Many lawyers dream of having their ads becoming viral sensations. Nothing would be better than your name being the first thing in anyone’s head whenever they have a legal problem. But personal injury lawyer Morris Bart in Louisiana has done every lawyer one better, and has become the theme of a two-year-old’s birthday party.
You read that right. A toddler became so obsessed with the lawyer’s commercials that his mother decided to throw him a Morris Bart-themed birthday party. The cake had Bart’s face on it, the toddler wore a t-shirt with Bart’s face on it, and there was even a life-size cutout of Bart. Although Bart didn’t attend the party in person, he did send an autographed picture along with some other schwag.
There’s a lot to be said about entering the market at the point of least competition or for having an advertising jingle stuck in people’s heads. But having a toddler’s mother voluntarily use your law firm as the theme for the child’s birthday party is, well, something else entirely.
Featured image: “Happy baby boy eating cake for his first birthday party” from Shutterstock.
Financially successful people have many things in common: they are good at making money, they find Prairie Home Companion tolerable, and they look through Williams Sonoma catalogs with the intent of actually buying something. They also — at one point or another — found a way to minimize their individual tax liability.
Most of the discussion surrounding tax-advantaged savings or retirement accounts center around 401(k)s, IRAs (Roth, Simple, SEP, etc.), and other major investment vehicles for a good reason. But those retirement savings plans have limits; you may not qualify for them, or you might have maxed out each tax year because your savings game is on point. If these retirement and savings vehicles are unavailable to you — or even if they are — a Health Savings Account may be your next best option.What Is an HSA?
Here’s the IRS’ description of a Health Savings Account:
A health savings account (HSA) is a tax-exempt trust or custodial account you set up with a qualified HSA trustee to pay or reimburse certain medical expenses you incur.
Ugh, that description is such an IRS thing to say. BORING.
Here is its intended purpose: an HSA is designed to help folks with a High Deductible Health Plan (a $2,500 annual deductible or more) create a savings buffer to pay for big medical expenses. You put pre-tax money into the savings account, and it grows. With interest and everything.How Does an HSA Help Save Money?
People in the retirement savings world will use terms like “triple tax-advantaged” to describe the HSA and refer to them as the “Ultimate Retirement Account.” If used correctly, they are right. HSAs combine the benefits of Traditional IRAs (deduction from gross income and tax-free account growth) with the advantages of a Roth IRA (post-tax contributions, tax-free growth, no required minimum distribution. It combines these features without any of the associated drawbacks of the two. And let’s face it, eventually you are going to need to pay for healthcare.
In plain English, up to $3,350 of your annual income (or $6,500 for a family) can go into an HSA account without getting taxed first or being subject to FICA. That money can grow tax-free. As long as you have qualifying and off-setting documented health care expenses sometime after you establish the account (doesn’t matter when), you can withdraw that offsetting amount for any purpose. And you can withdraw it without paying taxes on the withdrawn amount or the growth.Could an HSA Cost You Money?
To establish an HSA, you need to have a high-deductible health plan (HDHP), which might as well be called a “pay out of pocket for stupid high medical bills” plan. These are plans for which you still pay a significant monthly premium all for the honor of paying your or your family’s medical bills. You pay those bills until you hit a pre-determined cap: anywhere between $1,300 to $12,900 for a qualifying HDHP. While HDHPs generally have much smaller monthly premiums than standard health coverage, they will cost a lot if you have an exceptionally bad year.
Let’s use my seemingly normal family as an example. In recent history, I have had to take one of my kids to the doctor for the following issues:
We would not be living the Williams-Sonoma lifestyle if we had a High Deductible Health Plan when all these plagues fell upon our house. If you are a single, reasonably healthy person, though, this isn’t nearly as big of a concern for you. But for those of us with occasionally sickly and accident-prone wards under our care, an HDHP may not be an option.
The other major obstacle to taking full advantage of an HSA is that you have to have cash on hand. Remember above when I mentioned that your offsetting medical expenses didn’t need to come from the same year in which you make withdrawals? That is awesome from a return-on-investment standpoint because your HSA money stays in an account generating interest tax-free until you feel like withdrawing it. However, to take advantage of this, you have to pay for your medical expenses out of pocket. Some people can swing that, but most Americans can’t.
For those that can make an HSA work for them, it is an incredibly useful tax savings tool. There are not many tax-advantaged savings vehicles out there that can match the benefits of an HSA. But you must decide if you can handle the drawbacks before committing.
Featured image: “Pink piggy bank with stethoscope on light background” from Shutterstock.
HSAs: A Great Investment Tool for the Healthy Saver was originally published on Lawyerist.
It happened again.
You roared into your law office Monday morning determined that this week would be different. That you’d get things done. Own your calendar. Wow your clients. Be the model of efficiency.
But then it started.
You saw the sticky note from last week with the hours that you forgot to track. Those documents sitting on your desk? Those should have been filed with that client matter, but then you got that phone call.
Speaking of which, you check the ever-blinking voicemail and looks like that deposition will be delayed—again.
Which reminds you, you need to invoice that same client for that letter you sent on her behalf on the 15th of this month. Or was that last month?
You glance at the clock. It’s 9:15 and you’re already overwhelmed.How Did You Get Here?
