Illinois Privilege Law: A Trap For The Unwary
The Chicago Daily Law Bulletin just published a short article by my colleague, Reeghan Raffals, on Illinois courts' narrow definition of the "control group" entitled to privilege and Illinois' rather restrictive choice of law rules used to analyze privilege issues. Those considering litigating in Illinois are well-advised to understand the significance of the rule before pulling the trigger.
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Welcome Confluence Law Partners to Blawgo-sphere
My partner Nicole Auerbach and I had a chance to meet yesterday with Dave Bohrer and Michael Kallus of Confluence Law Partners. We love these guys because of their approach to pricing legal work in their area--IP litigation. CLP does flat fee IP litigation. That's right. I'm not making this up--check out their website.
Dave and Michael told us about their new blog--Flat Fee IP. I just love the premise of the blog--sharing the experiences, good or bad, of flat fee pricing. Be sure to check it out.
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Customer Service In Action: A Great Story
Kayak.com is a way cool company. If you travel and want to choose amongst the best options, rather than having the choice made for you, it is the best place to go. But that's not why I am writing this post. My partner Nicole Auerbach shared this great article about one of Kayak's founder's, Paul English. It begins with this quote from English, surely designed to capture the attention of anyone who cares about customer service:
"When the phone rings, I jump over desks to get to it. I love talking to customers, even angry ones."
But read on and you'll see the approach of someone who's serious about customer service:
"The engineers and I handle customer support. When I tell people that, they look at me like I'm smoking crack. They say, "Why would you pay an engineer $150,000 to answer phones when you could pay someone in Arizona $8 an hour?" If you make the engineers answer emails and phone calls from the customers, the second or third time they get the same question, they'll stop what they're doing and fix the code. Then we don't have those questions anymore.
There's so much more in the article, including the red phone story, that illustrates the thinking of someone who is into customer service. Great company, great article.
PS--Kayak is a client of ours, and Karen Klein, the company's General Counsel serves on our advisory board, so I don't claim neutrality here. But I do use Kayak in planning my trips!
Responsiveness is damned important
I have a new matter on which I inherited local counsel. I send emails asking simple questions, like "did you do a choice of law analysis before saying State A's law applies." Days later, I'm still waiting for a response. I am waiting for, literally, a one word response. The fact that I haven't gotten an answer is interfering with my ability to plan what I want to do on this case.
Will I survive. Absolutely. Will I hire this law firm again? Never.
Think about the last question. I sent my email query to 3 lawyers, all partners. And because of the poor service of those 3 lawyers, I have now ruled out the entire law firm.
Do you think clients think about their lawyers the way I do? Ask yourself this question: are you prepared to wager everything that all clients don't?
Client service may not be the reason you get a new client, but it certainly is a critical factor in whether you get new matters from a client.
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Change And The Art Of The Possible
I can change things I have control over. I cannot force others to change things that others control. I cannot force clients to forsake their rule that lawyers must submit timesheets. I cannot force every court I practice before to abandon their practice of relying on heavily on timesheets when reviewing fee issues. I can discuss those issues with clients and courts and urge them to change, but I cannot force them to do so. One I have made the effort to persuade them and they choose not to change, I am left with the decision to either play by their rules or move on to find others who allow me to exist solely in the space I want to be in.
Change is a process. People do it at different paces. Some take giant steps, some none at all. It's messy. And it takes time. Unless you are one of those people who can define your space and survive by requiring those who play in your space to play by your rules, you have to expect this messiness and deal with it.
Voltaire is reported to have said "the best is the enemy of the good." In the context of change, let's not let perfect become the enemy of better.
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Timesheets. Are They Core To Your Business Model?
Yesterday on Twitter, a query was made as to whether there were any truly new law firm business models. A highly regarded legal consultant identified Valorem, Bartlit Beck, Traverse Legal and Shepherd Law Group as examples. There ensued a debate whether any of these firms other than Shepherd Law Group were different. According to the protagonist in this dialog, if a firm used time sheets, it was not "different."
At one point, I was laughing so hard that I started to cry. The idea that your business model is different and acceptable if you eschew timesheets but not different or acceptable if you use timesheets is lawyer-centric (or consultant-centric or accountant-centric) in the extreme. The debate on Twitter (perhaps owing to the 140 character limit) seemed to devolve into a "my way is better than your way" argument where there was precious little recognition of the business realities driving the choice of whether timesheets are used or not.
Let me begin by acknowledging that my preference is for a world without time sheets. If I am ever a buyer of legal services, I won't have my lawyers use them. But right now, I live in a world where I serve clients. Our clients are sophisticated buyers of legal services. If they tell me they want to see time records with a bill, even if the bill is not hourly based, I provide them. For many clients making the transition to non-hourly billing, the hourly records are important as they gauge value. It would be nice if they all believed as Ron Baker does, but that's not my world. I suppose I could refuse to take on such clients, but I have mouths at home that clamor for food. I can just hear the voices out there telling me I am a coward for not abandoning time sheets completely in the hope that clients will come as they have to others. With due respect to these voices, I do not see enough clients willing to go that road that I am willing to write-off the chance to represent 99% of corporate America. If I had a practice dealing with smaller matters or individuals or a more local clientele, maybe things might be different.
