Like most workplaces, law firms faced an unprecedented situation in 2020 that has continued into 2021. First, they had to implement a system for …Back to the Office After COVID-19: How are Law Firms Preparing for It?
From our friends at NW Sidebar, seven steps you should take now to get your 2020 financials organized:
It’s that time again! Not just for holidays and eggnog, but also taxes, 1099s, and other year-end financial must-dos. And after the year we’ve had – what with PPP loans and unplanned expenses – the process will be more complicated than ever. If we set aside just a few minutes to organize our year-end now, we’ll find ourselves much less stressed when the new year and tax deadlines roll around. This practical, step-by-step guide will set you and your firm up for a year-end win and success in 2021.A Step-by-Step Guide to Year-End Bookkeeping for Law Firms
Starting today through December 31 get 50% off all CLEs by entering the code SAVE50 at checkout! Visit Oregon Law Practice Management On Demand CLE and choose from any of these programs:
Oregon-Specific Ethics Credits
General Ethics Credits
- Ethical Guidelines for Client Files
- Fee Agreements – Ethical Dos and Don’ts
- Effective Conflict Systems
Practical Skills/General Credits
- 7 Steps to Building Better Client Relationships
- Best Practices for Client Intake, Engagement, and Workflow
- Best Practices for Docketing, Conflicts, Disengagement, and File Retention
- eCourt Malpractice Traps
- Getting Paid
- Oregon eService
- Technology Tips for the Busy Legal Professional
Personal Management Assistance Credits
Use the SAVE50 discount
Browse the CLEs, select your programs, then click the shopping cart icon at the top right of your screen. Choose Checkout, enter SAVE50 in the discount field, and click Apply.
Instant digital delivery with options to save to the cloud or your mobile device
Links to digital files are delivered instantly at checkout with your purchase confirmation email. Download, stream, save to Dropbox, or send files to your mobile device or desktop computer.
Add credits now to your MCLE transcript
After you screen a program, you can add it immediately to your online Oregon State Bar MCLE transcript record. Download the instructions here.
Your on demand CLE purchase includes
- MP4 download (combined audio and video file)
- M4a download (audio only)
- Written program materials, including presentation slides and resources
- Answers to polling questions asked during the live CLE
- MCLE information
Secure payment processing
All transactions are handled by Selz and protected with encryption. Selz is SSL secure and PCI compliant. Visa, MasterCard, American Express, and Discover accepted. Click here to buy CLEs and save money!
With law firm revenues taking a hit from COVID-19, effective billing and collection procedures have never been more important. Follow the best practices outlined below to minimize hiccups.
- Review pre-bills carefully. Misspelled names and billing errors are irksome to clients.
- Correct any mistakes that slip by quickly and accurately – the first time.
- Issue statements before clients receive their paychecks – before the 15th and again at month end. If you serve corporate clients, send bills in a manner and format that works for the accounts payable department. When cash flow is challenging – for you or your client – weekly billing may be an option.
- Always include a due date on statements. Most clients prioritize payment based on due date.
- Offer incentives. In lieu of late fees or interest, offer clients a discount if payment is received within 10 days of the billing date.
- Give clients the 411. Your bill should tell a story – the who, what, and why of the work performed.
- Stick to your agreed upon billing interval. Monthly, quarterly, weekly – whatever it may be. Inconsistent billings disrupt firm cash flow, infuriate clients, and make collection more difficult.
- Be flexible in how you accept payment – Venmo, Zelle, PayPal, ApplePay, credit card. Absorbing processing fees may not be fun but it’s better than not getting paid.
Head off problems
- Always take the time to discuss fees, costs, and billing procedures. Most nonpaying clients who file retaliation suits or malpractice counterclaims do so because they never understood what the lawyer’s services would cost.
- Never leave home without a written fee agreement. Be specific and complete. Your agreement should: (a) specify the scope and timing of services; (b) describe what the client is expected to pay for and when; (c) explain billing practices; (d) identify what will occur if payment is not timely made. Losing a potential client who refuses to negotiate and agree to a comprehensive fee and engagement agreement is a small price to pay compared to defending yourself in a malpractice claim or disciplinary proceeding.
- Consider alternative fee arrangements – flat fees, fixed fees, unbundled fees, evergreen retainers, or “last month’s rent.” Clients cooperate more fully when they are financially invested in their case. If the client is unwilling to commit financially, the matter quickly becomes your problem rather than the client’s.
- Don’t allow outstanding fees to accumulate during the course of representation. As soon as a payment is missed, call the client. Get to the root of the nonpayment. Is the client dissatisfied? If a client becomes seriously delinquent, terminate the attorney-client relationship and withdraw from representation if possible.
- Offer to resolve disputes through the Oregon State Bar’s Fee Dispute Resolution Program.
Before you sue
Ask yourself these questions:
- Will a judgment be collectible if obtained?
- Do you stand to gain or lose a substantial amount of money?
- Are there any grounds upon which the client can credibly dispute the debt or any part of it?
- Have you really listened to your client’s side of the dispute?
- Was a good result obtained in the underlying case?
- Has an uninvolved, experienced lawyer reviewed the file for possible malpractice?
- Will a law suit result in bad publicity reflecting negatively on you or your law firm?
- Have you offered to arbitrate, compromise or meet the client part way on the amount due?
Most collection problems can be averted at the outset of representation. A frank discussion of fees, finances, and billing procedures will greatly reduce the possibility of disputes.
All Rights Reserved 2020 Beverly Michaelis
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:
“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.”
“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.”
“… (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.