Billing Practices and Lawyer Compensation

The new OSB 2017 Economic Survey is available for download. In it, you’ll find a plethora of information about Oregon lawyers, including employment characteristics, compensation, billing practices, career satisfaction, and future plans.  Here are a few highlights:

Employment Characteristics

  • 28.3% of survey respondents reported being a member of at least one other state bar.
  • 86.1% reported working as an Oregon lawyer; 13.9% were not.
  • Lawyers who chose to work part-time did so to maintain work/family balance, pursue other career interests, or because they were semi-retired.
  • Slightly more than 60% of working Oregon lawyers reported being in private practice, with just under 20% in government positions.
  • The most dominant areas of private practice are business/corporate (transactional and litigation), civil litigation (plaintiff and defense), tax/estate planning, family law, and real estate/land use/environmental.
  • The most common practice size was a 1 lawyer office, followed by 3-6 lawyer offices, and 7-20 lawyer offices.

Compensation

  • The statewide mean compensation was $143,277.
  • The amount of compensation was highest in the Portland metro area and lowest on the Oregon coast.
  • The highest paying area of practice was real estate/land use/environmental.
  • Statewide, female lawyers reported earning less than male lawyers.
  • Peak earning years were 50-59, with compensation generally decreasing after age 60.

Billing Practices

  • Statewide, the mean hourly rate was $286, ranging from $226 to $324 regionally. (The highest reported hourly rate was $850 in Portland.)
  • By area of practice, the highest hourly rate was for business/corporate – litigation, with a mean of $333.  Other top billing areas were: real estate/land use/environmental, civil litigation – defendant (excluding insurance defense), and business/corporate – transactional.

Career Satisfaction

  • On a scale of 1-5, with 1 being very dissatisfied and 5 being very satisfied, lawyers statewide had a mean career satisfaction rate of 3.98. In general, the more years in practice, the greater a lawyer’s satisfaction with his/her career.
  • By location, employment, and area of practice, the most satisfied lawyers were:
    • In the Upper Willamette Valley
    • Working as judges or hearing officers
    • Practicing in civil litigation defense, real estate/land use/environmental, or criminal law (private bar).

Future Plans

  • 19.2% of lawyers statewide reported they were planning or contemplating retirement.
  • 6.7% were planning to leave the profession, but not retire.
  • Another 10.3% were planning to reduce their practices.

All Rights Reserved 2018 Beverly Michaelis

 

Reduce Work Hours and Meet Your Goals

Is it really possible to reduce your work hours and still accomplish what you need to get done?

Absolutely!  If you’re willing to reform your habits and work routine.

A new year offers the opportunity to step back and take a fresh look at how to run your practice.  As someone who likes the idea of starting over and trying something new I am here to encourage you.  Please read on.

business-office

Are you in a rut?

It’s human nature to follow a routine. And this isn’t necessarily a bad thing.  For example, following set procedures for responding to client email, docketing deadlines, or checking conflicts are helpful time management and malpractice avoidance techniques. The problem arises when we form work habits that are self-defeating or even life-threatening.

Working long hours can kill you

Several years ago I reported on a study from the Annals of Internal Medicine that found people “who work an average of 11 or more hours per day have a 67 percent higher risk of suffering a heart attack or dying from heart disease than people who work a standard seven- to eight-hour day.  Those who work between 10 and 11 hours per day have a 45 percent higher risk.”

For those of you who champion working hard and putting in long hours, these numbers are a sobering wakeup call.

Sitting is the new smoking

In 2016 came the admonition: get off your duff to improve your health.

While deadlines may sometimes dictate longer hours, sitting in your chair for 10 or 11 hours a day shouldn’t be the norm.  Long hours translate to physical stress, little or no time to exercise, and eating habits that are often less than stellar (like grabbing fast food on the way home.)

The truth is that none of us can maintain a “7-7-7 schedule” (7:00 am to 7:00 pm seven days a week) without suffering the consequences.  Even if you buy a treadmill or standing desk.

Resolve in 2018 to make changes

If I am describing you, stop.  You can do better, and you’ll be happier for it.  Here’s how to cut back the amount of time spent in the office and still accomplish what you need to get done.

Learn to say “goodbye” and “no.”

Two of my favorite words.  And they should be yours too.

Find it hard to turn people away?  I understand how you feel.  Lawyers face economic pressure: I don’t really have a choice.  I need the money.  And emotional pressure: Family, friends, or former clients are depending on me.  

Next time you want to say “no,” but are struggling, follow this simple advice.

Overwhelmed by the amount of work on your plate?

This is a good news/bad news scenario.

