Tag Archives: law firm

COVID and Law Firms

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Consider these headlines from the ABA Journal:

May 2020 – Law firm revenue takes nosedive during COVID-19, new survey data shows

  • Roughly 81% of law firms have seen their revenues drop during the COVID-19 pandemic
  • 27% of firms experiencing loss of revenues saw business decline by more than half
  • Nearly 20% of firms have been forced to shrink their staffs
  • More than 60% said they believe it will take from four months to a year for their firms to revert back to their financial positions before COVID-19

June 2020 – Top law firms fared surprisingly well during COVID-19 pandemic, survey says

  • Demand for the first five months of the year was down only 1.4%
  • Cash collections were up more than 3% through May
  • Expenses were essentially flat as law firms reduced discretionary spending
  • 54% of the law firms reported increases in client requests for discounts in May, compared to the previous month
  • 52% reported more requests for extensions the same month
  • Lawyer layoffs have been modest
  • Layoffs of nonlegal staff members have been concentrated in jobs that don’t lend themselves to remote work
  • Transactional practices, such as corporate and real estate, were most affected by the slowdown
  • Practices have been active in bankruptcy, banking, labor, and employment
  • Liquidity is good, with almost 90% of law firms having the ability to cover at least three months of monthly expenses, excluding partner draws
  • More than 50% of the surveyed law firms cut or delayed partner contributions, which gave them more cash on hand

So… which is it?

Good question! There’s a difference between a nosedive and faring surprisingly well, although the devil is in the details.

The top law firm data is based on a survey of 52 of the nation’s top 100 grossing law firms and 20 midsized and regional law firms. Such a list would include very few, if any, offices with a presence in Oregon.

Additionally, the data was gathered four to five months ago. Measured in COVID time, which eerily resembles dog years, the survey feels outdated. Notice too that the firms judged to be “doing well” nonetheless laid off staff and reduced spending. Half received requests from clients asking for discounts and extensions, which were no doubt granted.

Either way we know our truth. Oregon is a state largely comprised of small firms and solo practitioners – lawyers who make a living but aren’t among the nation’s top money-wise.

So as we work to restore our livelihoods and practices, what should we keep in mind?

Five thoughts to keep in your head

  • We can and will bounce back.
  • Continue following COVID guidelines and don’t let your guard down. Staying healthy ensures that your practice remains open.
  • Deal in facts. Know the economic indicators for your firm.
  • If you have been neglecting marketing, you absolutely, positively must get going.
  • Make a plan and take action. Now might be the time to consider other practice areas.

What to do next

Work on your mental mindset

You are more resilient than you think.

Consider the tough times you’ve lived through. Losing someone you loved, struggling over student loan debt, or ending a relationship. It felt bad at the time, and I am not minimizing how bad. However, you did survive. You are here. You moved forward.

Furthermore, I am willing to wager that you had help. Someone supported you. Said something or did something that made you feel better. Reach out to those people today. Reach out to the attorney counselors at the OAAP for free, confidential assistance.

Your physical health

If you don’t take care of yourself, you won’t be able to help others.

You know what to do to stay physically healthy, so you won’t see it repeated here. Mental health is another matter. If you are struggling, pick up the phone and call the OAAP. They can help.

Just the facts mam

What are your outstanding accounts receivable? How many clients are 60 or more days overdue? When did you last compare your actual income and expenses against budgeted projections? Do you have a budget?

Financial management may not be fun, but we have to deal in reality. You can’t guess who owes you what or how much, you’ve got to know. Start now.

Begin by adjusting or creating a budget for the remainder of 2020. Yes, I know we only have four months remaining in the current year, so this is a task you could easily procrastinate about. Don’t do it. Face the numbers now while time remains to make a plan and take action.

On the expense side, ask for no-penalty extensions, negotiate new rates, request discounts, and get tough on discretionary spending. You may need to collect retainers for litigation expenses you previously fronted.

On the income side, get on top of overdue accounts. I’ve said it before: the most effective thing you can do is pick up the phone and talk to your clients. Screw up your courage and do it. Accepting monthly payments or a discounted amount due is better than no money at all. Offer contactless payment through your website or Square account, accept Zelle or Venmo. Be flexible. Find out what works best for clients.

Marketing

I devoted the month of July to marketing tactics centered around the new normal of COVID-19. If you didn’t catch those posts, or need a refresher, access my blog archives from July. From the home page, locate the sidebar on the right portion of your screen. The archives are midway down the page.