This scene isn’t uncommon; it plays out time and time again at solo and small law offices all over the country. The problem is that owning a law practice isn’t just about practicing law. It’s also about running a business.
Unfortunately, law school didn’t give you the skill set you needed to be CEO of Your Practice, Inc., it taught you how to practice law. And try as you might, getting ahead of the business side of owning a practice can seem difficult if not impossible.
But it doesn’t have to be. In fact, it can actually be easy to focus on your clients, get more done, bill more, work less, be happy, and enjoy stress-free time outside the office.
The secret is law practice management software.The Numbers, By the Numbers
Everyone talks a big game about the benefits of using law practice management (LPM) software, but that’s probably all marketing spin, right?
Nope. Not even a little bit.
Dave Houlihan, an analyst (and also attorney) from Boston-based Blue Hill Research had enough of the hype and decided to find out the benefits of law practice management once and for all.
He approached it as he would have any other research project, and interviewed 45 law firms with 50 or fewer attorneys about their use of practice management tools. While he expected that some of his initial notions might be true, he was surprised by the scope of his final findings.The Numbers, By the Numbers
Blue Hill Research published Houlihan’s findings in a report entitled Building a Business Case for Law Practice Management.
For solo and law firms, the benefits of practice management solutions tended to center on reducing administrative burdens, which corresponded to a direct increase in billable time and a corresponding reduction in un-billable time.
That makes sense.
But just how compelling were the numbers, really? Try these on for size:
And as the firm grows, the benefits of LPM scale up accordingly.Free Infographic, Full Report
If you’re tired of spinning your wheels on administrivia you don’t enjoy doing anyway, check out all the advantages practice management software can give you.
Featured image: “Asphalt road with light on a horizon and clouds” from Shutterstock.
The Road to Law Practice Hell: Paved with Good Intentions (sponsored) was originally published on Lawyerist.
Omar Ha-Redeye is (among other impressive things) co-founder of Fleet Street Law, a law practice incubator focusing on innovation and increasing access to justice. In today’s podcast, he talks about how the legal industry is changing and what that means for the future of access to justice. But first, we try to figure out why lawyers let receivables become a problem.Why Lawyers Let Receivables Become a Problem
It’s easy to solve your receivables problem. Just follow this rule:“Never do any work unless you’ve been paid for it.”
Why is this so hard for lawyers? Lee Rosen reports talking to a lawyer with an associate and $225,000 in unpaid bills — of which he expects to get about half.
That just … no. Don’t do that. Never do any work unless you’ve been paid for it.Omar Ha-Redeye on Incubating the Future of Access to Justice
The future of access to justice depends, in part, on experienced lawyers being willing to teach inexperienced lawyers how to run a law practice and serve clients, but also on innovation. Ha-Redeye’s Fleet Street Law incubator does all of that, and is helping to increase access to justice in Canada.
If you enjoy thinking about innovative law practice models, the future of law practice, and access to justice, you won’t want to miss Sam’s conversation with Omar Ha-Redeye.
Thanks to Ruby Receptionists for sponsoring this episode!Listen and Subscribe
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Podcast #27: Omar Ha-Redeye on Incubating the Future of Access to Justice was originally published on Lawyerist.
Many of us are familiar with the classic Nigerian prince scam. You get an email from an individual claiming to be a Nigerian prince who needs to get money out of the country. The sum ranges from thousands of dollars to tens of millions of dollars. Wow, what luck that you happened to get emailed by a Nigerian prince! The prince explains that to get money out of the country, you will need to wire him money to aid in the fees that are required to move money internationally. Sure. With eyes on the forty-million-dollar prize, you wire the prince anywhere from $1,000—500,000, and the prince never sends the money. He may even be so bold as to follow up requesting more money, claiming the funds are “stuck” in transit.
For those of you doing your due diligence (and if you are being promised $40 million USD, you probably should), any quick Google search of “Nigerian prince” would show you the first result as being related to a scam.
The scam, commonly referred to as an “advance fee fraud” or 419 scam (in reference to the Nigerian criminal code statute the scam violates), is pop culture at this point. It has been referenced on the TV shows 30 Rock, Futurama, and The Office.
There is even a subculture of scam-baiters dedicated to wasting the time, money, and pride of 419 scammers in an effort to deter them from scamming others. Some scam-baiters will humiliate the scammers into taking embarrassing photos or videos of themselves, and the scammers will hesitantly comply, because they think there is a payoff in the end. In one legendary scam-baiting operation, an individual overseas ordered thousands of dollars worth of “Anus”-brand computers from a business in the United States. The business owner packed about 200 lbs. of computer parts into UPS boxes and shipped them to the scammer’s address in the UK. The scam-baiter also declared a high value for the shipment, forcing the scammer to spend money to get the box of useless junk delivered.The 419 Scam on Lawyers
As much as the 419 scam has entered pop culture, it is still apparently unfamiliar to an exceptionally large group of people, lawyers included. Variations of the 419 scam specifically target lawyers and have proven effective in the past. Unfortunately, if you are duped by a 419 scam, you may not only be out of money, you may be suspended from the practice of law.