Let’s start with the “bad news” first.  You have too much to do and can’t get it done.  You may be paralyzed or depressed.  You don’t know where to start.  Call the attorney counselors at the Oregon Attorney Assistance Program (OAAP).  They provide free and confidential help with issues just like this.  They can also connect you to resources that can help relieve the pressure.

On the “good news” side, having too much to do means you can afford to be more picky about clients and cases.  Time to cull the herd:

What are your priorities?

What do you want to make a priority?  Create time that is sacrosanct to tackle what you want to get done by blocking out time on your calendar.  Treat this time as if it were a client appointment – take no calls, do not read email.  Stay off the Internet unless the task at hand involves being on the Internet.  Give the matter your undivided attention.

Multi-tasking is for the birds

Or rather, bird brains.  Literally.  It’s just about the worst thing you can try to do.

The idea that we can juggle ten things at once is a myth – we simply can’t do it.  Here is one of the better explanations I’ve read about why multi-tasking doesn’t work.  It was the inspiration for this post.  If you want to do something well, not start over ten times, remember it afterward, and get finished sooner, then single task!

You can control client expectations

Learn to shape and manage client expectations – from the very simple (availability by phone, ability to accommodate unscheduled appointments) to the more complex (meeting client deadlines).  The Professional Liability Fund (PLF) offers sample client brochures that explain office and billing practices.  Consider ordering the OSB-accredited webinar, Seven Steps to Building Better Client Relations.

Give yourself a break with this easy time management technique

Form a new habit for 2018.  Check your calendar first before making a time-related promise to a client.  If there is no “deadline” per se, determine when you can reasonably fit the project into your schedule.  You gain nothing by promising a quick turnaround if you can’t keep your word.

In a pickle? Triage!

If you’re in a pickle – a deadline is approaching and you know you can’t meet it – start triaging.  Call your client.  Call opposing counsel if necessary.  Negotiate a new due date.

I know facing up to deadlines is hard.  I also know many lawyers hesitate to call their clients or the other side because they fear being yelled at.  Know this: your clients and the other side are far more understanding than you give them credit for.  Everyone has been there.  They get it.  It turns out that waiting is not really that big of a problem ninety-nine percent of the time.  And if you need support making these kind of calls, just give a ring to the nice folks at the OAAP.

Get back in control

Getting help may be just the ticket to get your workflow back in control.  Consider temporary staff or a contract attorney.  Questions?  Call your friendly practice management advisor at the PLF for help.

Leaving early?  Good for you!

Last but not least, ditch the guilt of leaving early – it is your well-deserved reward for good planning and efficient work habits.

All Rights Reserved Beverly Michaelis 2018

Postscript

Have I given this advice before?  Absolutely.  But a reminder never hurts.  Especially if you know, as I do, that we all feel discouraged from time to time.  Never forget: you can start over and you can make a change.  Don’t let anyone tell you otherwise.

Lawyer Transitions: Departing Your Firm

The days of spending an entire career at one firm are long gone.  By the end of three years, nearly half of all associates leave.  Partners bail out for many reasons – compensation, lifestyle choice, and conflicts with other partners – to name a few.

No matter who you are, tread lightly when you leave.  Departing lawyers have ethical, contractual, and legal responsibilities.

If you are a partner

Conduct your partnership withdrawal in a manner that honors the contractual and fiduciary responsibilities owed to your fellow partners.  Contractual duties are controlled by your written partnership agreement.  Fiduciary duties are described in case law and codified by statute in Oregon’s Revised Partnership Act.

If you are not a partner

Review your employment contract, employment letter, office policies, office procedures, or any other applicable terms that may control the process for terminating your relationship with your current firm or your obligations upon departure.

Are issues likely to arise?

Consult outside counsel experienced in the areas of lawyer mobility, partnerships, fiduciary duties, lawyer separation, and law firm dissolution.

Give notice before you contact clients

Inform the firm of your decision to leave before contacting any clients.  Failing to give adequate and timely notice to your firm or partners before you contact clients is a violation of the duty of loyalty owed by a lawyer to his or her firm based on their contractual or agency relationship.  It may also constitute conduct involving dishonesty, fraud, deceit, or misrepresentation in violation of Oregon RPC 8.4(a)(3).

Although there is no explicit rule requiring lawyers to be candid and fair with their partners or employers, such an obligation is implicit in the prohibition…against dishonesty, fraud, deceit, or misrepresentation. Moreover, such conduct is a violation of the duty of loyalty owed by a lawyer to his or her firm based on their contractual or agency relationship.” In re Complaint as to the Conduct of Murdock, 328 OR 18, 25 (1998), citing, In re Smith, 315 Or 260, 266 (1992). See also OSB Formal Op No 2005-70; ABA Formal Op No 99-414.

