is affected by any of these issues, call (503-226-1057 or 800-321-OAAP) or contact the OAAP today.

All Rights Reserved 2018 Beverly Michaelis

 

Starting Your Own For Profit Referral Service

Have you ever thought about starting your own for-profit lawyer referral service? Using staff to screen incoming calls and match potential clients to lawyers?

OSB Formal Ethics Op No 2005-168, revised June 2018, contemplates exactly this scenario. While permitted, there are restrictions. Read on.

Can I own a for-profit lawyer referral service?

Yes! However: lawyers are not permitted to use other businesses (such as a lawyer referral service) for in-person solicitation of legal work. Nor may lawyers misrepresent the nature of services provided. OSB Formal Ethics Op No 2005-10; OSB Formal Ethics Op No 2005-106 (rev 2016); OSB Formal Ethics Op No 2005-108 (rev 2015).

Can I manage a for-profit lawyer referral service?

Yes! General management and administration of a lawyer referral service is ethical. This includes duties such as hiring staff or supervising operations.

May I operate my for-profit lawyer referral service at the same premises as my law practice?

Yes! Since lawyers are allowed to office share with non-lawyers, there is no ethical barrier to operating a referral service at the same physical location as your law practice.

What ethical issues might arise in operating a for-profit lawyer referral service?

Lawyer-owners should avoid participating in the actual screening of incoming inquiries (potential clients). This eliminates two risks.

  • Receiving confidential information which could create a conflict of interest
  • Creating a lawyer-client relationship

Lawyer-owned and operated referral services must be separate independent incorporated entities – not merely DBAs (assumed business names) registered to the lawyer. See In re Fellows, 9 DB Rptr 197, 199-200 (1995).

Do not give legal advice through your lawyer referral service! As OSB Formal Ethics Op No 2005-168 explains, “a referral service is not licensed to practice law and a lawyer may not assist a nonlawyer in the unlawful practice of law.”

In my opinion

If you decide to operate a lawyer referral service, consider taking these extra steps to minimize your liability.

  • Create your referral service with the same formality as you would an independent business for one of your clients. This isn’t the time for shortcuts. Have a business plan, mission statement, marketing plan, budget, financial projections, etc. If this is a co-venture among you and your lawyer friends, have a written “partnership” agreement or equivalent!
  • Keep independent records and books.
  • Set up the service in a separate physical location. Is it ethically necessary? No, but it’s smart. Keeping the businesses physically separate minimizes confusion and increases the appearance of neutrality. (The service isn’t there to feed clients to you – it exists to refer clients to others.)
  • Consider hiring separate staff for the referral service. This will offer further protection against potential conflict of interest arguments. If neither you nor your legal staff are involved in screening, you can’t possibly receive confidential information. Besides, your staff may not have the time to handle the additional workload. Referral services are busy. Do you want your paralegal or legal secretary to answer referral calls or get your work done? They may not be able to do both.
  • Train referral staff on unlawful practice of law issues and other concerns related to the service. For example, what should they do if a client comes to your referral business in person and wants to talk to a lawyer now!
  • Use disclaimers in your advertising, on your website, in online forms, or as part of a recorded greeting heard by all callers. See this language posted on the Oregon State Bar Lawyer Referral Service (OSB LRS) web page.
  • While the assertion of negligent referral is a rare thing, the right client in the right circumstance may make a claim. Be prepared and inquire into proper business insurance coverage. Don’t assume your professional liability extends to your independently owned and operated lawyer referral service.

All Rights Reserved 2018 Beverly Michaelis

 

 

You Need a Break

Memorial Day is right around the corner.  While you’re honoring our military men and women and taking time to relax over the three-day weekend, I want you to start planning your summer vacation.  Yes, I just said that.

Build time off into your work schedule now – no excuses!  It takes effort and organization, but your body and mind will thank you.  We all need true recuperative time away and three days just isn’t enough.  Here’s a game plan to help you get started:

Budget now to go on vacation later.

“If I’m not at the office, I can’t bill.  If I can’t bill, I won’t get paid.”  True enough, but there is a solution:  budget for your vacation.  A bit of research and number crunching is in order here. First, calculate your vacation expenses. This should be relatively easy.  Next, quantify the lost revenue you need to replace during your time out of the office.  Now that you know how much you need, begin setting aside funds every week to meet your financial goal.  If necessary, find little ways to cut back that can really add up: like bringing your lunch to work, deferring your daily Starbucks fix, using public transportation, or telecommuting.  Saving weekly will keep you on track and help manage expectations. If you’re just getting started, then your plans this year may be more modest.  Next year, you can begin saving for your summer vacation in January.

Clients are important enough to schedule.  So is your vacation.

Work will never go away, but I guarantee that if you look ahead in your calendar you will find a block of time with no commitments.  Even if you haven’t made plans yet, block the time out now before your calendar fills up.  If you have a habit of backsliding, enlist your family as enforcers.  This time should be sacred.  If you need an extra incentive, consider non-refundable travel reservations.

Preparation is Key!

If you’re a member of a firm, going on vacation is a matter of meeting with other lawyers who will be covering cases during your absence.

If you are a sole practitioner, use the buddy system.  Find a colleague who is experienced in your practice area and willing to cover for you.

This arrangement is usually reciprocal and is helpful if you have an unexpected absence from the office due to injury or a medical condition.

Follow this checklist:

  • Notify clients, opposing counsel, judges, or other appropriate parties that you will be out of the office;
  • Prep your files.  They should be well-organized and current, with status memos so your buddy can easily step in if needed;
  • Create a “Countdown Schedule.”  Identify what needs to be done when and whether certain tasks can wait until your return;
  • Allow for wind down.  As your vacation approaches, leave time in your schedule to finish up last minute work.  Reduce or refer out new matters;
  • Train staff.  Do they have a clear understanding of office procedures?  How will they screen client calls during your absence?  Give them parameters for contacting you or your buddy in the event of an emergency.
  • Resist constantly checking voice mail, e-mail, or text messages.  Technology is a God-send, but part of rejuvenation is taking a break from our instant Internet society. Checking in is okay, but stick to a schedule to avoid obsessing over what is going on back at the office.  Remember – you have an emergency plan in place.  If something happens, staff or your buddy will get a hold of you.
  • Avoid post-vacation overload.  Just as you blocked out dates to go on vacation, allow yourself time to get back up-to-speed.  Otherwise, you’re right back where you started.

Give yourself and your family a well-deserved break.  With a bit of organization, you can budget for (and enjoy) your time off.  Thank you for tolerating my nagging!

All Rights Reserved 2018 Beverly Michaelis

Postscript

As we speak, I am planning my escape now!