In Iowa, during the course of representing a client in a criminal case, an attorney found out that his client was the beneficiary of a large bequest from a long lost Nigerian cousin. If the client could pay over $150,000 in taxes, including an “anti-terrorism certificate,” the client would receive $18.8 million. The lawyer told his client he would help facilitate the transaction in exchange for a percentage of the client’s inheritance. The lawyer then solicited other clients, getting them to provide him with a loan to pay the Nigerian tax bill in exchange for a piece of the lawyer’s cut of the inheritance.
After paying his fees, the lawyer was told that funds were being shipped in trunks filled with hundred-dollar bills from Nigeria to Madrid and would be required to pay an additional €25,600 in “logistics charges.” The client-beneficiary traveled to Madrid, but for undisclosed reasons was unable to take possession of the trunks.
The lawyer violated, among other rules, the rule on competence. The disciplinary board noted a cursory Google search of “anti-terrorism certificate” would have suggested the lawyer was being scammed. Moreover, the lawyer never bothered to do his due diligence to determine whether the Nigerian representatives were actually affiliated with any legitimate bank, as they had suggested. At the end of the day, after being scammed of thousands of dollars from several clients, the lawyer was suspended from the practice of law.
It should be though. The critical thinking skills necessary to practice law should make lawyers more difficult targets.Variants of the 419 Scam
For lawyers, the 419 scam is not always in the form of a traditional Nigerian prince offering money; it can be harder to spot. In one common variant, the lawyer receives an email or website contact form submission requesting help to collect money owed by another party. The client may be from a foreign jurisdiction, but the opposing party happens to reside in the lawyer’s jurisdiction. The lawyer sends a demand letter, and the other side agrees to a settlement. The opposing party sends a check, the lawyer deposits the money into the trust account, and cuts the client a check from the firm’s operating account minus legal fees. Easy money for the lawyer, right? The client and the opposing party abscond with the lawyer’s money, and the lawyer realizes he or she has been scammed days or weeks later when the check provided by the opposing party is proved to be fraudulent.
Now, I know what you may be thinking: “I would never turn over money to a client until the check clears. That’s common sense.” But, in the United States, banks will make the funds available from a deposited check within a few business days, whether or not the check has cleared. It can take up to a month for a bank to determine that a foreign check is a forgery. Under pressure from the client demanding their money, the lawyer cuts the client a check sooner.
Although it may seem like common sense, here are some important red flags that pop up in 419 scams involving lawyers:
If you do choose to take on these potential cases, how can you avoid a 419 scam?
At the end of the day, you need to be smart. Not every scammer follows the same Nigerian prince formula. Lawyers are specific targets for scammers. Always do your due diligence and do not let clients pressure you into sending them funds if a check has not cleared.
Featured image: “Businessman takes the bait to the hook” from Shutterstock.
Even though I have been a defender of Microsoft Word for years (even when faced by die-hard WordPerfect users), even I have to admit that some of Word’s features just make no sense. Unfortunately, some user-hostile features are the ones most likely to be used in a law office. Here are my nominations for the most frustrating, user-hostile Microsoft Word features.Table of Authorities
If you have to do appellate briefs that require a Table of Authorities, you have my sincerest sympathies. No matter how carefully someone marks their citations, something goes wonky with the Table of Authorities: the indentations are not right, there is not enough space between the entries, the font does not match the text of brief . . . the list of what can go wrong is nearly endless. If it is a simple brief, the temptation is to do it all manually. I can not say that I blame anyone for that.
If you do TOAs often, you can buy software that can step between you and Word and provide an easier experience. But it will cost you.Bullets and Numbering
Frankly, I can understand why a Table of Authorities is a difficult thing to automate. There are a lot of pieces that have to fit together just so. But what is so freaking complicated about having auto-numbered paragraphs that are indented (or not) correctly? The whole thing becomes a tangled mess of field codes, Styles, and paragraph formatting, and if your numbering ever gets off-track, heaven help you.
Yes, there is help to be had here too, but again, it will cost you. At the very least, you will want to turn off the feature that lets Word AutoFormat anything that looks like it ought to be a bullet or paragraph number. Then, you can always do things manually until you choose not to.Track Changes
I would be hard-pressed to name a single legal practice specialty that does not need this feature. And truthfully, just turning it on and letting it mark the text as you type is actually quite simple. It’s trying to deal with the text later that’s complicated. Do you want to print the changes, or do you want to print the document as if all the changes have been accepted, or do you want to print the document as it was originally? Well, you can do all that, but first you have to figure out the difference between Final Show Markup, Final, Original Show Markup, and Original. It is not nearly as intuitive as it sounds. And if you got balloons but you don’t want balloons, or vice versa, good luck finding the place where you suppress or add them.
You might be better off simply using the Compare feature to look at the differences between two distinct drafts.Making Forms
From client intake to going to trial (or whatever your practice’s endgame is), forms could be a huge timesaver. And although Microsoft Word has a pretty impressive database of templates, they’re really not geared to law offices.
If there were world enough and time, you could assemble your own set of forms. But between hiding the Bookmark and Cross-Reference feature on the Insert tab and squirreling away the Controls feature on the hidden by default Developer tab, it’s almost as if Microsoft is telling you, “don’t bother.” Even Adobe does a better job of this sort of thing that Microsoft.