Beyond this point, both the expectation that courts have that any fee requiring court approval have time records to support it and the need to internally know who is available make time records important or useful. One person on Twitter wrote "since time records are an inherently inaccurate tool, how can they be used in court?" I have not debated the wisdom of this eons-old practice with any judges. But since I expect to be asking several to approve fees, I don't want to run the risk that I come across a judge who chooses to follow lines of authority basing approval of fees on time records. The visual of spitting into the wind comes to mind.
I've never told another lawyer that he or she should or should not use time records. I couldn't care less. I have spoken and written at length about aligning economic interests with clients. I know that this has to be done in a competitive marketplace and even those who don't use time sheets compete on price, at least to a degree. If they are more expensive than a comparable lawyer, the odds are many clients will chose the lower priced alternative. So if the lawyer factors into his or her pricing what a competitor is likely to charge, they have created a fee based, to some degree, on time.
If the debate is whether use of time sheets is relevant evidence of employing a different business model, I will pass on that debate as useless and a waste of, dare I say it, time. If the discussion is about how lawyers are aligning their economic interests with their clients, how workflow is different, how people are engaging in practices that deliver better results by eschewing use of baby lawyers, how lawyers are creating "wow" customer experiences and whether a model that is based on those things is different, I'll spend some time on that discussion because its about what the customer gets out of the relationship. But even these kinds of discussions are like talking about which team is going to win the Superbowl before the game is played. The conversation might be fun, but it really doesn't matter all that much, does it? The game still has to be played.
Instead of criticizing those who dare to change for not changing enough, it seems more prudent to be applauding anyone who tries something that's even a little bit different. A bunch of little changes will eventually beget big change. A larger scale change will benefit our clients, and that, to me, should be the focus of discussions.
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Storytelling ... and Client Service
It is amazing how one well-written sentence can communicate volumes and engage the reader to think beyond the sentence. My friend Dan Hull writes my favorite blog, What About Clients?. He had a post the other day with the simple title, Storytelling. The entirety of the post was this quote from Anton Chekhov:
Don't tell me the moon is shining; show me the glint of light on broken glass.
One sentence. Huge imagery. Huge.
I immediately posted a comment to the effect that Dan must be one hell of a trial lawyer. But I continued to marvel at the sentence, and I started wondering about my dealings with clients and colleagues. Do I tell them the moon is shining or do I show them the glint of light on broken glass? Do my clients see in their mind's eye the reflection of moonlight on a shimmering lake or do they hear my voice declaring that they must believe the moon is shining. Am I creating the image, the feeling, that I want or am I simply passing along information. Imagine one client telling a friend, "my lawyer shows me the glint of light on broken class." That lawyer is who I want to be.
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Valorem's Mark Sayre: sharing insights on securing insurance coverage is great client service
There are a lot of lawyers that would not share this information with the world at large. But it's a web 2.0 world, and Mark is a Valorem 2.0 lawyer!
Data Point: Experience and Size save money
I don't know why I didn't see this article before, but I just read Inside Counsel's September 2009 article on game-changing law departments. CN, a multinational transportation company, shifted work from large firms to smaller firms. How has that worked out? Well, it seems.
The results have been surprising.
"I was expecting to pay X per hour, for Y number of hours," he explains. "So according to my calculations, we should have achieved a 25 to 50 percent reduction in legal spend."
But what Rudnikoff didn’t expect was that the work at these small firms would be handled by more experienced lawyers than the large-firm associates who previously handled the company’s less sophisticated work. As a result, they complete the work much faster at a smaller hourly rate, generating closer to a 75 percent reduction in cost.
And the risk of not having the work done by big firms? Not a risk at all, as it turns out.
He adds that there is less risk in this approach than many companies may think. "Because we can afford to go with the most experienced lawyers in the small towns, the risk is lower," he says.
In this day and age, with so many big firm lawyers having left those firms, it is easier than ever to have the same lawyer you would have had at a big firm just a few years ago now doing your work at a fraction of the cost. It's not like lawyers have their brains siphoned when they leave the halls of BigLaw, after all. But BigLaw alums aside, lawyers who have run their own firm, who have dealt with the issues of meeting payroll and paying health care costs, have had an infusion of business experience that counts for something as well. Brand counts sometimes, but too often it is just an excuse.
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What Were The Firm's Incentives Under This Fee Agreement?
Not every alternative fee creates the same incentives. Check this one out, as reported in the AmLaw Daily:
Drinker took on a patent case for a company called AgriZap and signed an agreement under which the firm would be paid its full fees over an 18-month period if AgriZap lost at trial. But if Drinker were to win the case for AgriZap, the agreement called for the company to pay the firm triple its hourly fees (plus costs)--and to pay it immediately.
This creates a strong incentive to win the trial. But is there any incentive to control the cost of doing so? It appears not.
Check out the outcome:
When AgriZap did win, Drinker submitted a bill for about $5 million---about double the $2.7 million the jury awarded AgriZap in the patent case.
Drinker won the ensuing lawsuit, so it was good for the firm, but I think it is safe to say that this is not an alternative fee arrangement that should be emulated.