Assessing your client caseload

Undoubtedly there are clients you would like to take with you, but there may also be clients you prefer to leave behind.  Draft a client notification letter informing clients of your departure.  Schedule a meeting with your supervising partner or other appropriate member(s) of the firm.  Bring a printout of your current cases and your draft client letter.  This meeting must occur before you contact any clients.  [Note: more than one notification letter will be necessary if you intend to keep some clients and leave others behind.]

For clients transitioning to your new firm

Make arrangements to obtain trust funds, copy paper and digital records, and sign new fee agreements.  Checklists documenting the steps to take when leaving a firm are available from the OSB Professional Liability Fund.

For clients you are leaving behind

Properly document client files by preparing memos describing the status of each case and any upcoming deadlines.  If you are attorney of record, withdraw or confirm that a substitution of counsel has been filed where necessary.  Otherwise, you remain on the hook.  Check out the resources available from the OSB Professional Liability Fund describing a lawyer’s duties upon withdrawal and termination of representation.  If in doubt, contact the OSB General Counsel’s office or consult with outside counsel.

Transition don’ts

  • Misleading clients about their right to choose counsel
  • Contacting clients before speaking to your firm about your departure
  • Taking client files without the knowledge or consent of the firm
  • Taking client money without the knowledge or consent of the firm
  • Taking firm property, including forms, research, or other materials, without the consent of the firm

Transition Dos

  • Put clients first.  Whether you are making a lateral move to another firm or setting up your own practice, remember that the client’s freedom of choice in selection of counsel is paramount.
  • Keep the transition as amicable, professional, and stress-free as possible. Contentious withdrawals alienate clients and damage relationships.
  • Remember to take a list of clients with you so you can screen for conflicts at your new firm.

Handled properly, your departure should be smooth and uneventful.

 

All Rights Reserved 2017 Beverly Michaelis

 

Should You Take a Cue from Uber?

Getting your “side hustle” on is Uber’s way of suggesting that you join their team to earn extra money. Lawyers sometimes face this dilemma when first transitioning into private practice – giving up a regular paycheck is a high price to pay in exchange for the uncertainty of going solo.

For other lawyers, the practice of law is a second career.  Does this mean they are required to relinquish their first?

Not necessarily.  However, practicing on the side or in addition to another career, does raise some red flags.

Conflicts of Interest

Assuming your employer agrees to let you “moonlight” (and that’s a big assumption), you must address potential conflicts.  At first blush, you might think this concern applies only to lawyers who currently work in a law firm and wish to “work on the side” in a solo practice.  Not true!  If your other job is working as a real estate broker, mortgage broker, financial planner, psychologist, mediator, arbitrator, etc., you must also screen for conflicts.

In her article, Multidisciplinary practice: When Wearing Two Hats May Get You Burned  Helen Hierschbiel points out:

Recognizing and avoiding conflicts of interest is one of the more common concerns for lawyers who have side businesses, particularly when their clients do business with those other companies. Oregon RPC 1.7(a)(2) provides that a current conflict of interest exists if “there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer…” Thus, when there is a significant risk that a lawyer’s personal or other financial interests in a non-legal business will materially limit the lawyer’s responsibilities to a client, that lawyer has a conflict under RPC 1.7(a)(2).

In addition, when a lawyer’s side business is doing business with the lawyer’s client, consideration must be given to the limitations set forth in RPC 1.8(a), which provides more stringent requirements for obtaining client consent than those under RPC 1.7(b). RPC 1.8(a) provides:

A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:

1. The transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;

2. The client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and

3. The client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.

Note:  Learn more about this issue and other common conflict traps by attending Limiting Exposure to Conflicts on October 25, 2017.

Other Ethical Concerns

A “side practice” coupled with another job also raises potential concerns about advertising, solicitation, and fee sharing.  Here are Helen’s comments:

Advertising
“Oregon RPC 7.1 generally provides that any communication about a lawyer may not be false or misleading. Determining whether a statement is false may be simple, but assessing whether it is misleading can be more difficult. The cautious approach in making that assessment requires considering how the statement is likely to be interpreted by an unsophisticated consumer. Thus, OSB Formal Op 2005-108 concludes that a lawyer who has an active mediation practice may advertise the practice under “counselors — marriage, family, child and individual” sections of the yellow pages as long as the advertisement reflects the lawyer’s status as a lawyer offering mediation services.”