If you are a Microsoft Word user determined to streamline your document production process with forms, you can get help here, too, and a lot cheaper than you think. You can check out a simplified version of TheFormTool for free, or you can pay a small fee for a premium version that does really cool things like convert $123.45 to its text equivalent of “One Hundred Twenty-Three and 45/100ths Dollars” plus calculate amounts and dates. With that and a little elbow grease, you can save yourself the frustration of learning the Cross References feature and leave the Developer tab for the propeller heads.Pasting
Want to paste text from one document to another? Sure, you can do that, and the safe bet is you’ll somehow screw up the formatting in your destination document in the process. That’s because Word tries to figure out whether you wanted to paste just the text or some (or all) of the formatting.
As if that is not complicated enough, there are settings embedded deep in the Options area that control the defaults for pasting text within the same document, between Word documents, and from another program into Word. After all, getting text from one place to another isn’t all that simple (but it should be).Your Nominees?
Of course, these are just my pet peeves. Every Word user has their own “it’s got a be simpler than this” feature. What’s yours?
Originally published 2013-09-19. Last updated 2015-07-24.
Featured image: “Angry businessman holding hammer over laptop in his office” from Shutterstock.
It is tough out there for all of us. We need to keep thinking of new ways to attract — and keep — clients while managing not to run afoul of the thicket of ethical rules governing lawyer advertising. Most new questions, it seems, revolve around new-fangled things like soliciting clients via text message. But down in South Carolina, they try to get new clients the old-fashioned way: with donuts and beverage koozies.
Law Firm would like to pursue a practice referred to as “Donut Friday,” where an employee of Law Firm visits the Firm’s existing vendors (e.g., banks, real estate agencies, etc.) and delivers a box of donuts to these vendors. Included with the box of donuts are a dozen koozies bearing the name of Law Firm, as well as a fee sheet, a pamphlet containing information about Law Firm and its staff, and a coupon for $50.00 off Law Firm’s fee for a consultation or real estate closing. None of the marketing material is addressed or directed to any one person, nor does the material request that existing vendors refer business to Law Firm, although the intent is to receive referrals.
Only an ethics board could make the completely awesome practice of sending someone donuts, koozies, and coupons sound so stilted and boring.
At least the South Carolina Bar Ethics Advisory Committee came through and said that as long as you keep those sweet treats coming, regardless of whether the vendor referred clients that week, everything is cool. Thank goodness we can still woo prospective clients with sugar.
(h/t Brian Tannebaum)
Featured image: “Chocolate Donut Cartoon Character With Sprinkles Wanting A Hug” from Shutterstock.
You don’t have to look far to find legalese in legal writing. Just take the standard closings in affidavits and declarations. Here are three variations used in just one jurisdiction.
We can do better. Start by reading Bryan Garner. As Mark Hermann notes, the jury needs to know that you sound like a human being:
Remember: Deposition transcripts are read at trial. I want you to sound like a human being, not an automaton.
—The Curmudgeon’s Guide to Practicing Law, pg. 76.
Why don’t lawyers at least talk like regular people? Here are a few examples.A Question About Tobacco and Health
Why not just ask if smoking harms children?An Infidelity Question From President Clinton’s Deposition
I’ll let you fix this one.And a “Truthiness” Question From President Clinton’s Deposition
How about this: “Did you think he was a liar?”The Right Way to Ask Questions
Now that we know what not to do, watch Stetson Law Professor Charlie Rose ask questions the right way:
And make sure to check out Professor Rose’s YouTube channel. It’s full of great trial lawyer tips!
California’s proposed ethics opinion on attorney duties in e-discovery has been finalized. The opinion is unsurprising in terms of its analysis of today’s technology and long-standing ethics rules, and it highlights that in today’s world, discovery is extremely complex and high stakes.
In the Committee on Professional Responsibility and Conduct Formal Opinion No. 2015-193, California makes it abundantly clear that a lawyer who does not understand how electronically stored information is managed and retrieved for litigation purposes needs to get assistance before embarking on discovery in just about any matter. While there may not be electronic discovery in every case, every case does need to be evaluated for it, and when e-discovery is going to be conducted by either side, the lawyers involved need to understand (or get help understanding) the way the information is stored, retained, deleted, and mined. The potential for ethics violations is extremely high, and with that potential comes incredible malpractice exposure.
Here’s the full opinion:
Featured image: “Man biting a laptop in frustration” from Shutterstock.
California Says You Must Understand E-Discovery in Order to Litigate was originally published on Lawyerist.
We have known for a while that there is a serious maldistribution of legal resources out there. That is a fancy way of saying that lawyers clump in urban, suburban, and exurban areas while rural areas have far fewer attorneys. Looking for jobs in rural areas makes sense, particularly because rural generalist attorneys are retiring.
In North Dakota specifically, however, lawyer jobs abound in part because tons of young men who seem prone to legal troubles moved there during the oil boom.
It’s a great time to be an attorney in North Dakota — especially around the oil fields of rural North Dakota. The number of civil and criminal cases there have skyrocketed in recent years, partly due to squabbles over mineral rights and because of a booming population of young men with money, some of whom are getting in trouble. […]
The shortage in NoDak is apparently so bad that people keep calling Legal Aid. Not because they can’t pay — they can — but because they have no idea how else to find a lawyer because there are so few available.
So pack your bags! The oil fields await you!
