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

Market Research for the Legal Industry

Last week’s guest post examined profitability of lawyer marketing ventures by using a cost-per-case analysis:

Total dollars spent
÷
New clients signed on because of the marketing effort

Another piece of the puzzle is understanding what market research tells us about our potential clientele. But where can we find this information?  Data about demographics, employment, supply, and demand can hard to find – especially in one convenient location.  But thanks to the hard work of Annette Shelton-Tiderman we have a resource!

In her post, Problem Solvers: Offices of Oregon Lawyers, Annette reports on the following topics:

  • Offices of Lawyers Reflect Oregon’s Diverse Population and Geography
  • Supply and Demand: Employment Reflects Changes in the Economy
  • Marshalling Problem-Solving Resources
  • Projected Demand Shows Change and Overall Growth

She includes interesting infographics on the statewide marketplace for legal services, employment growth rates, employment projections, and breakdowns on areas of practice.  Because the report relies in part on the bar’s 2012 Economic Survey, the data is a bit aged, but still helpful.

I first shared this resource three years ago.  Unfortunately, it was relocated on the Employment Department website.  It took some time to dig back up again, thus the repost.  If you’re looking for other ideas on market and economic analysis, read on.

More Resources for Market and Economic Analysis

Lawyer billing practices

Lawyer Demographics – County, Population, Age Group, and Trends

  • OSB 2012 Economic Survey – the main survey includes data on the future plans of survey participants (leaving the practice of law or retiring).  The Addendum has additional demographic data.
  • Learning the Ropes 2016 Program Materials from the Professional Liability Fund.  Locate page 264, “PLF Covered Lawyers — by County, Population and Age Group.”  From the PLF home page, Select CLE > Past CLE and find “Learning the Ropes 2016” in the alphabetical list of Programs.  Click the program link.  On the description page, locate QUICK LINKS (top right of screen).  Select the PROGRAM MATERIALS link.
  • Are you a member of the OSB Lawyer Referral Service (LRS)?  They gather data on supply and demand for all their programs.

Market Research Databases

Economic Forecasting

Occupational data and job listings (including Lawyers)

  • The State of Oregon provides data and occupation profiles on all occupations, including lawyers and legal staff, at this link.   You can also display statewide job listings. Alternatively, start at this location, then select the “Wage Data Tool” in second column under Workforce.  To give you a better idea of how this tool works, here is a snapshot from a recent search:

wage20tool

As you can see, it is possible to print a full report, custom report, or summary.  If you want to find career pathways, wage range data, or occupations with similar skills just be sure the appropriate boxes are checked.

Postscript

The Oregon Employment Department’s Web site is a helpful resource for businesses researching economic data, business indicators, and other information. There are 13 workforce analysts spread across the state who are responsible for assisting businesses with needed labor market information. This can include the demographics of a neighborhood – very helpful when a business is looking to relocate or expand. The Employment Department also tracks education levels, income, population data, and maintains a database for occupational and wage-related information that is easily accessed via its website. Services provided by workforce analysts are paid for by business taxes.  There is no additional cost to access their expertise.

All Rights Reserved Beverly Michaelis 2017

Employment Practices for Lawyers – Avoiding Trouble at Termination

Last week I shared the top tweets for hiring staff from our May 28, 2015 seminar, Employment Practices for Lawyers. This week we turn to avoiding trouble at termination.  Here are just a few of the tips our speaker shared.  All the tweets from the CLE can be viewed on Storify.

disability

absenteeismflsa

Read all the tweets here. Oregon lawyers may order the CLE free of charge on the PLF website, http://www.osbplf.org.  Select CLE > Past, then Employment Practices for Lawyers: Hiring with Confidence and Avoiding Trouble at Termination.

All Rights Reserved [2015] Beverly Michaelis

Employment Practices for Lawyers – Hiring with Confidence

Hiring staff can be an intimidating process – whether you are a new or seasoned employer.  Avoid the pitfalls by reading the top tweets cultivated on Storify from our
May 28, 2015 CLE, Employment Practices for Lawyers: Hiring with Confidence and Avoiding Trouble at Termination.  Here are few representative tweets from the presentation:

2015-05-28_20-07-022015-05-28_20-07-112015-05-28_20-07-35

Read all the tweets here.  Oregon lawyers may order the CLE free of charge on the PLF website, http://www.osbplf.org.  Select CLE > Past, then Employment Practices for Lawyers: Hiring with Confidence and Avoiding Trouble at Termination.

All Rights Reserved [2015] Beverly Michaelis

The State of Oregon’s Legal Industry

Where can we learn about the state of Oregon’s legal industry?  Data about demographics, employment, supply, and demand can hard to find – especially in one convenient location.  Now a new resource is available, thanks to the hard work of Annette Shelton-Tiderman.

In her post, Problem Solvers: Offices of Oregon Lawyers, Annette reports on the following topics:

  • Offices of Lawyers Reflect Oregon’s Diverse Population and Geography
  • Supply and Demand: Employment Reflects Changes in the Economy
  • Marshalling Problem-Solving Resources
  • Projected Demand Shows Change and Overall Growth

She includes interesting infographics on the statewide marketplace for legal services, employment growth rates, employment projections, and breakdowns on areas of practice.  An interesting read and informative resource. Thank you Annette!

Postscript

The Oregon Employment Department’s Web site is a helpful resource for businesses researching economic data, business indicators, and other information. There are 13 workforce analysts spread across the state who are responsible for assisting businesses with needed labor market information. This can include the demographics of a neighborhood – very helpful when a business is looking to relocate or expand. The Employment Department also tracks education levels, income, population data, and maintains a database for occupational and wage-related information that is easily accessed via its Web site.  Services provided by workforce analysts are paid for by business taxes.  There is no additional cost to access their expertise.