Author: National Law Forum

A group of in-house attorneys developed the National Law Review on-line edition to create an easy to use resource to capture legal trends and news as they first start to emerge. We were looking for a better way to organize, vet and easily retrieve all the updates that were being sent to us on a daily basis.In the process, we’ve become one of the highest volume business law websites in the U.S. Today, the National Law Review’s seasoned editors screen and classify breaking news and analysis authored by recognized legal professionals and our own journalists. There is no log in to access the database and new articles are added hourly. The National Law Review revolutionized legal publication in 1888 and this cutting-edge tradition continues today.

Law Firms Should Syndicate Social Media for Maximum Results

From the National Law Review’s  Business of Law Featured blogger Margaret Grisdela of Legal Expert Connections  provides some nice specific things to do for attorneys getting started in social media: 

Attorneys who want to make time for social media among the competing demands of court deadlines, client meetings, and practice management can increase their online visibility with a few simple publishing techniques.

This article shows you how to create and implement a social media syndication plan that will increase your law firm’s Internet marketing visibility. Learn how you can develop and leverage your firm’s customized content to populate a broad range of social media outlets.

Common social media applications for lawyers include LinkedIn, Facebook, Twitter, and blogs. Broadly speaking, social media refers to any type of Internet and mobile-based tool for online networking, collaboration, and information sharing among web-based communities.

Getting Started With Social Media

Launching a social media campaign is actually quite simple. Signing up for LinkedIn, Twitter, and even a blog can be done in a few minutes. Momentum may quickly wane, however, when a busy attorney faces the on-going challenge of creating fresh content.

Start strategically by creating a 6-12 month editorial calendar. Let’s say you have an intellectual property law firm, encompassing several types of services. Pick one topic for each month.

Topics for three months of a calendar quarter could be: 1) copyright law; 2) patent protection; and 3) trademarks. Next, break each monthly topic down into four weekly supporting articles. For example, copyright law topics could be: a) fair use guidelines; b) protecting a copyright; c) international copyright issues; and d) negotiating licensing agreements.

Now that you have your calendar, you can start to write your articles in advance. Of course, the schedule can be interrupted or supplemented as needed to reflect breaking news.  Each blog post should be at least 250-300 words, including strategic use of keywords to attract visitors through search engine marketing. Writing for the web actually means writing for both Google and your actual site visitors.

Leverage your Social Media News Feed

Select one primary point of publication for your social media news feed. A blog works well for this purpose through the use of the “RSS” feed.  RSS is an acronym for “really simple syndication,” which means that your blog acts as a real-time news feed that can be used to distribute your content to other social media applications. Interested readers can also automatically subscribe to your blog using the RSS feed.

As a starting base, make sure all your social media accounts are properly set up and populated with a description of your law firm.

Plan to publish one main article from your editorial calendar to your blog at least once a week (more is better). It is fairly easy to use free services like HootSuite orNetVibes to then automatically transmit your blog posts to your Twitter, Facebook, and LinkedIn accounts. Alternatively, many social media services make it easy for you to automatically import blog posts by simply specifying the RSS feed within your profile.

You can easily extend your reach to multiple social media outlets without the need for additional time or effort when you leverage your original blog articles using these techniques.

Appoint a Social Media Manager

An essential ingredient in social media success is to put someone in charge of your campaign. Lawyers should be practicing law, so even the best laid plans for an attorney to manage a blog or other Internet marketing campaign will quickly fall to the wayside in the face of court and client demands. Look for a seasoned legal marketer with Internet marketing skills who understands the importance of complying with attorney advertising and other ethical guidelines to help manage your social media campaigns.

Business development through thought leadership marketing is a leading reason many attorneys are attracted to a blog and other social media services. The right legal marketing partner will understand strategic planning issues, the importance of keyword placement in blog posts, and the type of audience you wish to reach. They may even help you draft preliminary blog posts for your editing and publication.

Monitor Social Media Feedback

Social media is interactive, meaning that prospects and followers will comment on your posts and otherwise interact with your material. Prompt responses will make a favorable impression on your audience.  In addition to publishing fresh content regularly, you will want to watch for direct comments, republication (like “retweets”), and independent commentary. 

