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Proposed changes to the Minnesota Rules of Professional Conduct regarding marketing and professional communications call for modest adjustments in existing rules while encouraging effective client relations. by Roy S. Ginsburg and Kenneth F. Kirwin Business development. You keep reading about its importance to your career. You keep hearing about it from other lawyers in your firm and other professional colleagues. So you finally decide to do something about it. Everyone has told you that the key is networking. First stop: your law school alma mater-sponsored cocktail reception. You figure, this shouldn’t be too awkward; chances are pretty good you’ll run into someone you know and, sure enough, you do. That person, whom you haven’t seen in years but was one of your best friends in law school, is now the general counsel of a local medium-sized corporation. Rainmaker at Work You reminisce about old times. The conversation then turns to business. You go on the offensive. You tell your friend that you are a commercial litigator for a reputable firm in town. Your friend’s company has never been a client. You also remember reading in the local press that this company was sued last week in a complex products liability matter, an area where you have considerable experience. So you finally say, “I know your company got sued last week in the products area. I specialize in products liability. I would welcome your business.” Your friend responds, “Send me some stuff about you and your firm. We’re considering a few firms. I’ll get back to you if we’re interested.” You reply, “Thanks. It was great seeing you again.” On your drive home, you can’t believe the apparent good luck you’ve just had in surfacing a great business opportunity. You wonder if networking is always this easy. But then, as you continue to mentally replay the encounter, you begin to second-guess how you handled the situation. Did you come across too aggressively and turn off your friend? You realize that you overtly solicited business and remember that the professional conduct rules generally prohibit soliciting. Did you cross the line? You remember there’s something in the rules about specializing. Did you say the wrong thing? You now sheepishly ask yourself, “Was my marketing effort doomed to fail by my conduct? Did I violate the rules?” Too pushy? Probably, especially when there was no need to be so aggressive. Business development is all about relationships. Here, you were handed a huge opportunity to reestablish your relationship with the general counsel and failed to best take advantage of the situation. Instead of talking shop and soliciting business at the reception over the course of a ten-minute conversation, how about this alternative? Catch up on personal matters during the encounter and suggest a lunch date in the near future. Then, at some point during your lunch, discuss the nature of your practice and probe about the legal needs of your friend’s company. When the recent lawsuit comes up, talk about your successes regarding similar matters. Perhaps even offer to review the pleadings and provide a preliminary analysis at no charge. In short, make it obvious that you are willing and able to handle the litigation. If interested, your friend will ultimately ask you if you want to be considered. If your friend doesn’t bite, be patient; there is probably a good reason. But don’t give up. Maintain the relationship. Now that your friend knows you’re available to do certain types of work, stay in touch; your phone may ring sooner than you think. Solicitation and Ethics Let’s get back to ethics. As was reported in the July Bench & Bar, the MSBA General Assembly recently voted to petition the Minnesota Supreme Court to adopt an amended set of Minnesota Rules of Professional Conduct. This proposed set of rules is based upon the ABA’s newly amended Model Rules of Professional Conduct, with modifications recommended by the MSBA task force that studied the ABA’s new rules. So what about the solicitation? Rule 7.3 of the current Minnesota Rules of Professional Conduct states: A lawyer may not solicit professional employment from a prospective client with whom the lawyer has no family or prior professional relationship, by in-person or telephone contact, when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain. Because the general counsel was neither family nor a client, the rule was violated. However, this result is not really consistent with the purpose of the rule. The comment to the rule notes that in-person solicitation has a “potential for abuse” because it “subjects the lay person to the private importuning of a trained advocate” and is “therefore fraught with the possibility of undue influence, intimidation, and overreaching.” The potential client here is not a layperson; in-house counsel are presumably capable of protecting themselves without the benefit of the rules. Newly proposed Rule 7.3(a) states: A lawyer shall not by in-person or live telephone contact solicit professional employment from a prospective client when a significant motive for the lawyer’s doing so is the lawyer’s pecuniary gain, unless the person contacted: 1. is a lawyer; or 2. has a family, close personal, or prior professional relationship with the lawyer. Thus, under the proposed rule, the solicitation described above is clearly permissible. First, the rule expressly permits solicitation of lawyers. Second, it also allows soliciting a person who has a “close personal” relationship with you. Whether someone you see for the first time in several years but who was one of your best friends in law school has a “close personal” relationship with you is debatable, but here there is no need to debate because you are both lawyers. Remember, though, the solicitation here was probably not the most effective marketing technique in any event. Although the accepted practice in sales is that in order to “close” a deal, one must specifically ask for the business, sometimes the better approach is to simply seek and provide enough information to make it clear to the prospective client that you can and want to do the job. Ask questions and engage in a dialogue that will help the potential client realize the true level of need and the value that your legal services would provide. This softer approach avoids placing the prospective client in the potentially awkward position of having to say no to a direct solicitation. Attorneys sometimes complain that the rules tie their hands in the types of conduct that they would like to do. In this instance, the rule facilitates a sound consultative sales practice. Claiming Specialization What about the “I specialize in products liability” part of the conversation? Current Rule 7.4(b) provides: A lawyer shall not state that the lawyer is a specialist in a field of law unless the lawyer is currently certified or approved as a specialist in that field by an organization that is approved by the State Board of Legal Certification. Proposed Rule 7.4(d) is less restrictive. It states: A lawyer shall not state that the lawyer is certified as a specialist in a particular field of law unless: (1) the lawyer is certified as a specialist by an organization that is approved by an appropriate state authority or that is accredited by the American Bar Association; and (2) the name of the certifying organization is clearly identified in the communication. (emphasis added) In our scenario, there is no violation under the proposed rule, because you never said anything about being “certified” as a specialist. However, under the existing rule, there would be a violation. There is no certifying organization for products liability that has been approved by the State Board. It would have been better to say, “I have 20 years of experience litigating products liability cases.” Overly technical? Perhaps, but those are the rules. Other changes have been proposed to the solicitation, marketing, and advertising provisions surrounding Rule 7, which is entitled “Information About Legal Services.” The more significant ones include the following: Additional Proposed Changes Communications in General. The basic rule regarding all communications is contained in Rule 7.1. Essentially it provides that anything communicated cannot be false or misleading. The existing rule also provides guidance in two areas where lawyers frequently run into trouble: creating unjustified expectations about results that can be achieved and comparing one’s services to those of another. Current Rule 7.1 specifically defines a communication as “false and misleading” if it: is likely to create an unjustified expectation about results the lawyer can achieve … or compares the lawyer’s services with other lawyers’ services, unless the comparison can be factually substantiated. The proposed rule eliminates the definitions, simply leaving in place the “false and misleading” standard. As a practical matter, however, this change will likely have little impact. Under both rules, the overall standard remains “false and misleading.” Furthermore, lawyers accused of creating an unjustified expectation or unfairly comparing services under either rule will likely defend themselves by arguing that the communication either is not likely to create an unjustified expectation or that the comparison can be factually substantiated; in other words, the communication was not “false and misleading.” Referrals. Referrals are frequently the bread and butter of an attorney’s business. The basic guidelines for most referrals can be found in both current and proposed versions of Rules 1.5(e) (division of fee among lawyers), 5.4(a) (no division of fee with nonlawyer), and 7.2 (restriction upon paying another to recommend one’s services). Little has changed in the proposed version, with one exception. The existing rules provide no guidance about the propriety of reciprocal referral agreements, whereas proposed Rule 7.2(b)(4)(i) does. It would specifically permit a lawyer to have a reciprocal referral arrangement with another lawyer or with a nonlawyer professional as long as the reciprocal referral agreement is not exclusive and the client is informed of the existence and nature of the agreement. Electronic Communications. The proposed rules specifically cover “electronic” communications to make it clear that in general, activities on the Internet are subject to the rules. However, the MSBA’s proposed Rule 7.3(a) does not include ABA Model Rule 7.3(a)’s prohibition on solicitation by “real-time electronic” contact, i.e., solicitation in a chatroom. Reasoning that participants willingly enter chatrooms and that real-time electronic contact does not involve the kind of invasion of privacy and potential overreaching inherent in in-person and telephonic contact, the MSBA task force concluded that prohibiting solicitation by real-time electronic contact was unnecessary and may be subject to 1st Amendment challenge. Keeping Copies. Under existing Rule 7.2, copies and recordings of advertisements and written communications must be kept for two years. The reason for the rule is to ensure that there is an adequate evidentiary record if a complaint is filed. The two-year record requirement is not in the proposed rule because it was thought to be too burdensome and unnecessary. Contingency Fees and Expenses. Finally, those who practice in the personal injury area should already be aware that advertising communications “indicating that the charging of a fee is contingent on outcome must disclose that the client will be liable for expenses regardless of outcome, if the lawyer so intends to hold the client liable.” Under proposed Rule 7.2, the caveat is no longer necessary. Minnesota has decided to go along with the ABA recommendation, which contains no such qualification regarding expenses. Keep in mind that communications by attorneys are always subject to the “false and misleading” standard, so the practical effect of this change should be negligible. As you can see, the proposed rules governing information about legal services have not changed radically. However, it is always a good idea to reread them to refresh your memory about the limitations. But one shouldn’t worry about having to memorize them chapter and verse. Although the rules arguably contain a few traps for the unwary (e.g., the existing rule about claiming specialization), the vast majority simply codify what lawyers should be doing to maximize their marketing efforts and avoid the commission of fraud. Rather than handcuffing such efforts, the proposed rules provide practical guidance about how to best develop client relationships. Roy Ginsburg is a CLE provider who conducts onsite seminars on ethics and marketing for ethics CLE credit. He served on the MSBA Task Force on the ABA Model Rules of Professional Conduct. Kenneth F. Kirwin is professor of law at William Mitchell College of Law in St. Paul. He served on the MSBA Task Force on the ABA Model Rules of Professional Conduct. Read More

Executive coaching, a professional development tool that combines strategic consulting and problem-solving counseling to help professionals set and reach their business and/or personal goals, has in the past decade found much support in the business community. Managers in corporations, including blue chip companies such as IBM, AT&T and Kodak, are realizing its benefits. Lawyers on the other hand, are just now becoming familiar with the concept. That the coaching trend is more prevalent in corporate America than in the legal profession is no surprise. Historically, law firms have followed the lead of their corporate clients on implementing management and operational innovations. For example, most companies were using email and Web sites long before law firms got on board. Coaching has proven to be no different for a variety of reasons. But what exactly is coaching and why should it be of interest to lawyers? Perhaps it’s best first to say what it is not: coaching is not therapy. A central tenet of coaching is that the person working with a coach is currently functioning well, but wants to optimize performance. Moreover, coaching looks forward to achieve future goals; it is not concerned with the past. BENEFITS FOR LAWYERS Coaching can be of benefit to lawyers in areas as diverse as managing relationships with clients and colleagues, refining communication and negotiation skills, productivity, and working out issues of stress and work/life balance. Career management and practice development are additional areas where the insight, support, and prodding of a coach can give an attorney the extra edge to achieve in a competitive market. Most attorneys will concede that superior people skills are often the distinguishing characteristics of the most successful attorneys. Nevertheless, many attorneys, being logical and linear by nature or training, have been skeptical of opportunities to develop these skills through coaching. The number of skeptics is going down, however, as more lawyers recognize that their technical skills alone can get them only so far in the legal profession. Even among the attorneys who see merit in the personal and professional development that can be achieved through coaching, the idea that “I can do it myself” may be enticing. Attorneys tend to be a self-reliant lot, and may be put off by concern that taking on a coach will be perceived as a sign of weakness. But realistically, it’s the rare individual who can change behavior significantly without support. The problem, of course, is actually doing what you set out to do. Everyone knows that in order to lose weight, you eat less and exercise more. But how many people successfully lose weight without any type of support system? For attorneys, coaching provides the support system with its structure and discipline to “get it done.” WORKING WITH A COACH Working one-on-one, the coach and client first identify and assess the client’s goals and then devise a strategic action plan to achieve them. Coaches ask open-ended and provocative questions to help clients explore options they may not have ordinarily considered. Brainstorming frequently generates practical ideas, alternatives and realistic, attainable solutions. An action plan then provides a structure for commitment. The most important task of a coach is to hold the client accountable. In short, the best coaches are part strategist, part sounding board, part cheerleader and part taskmaster. Coaching sessions, usually weekly, continue for a period of three to twelve months, depending upon the client’s objectives and progress. Sessions may be held either in person or over the telephone and typically last 30-60 minutes. Frequency keeps the client on track and permits timely adjustments. Many coaches also make themselves available when unanticipated needs arise between scheduled sessions. From a financial standpoint, coaching can be a wise and prudent investment. Consider practice development coaching: if coaching support helps bring in just one additional piece of business, it has already paid for itself and then some. Alternatively, in the case of career management coaching, by investing in coaching to help retain a previously dissatisfied lawyer, the firm or corporate legal department may save itself the far greater cost of replacing that attorney. FINDING A COACH So how does an attorney find a good coach? In many instances, the process is very similar to how clients find good lawyers, by referral. There are also Web sites with online directories of coaches. Most coaches have received some type of formal training, and there are both attorney and nonattorney coaches. The advantage of nonlawyer coaches is that they are sometimes better equipped to bring a fresh perspective to an issue. Some are also more likely to add a level of spirituality to the experience, which certain clients appreciate. Lawyer coaches usually have a better grasp and understanding of the unique stresses of practicing law. They also tend to be more pragmatic than nonlawyer coaches, which many clients prefer. Most critical is the coach’s ability to relate interpersonally because the coaching relationship is an intimate one requiring respect and faith. Carefully interview prospective coaches before choosing. If complimentary sessions are offered, take advantage of the opportunity to discern and assess the intangibles of the relationship. Work only with coaches whom you trust and with whom you feel comfortable. Never hire a coach where there is no genuine rapport and don’t be afraid to rely on your instincts about the personal chemistry. It is often said that lawyers don’t want to be the first to do anything, but don’t want to be the last either. Coaching will become popular in the legal profession as more attorneys begin to understand and appreciate its value. What remains to be seen is how soon. Read More