Featured image: “WILLISTON, NORTH DAKOTA – MAY 3: Oil refinery is shown on May 3, 2010 near Williston, North Dakota. Oil discoveries in the Bakken Formation have led to rapid industrial development and job creation” Credit: Tom Reichner / Shutterstock.com
The idea of third parties financing litigation is now catching up to the crowdfunding zeitgeist. CrowdJustice is a UK startup that aims to use crowdfunding to pay legal fees for public interest lawsuits. And recently, LexShares entered the crowdfunding space as an online lawsuit investment vehicle for crowdfunding commercial litigation cases. A search for “legal fees” on GoFundMe yields nearly twenty-thousand active campaigns. Even lawyers have used crowdfunding to get off the ground.
Litigation finance’s entrance into the online crowdfunding space should prompt a discussion about the history of the litigation finance industry, as well as the ethical concerns it raises.A Las Vegas Loan Shark Hits It Big, and Loses It All
Litigation finance began in the late 1990s with a man named Perry Walton. After he lost his first “fast cash” lending company in 1997 due to criminal charges, Walton hit on the idea of advancing cash to people with pending lawsuits. According to Walton, his cleaning woman needed money to make ends meet. She had no collateral other than a pending auto accident lawsuit. Walton loaned her $1,100 in exchange for a stake in her lawsuit; he ended up nearly tripling his money nineteen months later.
Walton began regularly investing in lawsuits while selling his idea at seminars for thousands of dollars a ticket. But then Walton bet big on a sexual assault lawsuit against the owner of the Charlotte Hornets NBA team, George Shinn, only to see the suit fail at trial. A no-recourse loan meant when the defendant won, Walton lost and had no collateral to collect. Then the woman to whom he loaned money for the case turned around and sued him for wrongful interference in an attorney-client contract. She won a judgment of $1.6 million against him.
Walton is now running a cheesesteak stand in Las Vegas.The Ethical Concerns of Litigation Financing Companies Give too little information and the case may be rejected for funding. Give too much information and you risk violating client confidence or revealing case strategies best kept under wraps.
Many state bar associations have issued ethics opinions about lawyers using or recommending litigation financing companies. The American Bar Association Commission on Ethics issued a white paper on the issue in 2011 (pdf). The New York Bar also issued an opinion in 2011.
Bottom line: it is not unethical for a lawyer to assist their client in obtaining litigation financing. Bar associations leave the legality of such arrangements up to the courts. But it is a potential ethics pitfall even if it is not necessarily unethical.
The New York Bar ethics opinion raised the issue of client confidentiality and letting a third party exercise control of a case. For instance, LexShares and its ilk want to know details about the litigation to determine if it is worth the risk to invest. This requires knowledge of case details from the lawyer, and the lawyer gets many of those details from the client. From the New York opinion:
Providing financing companies access to client information not only raises concerns regarding a lawyer’s ethical obligation to preserve client confidences, it also may interfere with the unfettered discharge of the duty to avoid third party interference with the exercise of independent professional judgment. While litigation financing companies typically represent that they will not attempt to interfere with a lawyer’s conduct of the litigation, their financial interest in the outcome of the case may, as a practical matter, make it difficult for them to refrain from seeking to influence how the case will be handled by litigation counsel.
In other words, lawyers have to determine how much information they should give the litigation finance company. Give too little information and the case may be rejected for funding. Give too much information and you risk violating client confidence or revealing case strategies best kept under wraps.Can a Litigation Financing Company Interfere with a Case?
A lawyer also has to make sure the financing company does not start arm-chair quarterbacking the case to strengthen the potential of return.
A litigation finance company can interfere directly by calling up the lawyer and directing them on case strategies. They can also interfere indirectly, such as offering to increase the funding amount if the lawyer adds a party with deep pockets, even if the party’s liability is questionable at best.
Both kinds of conduct veer off into champerty. Champerty is an agreement between a plaintiff in a lawsuit and a non-party to the suit that lets the plaintiff get financing in exchange for letting the non-party interfere in the case. Some states, notably New York, still find some arrangements violate the champerty doctrine.
There are broader policy concerns as well. Business groups, such as the U.S. Chamber of Commerce, are not fans of litigation financing, claiming that it encourages frivolous lawsuits.
Finally, If the client recovers a settlement or judgment, the amount needed to pay back the litigation financing company can take away most of what the client would have otherwise recovered.The New Kid on the Block: LexShares
LexShares styles itself as an investment company. Plaintiffs with commercial litigation cases who are in need of funding can turn to LexShares, which then reviews the case for merit and, if it passes muster, puts out an offering for investors to buy. LexShares takes a commission from the funding in exchange for procuring the financing. Assuming the plaintiff’s case is successful, the investors share in the recovery. From the FAQ:
Investment opportunities posted on LexShares are indirect investments in legal claims offered through single purpose pooled investment funds managed by LawShares LLC and sold through WealthForge, LLC, a registered broker dealer and member FINRA / SIPC.
Since LexShares’ site had a chat bubble that popped up, I decided to ask it some questions:
LexShares: Can I answer any questions?
Me: What happens if the plaintiff loses the case?
LexShares: If the plaintiff loses the case, the investor losses their invested capital.
LexShares: Most litigation fundings are structured on a non-recourse basis, ie no win no cost to the plaintiff
LexShares: Are you looking to invest or apply for funding?