© Legal Expert Connections, Inc.

About the Author:

Margaret Grisdela is President of Legal Expert Connections, a national legal marketing agency serving law firms and litigation experts in the U.S. and internationally. She is the author of the legal marketing book “Courting Your Clients,” which presents a proprietary methodology for business development. An accompanying guide, the “Courting Your Clients Legal Marketing Playbook,” will be available to clients in November. Ms. Grisdela brings over 30 years of experience in marketing, publishing, and information technology to each engagement. She helps clients launch or expand successful practices in the legal field through integrated marketing programs including article placement, speaking, search engine optimized websites, publicity, and direct mail. A leader in professional organizations, she served as 2008 Co-Chair of the Legal Marketing Association South Florida City Group, and 2005 President of the Florida Direct Marketing Association. She holds a B.A. from Wayne State University and an MBA in Finance from The George Washington University. www.legalexpertconnections.com / 561-266-1030

National Forum on Clinical Integration Washington DC Nov. 16th-17th

The National Law Review is a  media sponsor of the National Forum on Clinical Integration  Monday, November 15 to Wednesday, November 17, 2010 Hilton Washington Embassy Row, Washington, DC   

Use Discount Code “NLR” and receive a $200 discount off your registration.

Health Care Reform is now a reality. You’ve heard the basics – now it’s time to learn the practical answers and solutions for developing long-term sustainability of commercial and PPACA integrated models

There is no time to waste – You must have strategies for forming, structuring, and implementing Accountable Care Organizations and other integrated models to stay competitive in the evolving health care market

Come to one forum that will help you understand how ACOs and other integrated models can be reconciled with existing delivery structures

The National Forum on Clinical Integration is your premiere guide to navigating the complexities of structuring and implementing Accounting Care Organizations and other integrated health care models in the wake of landmark Health Care Reform legislation.  The Patient Protection and Affordable Care Act (PPACA) expressly creates specific measures to curb, transform, and reduce spending while increasing quality of care through the introduction of ACO pilot programs that will have a tremendous impact on the legal and compliant structure, organization, and implementation of integrated care and health care delivery systems.

CLE credit has been approved in NY and CA  accreditation will be sought in those jurisdictions requested by the registrants which have continuing education requirements.

Register now – Space is Limited and Seats Are Already Filling Up Fast
www.AmericanConference.com/ACOForum   Also remember to use Discount Code “NLR” and receive a $200 discount off your registration.

Buy-Sell Agreements: Considerations for Funding a Buy-Out

The featured bloggers at the National Law Review for this upcoming week are from the Chicago Law firm of Funkhouser Vegosen Liebman & Dunn Ltd. Partner James F. Growth and Michelle L. Wolf-Boze highlight some of the issues involved with buying out the owner of a business.  

You and your partner(s) have nurtured and grown your business to become a critical piece of your families’ and employees’ financial futures, and now you want to assure that it can survive and prosper when you are gone. One of the issues that keeps many business owners up at night is how their loved ones and their companies will fare if they or one of their partners leaves the business unexpectedly.

A company unprepared for the sudden loss of an owner-manager risks considerable organizational upheaval and financial hardship that can threaten its survival.  Privately-held, owner-managed businesses in particular depend on the leadership and efforts of their owners. If one of the owners dies, becomes disabled, or for some other reason ceases to fulfill her role as employee/manager, equity owner, or both, her remaining partners likely will need to replace her services.

In order to be in the best position to weather this potential storm, business owners often need to include, as part of their estate planning and business succession planning, what is known as a “buy-sell agreement.” A buy-sell agreement is an agreement among the company’s owners that provides the terms for transition of ownership upon an owner’s departure from the company. Preparation and agreement among the owners on the structure and terms of this document can make all the difference in ensuring an effective transition of the business following the death, disability, retirement or other departure of an owner-manager.

One of the big hurdles owners often face in structuring a buy-sell agreement is determining how the purchase of a departing owner’s interest will be funded without bringing in a new owner. Generally, there are three potential funding sources for the internal buy-out of a departing owner’s interest: 1) company cash, 2) the remaining owners’ non-company resources, and 3) insurance proceeds.