The representation of women and minorities in major U.S. law firms, especially at the partnership level, remains abysmally low. The numbers indicate that relative to the overall population (half women; one-third minority) and the profile of today’s law graduates, women and minorities continue to be underrepresented in the partnership ranks at major law firms. According to the latest statistics from The National Association for Law Placement (NALP), approximately 17 percent of partners in such firms are women, while minorities account for slightly more than 4 percent. In the Twin Cities, almost 19 percent of partners are women and slightly more than 2 percent of partners are minorities. Since the 1980s, almost half of law school graduates have been women. During that same time frame, the percentage of minority law school graduates has doubled: from 10 percent to 20 percent. Perhaps in consequence, women and minority lawyers are better represented at the associate level than among partners. Nationally, approximately 43 percent of associates are women and 15 percent of associates are minorities; their placement thus lags roughly 5 percent below their representation among law school graduates. Locally, 47 percent of associates are women and 9 percent are minorities at Twin Cities law firms. Progress has been slow. In 1993, nationwide, 12 percent of partners were women, while 2.5 percent of partners were minorities. There has been considerable debate within the profession about what these numbers mean. One camp believes that the playing field is not level and never has been for women and minorities; in their view, a “glass ceiling” inhibits their success. Others maintain that the statistics reflect a personal choice to jump off the traditional law firm partnership track. Why is Diversity Important? This debate continues relatively unchanged today. What has changed dramatically over the past decade are the arguments about why diversity in law firms is important. Traditionally, diversity proponents have contended that diversity is the “right thing to do.” This school of thought is reflected in remarks by Robert J. Grey Jr., the current ABA president, who says he believes that “Diversity preserves the legitimacy of our legal system and safeguards the integrity of our democratic government.” More recently however, many diversity proponents instead talk about diversity in terms of the “business case” or that diversity enhances the bottom line. As stated in a study by the Minority Corporate Counsel Association (MCCA), “Law firms that only pay lip service to diversity may pay a stiff economic price. Law firms that do not take diversity seriously are already losing money.” Diversity Enhances Business This shift in the debate has been welcomed by many involved in diversity initiatives. Instead of lawyers in firms arguing about whether there is in fact anything “wrong” at their firm that needs correcting, they now discuss how improving their representation of women and minorities may enhance their business. That debate is usually a far less controversial one since, not surprisingly, it is easier for lawyers to reach a consensus about activities aimed at enhancing revenue and profits as opposed to achieving social justice. Diversity helps the bottom line in a variety of ways. First, diverse law firms attract and retain better lawyers. The pool of available white male law school graduates continues to shrink. As noted above, approximately half of law school graduates today are women and 20 percent are minorities. Firms that recruit solely through the “old boys network” are finding that this network is becoming smaller and smaller. As a result, these firms lose out on many talented lawyers. Law firms that do hire women and minorities, but fail to retain them, experience substantial turnover costs. It has been estimated that the cost of losing a second year associate can be as much as $250,000 when one factors in the lost return on the investment in training the associate. Law firms that are able to retain their diversity hires reap the benefit of their investment in training. And of course, law firms that lose such associates, on occasion, face discrimination litigation with its attendant expense and distraction, as well as adverse publicity. Another argument in favor of diversity relates to the quality of lawyering. Many corporate clients want diverse perspectives when seeking legal advice. As expressed by Catherine Lamboley, the general counsel of Shell Oil, “When you use people of diverse backgrounds and different ways of looking at things, you get a better solution.” A more controversial reason supporting the business case for diversity concerns the strategic use of women and minority attorneys in litigation. Jury pools today are more diverse. According to the chairman of the National Association of Minority and Women Owned Law Firms (NAMWOLF), “Using firms with lawyers of a different race, sex and age may allow them to better connect with juries, who also are more diverse.” Critics contend such use of women and minority attorneys is tantamount to exploitation. This criticism is frequently heard when companies intentionally seek out law firms that have women or minority attorneys available to help defend a lawsuit involving race or sex discrimination. The response to the critics is that as long as the attorneys are competent and their presence does not risk being viewed as “window dressing” by the jury, the strategy is simply smart advocacy. New Business Through Diversity Perhaps the most compelling argument underlying the business case for diversity relates to marketing and business development. The legal profession is a relationship-driven business. Once the competency threshold is passed, selection of counsel is often subjective and is frequently driven by the comfort and personal chemistry between lawyer and client. It is therefore not unusual, as a minority female partner at a major national law firm noted, that clients “want people who reflect their backgrounds.” According to the most recent MCCA survey, 14 percent of general counsels today are women and 5 percent are minorities. In-house counsel are 20 percent women and 10 percent minorities. Twenty-five percent of business owners are women and 15 percent are minorities. Says the chair of NAMWOLF, “Just like there’s an old boys network, there’s a network of people of color and women. Nowadays at the large corporations, it’s a person of color or a woman who is making the decision [of whom to use as outside counsel] and for some it’s not appealing to deal with an all-white [male] firm.” Not only are women and minority lawyers developing new business relationships with clients, some corporate clients today are demanding that their law firms have respectable diversity statistics. If the firms don’t, they won’t get the company’s business. As more and more companies have become committed to diversity, they in turn, expect their vendors to be. “Diversity in our workplace and supplier base strengthens our company and our performance in the global marketplace,” observes Delta Airline’s general counsel. More Than Lip Service Needed Two major companies that have garnered much recent publicity about their efforts to use diverse law firms are Shell Oil and Sara Lee. Both corporations gather extensive information from the law firms already doing business with them and those seeking to do business with them. These data go well beyond the number of women and minority attorneys at the firm. The companies want to know if women and minorities are actually doing the work and/or getting business development credit. They also examine the law firm’s diversity policies. If the numbers are weak, what does the firm plan to do to make them stronger? Most importantly, the corporations are holding the law firms accountable. Says Shell Oil General Counsel Catherine Lamboley, “We no longer do business with [some] firms because they were simply giving lip service to diversity.” A number of other blue chip corporations evaluate diversity data (though less exhaustively than Shell and Sara Lee) when considering who to retain as outside counsel. The list includes Coca-Cola, American Airlines, Wells Fargo, Bank of America, Baxter Healthcare, and Merck. This trend is best summed up by Merck’s general counsel, Kenneth Frazier, who said, “We are in the fortunate position of having many highly capable law firms lining up to work with us. And it was hard in some ways to differentiate among these firms. But we found that diversity was something that would allow us to make that differentiation.” As the list of companies formally seeking diversity data continues to grow, there are also companies and individual in-house counsel who informally solicit such data before selecting counsel. Furthermore, an “underground network” of women and minority in-house counsel routinely recommend law firms with good diversity records that they have retained to others within their network. Under these circumstances, many law firms do not even get a seat at the table, thus losing potential business without ever knowing it. Growing Your Business In summary, law firms that do not take diversity seriously have already started to or may soon begin to lose business. Many believe that the progress made by women and minorities in the legal profession has been too little, too late. As more law firms take notice of the business case for diversity, the progress is not only likely to continue, but should do so at a faster pace than previously experienced. Read More

Pro bono service is frequently considered a selfless act, the “right thing to do.” But can a selfless act also be selfish? With respect to pro bono service, the answer is yes. While many attorneys volunteer legal services, few seem to recognize that performing pro bono work often yields substantial practical economic benefits for themselves, their organizations, and the profession as a whole. In short, when it comes to pro bono service, “it pays to be good.” “Pro bono” means “for the public good.” Historically, a certain segment of the legal profession felt responsible to ensure equal access to the legal system in the hope that justice would not become a concept that was simply bought and sold. This responsibility is partially derived from a social contract between lawyers and society. Society provides an exclusive license to individuals who want to practice law, thereby offering lucrative career opportunities for many. In return, lawyers give something back to society; that “something” is pro bono service. Minnesota’s Rules of Professional Conduct specifically remind Minnesota lawyers of their pro bono obligation. According to Rule 6.1, every lawyer should aspire to provide 50 hours of pro bono service annually because lawyers have a “responsibility to provide legal services to those unable to pay.” This service is not mandatory. While the rule provides no reporting or enforcement mechanism, it nevertheless underscores the importance of pro bono service to the organized bar. DEBUNKING MYTHS In any argument to establish the overall practical economic benefits of pro bono service, it helps to first debunk the myth that every pro bono hour is somehow a lost billable hour. Many attorneys instinctively believe handling a pro bono matter is a drag on the bottom line. In their view, time spent practicing law that is not being billed to someone can always be convertible to billable time. A closer examination of the myth suggests a more complex situation. It is as logical to presume that pro bono hours are like time spent marketing, handling administrative matters, or bar association activities. With rare exceptions, when lawyers spend time doing any of these, they are not billing less time for their paying clients. One never hears about lawyers turning away paying work because they were too busy doing pro bono service. Nevertheless, many find the time to make sure pro bono service is one of the things that “get done.” Furthermore, it’s worth questioning the assumption that attorneys who perform pro bono work make significant financial sacrifices. Last year, the American Lawyer magazine ranked the pro bono efforts of the nations’ major law firms based on the average number of hours per lawyer and the percentage of lawyers who performed more than 20 hours of pro bono service per year. Of the ten firms ranked highest, all had very healthy profits per partner, most between $500,000 and $1 million or more. The same is true locally. Dorsey & Whitney, Faegre & Benson, and Robins, Kaplan, Miller & Ciresi all averaged more than 50 hours of pro bono service per lawyer and all three had approximately half of their attorneys doing more than 20 hours per year. Lawyers at the three firms similarly did not seem to take any significant financial hit based on their exemplary pro bono record; profits per partner were well into six figures at all three. ENHANCING SKILLS On an individual basis, handling a pro bono matter provides a wide variety of benefits that can help build your practice. First, it enhances legal skills. One can either learn a new skill or sharpen an existing one. For example, in many pro bono cases, lawyers represent clients from more diverse backgrounds than their usual clientele. Dealing with individuals from different socioeconomic or cultural backgrounds can improve communication skills. Furthermore, pro bono service builds confidence for less experienced attorneys, especially those working in the shadow of senior partners. By regularly doing pro bono work, they quickly lose any feelings of inadequacy and grow in the realization that they can autonomously assist others with legal problems. Some attorneys have even found that their pro bono service has enhanced their skill set to such a high degree that it attracts paying clients. For example, many lawyers in Minnesota know that Faegre & Benson’s Brian O’Neill has a lucrative environmental litigation practice. What many don’t know is that one of the ways that he was able to build that practice was by developing a reputation for success handling pro bono matters in environmental law. BUILDING RELATIONSHIPS For attorneys in private practice, pro bono service can be strategically used for client development. For example, business law pro bono is a relatively new and growing area where business lawyers donate their time to assist eligible nonprofit organizations and microenterprises. Here in Minnesota, LegalCORPS, (www.LegalCORPS.org) was recently created with help from the Minnesota State Bar Association to match business lawyers with nonprofits and microenterprises with legal needs. For attorneys who take advantage of such pro bono opportunities, there can be collateral benefits. On occasion, a client organization may reach a level of financial security that obviates their need for free legal services. If that time ever comes, whom do you think that organization is going to call on to perform services for a fee? Alternatively, business law pro bono volunteers frequently establish relationships with nonprofit board members who belong to organizations that frequently hire attorneys or are asked for attorney referrals. Here, the pro bono lawyer is well-positioned to get that work because of a preexisting relationship. At first glance, some may be offended by such opportunism. But if you talk to pro bono leaders in the bar, many find nothing wrong with this form of “enlightened self-interest.” Besides establishing new relationships, pro bono service can strengthen existing ones. Lawyers from Lindquist & Vennum and Valspar Corporation partner at a shelter connected with Sharing and Caring Hands (Mary’s Place) in downtown Minneapolis. Similarly, attorneys from Dorsey & Whitney and U.S. Bancorp work together handling pro bono matters at the Brian Coyle Legal Clinic in the Cedar Riverside neighborhood. The latter collaborative effort recently won the Pro Bono Partner Award from Washington D.C.