Does your Lawyer see the sky falling?

Business is about risk. There is no such thing as a risk-free business. If such business existed, then it would also be a profit-free business. There is a point, however, where too much risk is being taken which can also make the business profitless. The real art is finding that point where the risk taken maximizes the profitability of the business. Does your lawyer help you reach this point?

Too often, lawyers run about like Chicken Little seeing the sky falling. They see every potential liability risk regardless of the likelihood of that eventuality occurring. The majority of these percieved risks are so remote that to try and avoid them cuts into your profit unnecessarily. One way this commonly occurs is in drafting contracts. The lawyer keeps adding more and more clauses to cover every conceivable issue. At some point, these contracts become too cumbersome to understand. Occasionally they become unenforceable because of their boilerplate language allows courts to deem them “contracts of adhesion” and “unconscionable”. I can’t blame those lawyers. After all, they are trained to pinpoint liability and avoid it. Besides, if they are billing by the hour, the more problems identified, the more they can bill.

However, I suggest that if every time you take a new endeavor to your lawyer the focus of the discussion is on what can go wrong, then perhaps you have a Chicken Little attorney. Sure, risks should be discussed, but the focus should be, “How we can make this work.” Only risks that appear likely need to be focused on while remote risks should be mentioned, but they should not dominate the discussion. After all, business involves risks.

Why I use Counselor at Law rather than Attorney at Law:

Occasionally I am asked why I refer to myself as a Counselor at Law rather than Attorney. It is a sublety that most miss, but it actually encapsulates a key philosophy to my practice. An Attorney is an agent. They go and do what they are told to do by the principal. I remember going to an attorney in my prior life over an employment issue. I really needed to understand what was happening, but this highly recommended attorney told me very little. I later realized that this was because he either: 1) did not know what he was doing so stayed silent to look wise, or 2) said very little to minimize any liability on his part.

Anyway, he went and did what I asked him to do, but I was very dissatisfied with the process because I felt very much in the dark most of the time. I mean for my clients to feel informed. This is one thing a counselor does. They help you understand what you are going through.

Secondly, a counselor counsels. In my example above, I sought wise counsel as well as understanding. This is because I was faced with something outside of my experience. I recognize that it was ultimately my decision to make as to whether or not to pursue the matter, but I needed at least some rough estimates about the expected outcomes would be depending on my decision. So, as a Counselor at Law I take the risk I believe I believe my profession calls upon me to take to explain options and the likely outcomes of each.

Value billing approach

I was excited to come across this post by The Greatest American Lawyer. It reflects very closely my own approach to billing as I described here. I am reprinting his value billing policy here for comparison purposes:

Value-Based Billing Policy
Some of Traverse Legal’s customers prefer to be billed on a time-based system, where hours are tracked and billed to the client at a specific hourly rate. Some cases are best suited for time-based billing. Unlike most other firms, Traverse Legal does not bill for every activity and task associated with the handling of a matter for a client.
The following is a list of items that we do not charge to clients:
· Transmittal letters which do not contain significant legal analysis or recommendations.
· Short phone calls that do not lead to immediate legal work.
· Update or general information calls to or from client.
· Any activity that does not add value to client’s immediate matter.
· Any activity which deals with general information about the client.
· Any activity which does not work towards resolution of the client’s problem.
Things that we do bill for:
· Any activity which provides specific value to a specific client problem.

Once again, only at a solo or small firm could you find this approach.

What you won’t get from a conscientious solo/small firm:

I found this article about the legal bill to Larry Birkhead’s custody fight for Anna Nicole Smith’s daughter. Here’s the essential part of the post:

Opri’s bill serves as a template for what lawyers shouldn’t do when invoicing clients. The bill includes multiple, extravagently priced meals that Opri shared with other lawyers, where Birkhead wasn’t even present. And while presumably, Opri and her colleagues at least talked about Birkhead’s case at these meetings, most clients will wonder how much business is really discussed in the course of a fancy dinner.

Compare this to my own billing practices as I described them here. It is a fallacy to believe that you automatically get higher quality representation with higher fees. What higher fees often mean is higher overhead and inflated billing practices. Opri’s bill to Birkhead is a perfect case in point.