For many businesses, however, available cash is in short supply, and owners are unable or unwilling to count on borrowing or drawing upon other personal assets to finance a buy-out. Therefore, owners often turn to insurance products for these events. For example, to address a possible death, companies will purchase life insurance on the life of each owner with death benefits payable to either the company or the surviving owners. These benefits would then be paid to the deceased owner’s family in exchange for his equity in the business.

While the life insurance option solves the liquidity problem, many business owners find it has some unattractive drawbacks. Chief among them, many entrepreneurs are troubled by the idea that their families will receive only the proceeds of insurance, the premiums for which were paid out of the cash flows of their companies, in return for their equity in the businesses they worked so hard to build. They see that the end result is the same as if they had purchased the life insurance themselves (using the same dollars that would have been used by the company to buy the insurance), named their family members as the beneficiaries, and given their equity to their business partners. There are also tax issues that can result in a family paying more in estate taxes than they receive for the business in this scenario. For these owners, it is not acceptable to have their families, in effect, receive nothing for their equity if they die before they can either sell their companies or implement a succession plan.

Instead, owners may prefer to purchase and hold life insurance policies through tax-advantaged vehicles (such as irrevocable life insurance trusts) in amounts that are based on their families’ financial needs, rather than the estimated values of their businesses, and to use “seller financing” for a separate redemption of their ownership interests out of the cash flows of their businesses over a period of time following their deaths.  In this financing arrangement, the purchaser of the departing owner’s interest would make installment payments of the purchase price, plus interest, to the owner or the owner’s family over a number of years, and the family’s need for immediate cash would be satisfied through separate life insurance.

Regardless of your preferences for funding the buy-out of an owners’ interest, planning for the untimely exit from your company of you or one of your partners is critical. A carefully designed buy-sell agreement can provide valuable clarity and piece-of-mind for all of the stake-holders in an owner-managed business. Careful planning can minimize the tax costs while providing financial security for all owners’ families.

© Copyright 1999-2010, Funkhouser Vegosen Liebman & Dunn Ltd. All rights reserved.

About the Authors:

Jim Groth joined Funkhouser Vegosen Liebman & Dunn Ltd. upon his graduation from Northwestern in 1992 and is a member of the Firm.. Jim has extensive experience in mergers, acquisitions, divestitures, multinational business combinations, international trade transactions, international taxation issues, securities transactions, complex litigation including securities fraud litigation, labor and employment and various types of business financing transactions.312-701-6830 /www.fvldlaw.com

Michelle Wolf-Boze  joined FVLD after graduating from Law School. Since joining the firm, Michelle has gained experience in estate planning and administration, commercial real estate and general corporate matters. Michelle has represented both tenants and landlords in drafting and negotiating commercial leases for retail, office and industrial space. Michelle has also drafted a variety of corporate and employment-related agreements.312-701-6819 /www.fvldlaw.com


 

Fast Track Mastership of Legal Social Media- One Day Seminar / Webinar Oct. 21st Washington DC

The National Law Review would like to make you aware of a one day seminar / webinar presented by MyLegal.com designed to help lawyers gain a fast track mastership of legal social media. 

“I don’t think it’s too late to embrace social networking, it just rather disappoints me that other professions use these technologies, and lawyers for some reason are always rather late to the party. I have little doubt that within five years, social media, social networking systems, will play a central role in the daily lives of lawyers.”  Richard Susskind, September 2010.

The conference will be held on Thursday, October 21, 2010, at the Georgetown University Hotel and Conference Center in Washington, D.C. The conference will sell out at 300 on-site participants, so we will be introducing to the legal community a new technology called SMASH.  This technology aggregates the video stream of the sessions, along with the tweets, blogs and photos related to the conference, in one convenient landing page, allowing off-site attendees to experience the conference in a unique and interactive way.

By following the conference Twitter conversation directly from the SMASH page, off-site attendees can join in the live conversation while simultaneously seeing the speaker and checking out the live conference photos.  These are interactions and connections that might not otherwise have been made. 