-based CorporateProBono.org (CPBO — a national outreach program designed to enhance the participation of in-house lawyers in pro bono service). For inhouse and public sector attorneys, pro bono service is a means to expand their personal network. The bigger the network, the easier it will be for lawyers who may become dissatisfied in their current jobs to seek out more promising new opportunities. For those who find themselves unexpectedly unemployed, the job search will be an easier one with these existing relationships already in place. Finally, individual attorneys, wherever they work, will find that conducting pro bono service enhances the lawyer’s reputation within the firm or organization, within the profession, and within the extended community. After all, what’s there not to like about one who gives back to their community? BUILDING THE FIRM Law firms with a strong pro bono culture, as a whole, also benefit economically. Morale improves when a large number of attorneys and staff are similarly devoted to a particular matter or cause. The firm’s cohesiveness may increase as pro bono service draws together individuals who do not ordinarily work together. Certain relationships could even develop into genuine mentoring opportunities. A commitment to pro bono service is also often advantageous to the firm in hiring and retaining talented attorneys. Many talented lawyers in private practice have a public service orientation. This pool of attorneys is attracted only to law firms with a strong pro bono focus. Not only do these firms have a competitive edge in recruiting, they also retain pro bono-oriented lawyers and avoid turnover and its accompanying costs. Just as pro bono service enhances an attorney’s personal reputation it similarly enhances a law firm’s reputation. In the post Sarbanes-Oxley world, many corporate clients want to retain law firms with a broader social agenda than simply billing the most hours at the highest possible hourly rate. Locally based Target Corporation has earned an excellent reputation based in large part on its history of giving back to the communities it serves. Companies with such a strong culture of volunteerism want to hire law firms similarly committed. Firms that do not will frequently lose out on business. CONCLUSION Finally, pro bono service benefits the entire legal profession. The public’s confidence in the legal system remains low. Many lawyers fail to appreciate how good they really have it. Society grants them a monopoly to provide a service that enables many to gain powerful positions and wealth in their communities, subject only to self-regulation of the profession. The legitimacy of our legal system is largely dependent upon the meaningful participation of all citizens. Pro bono service ensures such participation, thereby preserving the system’s legitimacy. In sum, pro bono service provides a multitude of practical economic benefits for attorneys, their organizations, and their communities. Not only will you feel better because you helped someone less fortunate, but you will also feel better because you helped yourself. ROY S. GINSBURG is an attorney coach, independent CLE provider and solo employment law practitioner. He serves on the board of LegalCORPS and is a member of MSBA’s Legal Assistance to the Disadvantaged Committee. (www.RoyGinsburg.com) Read More

Lawyers tend to forget that law is a service industry. Clients have a myriad of choices for their legal representation. By focusing on client service, lawyers can better retain current clients, gain more referrals, and minimize the risk of ethics complaints. If you ask attorneys whether their clients are satisfied, most would, of course, say yes. If you then ask them “What makes you so sure?” the responses would typically range from “They don’t complain” to “They’re nice to me” to “They pay their bills” to “They continue to do business with us.” But statistics indicate otherwise. Such client behavior hardly translates into satisfaction: In 2005, a national consulting firm polled Fortune 1000 clients to determine client satisfaction. Only 30 percent of clients said they would recommend their primary law firm.1 The obvious disconnect between lawyer perception and client reality is supported by a recent Corporate Legal Times survey. When asked to respond to the statement, “The level of law firm service has improved over the past five years,” 75 percent of the lawyers responding said yes, but only 35 percent of the general counsels responding agreed.2 Customer satisfaction surveys in all industries indicate that only about 4 percent of customers receiving poor service will actually complain.3 Don’t assume that the figure is any different for the legal industry. Why don’t clients complain? In the legal industry, the percentage who complain may be even less than in other fields. Clients are often intimidated by their lawyers, and, as a result, they wouldn’t think of complaining. People don’t often express their discontent. Think about the times you have been out to a restaurant and received lousy food or service. How often have you complained to the manager? Most of the time, you don’t bother — you just never return. Can you conclude that the clients who are “nice” to you are, indeed, satisfied? When you practice in a state where everybody is purported to be “nice,” don’t be lulled into thinking that clients are as satisfied as you think. Lawyers also assume that timely bill payment reflects client satisfaction. That’s hardly an accurate assessment. Most of us likely pay our cell phone bills on time, and yet we could probably write a book about ways that cell phone companies could improve their service. Finally, many attorneys believe that clients who continue to do business with them must be satisfied. Why else would they keep coming back? Reasonable assumption? Yes, but wrong in many instances. Consider the cell phone company example again. Reasons we don’t switch range from laziness, to lack of time to research other companies, to assuming competitors are no different. While service may not be good, it isn’t awful. One of two things could make us switch: either an instance of horrendous service or learning that a competitor is offering a significantly better deal. The customer who is looking for an excuse to stop doing business eventually may find it. Your clients are no different. Many are waiting either for something noticeably better down the street or for you to make a colossal mistake. Importance of Client Service Two hundred attorneys from the largest 1000 law firms were recently asked, “If you could offer someone advice on how to be a successful lawyer five years from now, which areas would you recommend they improve?” Forty-three percent responded that focusing on client service was most critical to success. Client service was the area most frequently identified for improvement, and was mentioned more than twice as often as the next two most popular responses, specializing in one’s practice area and networking.4 Client service is the most critical component in maintaining client satisfaction for several compelling reasons: it sharpens your competitive edge, keeps your focus on controlling what you can control, and helps you avoid common ethics complaints. Achieving the Competitive Edge Nordstrom and Southwest Airlines both have great reputations for customer service. But can you name a law firm with a great reputation for client service? Didn’t think so. Law firms certainly have reputations, but they are usually built on such things as their expertise or aggressiveness — not how well they serve their clients. Lawyers tend to overestimate the importance of their expertise and competence as their competitive edge. This is especially true in the corporate world. The reality is that the majority of law firms representing corporate America do very good work. If my own experience as an in-house corporate attorney is any guide, those who hire outside counsel rarely, if ever, worry about the competency of the attorneys they retain, and their confidence is usually well-placed. However, the type of service outside counsel will provide is a recurrent concern. Will they be responsive? Keep me informed? Keep the matter moving along? Bill the company reasonably? Treat me like I wanted to be treated? As one who routinely hired outside counsel, I rarely had complete confidence in these matters. If I did have complete confidence in a firm, they would continue to receive my business. For any lawyer seeking to develop new business, a critical challenge is to distinguish oneself from the competition. What better way to do that than by emphasizing how you serve your clients? Lawyers who are technical experts are a dime a dozen; lawyers who provide extraordinary client service are few and far between. Controlling What You Can While the workings of the law may remain a mystery to clients, they can judge lawyers based on three things: results, outputs and service. “Results” means simply “Did we win?” or “Did the deal close?” But how much control do lawyers have over these matters? Very little. While advocacy skills can certainly make a difference in litigation, most cases are won or lost based on the facts and the law — factors over which lawyers have little control. Even the best corporate lawyer may not be able to close a transaction if a party’s unreasonable demand blows up a deal. “Outputs” are the work produced by lawyers. Examples include briefs or contracts. Few clients carefully review a lawyer’s briefs. And even if they do, it’s highly unlikely that they know the difference between a good brief and bad one. As for contracts, even fewer clients wax ecstatic over the wording of an indemnification clause. The fact of the matter is most clients, even sophisticated in-house counsel, either don’t have the time or the expertise to intelligently evaluate your work product. “Service” is another matter. Lawyers have abundant control over whether they return a phone call within a reasonable amount of time, and clients can readily evaluate whether the lawyer was responsive. Lawyering involves many things that are beyond an attorney’s control, as well the exercise of skills that clients cannot evaluate. Why not take full advantage of the one thing you can control and clients fully understand? Avoiding Ethics Complaints In Minnesota, a significant percentage of ethics complaints relate to service issues.5 Within the Minnesota Rules of Professional Conduct, four rules govern most of the service-related aspects of the lawyer-client relationship. The first is Rule 1.2 — Scope of Representation. Here the common complaint is “Why didn’t you do what I asked you to do? The second rule is Rule 1.3 — Diligence. Here, clients complain “Why is this taking so long?” The third rule is Rule 1.4 — Communication. Clients want to know “What is going on?” Finally, there’s Rule 1.5 — Fees. The complaint here is “Why did this cost so much?” Establishing an excellent working relationship with clients goes a long way toward avoiding these types of complaints. In this respect, lawyers are no different from other service providers. The reason their clients stay with them, despite the possibility that someone else could do a better job and for less money, is because of the relationship. If you like them, trust them, and believe that they care about you and will do their best for you, you are unlikely to look for an alternative. These are the precise reasons why clients keep coming back to their lawyer. Managing Clients’ Expectations What’s the secret to establishing great relationships with clients? Manage, and at times, exceed their expectations. Whenever involved in a matter, clients have certain expectations regarding the situation. Successful lawyers ascertain those expectations, communicate and negotiate which expectations are realistic and which are not. Then they proceed to satisfy, or better yet, exceed those expectations. They also check in with the clients throughout the course of the representation to make sure their expectations are being satisfied. Client expectations are fluid and the lawyer must carefully perceive the movements. Most clients won’t complain when something disappoints them, but they won’t easily forget either. Clients’ expectations can be broken down into four key areas, each of which the lawyer must manage in order to keep the client satisfied: Quality Timeliness Price and Billing Personal Interaction Ultimately, the lawyer will be judged in all of these areas. By the time the matter is concluded, the client will walk away with a “feeling” that the entire experience was either satisfactory or not, based on how well their expectations were handled. Quality Quality consists of two components. The first is process, which covers how easy it is to do business with the lawyer. Process-type items that may be important to clients include: How convenient is parking? Is there something to read in the reception area? Are bills easy to understand? Does the lawyer who needs to review client documents make an extra effort to assist the client in gathering them up? In short, are the lawyer’s processes as user-friendly as possible? The second component of quality is the outcome. One of the most challenging aspects of being a lawyer is communicating to clients what you think the result will be. Most lawyers overestimate the importance of the outcome as a factor in determining client satisfaction. While clients are obviously concerned about outcomes, client satisfaction is determined far more by how well the attorney manages the client’s expectation of the outcome, rather than the outcome itself. Attorneys tend to fall into one of two camps: cheerleaders or Chicken Littles. The cheerleaders tell a client what they want to hear. In many instances, they end up with a very disappointed client when the bad result comes in. Chicken Littles tell their clients every conceivable reason why the matter may not turn out to the client’s satisfaction. Attorneys do this because they believe that the client, if adequately forewarned, won’t blame them for a bad result. The problem with this approach is that no one wants to hire a lawyer to tell them all of the ways the matter can go wrong. Clients want lawyers with a can-do attitude. The best lawyers combine the roles of cheerleaders and Chicken Littles. They consistently convey a positive and supportive outlook, temper it with realistic expectations, and know how to deliver unfavorable news. It is an art and a science that few do well. Timeliness Anyone who calls someone and leaves a telephone message, including a lawyer’s client, has an expectation of when the call will be returned. Do you know what your client’s expectation is? Have you thought to ask? If you don’t ask, how can you successfully manage their expectation? People’s expectations regarding others’ response to email are similar. No matter how busy we are, under most circumstances, with the technology available today, there is no excuse for failing to get back to a client on the same day a call or email is received. When necessary, a voicemail or email in the evening, acknowledging receipt of the message and letting the client know when they can expect a response, will suffice. It’s a common courtesy that all clients deserve. Price and Billing A recent survey by Corporate Legal Times indicated, unsurprisingly, that billing issues are the number one source of friction with corporate clients. But a startling statistic from that same survey indicated that 35 percent of the general counsels believed that law firms padded their bills.6 In others words, over a third thought that major corporate law firms were literally stealing from them. That’s a pretty sad commentary about our profession. There is obviously a serious communication gap between lawyers and clients regarding fees. Many lawyers feel uncomfortable discussing fees and either simply state their hourly rate or that they work on a contingency fee basis. Rarely do lawyers explain to clients the value of the service being provided. Clients will have far fewer complaints about high fees if they have a better understanding of what their lawyer is trying to accomplish and why certain tasks are necessary. An up-to-date budget, provided to the client on a regular basis, can promote better understanding. Few things upset clients more with respect to fees than a monthly bill that has unanticipated fees on it. That can be avoided with proper communication. If something takes longer than anticipated, the client should be informed at the time the work is being done, not when the bill is sent out weeks later. Here again, managing the expectation is key. Personal Interaction Finally, there are the interpersonal skills of the lawyer. Treating the client as they want to be treated — courteously, respectfully, reliably, and with due appreciation for their business — is so important it can’t be overstated. The client may find a mistake here unforgivable and take their business elsewhere. The client who overlooks inconvenient parking, forgives a loss in litigation that was foreseen and forewarned, brushes off late return of a phone call, and takes a higher-than-anticipated bill in stride is unlikely to respond well to a personal slight. The attorney who is rude, doesn’t listen, or isn’t reliable will lose many clients. Why? Because clients take those things personally. Conclusion In sum, successful lawyers integrate excellent client service as a component of their practices, gaining a competitive edge and significantly reducing the possibility of an ethics complaint. Those who may think, “I don’t have time for all thisstuff; I only have time to practice law,” should consider the truth, that all of this “stuff” is part ofthe practice of law. Notes1 BTI Consulting Group, Strategic Review and Outlook for the Legal Services Industry 2006. 