Me: Let’s say the jury awards an amount exactly the same as the funding amount. What happens then?
LexShares: We only fund up to 10% of the low bar of our damage analysis of a case, so that situation would be rare
Me: Another scenario: plaintiff loses but has appealable issue and files a notice of appeal. Do investors lose out? Does the financing agreement stay in place?
LexShares: The financing agreement remains in place
Me: So this is essentially a non-recourse litigation loan? What is the interest rate?
LexShares: We structure our deals in 3 ways depending on the type of case, size and risk profile. Terms are bespoke on a case by case basis
It appears LexShares is letting investors buy shares in non-recourse litigation loans. If the plaintiff wins the case, they pay back the loan with interest; but if the plaintiff loses the investors lose out as well because the loan is non-recourse. Of the four cases on LexShares’ site, three have been fully funded. A fourth is on course to be funded as well.Access to Justice or Ethical Pitfall?
Perhaps there is need and space for innovation in funding litigation, or perhaps giving parties a crowdfunded war chest is the last thing the legal profession needs.
While the “David vs. Goliath” aspirations of lawsuit crowdfunding is a noble aspiration, there is ample room for bad actors to take advantage on both ends of the bargain. Giving investors the opportunity to crowdfund lawsuits online is a new twist in a young industry with a wild history. Companies like LexShares will likely continue to fill the access to justice gap, but only time will tell if they are forces for good or evil.
Featured image: “A lot of hands with important currencies isolated on white ” from Shutterstock.
Litigation Crowdfunding and LexShares: Access to Justice or Ethical Pitfall? was originally published on Lawyerist.
This chart (PDF) released by the American Bar Association shows that the total number of lawyers nation-wide is up nearly 18% nationwide since 2005. The numbers are broken down by state, and a couple of things stand out:
The steady increase in lawyer numbers nationwide has not solved the access to justice problem, mainly because the underlying economics of law school and law practice have not changed. Lawyers who graduated in the past five years are still burdened by the effects of the 2008 recession. But chances are we will soon see how the drop in law school enrollment will affect the total number of lawyers.
Featured image: “Large group of people gathered together in the shape of growing graph arrow” from Shutterstock.
Florida, Utah, and North Carolina Lead Lawyer Growth was originally published on Lawyerist.
When I was looking for a place to stay in Chicago for ABA TECHSHOW, most of the hotels in the area were either unavailable or cost more than what I cared to pay. A friend suggested that I check out Airbnb and rent someone’s bedroom during my stay.
Companies like Airbnb, VRBO, and Couchsurfing connect travelers with residents who are willing to rent or sublet their homes (otherwise known as the sharing economy). Most rent on a short-term basis (between one day to a few weeks) but longer arrangements are also possible.
There are some benefits to using a short-term rental. You can get a well-furnished room for a fraction of the cost of a traditional hotel room. Also, if you are new in town, your host can serve as a guide to help you get around. If your host is in the same line of work as you, he might also be a potential networking contact.
On the other hand, some hosts may not provide you with the traditional amenities that hotels offer, such as toiletries, towels, room service, and in my case, a functional bed. Also, there are isolated incidents of hosts assaulting or robbing renters.The Airbnb Experience “I did wonder whether the sheets were clean.”
I checked out the listings in downtown Chicago on Airbnb, and I was impressed with the variety of places available. There were several condos near the Hilton Chicago where ABA TECHSHOW was being held. But there were also rooms available in smaller homes just outside the city. Each room was unique. Some were well decorated while others were as bland as white rice.
I ended up choosing two places to stay. The first place was $90 per night and located near the top of a high-rise condo about three blocks from the Hilton. A picture of the bedroom displayed a spectacular view of the city and Monroe Harbor. There was free wifi. The images in the listing did not show the bed I would be sleeping in, but at the time, I didn’t think much of it. The owner is a financial planner but considers himself a hipster
The second place was $85 per night, and the apartment was located in Chinatown. I chose the place because the apartment looked spotless, had free wifi, and a small dog to keep me company. It was also located close to some restaurants my friends recommended. Finally, the place was only a block to the subway where I can take the Blue Line back to O’Hare Airport.
I landed in Chicago Thursday night. During the long ride on the subway, I received a text message from the owner of the condo:
“Steven, I rented the master bedroom to someone else for the night. Hope you don’t mind. :)”
While I didn’t mind sharing the condo with someone else, it was disappointing to get this literally at the last minute. Fortunately, my roommate for the night was a woman who was in town to attend a political science conference. After some small talk, she showed me to my room:
Thankfully, the bed was more comfortable than it looked. But I did wonder whether the sheets were clean.Should Lawyers Use Airbnb?
If you are on a business trip, using short-term rentals as lodging requires discretion, particularly when it comes to safeguarding sensitive information. Here are a few things to keep in mind before using a short-term rental arrangement.Security is Questionable At Best
If you plan to work in your room, it may be better to stay at a hotel — especially if you are bringing sensitive documents like financial statements, proprietary information, or customer lists. While the chances of the host stealing them are small, there is a better chance that you may forget them when you check out. Similarly, if you plan to have lengthy, sensitive conversations with clients or opposing counsel, your conversations are more likely to be overheard than they would be at a hotel.
