Don’t Be That Attorney – What Part of “Without Cause” Don’t You Understand?
Forgive me if I periodically vent here, but I’ll use my diatribes to illustrate important points.
One of my fundamental points is that the practice of law is far more enjoyable if you are on the right side of a case. You can feel great about what you are doing, knowing that you are on the side of justice. You get to fight the good fight with your super hero cape blowing in the wind, while the other attorney knows that his or her only function is to obstruct justice.
Don’t be that attorney.
A case of mine provides an example. My client was a skilled professional who was hired by a company pursuant to an employment agreement. The agreement provided that our client could only be terminated for cause, and if our client was terminated without cause, he would receive a year’s wages as severance. The company breached the agreement by terminating our client without cause and failing to pay the severance. We sued for breach of contract.
Upon receipt of the complaint, the attorney for the company called with the usual posturing, saying that he would bring a string of witnesses to testify that my client had been a terrible employee who couldn’t walk and calculate fractals at the same time. I knew better, so I called his bluff. If the facts were so clear, I suggested we both save our clients a lot of money and use one of our jurisdiction’s expedited programs. We have a program that most attorneys are not even aware of, whereby an entire case can be submitted on declarations and decided very quickly. If that’s too scary, there is an expedited jury trial method where both sides get three hours to put on their case and six or so jurors decide the matter, with no right of appeal.
The only issue in this case should have been whether or not there was cause to fire my client. If defense counsel was so confident that he could show cause, then let’s do it. You put on your evidence, we’ll put on ours, and the judge or jury can decide. Come on, defense counsel. As Dirty Harry would say, “You’ve got to ask yourself one question. ‘Do I feel lucky?’ Well do ya, punk?”
Apparently the answer was no. Defense counsel declined my offer and instead filed a demurrer, based on “uncertainty”. Really? Uncertainty? The complaint alleged very clearly that my client was terminated without cause, and that the company was therefore required to pay the year’s wages.
“But whatever could that mean?”, asked the demurrer. Instead of just answering the complaint, the company paid probably thousands of dollars in legal fees to argue that it could not possibly determine the basis of the claim from the wording of the complaint. Defense counsel claimed we should have alleged additional facts regarding how the termination was without cause.
How can one provide more detail about how a termination was without cause? That’s like alleging that Diet Coke is sugar free, and the other side asking for more details about how it is free from sugar. Maybe if we had used stronger words? “Plaintiff was absolutely, positively fired without cause.” Or perhaps, “Plaintiff was really, really, really fired without cause, and that’s no lie.”
I wish I could credit my brilliant oral advocacy, but in overruling the demurrer, the court would not even allow oral argument. The court said the complaint was fine and ordered the defendant to answer. And so the case went, with the company paying tens of thousands to its attorney until it ultimately settled for the full amount owed.
What did that defense accomplish? Can defense counsel feel good about the time he spent on that case? I’m probably just naïve, but I believe that has to take a psychological toll. What is the distinction between a con artist that tries to cheat someone out of their money, and an attorney who tries to do the same thing by way of litigation?
Don’t be that attorney.
All Clients Will Shop On Price if That is the Only Distinguishing Factor
I’m not here to spread doom and gloom about the legal job market, but these articles keep catching my eye. The latest if from the TaxProf Blog, where Paul Caron reported on a service he described as the eBay for lawyers, with the terrible name Shpoonkle. The Shpoonkle service allows clients to post their legal problems, and member attorneys bid on the work.
The site was started by a law student concerned about his $140,000 in student loans and the poor job market. Apparently his concerns are well founded. Caron cites the Association for Legal Career Professionals, which reports that only 64% of law graduates in 2010 had full-time jobs that required a J.D.
What I found interesting was the very negative response to the service from another blogger, Scott Greenfield on Simple Justice. He suggests that “[a]ny lawyer who signs up for this service should be immediately disbarred, then tarred and feathered, then publicly humiliated.”
Why so? Although Shpoonkle might make the process a little more structured, this bidding war among attorneys has been going on since advertising was legalized. Mill practices like simple Chapter 7 bankruptcies, uncontested divorces and traffic ticket defenses have competed on price for decades, and that is as it should be. Any system that discourages competition and forces an artificially inflated price should be rejected. Providing affordable legal services is something we should all strive for.
Even more sophisticated matters are being shopped around by clients. Recently a prospective client called to say he was retaining me after consulting with seven other attorneys. He confided that I was on the high end of prices he had been quoted, but that he had been impressed by my even-tempered approach, while all the other attorneys had wanted to go to war. But that’s really just another way of saying that he thought I’d be less expensive in the long run.