2 Corporate Legal Times, July 2005, p. 37. 3 Petra Marquart, The Power of Service: Keeping Customers for Life. Ouray, CO: Ponderosa Press, 1998, p. 8. 4 Survey reported by Robert Half Legal, January 11, 2006 press release. 5 The Minnesota Lawyers Professional Responsibility Board codes each complaint it receives into one of over 50 categories covering a wide variety of subject areas. Complaints coded in service-related areas (e.g., Communication, Diligence, Fees) comprise over 25 percent of the total complaints received by the Board from October 2004 – October 2005. Since many complaints include multiple allegations, but are only coded for only one allegation, the Board estimates the total percentage of complaints with a service-related issue to be almost half. 6 Corporate Legal Times, August 2005, p. 14. ROY S. GINSBURG is an attorney coach and CLE provider, consulting in areas of business development and professional growth. He has experience at both large and small law firms, in corporate legal departments, and as a solo practitioner. www.royginsburg.com Read More

Attorneys are widely perceived as successful in life and many would affirm their satisfaction with their careers. But lawyers who can claim they “couldn’t be happier” are rare, and far more common are those who don’t take time to consider how making changes might yield greater satisfaction. by Roy S. Ginsburg Some of you may remember the movie, City Slickers, starring Billy Crystal. He plays a radio ad salesperson who is going through a rough stage in his career. Like most, he complains to himself and others about his predicament, but unlike most, he is given a chance to reflect upon where he is in his career and where he’d like to go. The opportunity presents itself when he is asked by his son to talk to his elementary school class about his career. He begins his speech by saying, “value this time in your life. This is the time in your life when you still have choices. It goes by so fast.” You Still Have Choices I suspect no one reading this article is in elementary school, but Crystal’s advice is as applicable to practicing lawyers as it is to a ten-year-old. No matter at what stage you are in your legal career, you “still have choices.” Many lawyers are simply too busy, cynical or fearful to think about how they could create a more satisfying career. Even though we’re trained to plan out the most complex deal or litigation imaginable, few attorneys intentionally plan their own careers. Rather, when an opportunity presents itself, we take it and hope for the best. If all goes well, the comfort zone that’s created makes it difficult to want to change. If it doesn’t work out, we look for another job, hoping the next one works out better. There’s a more proactive way to weigh and implement choices. With some careful planning and a bit of luck, you can create a satisfying second act at any time during your career: as a first-year associate or as a senior partner thinking about the best way to wind down and plan your retirement. Attorneys searching for a second act want to do something different, more satisfying, than what they’re doing now. Some simply want to enhance their existing practice by finding a better mix of clients, others want to add a new practice area to what they already do, others seek to practice the same type of law in a new environment, and others want to stop practicing altogether. In short, a second act can range from tuning up what is basically working well to trading in for a new model. Is It Time? Lawyers by nature tend to be highly analytical. When making any career change, large or small, they tend do so only after consciously or subconsciously answering four simple questions. 1) Why do I need/want to make a change? 2) What do I want to do next? 3) How can I make the change? 4) What are the costs of the change? When the sum of the why, what, and how exceed the perceived costs, it’s time for a second act. In other words, for change to occur, one needs a good reason to do it, have an idea of what the change would be and how to achieve it, and finally, believe that the risk of the change is worth the associated costs. Let’s look at each of the four questions more closely. The “Why.” The initial question is why even consider a second act? Three reasons tend to drive career changes. The first is dissatisfaction, which can take many forms including boredom, stress, poor work/life balance, not making enough money, or lack of job security. Second, some lawyers enjoy their practice, but want to make sure they maintain momentum, not lose their edge, or even better, take their practice to a more successful level. Finally, change is driven by personal or professional circumstances. On the personal side, perhaps a child has been added to the family, or an elderly parent needs more personal care. On the professional side, the most typical change is losing a job. Whether the reason for termination is performance-related doesn’t matter. Change must occur if you want to continue to earn a living. The “What.” Once there’s a reason, you need to determine what’s next—to articulate a goal. If you just lost your job, the goal is easy; you need another one. It may not be easy to find a new job, but the goal is clear. If you’re employed, the goal may not be so obvious. You may have a vague feeling that you want to take your practice to a higher level; perhaps you’re bored with your practice; or maybe your work/life balance feels out of whack. Creating tangible change under these circumstances requires honest self-assessment. Ask yourself, what do I really want to do? Or, what really matters? What motivates me? What are my passions? What’s meaningful to me? What do I enjoy doing? What don’t I enjoy? How do I want to balance my time for personal, professional and community activities? Or try asking yourself this question: What do I want people to say about me at my retirement dinner or funeral? Once you have some answers, consider what has to change. Of course, there is more to goal-setting than lofty aspirations. You must have the ability to perform the second act. Again, honest self-assessment is key. Do I have the talents or skills required? If you are exceptionally self-aware, goal-setting usually can be accomplished by putting aside time and thinking through the questions posed above. Others may find professional assistance helpful in identifying goals. A coach or counselor can be particularly helpful in probing subjects or eliciting answers to tough questions that people would rather avoid. Such professionals also have access to a variety of formal assessment tests, such as the Strong Interest Inventory, Myers-Briggs Type Indicator, and California Personality Inventory that can yield insights to help you identify your goals and skills. The “How.” Once you have a reason to change and a goal to achieve, the next question is how to achieve it? (See the sidebar for a list of potential “second acts” you might consider.) Reasons and goals are necessary, but without ideas on how to accomplish them, you’re stalled. Two words familiar to most attorneys describe the “how” component of creating your second act: due diligence. This is the time to determine whether your goal is realistic. Are there opportunities for what you want to do? Can you make enough money? Start by doing basic research on the internet. Then, get out and talk to people. Chances are very good that someone you know, directly or by association, has gone through a similar career realignment. Meet with them and have the conversation. You’ll find that acquaintances and strangers alike are more than happy to share their experiences with you. If, after conducting due diligence, you still believe your idea has potential, what’s next? To borrow a phrase from Nike, “Just do it.” If you’re currently out of work and seeking a position in a similar environment or practice area, start networking and interviewing for your second act. If you are currently working, your path to a second act can be more sequential. Keep doing what you’re doing, but build a bridge to a new possibility one step at a time. You’ve probably “sequenced” in your career already without even realizing it. Think about the first time you were exposed to a case in a new practice area that you found a pleasant diversion from your regular caseload. Did this experience prompt you to shift your practice into the new area? People who sequence under a circumstance like this aren’t consciously seeking a major career change. They’re presented with an opportunity to test out, or perhaps they’re even forced into working on a new case, and are pleasantly surprised by how much they enjoy the new practice area. But how many of you have ever “sequenced” proactively? That’s where you seek out an opportunity to try something new. You don’t dive head-first into anything, but rather put your foot in the water to see if you like the way it feels before plunging in. You can try moonlighting, pro bono work, board work, community service, Bar activities, and temporary assignments. By sequencing this way, you can you can see whether something new fits before abandoning what you’re presently doing—maximizing your chance of creating a successful second act. The Costs. The final consideration before making the big change is to weigh its costs. The price of your second act must be perceived to be worth the attendant risks. If the costs are too high, the status quo remains an option. Obvious costs of change include the time and effort to pursue a change. Your second act could require a financial sacrifice or the loss of prestige. What if it doesn’t work out? Can you handle failure? Furthermore, there are emotional costs to consider. For many, their second act will feel like a roller coaster of emotions including excitement, fear, uncertainty, doubt, and anxiety. It can be confusing as you lose one identity and create a new one. Initially, you may feel out of place since many of your working relationships will change—your clients, peers, mentors and network. Lawyers typically underestimate the softer side of change. Don’t. Make sure you have a support system of family, friends, and professionals who can help you navigate the bumps in the road that accompany change. Now What? As Yogi Berra once said, “When you come to a fork in the road, take it.” It’s now time to decide if you want to pursue a second act. If you have a reason to change, a goal and a way to achieve it, and the sum of those three components exceeds your perceived costs of change, it’s time to get going. Create an action plan with goals that are SMART: Specific. Measurable. Action-oriented. Realistic. Time-sensitive. Start to think about the obstacles you might face in achieving your goals and how you’ll get around them. With or without the assistance of a professional, if you are patient, flexible, and disciplined, your second act could earn a standing ovation. Mark Twain once remarked, “Twenty years from now you will be more disappointed by the things that you didn’t do than the ones you did do.” Perhaps now is the time for your second act. Chances are, you won’t be disappointed. Potential “Second Acts” Have trouble visualizing alternatives to what you are doing now? Here’s a sampling of potential second act options to help you formulate your goals: Take a sabbatical. If you remember, Billy Crystal came back from the cattle drive in City Slickers reenergized and told his wife, “I’m not going to quit my job. I’m just going to do it better.” He needed only a new adventure for a few weeks to make him appreciate what he had. Enhance your existing practice. Maybe you’re satisfied with your choice of practice area, but would like to become more successful—increase the number of clients with interesting cases. In your second act, you’ll be more focused and disciplined on business development. Switch environments. In this case, you might be satisfied with your practice area, but you’re not happy in your current location. Is the culture and size of your law firm right for you? Should you consider going solo? What about inhouse at a corporation or for the government? Modify your practice. You like your firm, but perhaps your caseload lacks variety. Look for opportunities to help out on a case outside your area of expertise. Having one or two cases that are not a part of the normal routine may be all that is required to refresh your act. Although it may seem counterintuitive, getting out of your comfort zone will make your practice a more comfortable one. Work part-time. This option usually is associated with working moms, but more fathers are considering working part-time. In addition, look for more baby boomers, both men and women, to work part-time rather than abandon their practice altogether when they reach retirement age. Stop practicing law. For litigators, a popular second act is to become a third-party neutral and take on a new role in the area of alternative dispute resolution. As inhouse corporate counsel, have you considered a business role at your company? Or, maybe you’ve simply had enough of the law and it’s time to become a celebrity chef! Rebalance. Here’s a second act that all lawyers should probably consider. I know or meet hardly anyone who is truly satisfied with how they juggle their personal, professional and community involvement priorities. In my view, no one can ever be completely satisfied because there is no perfect balance. However, it is the rare person who cannot achieve a better balance. Roy S. Ginsburg is an attorney coach and CLE provider, consulting in areas of business development and professional growth. He has experience at both large and small law firms, in corporate legal departments, and as a solo practitioner. Read More