After the conference, registered users will have access to the video of the sessions, along with the speaker presentations.  The sessions will also be available via iTunes, allowing registered users to listen and learn while on the way to work, running errands or housework (ugh)!  Multi-tasking is King!  After listening to the sessions, users can continue the conversation and commentary online.

Conference speakers / topics scheduled to be included are:

Matthew Asbell, Esq., Certified Legal Social Media Strategist will speak on the use and protection of trademarks in social media marketing.

Nicole Black, Esq., founder of lawtechTalk.com and co-author of “Social Media for Lawyers: The Next Frontier” will speak on social media for lawyers.

Larry Bodine, Esq., legal marketing expert and author of the Lawmarketing Blog will speak on business development with LinkedIn.

Steve Crandall, J.D., expert in digital media and business applications of social networks will speak on social media and the law.

Adrian Dayton, Esq., author of “Social Media for Lawyers: Twitter Edition” and the “Legal Marketing: Social Media Edition” blog will speak on starting to bringing in business with social media

Carolyn Elefant, Esq., creator of MyShingle.com, the longest running blog on solo and small firm practice, and co-author of “Social Media for Lawyers: The Next Frontier” will speak on social media for lawyers.

Sharon Nelson, Esq., author of the electronic evidence blog “Ride the Lightning” and co-host of the ABA podcast series “The Digital Edge:  Lawyers and Technology” will speak on on social media: ethical, compliance, E-discovery and liability implications.

Conrad Saam, runs marketing for Avvo, where he oversees the firm’s SEM, SEO, social media, online marketing, email and web analytics initiatives will speak on getting the most out of Avvo.

John Simek, co-author of “The Electronic Evidence and Discovery Handbook: Forms, Checklists and Guidelines” and “Information Security for Lawyers and Law Firms” will speak on on social media: ethical, compliance, E-discovery and liability implications.

For more information, conference schedules and registration forms, please visit:  http://mylegalmedia.com or call 253-405-7910.

Powerful Prospecting Starts with a Plan

The Business of Law Featured Guest Blogger this week at the National Law Review is Margaret Grisdela of Legal Expert Connections.  Margaret provides some great, concrete ‘things to do’  for effective legal business development.  Read On:  

Social media is all the rage these days, and it is indeed an effective way to maintain high visibility in the legal marketplace. Social media is only one piece in the business development puzzle, however.

Rainmaking success works best with an integrated marketing plan. There are many communications channels available to build your prospect list, and finding the mix for your law practice will reward you with new business opportunities.

Here are the top seven proven lead generation techniques for legal marketing:

1.  Speak.

Addressing an audience of prospective clients is one of the best possible ways to demonstrate your legal knowledge. While most of your preparation will focus on the presentation itself, lead generation is accelerated when you make the time to promote the event in advance and then quickly follow up on all your leads after the event. Make a point to get a list of all audience members, even if you have to give something away in exchange for a business card.

2.  Publish.

Getting your name in print as an author essentially provides an independent third party endorsement of your legal expertise. A well written article in a highly regarded legal or trade publication will contribute to your business development efforts for years to come.

3.  Prioritize your referral network.

Most attorneys maintain an informal list of referral sources. Take this a step further by writing down your best 5-10 referral sources, and assigning a priority to each contact person. Schedule a meeting with your “A” sources every 30-45 days, your “B” sources every 60-90 days, and stay in touch with your “C” sources with less time-consuming methods like email or a phone call. Constantly work to refine your list to maximize performance, and remember to reciprocate with qualified leads for your referral partners.

4.  Market to current and past clients.

Your best source of new revenue in the short run is hidden in your client list. Stay in touch with clients at least 4-6 times per year through newsletters, client alerts, or events to increase retention rates, up-sell, and cross-sell.

5.  Maintain a prospect list.

Refine your “ideal client” profile to the point that you can compile a list of at least 25 key prospects, identified by firm name and contact person. Work this list diligently in a continual effort to move to the “next step” of gaining the client. Start by identifying a mutual acquaintance who might provide an introduction, or an organization where your prospect is active. Move from getting acquainted to building trust, assessing needs, suggesting solutions, demonstrating your value equation, and closing the deal. The entire process may take months or even years, so be patient but politely persistent.