Make a plan

You are in control. Make a written list of what you will do differently, starting today and in the future. Be specific and lay out next steps. For example:

  • Read up on COVID and marketing. Identify 5 or more ideas you want to pursue. Set timelines for each and execute your plan.
  • Prepare a budget-to-actual comparison. Identify what you need to adjust, and act accordingly.
  • Review accounts receivable. Decide on a strategy for each overdue client and begin making calls.

Commit by scheduling out each planned activity. Allow adequate time to get tasks done and don’t overcrowd your calendar.

Scheduling isn’t busy work. It protects your intentions to follow through on your plan and increases the likelihood you won’t brush tasks off.

If you really want to ensure success, find an accountability buddy. Another lawyer is nice, but not necessary. Anyone who is willing to partner with you in goal setting will work. The purpose is not to critique, but to incentivize you to follow through because you’re answering to someone other than yourself.

Once you have a buddy, schedule weekly phone appointments. You won’t be sharing confidential client information. This is a “how did you do this week?” type of conversation and it doesn’t have to be a major time suck. If you want the exchange to go a bit deeper, obviously it can. You can ask for feedback and offer suggestions. It’s up to you.

All Rights Reserved 2020 Beverly Michaelis

Proposed COVID-19 OSHA Rules Will Apply to Law Firms

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The Oregon Occupational Safety and Health Administration (OSHA) is proposing a temporary rule that would require all employers to implement risk-reducing COVID measures, including social distancing, barriers, face coverings, cleaning, and information sharing.

The temporary rule has a planned effective date of Monday, September 14 and would eventually become permanent. View the rulemaking timeline here.

Summary of Key Provisions

Key provisions applicable to law firms include:

Six-foot distancing between all individuals in the workplace

  • Both the work activities and the workplace must be designed to eliminate the need for any worker to be within 6-feet of another individual in order to fulfill their duties.
  • To the extent that the employer can demonstrate that such separation is not practical, the employer must ensure that face coverings are worn and that as much distance as practical is maintained.
  • The 6-foot distancing requirement can also be met with an impermeable barrier that creates a “droplet buffer” of at least 6-feet in distance as measured between the mouths of the affected individuals (the droplet buffer is effectively the distance a string would travel if it were held in the mouths of the two individuals – the rule draft provides several examples of such calculations).

Mandatory Face Coverings

Everyone in the workplace or other premises subject to the employer’s control must wear face coverings (masks, cloth coverings, or face shields) whenever the 6-foot distancing requirement cannot be consistently assured.

  • Face coverings must be worn by employees and other individuals whenever customers, contractors, or other visitors are present and a strict separation cannot be maintained through barriers that physically prevent individuals from approaching within 6 feet of one another.
  • Face coverings must be worn by employees when the work requires them to be within 6 feet of one or more individuals for more than 5 minutes either in a singular instance or in all cases when work requires such contact more than 30 minutes total in the course of a single working day.
  • Face coverings must be worn by employees working in office settings when not at their desk or seated in a conference room in addition to whenever 6-foot distancing cannot be reliably maintained between individuals (for example, face coverings must be worn in corridors, restrooms, elevators, and stairwells).

Cleaning of High-Contact Surfaces

All employers must ensure that all high-contact surfaces used by multiple employees (door handles, telephones, computers, drinking fountains, etc.) are thoroughly cleaned at the beginning of each shift.

  • All shared equipment and high-touch surfaces must be cleaned before use by another employee.
  • The employer must ensure that employees have the supplies necessary and are able to use proper hand hygiene before and after using shared equipment or tools and before eating, drinking, applying cosmetics, or smoking.

Social Distancing and Enforcement Officer

Employers with at least 25 employees at any time must designate one or more employees who will be responsible to assist the employer in identifying appropriate social distancing, proper face covering use, and sanitation measures and ensure such policies and procedures are implemented.

Building Owners/Operators

Building operators must ensure that the building layout allows appropriate social distancing and must ensure that the basic requirements of this rule are posted (and enforced to the degree reasonably possible) in any common areas, including shared entrances, waiting rooms, corridors, restrooms, and elevators.

Required OSHA Posting, Information, and Employee Training

Employers must provide information and training to their employees:

  • Employers must post the “COVID-19 Hazards Poster,” which will be provided by Oregon OSHA.
  • Employers must notify their employees about the social distancing requirements and how they will be implemented in the workplace, and employers must provide an opportunity for employee feedback about those practices (through the Social Distancing Officer and through either the Safety Committee, an interactive safety meeting, or both). Such notification must be conducted in a manner and language understood by the affected workers.
  • Employers must provide an explanation of the employer’s policies and procedures for employees to report signs or symptoms of COVID-19. Such explanations must be conducted in a manner and language understood by the affected workers.