Hard times make for hard choices, sometimes including termination of employment relationships. Outplacement services can serve both the employer and the employee in these circumstances, preserving good will for the former and enabling the latter to quickly move on to new opportunities. By Roy S. Ginsburg Severing employment relationships involuntarily is never pleasant, personally or professionally, no matter what your role. When it happens in a law firm or law department, it can be particularly challenging. Lawyers are competitive by nature, and a dismissed lawyer might be embittered or worse, tempted to contest the dismissal. Taking a cue from the corporate world, today’s proactive law firms and corporate legal departments are more likely to ease the transition by offering released attorneys the services of an outplacement provider. Outplacement services, tailored to the legal profession, can mean the difference between lasting resentment and, surprisingly, acknowledged respect. Considering OutplacementIn today’s economy, where the legal industry is not already suffering, it’s bracing for the effects of a slow down in a variety of practice areas. What happens when a law firm has to trim headcount in certain practice groups? Or when an in-house legal team feels the squeeze of lowered corporate earnings? What if an associate has fallen off the partnership track? How about when a partner’s inadequate book of business can’t support a law firm’s revenue goals? In any of these scenarios, when departures are imminent, an environment of tension, stress, suspicion and rumor swirls around the office, potentially scarring those who are let go, as well as those who remain. However, if the organization is prepared to offer transitional outplacement services, the transition will likely have fewer after-effects for the employer and a far more favorable outcome for the dismissed employees. The Employee’s PerspectiveLosing a job is one of the most emotionally challenging events a person can go through. One’s position in society, livelihood, and sense of self are inextricably tied to one’s employment. So it’s not surprising that, even after the initial shock has subsided, many dismissed employees find it difficult to overcome feelings of anger, fear, and inadequacy about how to support themselves or their families. Emotions like these, as natural as they are, can seriously impede one’s progress moving toward a new opportunity. Employees who are offered and accept personalized outplacement counseling often are better able to cope with job loss and more successful launching an employment search that yields results more quickly. Outplacement services may lead the employee to discover that a partner-track in a law firm environment is not as appealing as first envisioned. Outplacement may also enable one to be more open to alternatives, possibly leading to increased satisfaction in a different practice area. Many lawyers resist change and remain in jobs where they are unhappy. Talk to any professional who has been forced to change jobs and most will confirm that their new position is more meaningful and rewarding than the one they left. That is because they had the time and incentive to consider opportunities they otherwise might have overlooked. While the time between jobs may have been an emotional roller coaster, once it’s over, few regret having been on the ride. In the Firm’s InterestSo, what’s in it for the law firm or the in-house department that funds the outplacement option? Minimizing disruption and possibly gaining future business are among the things to consider. The legal community, regardless of location, is a small town, with all the advantages and disadvantages that implies. The experiences and reputations of firms and attorneys alike are soon common knowledge. Forward-thinking managers recognize that their former employee may someday be in a position to either refer work back to the firm or even become a client. So treating an unpleasant situation as respectfully as possible may pay dividends later. Offering outplacement services can also foster good will, helping to maintain good relationships with those leaving the firm and, in turn, across the broader legal community. Employees who remain with the firm get the message that leadership cares for and respects everyone in the workplace. Word like that gets around and can have a positive impact on retaining talent, as well as recruiting talent in the future. How Outplacement WorksLegal outplacement is employer-funded, typically for a term of three months to one year depending upon the seniority of the departing attorney. Some lawyers, when offered outplacement services, attempt to negotiate an alternative, asking that the money be applied to the severance package. Employers who realize the value of outplacement refuse. While a released employee can’t be forced to take advantage of any service offered, those who choose outplacement generally shorten the time it takes to find a new job. The first order of business in outplacement sessions is to work through the range of feelings that people experience after a job loss. Coming to terms with the resentment, anxiety and fear is necessary before beginning a new search for employment. And the sooner the better, before the job seeker’s negative outlook becomes so entrenched that it undercuts the ability to enter new situations with confidence and interview properly. Next comes an assessment of the attorney’s transferable skills, experience, aspirations, and education. This portion of the outplacement process helps the attorney identify specific practice areas and potential employers for more targeted follow-up. At this stage one may even discover that leaving the practice of law altogether feels like the best choice. Working with an outplacement coach, the attorney then develops an actionable plan that entails positioning oneself for particular employment and identifies contacts within an area of interest. There’s more coaching to devise techniques for networking and interviewing, as well as strategies for negotiating compensation. Apart from the tips and techniques offered, the process bolsters the job-seeker’s sense that they are not alone at a vulnerable time. They have professional support and guidance available to them, especially when frustration sets in, as it often does during an extended job search. Doing Well, Doing GoodBreaking up an employment relationship is almost always unpleasant for all concerned. But offering legal outplacement services curtails much of the hard feelings, enabling everyone to move on to more productive outcomes. Often after time passes, the situation can even create the possibility of a different type of professional relationship that is mutually beneficial. ROY S. GINSBURG is an attorney coach, providing outplacement consulting, as well as business and professional development coaching. He speaks nationwide on the best practices and ethics of marketing and client service. He also practices in the areas of marketing ethics and employment law as a solo practitioner. www.royginsburg.com. Read More

As the headlines proclaim continued job losses and the trickle-down effects of unemployment are examined, it shouldn’t come as a shock that lawyers are not immune to this sagging economy. In fact, you may find yourself among those statistics to which you paid only passing notice until job loss happened to you. If that’s your situation, first, take a deep breath. It’s a good time, too, to reflect on advice from Abraham Lincoln, “The best way to predict your future is to create it.” Job Loss–Now What? First clear the air and fine-tune your attitude. Keep in mind the “Do’s and Don’ts” of the job hunt, “tough 2009 economic times” style. What To Do Count your blessings. Take deliberate stock of all the things you are grateful for. Your health, family, a good education. Remind yourself of these things daily. Internalizing gratitude helps to inhibit self-pity. Take care of yourself. It is the rare person who goes through the job search process without feeling like they are on an emotional rollercoaster. When you encounter a low day, take it off and do something that makes you feel good-a bike ride, a massage, a movie matinee. Stressful times require an antidote. Along the same lines, make sure your support system is lined up; chances are you will need it. Remember the two “P’s”: persistence and patience. Without them, job hunting in this climate will be discouraging. From the outset, accept that this likely will be a protracted journey. In the event an employer does have a position, there are many candidates from which to choose, so stay visible and you will be top of mind. What Not To Do Don’t feed your anger toward your former employer. No matter how justified it is, anger is unattractive and sucks up the energy you will need to find a job. Forgive or forget-whichever you find easier. Rewriting history is a waste of time. There is nothing that will change the fact that you lost your job. Although reflection may be warranted for lessons learned, the sooner you look forward, the more effective you will be. Don’t let this setback shatter your confidence. It’s not personal. Resist telling yourself you’re a bad lawyer. You’re either a casualty of a challenging economy you can’t control or you may have been a bad fit for your practice area or your employer. Additional Considerations When it’s necessary to start looking for employment, job seekers often need to clear up potential misconceptions. Keep in mind: There is no such thing as a perfect resume. Ask four outplacement counselors to critique a resume and you will get as many opinions. Minimally, a resume should look professional (standard typeface, organized for logical flow and no typos, of course). If it’s been a while since you’ve brushed off your resume, the web has resources to get you started. Headhunters do not work for you, so don’t depend on one to place you. They are paid by law firms and corporate legal departments to find appropriate candidates to fill a specific position. Headhunters would like to have you in their candidate pool should an employer require your skills, but you cannot count on them to find you a job. Outplacement services can be an efficient tool. If your former employer offers outplacement, avail yourself. The search process can be more strategic, organized and motivating with such assistance. Opportunity for Assessment Seize the day. Before jumping on the web to see what’s available, take a time out. Do you know what type of job you want? Really want. Do you want to do exactly what you’ve done in the past or would you like your next position to be different? Perhaps a new practice area or a different sized firm? Have you considered in-house counsel, government, or non-profit? Do you want to stay with the law or move to a related field? There are a lot of choices. To help you decide, think about what you enjoyed about your last job and what you didn’t like. Think even further back: Why did you go to law school? Can your next job be more consistent with those reasons? What accomplishments as an attorney made you feel most proud? Can your next job create a caseload where that feeling occurs on a regular basis? In short, seek opportunities where you will be most fulfilled. If you have trouble identifying your interests and passions, you’ll find assessment tests online, in books, or from professional outplacement counselors that can further assist you. Assessing where you’ve been and reflecting on how the experience might improve provides powerful perspective. Passions are one thing, real jobs can be something else altogether. There is a degree of reality to consider. Do you have the skills for your dream job? How transferable are those skills? If you’re not sure, here again, assessment testing may help. A greater consideration than the skill set is whether there is a market for that type of job. For example, becoming a real estate or M & A lawyer would not be a good choice right now. Seek out others who are doing what you want to do. Often there are no more than two or three degrees of separation for finding that person within your network. Have a conversation and learn how they got their job, what they like and don’t like about it, and what they might have done differently. Evaluate whether your perception of the job is still valid. Search in Your Network While Internet job sites can be useful, they are not your best resource. Jobs posted on the Internet receive hundreds of responses, making it difficult to break out of the pack. Studies show that about three quarters of all jobs are filled by word of mouth. That means you must ramp up your networking activities. Begin by creating a list of people you know who may be able to help you find a job or connect you with others. Invite each of them for coffee or lunch, and be prepared. Every meeting should have a purpose. Be specific about what you want this person to do for you. Is it to identify contacts at particular law firms; to call their contacts to introduce you; to provide a certain type of information? The overriding goal is to expand your network and gather information, so how can this person help you accomplish that? Being vague wastes everyone’s time. Know your story about why are you out of work. Be ready to talk about it in a positive manner, without creating fiction. Never bad mouth your former employer. The profession is small and word travels fast. In its purest sense, networking is about building connections with people for mutual assistance. It is not only about you and your job loss. Don’t forget to ask how you may be able to help the other person. Follow up afterwards with a personal thank you note. Remember the Do’s Be grateful for what you have and treat yourself well. Practice patience. Know that persistence opens doors. Keep a positive attitude, knowing this too shall pass, and you will eventually find a job. And if you do the background work and reflection, your next job will be more rewarding and satisfying than the one you recently lost. Roy S. Ginsburg is an experienced attorney coach in the Twin Cities area. He offers services that help lawyers achieve practice development goals and career satisfaction, as well as outplacement counseling for those who are in-between jobs. www.royginsburg.com Read More

Everyone knows that, much like diet and exercise, networking is good for you and that there are lots of excuses for avoiding it. Practicing lawyers confronting the need to “get out there and network!” find it engenders powerful attitudinal obstacles. But unless you tap networking as a business development tool you will consistently fall short of your potential. Understanding NetworkingAlmost anyone can learn to network comfortably and achieving that comfort depends first on understanding what networking is not. Networking is not showing up at a conference or reception, glad-handing and distributing business cards to strangers. Who wouldn’t feel uncomfortable doing that? Networking is building a network of people for the purpose of mutual assistance. Put the emphasis on mutual. It’s not “I want your legal business.” Rather, it’s “How can we help one another in professional, as well as personal, ways?” In its simplest form, networking presents a platform for exchanging information that is mutually beneficial. It may be about a legal matter, but it could even be about a baby sitter or plumber if the need is expressed. Further, and this is key to building a network, it’s more about giving than receiving. Only when you give (advice, praise, recommendations, etc.) do relationships grow and develop. Once that occurs, it’s only a matter of time before you get something back. It’s human nature; people like to reciprocate. Developing trusting and dependable relationships, however, doesn’t happen in one meeting. It is a process, and it requires persistence and patience to reap the benefits. Getting Past the ExcusesMany lawyers resist incorporating networking as a means of building a book of business. Here are their most common excuses: I don’t have the time. I’m a professional; networking is like being a salesperson. It is outside my comfort zone. These attitudes stand in the way of networking progress. Let’s consider them one by one. I don’t have the time. Once you understand what a well-developed network can accomplish, it can actually save you time. For instance, everyone who is part of your network is a potential resource, with access to information, opportunities, or ideas that could otherwise require hours of your time to gather. With an established network, the answer to a practice management issue is only a phone call or two away. But the main reason lawyers should network is that having an effective network is one of the most critical components of being a successful rainmaker. As such, taking the time to network must be a priority. Think about the successful lawyers you know. Are they the most exceptionally skilled or technically competent legal professionals? If not, then what is it that sets them apart and sparks their success? Undoubtedly, it’s the number of people they know and the quality of the relationships they have with them. Building meaningful relationships, over time, is the key to