6. Leverage organizational memberships.

Whether it’s a bar association or an industry organization, turn your memberships into new business through speaking opportunities, newsletter articles, webinars, or by serving on a committee that gives you access to decision makers.

7.  Internet marketing.

Your website bio page is a good starting point. Make sure it is current and provides a recent headshot. Next evaluate your website to confirm that it is easy to navigate, frequently refreshed, and structured for search engine visibility. Online legal directories abound. LinkedIn is an easy first step into the social media scene, followed by blogs. There are so many Internet marketing options that space simply does not permit full coverage.

A strategic attorney marketing plan can serve to tie all of your business development efforts together around a focused practice.

While all these marketing activities can seem like a juggling act, there are a few techniques that will streamline the process.

Create a marketing calendar that includes your desired frequency for each campaign. For example, you should try to speak at least 2-4 times per year. You may want to get published twice a year. By putting these goals on your calendar, they are easier to manage and achieve.

Take a few minutes to identify 3-5 newsworthy topics within your area of expertise. You can then incorporate these topics into all your marketing efforts, such as speaking, publishing, newsletters, blogs, social media, etc.

A database can be your best friend in recording and tracking your prospects, outreach efforts, and follow up dates. This can be a simple Excel file, Microsoft Outlook, or a more complex customer relationship management system.

© Legal Expert Connections, Inc.

About the Author:

Margaret Grisdela is President of Legal Expert Connections, a national legal marketing agency serving law firms and litigation experts in the U.S. and internationally. She is the author of the legal marketing book “Courting Your Clients,” which presents a proprietary methodology for business development. An accompanying guide, the “Courting Your Clients Legal Marketing Playbook,” will be available to clients in November. Ms. Grisdela brings over 30 years of experience in marketing, publishing, and information technology to each engagement. She helps clients launch or expand successful practices in the legal field through integrated marketing programs including article placement, speaking, search engine optimized websites, publicity, and direct mail. A leader in professional organizations, she served as 2008 Co-Chair of the Legal Marketing Association South Florida City Group, and 2005 President of the Florida Direct Marketing Association. She holds a B.A. from Wayne State University and an MBA in Finance from The George Washington University.  561-266-1030 / www.legalexpertconnections.com

 

 

ABA's Fourth Annual National Institute on Criminal Enforcement of Intellectual Property Rights November 5th San Francisco, CA

The National Law Review is proud to support the ABA’s Fourth Annual National Institute on Criminal Enforcement of Intellectual Property Rights November 5th at the Hotel Nikko in San Francisco, CA. 

This comprehensive, one-day program will provide in-depth information concerning the complex issues that arise in connection with criminal enforcement of intellectual property rights (primarily involving trade secrets, copyright, and trademarks). The program consists of five panels whose members are key government insiders; policy makers; Assistant U.S. Attorneys; defense counsel; trade group leaders; and rights holders. Panel topics focus on current issues, trends, legal strategies, private industry case development and criminal referral, parallel proceedings and ethical issues in intellectual property enforcement.

This program brings together defense attorneys, prosecutors, members of law enforcement, policy makers, and business leaders to discuss hot topics and legal trends in the rapidly evolving field of intellectual property enforcement.

Mandatory continuing legal education (MCLE) accreditation has been requested from all states which require continuing legal education. 5.75 hours of CLE credit have been requested from those states recognizing a 60-minute credit hour and 6.90 hours of CLE credit have been requested from those states recognizing a 50-minute credit hour.

For more information & to register – click here:

Peeled, Inc. Seeks Injunction, Damages in Trademark Infringement Suit Against Peeled Fruit LLC

This week’s featured blogger at the National Law Review is Jonathan C. Stagg of Stoel Rives LLP who writes an interesting tale about a fruity trademark infringement case. Read On: 

Peeled, Inc. (“Peeled”) www.peeledsnacks.com, a company specializing in healthy, natural snack foods including dried fruits and dry roasted nuts, recently filed a trademark infringement suit in the United States District Court for the Southern District of New York against Peeled Fruit LLC (“Peeled Fruit”) www.simplypeeled.com.  Peeled Fruit sells frozen soft-serve fruit, with fresh fruit toppings. Peeled alleges that Peeled Fruit is attempting to cash in on the brand awareness and goodwill associated with Peeled’s marks.