The takeaway here is to know that clients will always shop on price if that is the only distinction among attorneys, and it is your job to make it about something else. When a client balks at my proposed fee agreement because two other attorneys quoted lower hourly rates and deposits, I explain that is a false savings if those attorneys take twice as many hours to perform the work. If I know they are going to continue shopping or are considering another attorney, I provide them with a verbal shopping list.
“I’d be happy to represent you, but please go with the attorney who gives you the greatest comfort level. Let me give you a couple of things to look for. Most attorneys will probably tell you that you can’t recover your attorney fees in this type of case. I have found two techniques that make it possible, although certainly do not guarantee, that you will recover your attorney fees. Be sure to ask whichever attorney you choose if they have a means to try to recover your fees, and if they don’t, have him or her give me a call so I can walk them through the process. Also, it’s always the hope that a case can be resolved without the time and expense of going to trial, but you want someone who is comfortable in a courtroom in case that becomes necessary. I’ve taken more than a dozen of these cases to trial. There is a real trick to getting the proper jury instruction on the elements, so be sure your attorney has gone thorough the process a few times.”
This speech is completely honest and provides a great service. I have successfully obtained attorney fees for my clients using a method that is so cutting edge that it is not in any reported decision. The second technique simply involves the use of Requests for Admissions, which many attorneys don’t understand provides for the award of attorney fees or simply never use them properly to set up such an award at the conclusion of the case. It does concern me that the client may be penny wise and pound foolish and go with another attorney who won’t know or apply these techniques to get the client their attorney fees. A client could nonetheless hire the less expensive attorney and take me up on my offer to educate him, but that has never happened. Understandably this generous offer to educate their attorney leaves the client thinking, “why would I hire an attorney who has to call another attorney to figure out how to handle my case?”
Back to Shpoonkle. It should not be assumed that an attorney who competes on price and bids for work is anything other than a fine attorney. (Don’t most attorneys representing insurers bid for the work, agreeing to take a greatly reduced hourly fee?) He or she may just be new and looking for some experience, and/or feel good about providing services to those who fall between the cracks; too much money for Legal Aid and too little money for most attorneys. I don’t know any attorney who does not provide pro bono service, voluntarily or otherwise, but it is unreasonable to assume that it is enough to cover all people in need.
P.S. Thanks to Scott Greenfield for finding and posting this great video:
Posted in Income, Wages, Your Own Law Firm | 
Tags: Aaron Morris, Shpoonkle, Your Own Law Firm | 
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Student Debt? What Student Debt?
With the downturn in the economy and the upturn in law school tuition, the perfect storm was created for a bumper crop of extremely dissatisfied law school grads, saddled with debt and finding only poor job prospects. On my Internet Defamation Blog, I wrote about the law student from Thomas M. Cooley Law School who was not happy with that institution, and started a blog called Thomas M. Cooley Law School Scam, telling tales of wrongdoing. (The school is not happy and is attempting to sue the student for defamation.) Like many newly minted lawyers, he feels the law school lied about the employment opportunities he would find after graduation. (Resentment toward your school after running up big debt and not being able to do anything with the degree is not limited to law school. Read the insightful article, How a Dog Walker Paid off a 37K Student Loan in 6 Years, about the author’s “naïve mistake of getting an MFA in creative writing . . . .”)
Today I came across another posting on the topic, although far less vitriolic, on the Above the Law blog, which was in turn reporting on an article in the National Law Journal by Jim Chen. Chen, Dean of the Louisville School of Law, has come up with a formula for determining whether law school was a wise investment. Chen uses qualification for a home loan while paying off student debt as his criteria for “financial viability”. He suggests that your starting salary at your first position after law school should be no less than three times your annual law school tuition if you want “adequate financial viability”. If you want to achieve a “good” level of financial viability, then you need to land a job paying six times the annual tuition. If your job only pays twice your annual tuition, then you have only “marginal” financial viability, according to Chen. All of these calculations are based only on your law school debt; if you have undergraduate debt, then you need to adjust accordingly.