a robust practice; and effective networking is the genesis for developing those relationships. I’m not a salesperson. Don’t confuse networking with a sales call. Remember, networking is about sharing information and listening for ways to be of mutual assistance. Letting people you meet know that you practice law in a firm that offers a range of services is information, not sales. Lawyers need to shift their attitude if they think that networking is the same as “selling” legal services. Most people are grateful to know where to find a lawyer when they need advice about estate planning, protecting a company’s intellectual property, completing a business transaction, or trying to keep someone out of jail. And all lawyers can be proud of the fact that they earn their living by helping people. It’s out of my comfort zone. Just as networking is not handing out business cards at receptions, it is also not cold-calling complete strangers. Rather, think of it as developing relationships with people with whom you may be acquainted, but would like to know better. Is a cup of coffee or lunch out of your comfort zone? Rarely have I worked with an attorney who could not carry on a pleasant conversation in a one-on-one setting. Start with people you already know, professionally or personally, to create a contact list. Think about people who can benefit from an enhanced relationship with you. Here’s a starter list of prospects: Law firm (cross-sell) Clients People from bar association or trade/industry organizations People from organizations where you volunteer Opposing counsel from past cases Extended family members Friends (and their friends) Neighbors (do you ever wonder what to talk about at the annual block party?) People with whom you went to college or law school People from previous jobs Members of your church or synagogue Next, prioritize the list and contact these people to set up a casual get-together. Connect with a college alum who is starting a new business or another lawyer who could be a good referral source. Not everyone will accept your outreach, so don’t take it personally. They are either too busy or are too shortsighted to see the benefits of networking. Remember that 70 percent of the time, the best baseball players don’t make it to first base when they come to the plate. If you can enhance your relationship with 25 percent of those on the contact list, you’re doing fine. Building a network is a numbers game. It’s not about having the best personality or leading the popularity chart. To be successful at it, you must continuously circulate, adding new names to your contact list. Build your network within groups where prospective clients or referral sources are likely to be found. Attend conferences, become visibly active in professional and community organizations where you interact with many people, or join a committee where you can meet and build rapport with a smaller group. Networking doesn’t happen in your office: Get out and meet someone new. Practical TipsHere are some general tips to make those networking efforts more effective: 1. Network systematically. Make a contract with yourself that you will spend a certain amount of time networking. For example, your contract could be a commitment to have a certain number of coffees, lunches, or association gatherings per month. Keep the commitment realistic. If you set your sights too high, you’ll likely get frustrated and stop all of your efforts. The goal is eventually to make networking a seamless habit. 2. Listen. Remember the ears-to-mouth ratio. You have two ears and one mouth. Spend at least twice as much time listening as talking. If you don’t listen, you will not learn how you can help this person. 3. Follow up with regular communication and thoughtful gestures. Email your contacts an article they might find interesting, send a card when their child graduates from college or a plant on their birthday, or make a date for lunch again later in the year. 4. Be enthusiastic. Few people hire lawyers who don’t enjoy what they do. When I was an inhouse attorney, I wanted lawyers who truly loved what they did. I was once involved in a 1st Amendment case and was seeking counsel. I obtained three referrals. On paper, they all had the necessary credentials and experience. I then interviewed all three. One lawyer in particular simply exuded passion for the 1st Amendment when we talked. Guess which one I hired? 5. Be confident, not arrogant. Many lawyers find it difficult to strike the proper balance between these two. Everyone wants to hire the lawyer who sounds like she knows what she’s doing. Unfortunately, in trying to project confidence, many lawyers “cross the line,” boasting about themselves or their law firm. When I’ve encountered these I was never impressed, but I was always incredibly bored. 6. Be patient. How many people do you know who got married after only one date? Then why expect to be hired after one lunch? Remember, networking is a process of building relationships. It may take years of staying in contact before you are retained. The ROIA well-worn cliché reminds us, “it’s not what you know that counts, it’s who you know.” Well, in the legal profession, we know for sure that what you know is of primary importance. But it doesn’t do much good if others don’t know you know it. Investing the time to develop a wide network of informational resources, advisors, and prospects yields a return that exponentially increases over the years. And that’s because just about all the contacts you make, at some point in their personal or professional lives, will need legal services. Wouldn’t it be great if you popped into their minds? Networking effectively will assure that outcome. Ethics & Networking While there are no specific ethics rules that have the word “networking” in them, a key goal of networking-business development-is addressed directly. Rule 7.3 of the Minnesota Rules of Professional Conduct states that lawyers cannot “solicit professional employment from a prospective client” in person or by telephone unless that person is a lawyer or has a “family, close personal, or prior professional relationship with the lawyer.” This rule is commonly misunderstood. Keep in mind that: 1. The rule applies in any room in any type of building, not only hospital emergency rooms. 2. There is no exception in the rule for soliciting a “sophisticated client,” e.g., a corporate executive whose company is being sued. Calling the CEO and asking to be considered as defense counsel is unethical unless the CEO falls within the exceptions noted above. 3. The rule contains no consent exception for referrals. If one of your contacts calls and asks you to call a friend who needs legal assistance, you cannot presume that the friend has consented to be contacted. Thank your contact for the referral, but urge that they have their friend call you directly; if you initiate the call you could be disciplined. ROY S. GINSBURG is an attorney coach, providing business and professional development consulting. He speaks nationwide on the best practices and ethics of marketing and client service. He also practices in the areas of marketing ethics and employment law as a solo practitioner. www.royginsburg.com. Read More

The attorney looking ahead to retirement need not be reconciled to a precipitous loss of income or of the value built up in practice. By carefully planning and negotiating the terms of their departure, retiring lawyers can both ease the transition and come away with more of the value they invested in their practice. When approaching retirement, most attorneys take a careful look at their assets to determine when they can retire, as well as get a good idea of what type of lifestyle they can afford. For most, that means a review of their brokerage statements and appraisals of whatever real estate or other tangible assets they own. After all, except for government lawyers, most attorneys do not have a defined benefit plan to pay them income in their retirement. Or do they? Instead of riding into the sunset and leaving behind the books of business and referral networks that they worked for years-perhaps decades-to develop, lawyers should evaluate whether their practices can generate value even as they wind them down. Many lawyers, regardless of the size of their law firm, fail to recognize that their practices may have significant value that can enhance their nest eggs. Depending upon a lawyer’s book of business, practice area, geographic location, and degree of advance planning, it is very possible to derive value from one’s practice to either enjoy during retirement or pass along to one’s heirs. Valuing Your PracticeWe’ve all heard stories of the lawyer who died at his desk without giving any thought to transitioning his practice. When that occurs, as a practical matter, there’s little value to recover. If the deceased was a solo practitioner, the estate may collect outstanding receivables but has no claim on future client income. Longstanding clients or clients with open files will simply find other counsel, providing no financial benefits to the deceased lawyer’s estate. The result is usually no different if one works in a large law firm. Upon a lawyer’s retirement or death, the other lawyers in the firm scramble to maintain the client relationships. Any financial benefits from the book of business go only to the firm’s other lawyers. Even those attorneys who consciously plan a departure date, more often than not, make no attempt to extract any value from their practice. This occurs for a variety of reasons. Some simply do not realize that there are means to obtain value. Among those who do, some conclude that gleaning what remains is more bother than it is worth. Finally, of those practicing in firms, some apparently prefer to give the value away to their partners based on feelings of institutional loyalty. Income-Preserving Exit StrategiesLet’s examine the situation of hypothetical lawyer, Sara Sage: Sara has been with Dewey, Cheatem, & Howe for 30 years. At 62, she’s earned a comfortable living but is thinking she’d like to wind down. Sara would like to earn some income at least through her late 60s, but she wants to spend a few months a year traveling to see her grandkids, who live in other states. She wants to work part-time and be done in about five years. Sara’s book of business is better than that of most of her partners. Her firm doesn’t have a mandatory retirement date, but there’s no formal retirement plan either. When partners are done, the firm throws a party and the retiring partner sends post cards from Florida. Sara has a number of options to consider that will enable her to continue to benefit from her investment in her firm. Of Counsel-Same Law Firm. A first option for Sara is to go “of counsel” with her firm. Historically, the profession has acknowledged the notion of older lawyers winding down their practices. Especially at larger law firms, attorneys would become “of counsel” and negotiate an arrangement that suited the needs of the law firm and the “of counsel” attorney. This can be a win-win situation: the “of counsel” lawyer may work fewer hours and accept lower compensation, but keep an office, some support staff, and most importantly, his reputation as an experienced practitioner and role as a rainmaker and mentor. The firm is relieved of some financial obligations and continues to receive business and the benefits of the attorney’s institutional knowledge or substantive expertise. Most importantly, a well-thought-out “of counsel” arrangement provides a timeframe and blueprint to properly transition clients of the “of counsel” attorney to others at the firm. As defined by the ABA, the term “of counsel” signifies that the lawyer has a “close, regular, personal relationship” with the firm.1 From an ethics perspective, the relationship provides the firm and the lawyer greater flexibility in sharing fees that may be generated by the lawyer continuing to work on files or from new business originated by the lawyer. Indeed, the advantage of the “of counsel” model is that the terms and conditions of the financial arrangement are usually limited only to the creativity of the lawyer and the law firm. When negotiating its terms, lawyers like Sara with a respectable book of business may have more leverage than they think. Transitioning clients takes time and effort and one should be compensated for what is, for all intents and purposes, a sale of the lawyer’s good will to the law firm. In large firms, management may wrongly assume that some clients feel loyalty to the entity. In a more and more competitive legal marketplace, that assumption could prove to have disastrous consequences when the “of counsel’s” client relationships turn out to be far more personal than institutional. On the flip side though, Sara should not overplay her hand. For example, some of her relationships may very well be with corporate constituents who are also retiring and may not be so easy to transition. In small firms, other partners’ dreams of taking over the senior lawyer’s client base and finally obtaining the full benefit of all the hard work they have done for those clients at no cost may be naïve. There is no typical or standard compensation arrangement for an “of counsel” lawyer. Much like partners in any size firm, attorneys “of counsel” typically are compensated based on revenue collected, hours worked, and business brought in. The only real difference is that the formula may recognize the time and effort spent transitioning the attorney’s book of business to others at the firm. After all, someone like Sara will be transferring her good will to the benefit of her partners and its worth should be taken into account. Hence, it may be appropriate to pay the retiring lawyer a percentage of the fees generated by other lawyers’ work done on behalf of clients formerly handled principally by the retiring lawyer. The formula should provide incentives for both Sara and the lawyers on the receiving end of the client transition to cooperate with one another. That can sometimes be a challenge for both the law firm and the retiring lawyer. Firms understandably prefer formulas that emphasize a percentage of future fees expected to be generated; retiring lawyers will usually want something more fixed. Of Counsel-Different Firm. Now let’s suppose Sara’s law firm offers her an “of counsel” agreement that in her mind undervalues the book of business that she could transfer to others at the firm. Depending upon the portability of her book, she might want to consider going “of counsel” somewhere else. Most law firms, small and large, are willing to talk to 30-, 40-, or 50-something-year-old partners with a book of business who are thinking of switching firms. Smart law firms will similarly want to talk to a 62-year-old partner with a well-thought-out client-transition plan. That plan would include a description of the lawyer’s key clients,2 a history of fees billed and collected, hours worked, and an indication of how many years and how many hours each year the attorney plans to work. This “of counsel” arrangement with a different firm can be a viable option for a lawyer in any size firm, including solo practitioners. Solos and small-firm owners who want to relinquish the duties of running the business of their practice may find the arrangement especially attractive. While some may label the transaction as merely switching firms or a merger, it is in reality an acquisition, but one where the retiring lawyer does not receive cash for the practice. Instead, the lawyer negotiates a compensation package with the acquiring firm, following the same parameters noted above for lawyers who become “of counsel” at their original firm. Changing law firms in an “of counsel” role is easier said than done. As would be true any time a lawyer wants to leave one law firm for another, the lawyer needs to “shop” the practice to other firms; the market may not be as robust or predictable as one hopes. Furthermore, switching firms can be problematic for all of the familiar reasons, including conflicts, culture, and governance. Most importantly, there are no guarantees that one’s book of business will follow to the new firm. Those who are thinking of moving their practice elsewhere need to be aware that their firm’s retirement plan may restrict their ability to practice law while receiving retirement benefits. Although Rule 5.6 of the Minnesota Rules of Professional Conduct prohibits noncompete agreements for lawyers because they limit clients’ freedom to choose their attorneys, the rule specifically exempts agreements “concerning benefits upon retirement.” The ABA has recently opined that as long as a lawyer is genuinely retiring, a law