Peeled began marketing its products under the marks “Peeled,” “Peeled Fruit,” and “Peeled Snacks” as early as 2004. Since that time, Peeled’s marks have received extensive coverage in television and print media, including receiving a coveted spot on Oprah’s O List as one of Oprah’s favorite afternoon snacks, and receiving the 2008 “Best of Food” award from Health Magazine. Peeled registered the mark “PEELED SNACKS” on January 10, 2006 with the United States Patent and Trademark Office.

Peeled alleges in its complaint that long after it began marketing its products with the Peeled marks, Peeled Fruit began infringing on the marks by using the words “Peeled” and “Simply Peeled” in its marketing materials. Peeled argues that Peeled Fruit sells similar products with similar ingredients, and that as a result the products are confusingly similar. Peeled claims that Peeled Fruit had full knowledge of Peeled’s prior use of the marks, and that in spite of Peeled’s requests, Peeled Fruit has refused to cease its use of the marks.

Peeled alleges that Peeled Fruit not only knew about Peeled’s use of the marks, Peeled Fruit “adopted the trademarks with the intent to trade and capitalize on the goodwill generated by Peeled, Inc.’s extensive and widespread use of its trademarks, as well as its extensive sales, advertising and consumer acceptance and recognition.” Peeled argues that the similarities between the products sold by both companies make the shared use of the marks likely to cause confusion, mistake and deception among consumers.

As a result, Peeled is seeking an injunction against Peeled Fruit, which would restrict Peeled Fruit from further use of the marks. Peeled is also seeking a monetary damage award, under federal trademark law (15 U.S.C. § 1117), in an amount equal to either 1) three times the amount by which Peeled was damaged by the alleged infringement, or 2) three times the total profits Peeled Fruit obtained from the use of the allegedly infringing marks.  Finally, Peeled is seeking an order from the court, under 15 U.S.C. § 1118, requiring Peeled Fruit to destroy all materials that display the allegedly infringing marks.

Reposted with permission from Stoel Rives’ Essential Nutrition Law Blog.

Copyright 2010 Stoel Rives LLP

Authored by:

Jonathan Stagg is an associate practicing in the Corporate, Securities and Finance section of the firm’s Corporate group. Jonathan assists clients with mergers and acquisitions, business formation, public and private offerings, venture capital and general securities law compliance. www.stoel.com / 801-428-6338

ABA 13th Annual National Institute of Banking Law Basics Oct 27 -29 Boston, MA

The National Law Review is proud to support the American Bar Association Business Law Section, the ABA Center for Continuing Legal Education, and the Morin Center for Banking and Financial Law of Boston University School of Law‘s two-and-one-half day primer on banking law. If you need the basics, you can’t afford to miss this program. Attendance is limited. 

Attend this program and learn what you need to know about:

·         Who regulates whom, why and how

·         The structure and intent of bank regulation

·         The impact of Gramm-Leach-Bliley and Dodd-Frank

·         The role of capital

·         Prudential limitations

·         Permitted investments and activities of banks, bank holding companies and financial holding companies

·         Insurance, securities and capital market activities of banks and bank affiliates

·         Geographic expansion and mergers and acquisitions

·         Supervision and enforcement

·         Failing banks and actions against affiliated persons

This fundamental banking law course was developed to provide practitioners with an understanding of the basic laws and regulations governing banks and bank holding companies. This course is a comprehensive introduction to banking law regulation for attorneys, consultants, and bank professionals who intend to work in the field. It is also a refresher course for experienced banking law practitioners whose practice has not provided an opportunity for the broad exposure that this course offers. This course includes a two-hour segment on ethical considerations in the representation of banking organizations.

Date: October 27 — 29 2010
Location: Boston University School of Management
Fl 4 – Executive Leadership Ctr
595 Commonwealth Ave
Boston, MA 02215-1704
USA
Requested CLE Credit: 18.50

For More Information and to Register: Click Here.

Are Alternative Fee Arrangements (AFAs) the New Standard for Law Firms?