Solicitation
“Lawyers should also take care to observe the ban on in-person solicitation of legal business when providing non-legal services. The non-legal business may not be used to solicit clients with legal needs in a manner that violates RPC 7.3… (L)awyers would be wise to exercise extra caution when confronted in their non-legal business with an individual who has legal needs as well.”

Fee Sharing
“… (L)awyers should be mindful when setting up an ancillary business, not to allow non-lawyers any control or influence over their law practice.”

Employment Law and Liability Implications

Before you set up a side practice, check your employer’s policy and personnel manuals.  Some employers prohibit moonlighting altogether, others require preapproval of “outside employment activities.”  If you are a contract lawyer and a true independent contractor you should be completely free to have your own solo practice and perform contract work for other lawyers.  Be sure the principal lawyers who hire you agree.  Contact the OSB Professional Liability Fund for more information on setting up a contract practice.

Query:  If a lawyer commits malpractice in the course and scope of his or her “side practice,” could the lawyer’s primary law firm employer be held vicariously liable?  (Food for thought…. as clients have attempted to hold firms responsible for the negligence of “sole practitioners” who were leasing space in the firm’s office suite.)

Professional Liability Coverage

Lawyers engaged in the private practice of law in the State of Oregon are required to carry professional liability coverage through the Oregon State Bar Professional Liability Fund.  This requirement applies equally to full-time and part-time practitioners.  In other words, if you are a lawyer in private practice in Oregon (as defined in the PLF plan), it does not matter whether you provide legal services 50 hours per week or 10 hours per week – coverage is required in either case – and the cost of coverage does not vary based on the hours worked.  With that said, liability coverage in Oregon is complex.  Your best bet is to contact the Professional Liability Fund for more information.

Is it Worth it?

It may not be.  If you are not an active member of the Oregon State Bar, it will be necessary to pay bar dues.  If you intend to engage in the private practice of law and require professional liability coverage, the cost is currently $3500 per year (assuming coverage is not prorated and no discounts apply).

To assess whether a “side practice” makes sense, go through all the steps you would normally follow to set up a full-time law practice.  This includes forming an entity (or not), naming your business, choosing a space option, developing a business plan and budget, opening appropriate bank accounts, consulting with a CPA, creating (and implementing) a marketing plan, and establishing office systems.  If it sounds like your proposed “side practice” is getting more complicated by the minute, it is.  Don’t assume setting up a “side practice” is any less work than committing to the full-time private practice of law.

All Rights Reserved 2017 Beverly Michaelis
Eventbrite - Limiting Exposure to Conflicts

Negative Online Reviews

We all know that negative online reviews can be hurtful and maddening.  Last month I highlighted suggestions from the July Oregon State Bar Bulletin article by Linn Davis, with a few additions of my own.  Because I know this topic strikes a nerve, I wanted to share some further advice from our friends at NW Sidebar.

  • A reasonable and measured response is key. Blasting people who give you a negative review is not a good business model. You can try contacting the review site and asking for the review’s removal if you can prove the review is false, defamatory or written by a competitor. This, however, may not be successful, especially if the review is anonymous. See Thomson v. Jane Doe, 189 Wn. App. 45, 356 P.3d 727 (2015) , when the court refused to force disclosure of an anonymous online reviewer’s identity.
  • You can respond directly to the review on the site. Be courteous and explain that due to your duty of confidentiality, you can’t address the facts of the complaint, but that you do not believe it presents a fair and accurate portrayal of the events. Make clear that you are always available to meet with former clients and address any concerns they may have.
  • If possible, try to contact the reviewer directly and seek to ameliorate the situation or explain to them further why the representation unfolded as it did. If this is successful, don’t hesitate to ask for an updated review.
  • Try to avoid further negative reviews by soliciting client feedback directly as the representation continues and in exit interviews. Try to give your clients every opportunity to air their grievances with you and your firm directly so they don’t have the need to vent in public.
  • Lastly, the best antidote to a negative review is positive reviews. Keep your profile updated and facilitate the opportunity for your other clients to post their own satisfied reviews.

via Responding to Negative Online Reviews — NWSidebar

As I’ve said before, I am not a fan of engaging with the reviewer/client online.  However, the idea of soliciting client feedback during and after the course of representation is stellar.  As Sandra Schilling notes, this is about giving your clients the opportunity to vent so they don’t feel the need to blast you online.  I would add: it may also be preemptive. While there will always be clients who are perpetually unhappy, most people are reasonable.  If you learn about a client’s dissatisfaction early, you can intervene and repair the relationship.  The unappealing alternative is to allow the client’s bad feelings to fester – never a good solution.

All Rights Reserved 2017 Beverly Michaelis