firm may impose geographic, temporal, or subject matter restrictions on the departing lawyer’s practice, or prohibit the lawyer from practicing law entirely, as a condition of receiving the retirement benefits.3 Selling Your Law PracticeNow what if Sara was a solo practitioner or the majority owner of a small law firm? Although ethically proscribed for years, a relatively new exit strategy can be to sell the practice and turn good will into cash.4 The lawyer’s client base, the referral network, the law firm’s name and reputation, the firm’s phone number, the firm’s web domain name-all of these intangibles have value which can form the basis for a selling price. Even when the ethics rules prohibited the outright sale of one’s practice, smart lawyers would seek out potential “successors” and devise a partnership or other contractual arrangement of shared overhead expenses and revenue that enabled the retiring owner to extract the good will value of the practice during the last years of practicing. Under the “successor” model, after a negotiated time frame, the entire practice would then be owned by the “successor.”As a practical matter, whether one sells a practice or finds a successor, the issues that need to be addressed by the retiring lawyer are virtually identical. The only significant distinction between the two is the nature of the legal documentation required to close the deal. Both scenarios offer many advantages. Employees of the practice, if any, can frequently be retained. Someone else becomes responsible for old client files. And the lawyer avoids the problems of dying at her desk, including the burden on heirs of winding up the practice, determining whether any active matters remain, and returning client files. What problems will Sara likely face? First, she will have to find a buyer. One can do that by advertising, networking, or utilizing the services of a consultant. Likely buyers include: Refugees from large firms who are seeking a career change for reasons of lifestyle, inability to make partner, layoff, or conflicts; Insiders-minority shareholders or associates who would benefit from being able to retain the firm’s name, staff, presence in the marketplace, etc.; and Recent graduates “hanging out a shingle.” Buyers are motivated because in theory they can obtain: An existing book of business; Good will; Ability to grow their practice faster; and Operating systems and staff in place with known costs and an existing track record. Assuming Sara can find a buyer, she will next need to reach agreement with the successor on a partnership, value, or other form of contractual arrangement, including a payout schedule. There are no hard and fast rules. Much like selling a home, selling a practice ultimately requires a determination of what someone is likely willing to pay. The most significant factor in trying to value a practice is assessing the book of business. That includes: Business that continues from existing clients; New matters from former clients that come to the firm; and New matters that come to the firm simply based on the seller’s reputation. It should come as no surprise that the value of one’s book is largely dependent upon the practice area and type of clientele. For example, if you are retiring from an estate-planning practice, chances are good that the heirs of clients whose wills you drafted will turn to your successor to probate the estate. If you have provided employment law advice to a variety of small business owners and work with your successor lawyer to transition such clients, many will remain rather than search for new employment law counsel after you are no longer around. Contrast that with the practice of a prominent criminal defense lawyer. Here, transferring any good will is extremely problematic; the good will may be too personal in nature. Enter the number crunchers. Some parties emphasize current earnings to support a value; others look to the expected earnings. Still, others use a market- or asset-based approach. Both buyers and sellers should consider the impact on value of economic trends in the practice area and the competition, as well as the tax consequences of the practice transfer. Whatever approach is taken, once the practice is valued, the payout of the purchase price or other agreed upon arrangement can be structured over a period of several years, providing an income stream to the retiring lawyer and allowing the buyer to stretch out the payments enough to make a living in those first few years of the transition.One difficulty of selling an active practice is how to allow the buyer to conduct a due diligence inspection of the quality of the existing client matters without breaching client confidentiality. As a threshold matter, individual files may not be sold; Rule 1.17 requires that the “entire practice” be sold, save for conflicts files or matter in which the buyer would not be competent.5 Similarly, Rule 1.17 addresses confidentiality only in the context of the client’s failure to respond to a notice from the lawyer that the entire practice has been sold and that the client’s file will be transferred.6 But in the negotiation phase, a buyer cannot be permitted to casually peruse client files to determine their value. Instead, selling lawyers may have to make lists and summaries of client matters for inspection of the buyers. Those lists may also need to be incorporated by reference into the sales agreement, so that the buyer has some recourse if the seller misrepresented the merits of the matters. Plan Your RetirementJohn Kennedy once remarked that “the time to put on a new roof is when the sun is shining.” All of the retirement strategies discussed in this article require time-time to determine the best strategy and then time to implement it. Transferring client relationships and one’s caseload requires effort; it will not just happen overnight. The bare minimum amount of time required is probably one year. And depending upon the pace at which the retiring partner wants to wind down, the complete transfer may last as long as five to seven years. In any event, if you intend to retire, it is time well-spent to ensure that you can spend well during retirement. # Notes1 American Bar Association, Formal Op. 90-357 (May 10, 1990).2 As with any lateral transfer, the moving lawyer must maintain client confidentiality, which may require, in the early stages of negotiation, descriptions of the lawyer’s clients without immediate disclosure of their identities.3 ABA Formal Opinion 06-444, “Permissibility of Restrictive Covenants in Lawyer Agreements Concerning Benefits Upon Retirement” (Sept. 13, 2006).4 See Minnesota Rules of Professional Conduct, Rule 1.17.5 See Rule 1.17(c).6 See Rule 1.17(e). If the client does not respond to the notice, the client is deemed to have waived confidentiality for purposes of transferring the file to a new lawyer. Read More

The demographic phenomenon known as the baby boom has been shaping all aspects of American life since its advent in 1946—from an unprecedented number of students when the boomers were young, to an unprecedented number of workers during their adult years, to an unprecedented number of retirees in the years ahead. There is no escaping the impact of this generation. For the next 19 years, about 10,000 people a day will turn 65—including many of the nation’s most experienced and respected attorneys. The American Bar Association estimates that there are 400,000 baby boomer lawyers—approximately one-third of the nation’s current total. Before long, golf courses may be as crowded as highways. Take a careful look at your law firm’s most-influential leaders and biggest rainmakers. Chances are good that these individuals will be retiring over the next two decades. Is your law firm prepared for the impact of this seismic generational transition? The impact will be felt well-beyond the law firm itself. Clients who have been well-served for years will find themselves bereft of the lawyer with whom they have built and maintained a personal and professional relationship over the years. Who at your law firm is prepared to step to the plate and keep these clients equally satisfied? The future health of your law firm depends upon how today’s leadership plans for the firm’s post-boomer viability. This important effort is called succession planning. Obstacles to Planning Afraid to Plan. In order to plan for the future of your law firm, you need to know the retirement plans of the firm’s senior lawyers. Obtaining this knowledge is easier said than done. It can be problematic to simply start a conversation about the subject. Many senior lawyers avoid raising the issue on their own due to a variety of real or perceived fears, including potential reduction of compensation or loss of clout among partners. Others resist any conversation that involves thinking about the end of their professional career—with its hints of their eventual mortality. Junior lawyers whose future is at stake have their own fears about starting the conversation. If handled incorrectly, broaching the topic of succession could in some firms be political suicide. Younger lawyers fear being perceived by their elders as putting their self-interest ahead of the firm’s. Too Busy to Plan. Lawyers are notorious for contemplating every possible way in which a client deal or transaction can go wrong—even if it would not occur for years. Paradoxically, when it comes to the future of the law firm, thinking ahead is hardly a blip on their radar screens. Each lawyer’s focus is on day-to-day issues such as handling client crises, billing and collection matters, or dividing up firm profits. They cannot see the forest for the trees. Too Selfish to Plan. There are also some partners who, quite frankly, care about themselves more than they care about the firm. If they have a big book of business, they are usually tolerated. These lawyers will disrupt the law firm by leaving under their own terms, planning only for themselves and not their colleagues. Starting the Discussion In theory, any discussion about succession planning should be started by the firm’s managing partner or management committee. Alternatively, influential and well-respected partners can raise the issue. In reality, many of these individuals suffer from the fears mentioned above. In that case, one effective tactic is to camouflage the firm’s succession planning within its strategic planning process. This can be particularly effective when the strategic planning process is facilitated by an outside consultant. Unlike the lawyers in the firm, outside consultants have no vested interest in the outcomes of succession planning. The best way to engage selfish partners in the process is to focus on the client side of succession planning. Even partners who do not particularly care about their colleagues typically care very much about their clients. When the emphasis is placed on meeting client needs, and not on the firm, the chances of getting their attention substantially improves. Nuts and Bolts The objective of creating and executing a succession plan is to ensure continuity in firm management and client relationships. Management. Responsibility for transitioning firm leadership falls to the managing partner or management committee and, at larger firms, the practice group heads. Firms led by managing partners should elect or select a successor to be “assistant managing partner” to work with the incumbent managing partner for months, or even years. This allows time for the new leader to be mentored and gradually assume management responsibilities. Firms led by committee should adopt a rotation process that maintains continuity while providing a steady infusion of fresh blood and future leaders. Client Relationships. Transitioning the clients of a senior attorney to the next generation is the most challenging component of any succession-planning equation. Client input is essential. Success requires managing and finessing human relationships, a task that—even with the best of intentions—is never easy. It can take years to successfully transition a client relationship. The successor lawyer needs time to obtain the necessary expertise and client/industry knowledge. More importantly, it takes time for clients to feel the requisite “comfort and chemistry” that is so crucial for a successful lawyer-client relationship. Finally, time should be set aside to accommodate any adjustments to the plan. There will be inevitable bumps in the road that will require some time to absorb shocks and make any necessary repairs. Furthermore, a comprehensive client-transition succession plan is actually multiple plans. Each senior lawyer needs a plan and, within that plan, there must be a plan for each significant client. Remember, however, that all clients are not created equal. Allocate the bulk of your time and efforts to the clients that are most crucial to the firm’s bottom line. In order to put together a client transition plan, ask the following questions: Which firm clients are being served by senior lawyers? How long do these senior lawyers intend to work? Are any junior lawyers serving those clients? If not, who can be introduced to the relationship? What types of training and mentoring do these junior lawyers need? How long will that take? What are the clients’ concerns about the potential loss of the firm’s senior lawyers? Do they have successor preferences? Are any of your key clients going through their own transition process? Do you have a relationship with the client’s post-boomer generation? How will successor lawyers be introduced to clients—both socially and in a working relationship? The answers to these questions will help your firm develop a plan to transition clients. Will your plan work? Only if your firm has asked and answered one additional crucial question: What will motivate the senior attorney to begin to let go? More often than not, the answer is money. Without the proper financial incentives, the client-transition plan is destined to fail. In most law firms, the firm’s compensation policy must be adjusted for those impacted by the plan. If the firm’s policy is heavily weighted towards billable hours, senior lawyers are unlikely to delegate to junior lawyers. If the firm wants senior lawyers to delegate work, the senior lawyer needs to be rewarded for taking that action. Additional adjustments will most likely be necessary in compensating for origination and nonbillable time (e.g., mentoring). For any client-succession plan to work, the senior lawyer must be provided with some level of income protection that rewards the lawyer for furthering the goals of the plan. Flexibility, communication, and accountability are also critical to the success of any succession plan. Since each lawyer may want or need a different time-frame for transitions—to address personal as well as client needs—plans must be flexible. Firm management, senior lawyers, junior lawyers, and clients must communicate regularly to ensure that the expectations of each party are being satisfied. If not, individuals must be held accountable to get them back on track. Finally, any succession plan should take into account the role of a retiring lawyer after the client transition has been completed. Can the lawyer add mentoring or marketing value to the firm in an “of counsel” role? If the cord is to be cut completely, has the firm provided resources to ease the individual’s change to a retirement lifestyle? Never Too Late With one-third of the nation’s lawyers contemplating retirement, it is time to start or ramp-up your firm’s discussion of succession planning. It is never too late. Even a few months or a year of planning is preferable to a crisis situation generated by the precipitous retirement of a critical partner who rides off into the sunset never to be heard from again. I can guarantee that this unhappy scenario occurs more often than you would expect! If your law firm wants its best clients to stay when your baby boomer lawyers leave, succession planning is the most effective insurance policy to accomplish that goal. Read More