From the National Law Review’s Business of Law guest blogger, Meredith L. Williams of Baker Donelson Bearman Caldwell & Berkowitz, PC discusses the current legal marketing ‘it’ topic – alternative fee arrangements or AFAs.  Meredith provides a great historical perspective on this topic and goes into nice detail on how law firms should address this new hot issue.  Read on: 

The Supreme Court of the United States answered this question when they released the opinion for Perdue v. Kenny A. In this case, the Supreme Court rejected the statement “departures from the hourly billing are becoming more common.” In addition, the court noted “if hourly billing becomes unusual, an alternative to the lodestar method [hours worked times billing rate] may have to be found. However, neither the respondents nor their amici contend that that day has arrived.”

Are AFAs new?

Although the U.S. Supreme Court stated hourly billing is the usual practice, alternative fee arrangements remain a growing trend in law firms. From 2008-2010 law firms have seen an increase in AFAs from 4-16% (Source: CounselLink). However, the question remains are AFAs new or are they a natural evolution?

Alternative fee arrangements have existed for decades in many law firms. Examples include blended rates, contingency fees, fixed fees, capped fees, collared arrangements, etc. Although the concept of AFAs is not new, the push to offer more alternative arrangements has never been more prevalent in law firms as it is today. Key drivers of this shift are the economy, the ACC Value Challenge and the clients demand of more risk sharing and consistent, transparent, value-based project pricing.

The ACC’s Value Challenge is based on the concept that law firms can improve the value of delivering legal services without increasing the cost. For law firms, this concept alters and increases the focus on efficiency in the delivery of those legal services. This new focus on efficiency creates a demand to price legal services, manage the legal work process, manage the right talent and form a strategic alliance with clients to improve the service delivery. Clients are now looking for transparency and true cost control. AFAs are the new way of delivering on these demands.

Ultimately, alternative fee arrangements are about risk sharing. With the economic and global shift, clients and companies are now in the driver’s seat. They are attempting to shift more risk of legal service delivery to law firms. However, law firms are only agreeing to this risk transfer as long as the arrangements are still profitable.

What do law firms do now?

As AFAs become more common, how can a law firm compete in this area? Law firms must understand the different sides to alternative fees – estimation and management – and align their firm strategies to these areas.

First, firms need to learn to estimate the cost of legal services. Estimates and budgets must now be based on cost rather than billable rates. Firms are beginning down this path of price estimation with many different budget and estimation tools that are new to the market. A standard starting point is data mining previous matters of similar nature of suit. This process provides an accurate view of prior costs for a type of service. However, using historical data can also show the inefficiencies in those former processes. Finally, the data mining of former data can be incredibly difficult if law firms have not previously used phase and task billing codes in their time entry system.

Next, firms must learn to manage the alternative fee arrangements effectively in order to remain profitable. Budgeting tools, case management tools/ strategies and process analysis are key pieces to this phase. As stated above, there are many new budgeting tools to the market that now help law firms manage budgets and control expenses. However, most tools rely on the use of phase and task billing. In addition, law firms are now considering strategies to aid their attorneys and staff in the understanding of legal project management. This is a difficult task to accomplish because lawyers are not project managers by nature and the norm is not to look at legal work in phases or tasks. Finally, firms are looking at any and all tools that exist within their firm our outside their firm that can aid in efficiency. Things such a document assembly, form production, expertise databases, case/deal management software and extranet collaboration with clients are just a few tools that firms are considering. When an alternative fee arrangement is used, without management of the budget, deal/case and processes, the risk of profitability loss now falls to the law firm instead of the client.

What will change?

The largest change seen by law firms is that billable rates are no longer the driver of profitability. Firms have previously been raising rates at a 6-8% increase with each passing year. With the economy, the practice of raising rates had to change. We now live in a buyers-market for legal services. Clients no longer stand for the standard rate increases but instead now look for a strategic partner. Additionally, the entire law firm model on compensation and partner track are called into question with the change from billable hour and rates. Firms that move to alternative fee arrangements need to look to alternative metrics and measures for compensation, partner track, staffing and bonuses. Some firms are turning to metrics such as overall performance, expense management, practice management, client development, and leadership skills instead of the maximum billable hours.