Also, do not assume the wireless connection your host provides is secure. If you are using your host’s wifi, be careful accessing bank or credit card accounts, or your firm email. Use a VPN or your smartphone’s data connection, instead.Check to See if Short-Term Rentals are Legal
Airbnb and VRBO have a strong presence in most major cities. Some cities are turning a blind eye while others are regulating and taxing short-term rental transactions. But it is illegal in a few cities, including Los Angeles. And since short-term rentals are a relatively new phenomenon, it is unclear whether owners would have to follow state innkeeper laws or landlord-tenant laws.
Violations will likely result in penalties to the host only. But you do not want to place yourself in an awkward situation where a city inspector makes a surprise visit and tells you to leave. Also, short-term rentals have become illegal mostly due to residents complaining about unruly tourists congesting the neighborhood. So if you are staying in an area where the legality of short-term rentals is in question, it’s possible that neighbors would spy on you or even harass you.Trust Your Gut
So you found what looks like the perfect place to stay. The location is excellent. The rate is reasonable. The room looks clean. But something does not feel right. Perhaps everything seems too good to be true, and you get the impression that the host is not disclosing something important. Or the political posters in the living room make you wonder if the host is on any medications.
Whatever the reasons are, if you do not feel comfortable do not book the room. If you think something is going to go wrong, then it probably will.
Using a short-term rental was an interesting experience. I liked the traditional feel of staying as someone’s guest. But at the same time, I began to appreciate the many little things that hotels offer. If I am traveling for fun or to attend a conference, then I may use Airbnb again. But if I plan to work in my room and speak with my client over the phone until 1am. discussing the specifics of tax returns and bank statements, then I will choose to stay somewhere confidential and secure.
Featured image: “ Low section of young businessman sleeping beside suitcase in hotel room” from Shutterstock.
The United States Postal Service is a remarkably efficient, albeit spectacularly unprofitable, piece of work. It is available to everyone, relatively cheap, accessible from a spectacularly wide variety of locations, and they bring the J. Crew catalog right to your house. However, there remain two incontrovertible downsides: First, you have to actually go to a post office to do many postal-y things. Second, you have to wade through a near-infinite amount of garbage to get to that letter from your grandmother. Fast Company rounded up several new-ish services that aim to turn your snail mail into bytes and pixels so you need never stand in line behind that weird lady who is sending 12 packages to Eastern Europe ever again.
Virtual Post Mail basically gives you a postal address and scans the outside of your mail for you. They upload it to a server so that you can sit around in the comfort of your own home and decide whether to give them the go-ahead to open it and scan the inside, send it to another address, or push it into the maw of a hungry paper shredder. They will deposit checks for you too. Earth Class Mail does does pretty much the same thing but also integrates with Dropbox and Bill.com so you can use it for invoices and payments, which might be the best use case for a solosmall lawyer.
If most of the mail you receive is not mail you actually need in physical form — which is probably the case for many small firms once you figure out a way to get checks deposited and bills paid like Earth Class does — you might consider paying for your mail to be virtual. It isn’t terribly cheap yet, though. Earth Class will run you at least $99/month to start, and while Virtual Post is significantly cheaper, you lose some of the online services integration. So, unless dealing with your mail is really wrecking your life at this point, you might want to wait for more services to enter the fray and force the prices down.
Featured image: “Male hand typing on computer keyboard in virtual space.” from Shutterstock.
Sometimes the best way to figure out how to do something is to first figure out how not to do it. If you want to learn how to cross-examine, why not start with listening (ending at 30:30) to how Cristina Gutierrez cross-examined Jay Wilds in the Adnan Syed case (the topic of last year’s Serial podcast)?
What went wrong? Just about everything. Her questions are long, convoluted, with no indication of where she’s going. All of this made her look bad and Jay Wilds look good, which was no small feat.
And here’s a start on how to do it right.
The video illustrates some components of a good cross-examination:
Isn’t this a simpler and more effective way to do cross-examination?
How To Be Better At Cross-Examination Than The Lawyer From Serial was originally published on Lawyerist.
David Lat of Above the Law talks about the similarities and differences between BigLaw and solo and small firms, and talks about changes and opportunities in the legal market. But first, Sam and Aaron talk about the new wine fad: rosé.Real Lawyers Drink Rose
Sam and Aaron are both drinking a lot of rosé this summer, mostly on the advice of Fusion blogger Felix Salmon, who is championing the cause of the much-maligned wine.
Also it’s very manly.David Lat on the Future of BigLaw and SmallLaw
David Lat’s Above the Law is “a behind-the-scenes look at the world of law” and Lat himself keeps his finger on the pulse of the legal industry writ large. In this episode, he talks to Sam about the ways in which the business of BigLaw and solo and small-firm practice are similar, different, and changing. As Biglaw changes, many lawyers are going in-house, to boutiques, or trying new business models. There are new challenges, but also new opportunities.
Lat also talks about writing his novel, Supreme Ambitions, and has some advice for other aspiring lawyer-novelists.
Thanks to Ruby Receptionists for sponsoring this episode!Listen and Subscribe
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Podcast #26: David Lat on the Future of BigLaw and SmallLaw was originally published on Lawyerist.
How do you gauge the health of your law firm? While there are many ways to measure the health of a business, it is hard to call yourself successful if you can’t keep the lights on.