Back in the late 1960s, when baby boomers cheerfully sang the lyrics to “When I’m 64” along with Paul McCartney and the Beatles, age 64 seemed impossibly far away. Today, not so much. For one third of the nation’s current lawyers, age 64 (and the concept of retirement) now seems just the opposite—impossibly close. Approximately 400,000 lawyers will retire over the next decade. During their years of active practice, most of these lawyers made a real difference in their clients’ lives—and want to continue to have the same impact as they approach and reach retirement. After all, Paul McCartney is still touring at age 69. With proper planning in the years leading up to retirement, lawyers can ensure that their retirement years provide the same personal fulfillment as their working years. Why Lawyers Flunk Retirement Attorneys often find adjusting to a retirement lifestyle very difficult. Perhaps the most fundamental reason is that they do not plan, or even think about, what they are going to do with their time. They plan for their financial futures, but rarely for their practical, day-to-day futures. They naively believe that when they retire, everything will fall into place. Most overworked lawyers eagerly anticipate having more leisure in their lives. However, they soon learn that a daily routine of golf, movies, and restaurants starts to feel older than they do. In addition, few lawyers honestly assess their relationship with a spouse or partner. They may have made a commitment years ago “for better or for worse,” but often begin to doubt that they can make a similar daily commitment “for lunch.” Sooner Rather Than Later President John F. Kennedy once said, “The time to repair the roof is when the sun is shining.” Similarly, when it comes to retirement, you should start the planning while you are still engaged in active practice. Too often, lawyers assume that professional development ends when they start to wind down their practice. Instead, a lawyer’s focus on professional development should be maintained—and maybe even intensified. Why? Because whatever your goal for retirement, a few years of groundwork are often needed to make a successful and personally fulfilling change. Timing Is Everything The first consideration is “when” to retire. The answer is never simple. Think about your answers to the following questions: Do you still look forward to going to work or have you had enough? Have your law firm colleagues suggested you slow down or stop practicing? Does your law practice interfere with hobbies, volunteer work, travel, family, or other activities on which you would rather spend your time? How is your physical health? Do you still have the mental edge your clients need and deserve? How healthy is your spouse or partner, or other significant relatives? Is there someone you will need to care for? Can you afford to retire? There’s no magic formula; the decision about when to retire is always a “guesstimate.” Factors will be ranked differently by each individual. In addition, many of the best predictions could be upset with little advance notice. But it is important to at least think about your answers to these questions—and do your best to determine a time that feels right. Take a Time Out Once you have an idea “when” you want or need to retire, it is time to think about “what” you want to do when you retire. Here is a sample of “dig deep” questions I use with the lawyers I coach: What excites you the most about retiring? What worries you the most? What will you miss most about your law practice? Think about family, friends, and colleagues who have retired. What have you admired about their approach to retirement? What would you do differently? Why? Why did you go to law school? Are there any as-yet-unaddressed reasons that you can accomplish during your retirement? As a lawyer or community member, which accomplishments have been particularly satisfying and rewarding to you? Can you build on this in retirement? What would attendees at your 90th birthday party say about you, based on your current accomplishments? What can you do between now and then to improve that script? What do you most enjoy doing in your spare time? What do you most enjoy about your vacations? What is your ideal way to spend the day on a weekend? The work of practicing law provides most of us with more than a paycheck; it also provides a sense of purpose and identity. It provides mental stimulation. It provides a vast array of professional relationships inside and outside of the office. Finally, at its most basic, work provides a place to go every day and structure to your day once you get there. While some lawyers cannot wait to be free from the daily commute, environment, schedule, and tasks, others feel lost without a routine. When planning the “what” of your retirement, find activities to replace the structure and activities that were important to you in law practice—above and beyond the money that you earned. What Are The Options? Whether a lawyer works in a firm or as a solo, he or she does not close up shop one day and ride off into the retirement sunset the next. Many lawyers gradually wind down their practices—over months or years—and transition to part-time before retiring completely. Historically, law firms use the “of counsel” designation for lawyers nearing retirement. Depending upon the needs of the individual lawyer and law firm, a lawyer’s productivity can vary significantly. For some, “of counsel” status is little more than a destination for socializing and regular lunches with colleagues. Others continue to bill some hours, mentor younger lawyers, represent the firm in the community, and continue to make a significant contribution to the firm and its bottom line. Even solos usually wind down and work part-time before retiring completely. Some stop accepting new cases and work until all of their active cases are completed. Others transfer active files or sell their practice to former competitors. Either option takes some planning. Whether a lawyer goes cold turkey or slowly phases into retirement, there will be many more hours of available time in each day. After working hard for 30 or 40 years, rest-and-relaxation is usually the first goal—sleeping in, renting and watching the movies you’ve always wanted to see, and reading the daily issues of The New York Times and The Wall Street Journal cover to cover. Trouble begins when retirees start expanding two or three hours of relaxation into regular full days of nothing but relaxation. That soon results in boredom and a loss of professional identity. Many retired lawyers remain happily connected to the legal profession in a number of ways—part-time (and sometimes for pay)—in areas like these: Expert witness work Alternative dispute resolution (ADR)—mediation and arbitration Politics (running for office or working on a campaign) Teaching as adjunct faculty at a law school or college Teaching continuing legal education programs Pro bono work Ramping up bar association activities Writing articles for print or electronic media, or blogging. Lawyers can also look outside the legal profession. There are paid opportunities in corporate America and the entrepreneurial sphere. Based on your interests, you can also consider an active involvement (most likely unpaid) in organizations in the following areas—any one of which would be thrilled to have you as a volunteer: Religious Social services Hospitals Civic Education/youth services and sports Environmental Culture/arts Community agencies What Are The Next Steps? Give your retirement planning the same due diligence you devote to your legal work. Are your goals realistic? Use the Internet to conduct basic research. Read some books and articles. Most importantly, get out and talk to real people—especially those who have already retired and can provide their “real-world” perspective. Chances are very good that you know someone, directly or by association, who had retirement goals similar to yours. Did it work? What went right? What went wrong? How much groundwork had to be laid? Was enough time devoted to planning? Have a conversation with these individuals. You will find that they will be more than happy to share their experiences with you. I strongly recommend that my attorney coaching clients who are still working (but thinking about retirement) “practice” for retirement. Actively engage in some of the things you are planning to do in retirement, and see if you in fact enjoy it. Start taking longer vacations and more three- or four-day weekends. If all goes well and you have planned properly, you will enjoy this time. If you get restless, it may be a good idea to amend your plan and keep practicing—or you run the risk of an unsatisfying retirement. Assuming that your “practice” time goes well, your retirement planning is still far from complete. You must plan to continuously adjust your expectations and actions as time goes by. When you began practicing law and finally felt you knew what you were doing, you did not hit the automatic pilot button and coast for the rest of your career. You continued to make minor and major adjustments. You needed to be flexible, persistent, and patient. The same is true with your retirement activity plans; tweaks will be needed as circumstances change. Your career was satisfying but not perfect. No retirement is perfect, either. Ideally, you can look back at your legal career with a sense of accomplishment. With some thoughtful planning (and a bit of luck), you can have that same feeling of accomplishment about the productive and satisfying years you spend in retirement. Read More

As baby-boomer solo practitioners and owners of small law firms approach retirement, many start to think about selling their practices. However, they do not want to explore that path without a rough idea of what their practice is worth. It sounds like a cliché, but a law practice is worth exactly what someone else will pay for it. Although that answer is not very satisfactory, valuing a law practice is different from valuing other professional services businesses that are bought and sold. When this happens, appraisers routinely apply a variety of formulas. Virtually all other types of professional services, including accountancies, medical or dental practices, have fairly predictable future books of business. The transferability of an attorney’s book of business is much harder to predict. In large part, this is because many services that lawyers perform are one-time or at best sporadic. In addition, even when there is recurring business, that business is usually dependent upon certain client relationships that may not be as easy to transfer as the seller and buyer hope. What about comparables? Comparables are of no help. The marketplace for selling law firms is immature. There are very few comparable sales. Moreover, there is no standardized way to find out what other law practices sold for. It is not like finding comparables for the house that sold down the street. Deals that are done usually remain confidential. Even if one hears about a deal and its terms, it is hard to use this deal as a comparable. Many deals are insider ones. In other words, the parties knew each other and have worked together for years—many times in the same law firm. The actual valuation method in such cases is typically “what seems fair.” For arms-length transactions, the determination of “fair” creates a much bigger problem. Similarly, it is not much help to investigate how practices are valued in divorces. In a divorce situation, there is relative certainty about the amount of business going forward. Few factors will change. If a lawyer going through a divorce has netted $250,000 annually for the past three years, it is very reasonable to assume that those numbers will not change significantly in the near future. In addition, the parties in a divorce must strike a deal or a judge will do it for them. When a law practice is transitioned to someone else, many factors are changing. You can’t make the same assumption about revenues going forward. Also, there is no court mandate in a buy/sell situation. Neither party is required to do a deal. Each party can walk. Estate-Planning Hypothetical Conventional wisdom holds that there is value in an estate-planning practice. Most estate-planning lawyers will have drafted many wills and other documents for clients over the course of a career. In theory, these should generate a steady stream of future business as documents need updating or an estate is probated. The purchaser of this practice is acquiring future potential business. While there is no guarantee that this business will materialize, it is reasonable to assume that at least some of these former clients will seek out the new owner when they are in need of future legal services. In selling a law firm to a particular buyer, a retiring lawyer is actually recommending the purchaser. While some clients may certainly look elsewhere, many others will accept this recommendation and stay with the new owner. Let’s assume that a hypothetical lawyer wants to sell an estate-planning law practice that has consistently netted $100,000 in annual revenue. Let’s further assume that, over the years, the lawyer has created 1,500 wills. We can speculate that, over the next five years, 50 clients will contact the purchaser of the practice to have their wills updated (at $1,000 per will) and 20 more will need to have an estate probated (at $5,000 per probate). The purchaser has gained an additional $150,000 in total revenue. These are relatively conservative assumptions. Two Common Valuation Methods Is it possible to get at least a ballpark idea of what this practice is worth? Yes. Perhaps the simplest method used to value any business is the rule-of-thumb method. Here, bean-counters assign a variable (also known as a multiple). They then multiply the annual net revenue by this variable to derive a value. In other service professions where future revenue is more predictable, this method makes sense. It makes less sense for law practices. Although there is little science to support one multiple over another for law practices, the number is thought to be somewhere between .3 and 1.0. Should a future book of business be very predictable, it could be higher. For the purpose of our hypothetical, let’s assume a conservative multiple of .5. Using the rule-of-thumb method, the value of the practice for sale is .5 of $100,000 or $50,000. Another method can be used, but with this method the value is determined after the fact. Under the earn-out method, the buyer pays the seller an “earn-out”—a percentage of future revenue for a fixed period of time. If the actual revenue from the seller’s files turns out to average $30,000 a year over five years, the buyer would then pay one-third (a typical ratio) of the total to the seller. In this case, the amount would also be $50,000. It is readily apparent that neither the rule-of-thumb nor the earn-out method is exact. With the rule-of-thumb method, there is a lot of wiggle-room when estimating future revenue, as well as with the selection of a somewhat arbitrary variable or multiple. With the earn-out method, parties won’t know the precise sale price until years down the road. Terms & Risks The terms of both types of deals are very straightforward. Once a rule-of-thumb price is agreed upon, sellers and buyers need to negotiate a payout schedule. Using the hypothetical discussed above, for example, the parties may agree that the buyer pays the seller $10,000 annually for the next five years. In an earn-out deal, three factors must be negotiated: the earn-out percentage, the length of time over which revenue will be calculated, and how frequently the percentage will be calculated and paid out. As is the case with all business deals, there is risk involved in the sale and purchase of a law firm. When there is an agreed-upon fixed price, the buyer may pay something for nothing if the predicted future revenue does not materialize. However, if there is an extraordinary amount of future revenue, the seller may have left some money on the table by agreeing to a fixed price. With an earn-out, the buyer assumes absolutely no risk of losing money other than perhaps a negotiated down-payment. If there’s no future revenue, the buyer pays the seller nothing more. In exchange for this, however, the buyer assumes a different kind of risk. Should future revenues exceed the anticipated amount, the buyer pays more. Given the general risk-averse nature of attorneys, most buyers prefer the earn-out method, where they pay only if the anticipated business actually materializes. Most sellers, on the other hand, would rather have the certainty of fixed payments, avoiding the risk of an earn-out where future payments could be minimal. Few legal practices are as predictable of future revenue as estate-planning practices. Under those circumstances, what a practice is worth will be far more dependent upon the old rule of supply and demand than any formula. In short, your practice will be worth only what someone else will pay. ROY S. GINSBURG is an attorney coach, providing business and professional development consulting. He speaks nationwide on the best practices and ethics of marketing and client service. He also practices in the areas of marketing ethics and employment law as a solo practitioner. www.royginsburg.com. Read More