Medical Removal of Symptomatic Employees

Employers will also be required to address the medical removal of employees with symptoms, undergoing testing, or otherwise requiring isolation:

  • Employers must provide information about any paid leave to which employees would be entitled by company policy as well as under the Federal Families First Coronavirus Relief Act (FFCRA).
  • Whenever a medical provider or public health official recommends isolation or quarantine, the worker(s) must be reassigned to duties that do not involve in-person contact. Such reassignment must continue until the need no longer exists, based on guidance from the medical provider or involved public health officials.
  • To the degree reassignment is not possible, the employer must allow workers to use leave to which they are entitled under the FFCRA. If the employer is not covered by the FFCRA or has previously opted out of the paid sick leave provisions of the FFCRA, then the employer must provide up to two weeks of paid reassignment leave in addition to whatever benefits to which the worker would otherwise be entitled. (There are two exceptions to this requirement.)
  • Employees who are reassigned for medical removal reasons are entitled to return to their previous job duties without any adverse action as a result of the medical removal.

Public Comments

Oregon OSHA is accepting public comments on the proposal through Monday, September 7. Send comments via email to tech.web@oregon.gov. The full text of the draft rule may be found here. Background documents are available on the rulemaking overview page.

All Rights Reserved 2020 Beverly Michaelis

Do Good Friends Make Good Partners?

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The following is an update of “Thinking about Partnership?”

A potential partnership between lawyers sparks many issues – capitalization; entity formation; allocation of profits, losses, income, and expenses; restrictions on partnership authority; division of management duties; decision-making; withdrawal; and more.

But the most important consideration is often ignored: basic compatibility.

Do good friends make good partners?

Not necessarily. The interests or characteristics that draw two or more people together as friends do not always translate well to the business world.  This includes the practice of law.

Sometimes money gets in the way.  Or you could be polar opposites when it comes to work ethic or work style.

Perhaps you and your potential partner are “two peas in a pod,” sharing the same dislikes. While that may sound like a basis for bonding, it can also be a deadly combination.  The example that comes to mind is accounting.  Billing, recordkeeping, accounting, and reconciling can be outsourced, but should still be supervised.  As partners, the buck stops with you.  If neither of you has an interest in tending to law firm finances, you may quickly find yourself out of business.

How to size up a potential partner

For two lawyers considering a partnership, compatibility can be gauged best by joining forces as solos in an office share.  Each lawyer maintains his or her own practice, following the usual recommendations for an office sharing situation.  See the Professional Liability Fund (PLF) form/practice aid, “Office Sharing Guidelines” available on the PLF Website.  

In an office share you can assess your potential partner’s work ethic, work style, and work habits first hand.  You will also learn how your potential partner approaches division of responsibility and money when the time comes to allocate and pay office share expenses.  You have the option of collaborating on individual cases while maintaining your independence.  This will give you intimate knowledge of your potential partner’s capabilities as a lawyer.

If the office sharing arrangement is successful, and you can come to terms on partnership formation issues, you are likely to have a successful union.  If the office sharing arrangement is not successful, you can accept the experience as a “lesson learned” and terminate the office share without the mess of a formal partnership dissolution.

For those who are convinced they have a winning partnership

Occasionally I meet two lawyers who are absolutely convinced they will form the perfect partnership.  They forge ahead, without the benefit of an office share experience, and later regret their decision.

I don’t wish to dampen anyone’s enthusiasm, and sometimes folks are absolutely right in their assessment.  If you’ve known each other for years, and “just know” it will work please do this simple exercise first:

Schedule a time to get together with your potential partner.  Bring two legal pads and two pens.  Allow ten or fifteen minutes for each person to make a list of the goals he or she has for the partnership.  Each person should be able to answer: what do I hope to get out of this?  How will partnering up be a significant improvement over my current working situation?  Exchange lists.  What you learn may surprise you.

Obviously you can approach this exercise any way you like, but here are my suggested ground rules:

  1. Keep the process as spontaneous as possible. If the exercise is your idea, resist the temptation to work on your list in advance.
  2. Write down the first thoughts that come to mind.  Don’t edit yourself to please your potential partner or you defeat the whole purpose of the exercise.
  3. Keep it succinct.  The next ground rule should help with that.
  4. Stick to the time limit. If one or both of you can’t put your goals down in writing in ten or fifteen minutes, that alone should make you pause.
  5. Be open to whatever the other person has to say.

Why bother?

As a wise man named Lee Rosen once pointed out, “lawyers can be nasty.”  We are, after all, human beings.  If we don’t get along, odds are we will take it out on each other. Finding someone compatible to partner with is incredibly important.  The experience should be positive, rewarding, and gratifying.  Life is too short for anything less.

All Rights Reserved [2017] Beverly Michaelis