Conclusion

In conclusion, alternative fee arrangements are not the new standard for law firms in 2010. Currently, AFAs only make up 10-16% of business. However, just as we saw this percentage increase from 2008 to 2010, we expect a further increase over the coming years. In order to stay competitive, law firms must determine their stance and strategy with AFAs and learn to remain profitable in this changing time.

©2010 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC. All Rights Reserved.

About the Author:

Meredith L. Williams is Baker Donelson’s Director of Knowledge Management.  Although trained as a lawyer, she is not actively engaged in the practice of law.  Instead, she oversees BakerNet, the Firm’s industry-leading intranet, and coordinates strategic growth on behalf of the Firm in knowledge management, competitive intelligence and technology.  Ms. Williams is widely recognized as a leading authority in knowledge management issues for the legal field, and is a frequent presenter and author on knowledge management and competitive intelligence. 901-577-2353 /www.BakerDonelson.com

Testing the Limits of Applicant Testing

The potential legal pitfalls of job applicant testing are illuminated by the National Law Review’s featured blogger Sarah L. Hinkle of Steptoe & Johnson PLLC.  Read on:  

Many employers believe that applicant testing – skills, personality, or honesty testing, for instance – is an easy way to screen out undesirable job candidates. Besides, all employers want highly skilled, easy to work with, honest, and sober employees … and what better way to rate a candidate than to subject him or her to a test, right? Not so fast! Applicant testing is fraught with potential legal pitfalls, and caution must always be exercised before engaging in any kind of applicant testing.Anchor

For example, while tests can be very effective tools for finding qualified applicants, employers must be aware that some tests or selection procedures can violate state and federal anti-discrimination laws. Worse, this can occur even if the employer does not intend to do so, such as when a “neutral” test or other selection procedure disproportionately excludes people in a particular group by race, gender, national origin, religion, disability, age, or any other protected classification, unless the employer can justify the test or procedure by showing that it is “job-related and consistent with business necessity.”

The seminal case examining the unintentional “disparate impact” discrimination found in some testing techniques is Griggs v. Duke Power Co., 401 U.S. 424 (1971). In Griggs, the employer instituted a requirement that applicants at a power plant must either have a high school diploma or pass a general intelligence test in order to be hired. The Court found that the requirement was discriminatory because the employer could not show that the requirement bore a “demonstrable relationship to successful performance of the jobs for which it was used.” The full text of Griggs, by the way, can be found at: http://www.law.cornell.edu/supct/html/historics/USSC_CR_0401_0424_ZO.html

Keep in mind that pre-employment screening which merely has a discriminatory impact isn’t the only type of applicant testing employers need to be careful with. Certain other pre-employment testing may be found unlawful regardless of intent, such as requiring medical examinations of applicants before providing them a conditional offer of employment.

With due caution in mind, consider the following when deciding whether to begin using or continue using pre-employment testing procedures:

  1. Most obviously, but also most importantly, never use testing or any other selection procedure for the purpose of “weeding out” members of a protected class.
  2. Do not casually adopt testing procedures, and make sure decisions regarding testing are made at high levels of your company after consulting with counsel.
  3. Make sure that any tests or selection procedures that you use are valid and reliable. That is, make sure that the test actually measures components or characteristics that are necessary for the job position, that the test is truly useful in predicting success on the job, and that it yields consistent results. Do not assume that a test-maker vendor’s supporting documentation is entirely accurate – do your own investigation as well.
  4. Be vigilant as to changes in job requirements so that you know when you need to update test specifications or selection procedures.
  5. Accommodate people with disabilities by modifying the test or testing conditions or eliminating the testing requirement if necessary.
  6. Do not rely solely on tests for making decisions about candidates; use them as one component of your overall selection procedure.

If an employer remembers the above tips when evaluating current testing practices or when considering implementing new selection procedures, it will go a long way towards making sure the company gets a passing grade of its own.

© 2010 Steptoe & Johnson PLLC All Rights Reserved

About the Author – Sarah L. Hinkle:

Sarah Hinkle focuses her practice in the areas of labor and employment law.

304-262-3542 / www.steptoe-johnson.com