I can only chuckle when I read articles such as this, because they are based on what I consider to be false assumptions. Far too many students base their career aspirations on the Big Firm model – attend an impressive and expensive law school in order to get a job at a big firm that will pay a high enough salary to pay off the staggering debt incurred in pursuing that route. (Although to his credit, Chen recognizes that financial viability can be achieved with a lower paying job if the tuition is kept low — what a concept!) Here are the fallacies to that Big Firm mentality:
You don’t need (or want) to work at a big firm. I went the big firm route, and hated every minute of it. After six months I was already putting together my escape plan, which was to start my own firm. But assume for a minute that you would be happy working as a drone at a big firm with a starting salary of $180,000. (Be sure to read my article Fun With Numbers to understand how that works out to about $37.14 per hour.) The big firms employ only a tiny fraction of all working attorneys. For the rest of the working attorneys, the average salary for first year associates is $68,500. Don’t assume that you will land at a big firm, but even if that is your plan . . .
You don’t need to go to an expensive law school to land a job at a big firm. There are many impressive schools that won’t leave you with $250,000 in student loans (the figure that everyone is using to argue why law schools are a scam). And don’t get caught up in the ivy league mentality. I imagine there are some career paths that benefit from an ivy league education. It seems to be pretty important if you hope to be POTUS, and some firms only hire from those schools. But if your goal is to practice law, big firm or not, then distinguishing yourself at your school is far more important than being just another student at an expensive school. My main criteria for choosing a law school was that it had to be relatively close to a beach, and yet I ended up at the biggest law firm in the world. And finally . . .
You don’t need to pay for law school. My law partner and I both followed the same law school model. We got into a law school that met our criteria (for me, close to a beach, for her, close to home, work and family), worked our butts off to excel the first year, and then enjoyed a full ride scholarship. I was third in my class after the first semester. Of the top five, two eschewed the scholarships and instead used their success to transfer to ”better” schools. They graduated with large student debts, while the three of us that stayed graduated with virtually none. We all went to big firms, and ultimately we all ended up quitting those firms to start our own or to go in-house. In other words, we all ended up in about the same place, the only difference being the cost of getting there. Of course, an even better technique is do really well in your undergraduate studies and start law school with a scholarship.
Maybe the grousing students and graduates were mislead by their schools with overly optomistic employment figures, but I think that the problem first arose from misleading themselves into thinking that a successful law career follows a defined path and requires big debt.
[Update] I was on a news website, and I happened to notice an ad for Ottawa University. The school’s trademarked slogan is “Prepare for a Life of Significance.”
Note to Ottawa University. With all the lawsuits against law schools for making false representations about job opportunities, you may want to rethink that slogan. It’s only a matter of time until one of your graduates realizes his life is not significant and comes after you.
Posted in Business, Education, Starting Your Own Firm | Tags: Law School. Starting Your Own Firm | No Comments »
Thank God I was only offboarded!
It has long been the case that law firms never admit to terminating lawyers for financial reasons. Many big companies, the lifeblood of large law firms, want to feel like they have a big, bad law firm working for them. If a firm doesn’t have enough business to keep its lawyers busy, that must mean companies have taken their work to other firms that are bigger and badder. At the first sign of contraction at a law firm, companies may take their business elsewhere.
To avoid this perception, law firms will go to great lengths to characterize terminations as anything other than a reduction in force. Most often they will kick an entire group of attorneys to the curb, claiming they were terminated for poor work performance. The efforts are sometimes so successful that even the remaining attorneys don’t know the truth. I once spoke to an attorney at a firm that had axed over 40 attorneys, and he was absolutely convinced that they were all terminated for work performance.
But this approach is not limited to law firms. With half a million terminations just last month, U.S. companies are becoming very creative with their euphemisms for terminations. For some time, “downsizing” has been replaced by “rightsizing.” The latter gives the impression that the company isn’t contracting, only correcting. In a November press release, Nokia fired 9,000 employees, and referred to it as a “synergy-related headcount adjustment goal.” I’m sure the fired employees feel much better about that.
In October, eBay didn’t fire 1,600; instead it took “actions to simplify our organization.” Many companies use the terms “offboarding” and “reduction in force.” The latter term has been reduced to an acronym, as in, “What’s the RIF going to be this month?”
My personal favorite for job cuts is “surplusing”. The implication is that you are taking a paid employee, and holding him in reserve as an unpaid commodity. When things turn around, you can take him down off the shelf and put him back to work. Also good is “de-verticalization”. I’m not sure what that means, but that’s the point.
Control your own destiny. Work for yourself lest you be offboarded.
Posted in Self-Employment | Tags: downsizing, headcount adjustment, offboarded, rightsizing, surplusing | No Comments »