Related Lawyer Hourly Rate Calculator
If you are just starting out, use your break-even point to set your revenue targets. Job number one is just keeping your firm going. Once you have exceeded your revenue targets enough to save up a cushion of a few months, come back and bump your income goal to set new revenue targets.
If your firm is financially healthy, you will be hitting your goals more often than not.Calculate Your Revenue Targets
Save them or write them down, first of all. Then use your revenue targets as motivation. At the beginning of each day, ask yourself what you can do to help bring in your daily goal before you leave the office.
Do not be shortsighted, though. Always be thinking about what you can do to hit that revenue target regularly. Cutting your fee to sign up a new client isn’t worth it just to hit your revenue target. Look beyond the next client for long-lasting opportunities to increase your revenue.
For example, if you allowed people to sign up and pay for a consultation right from your website, would you get more paid consultations? Is there a relationship you could strengthen (by having coffee, sending a note, or inviting someone to join a bar committee) that could result in referrals? Is there a service you can unbundle that would get more clients in the door? Is there a document you could responsibly offer for free (or in exchange for an email address) that would bring more potential clients to your website?
Consider telling your staff about your revenue targets and making a deal with them: if the firm exceeds its weekly goal, you will give them a bonus. If it regularly exceeds its goal, you will give them a raise (and then set a new target). You are all in this together, after all.Do Regular Checkups
Check up on your revenue targets often enough to gauge the health of your firm. If you can’t hit them regularly, you probably need to try something different. If you are hitting them regularly, good for you! Use that momentum to grow (or just use the profits to go on vacation).
Featured image: “A value increase for this statistical data report.” from Shutterstock.
The Universal Bar Exam is a new version of the bar exam being offered by the National Conference of Bar Examiners. It is a two-day exam comprised entirely of questions testing national principals of law. States often adopt the UBE to help give new graduates and others seeking employment a greater range of employment opportunities.
Applicants who take the UBE are given a portable score they can use to apply for admission in any of the sixteen states that offer the test and accept transfer scores. This alleviates the need to take time off to take a new bar exam and to wait for grading.
However, each state that accepts the score does have its own requirements for character and fitness, as well as a fee associated with the transfer application. In six states, it ends there. In ten other states, there are additional state-specific testing or educational requirements applicants must complete before they are licensed to practice. The chart below details the range of costs and requirements, by state, for applicants with a UBE score.StateCostAdditional Transfer RequirementsScore Transfer CostDate of AdoptionAlabama$575Course on Alabama law$875March 2007Alaska$800Alaska Bar Rule 64 affidavit$800January 2014Arizona$580Course on Arizona law$625 + $200 course feeJanuary 2015Colorado$710Six hour course on professionalism$810November 2011Idaho$600N/A$800February 2012Kansas$1250Cannot have previously failed the written Kansas exam$1250April 2015Minnesota$950 + $100 laptop feeN/A$950February 2013Missouri$910Mandatory open book test : Missouri Educational Component test (MECT) and sign Certificate of Completion$1240February 2011Montana$450Attend a Montana Law Seminar$400July 2013Nebraska$490 + $150 laptop feeN/A$925January 2013New Hampshire$725N/A$725August 2013North Dakota$825N/A$775February 2011Utah$550 (student) $850 (attorney) + $150 laptop feeIf less than two years legal practice, New Lawyer Training Program. If more than 2 years, at least 15 CLE hours on Utah practice & procedure & ethics & civility$550 (student)
State-by-State Universal Bar Exam Costs and Requirements was originally published on Lawyerist.
According to an industry-wide study conducted by LexisNexis, 9 out 10 lawyers say they’re operating at a time of unprecedented change. In addition, 6 in 10 agree that retaining clients has become a daunting challenge compared to years past. The fact of the matter is that the legal industry itself isn’t the only thing changing face. The modern legal client has updated expectations when it comes to the legal representation they think they deserve in our digital age.
We’re seeing online commoditization emerge in the legal domain, completely revolutionizing how we think of the industry. One trend, however, could be the legal professional’s saving grace – technology. To all of the late adopters out there, it’s now or never to welcome legal software into your firm. Contemporary business solutions like practice management and communication tools are the modern law firm’s way of differentiating itself. However, the more prevalent variable that most firms struggle with is collections – technology has provided a solution for that as well. Today, many current and prospective clients prefer the option of paying with credit or debit cards as opposed to checks. Has your firm considered this payment alternative?
According to the Aite Group, we will see a dramatic increase in online or mobile bill payments in the next few years. By as early as next year, 55% of all bills will be paid online or by smartphone. Payments delivered by mail are also expected to change drastically, decreasing from 21% of all bills to only 15% – paper checks will be nearly nonexistent. Another trend to consider is online banking, which has taken our country by storm and shows no signs of slowing down. In fact, 4 out of 5 households with internet access choose to bank online, according to a survey conducted by Fiserv Inc. A surprise to some, these numbers represent a diverse group of users not just restricted to tech-savvy Millennials; it is estimated that more than 70% of the online or mobile bill payers are 35 years of age or older.
For the legal industry, credit, debit, and online payments may seem like a fad but they are quickly becoming a practice standard. Credit card payments are allowing a rapidly growing number of law firms to benefit from immediate cash flow, eliminating the well-known “the check is in the mail” response. Clients need the ability to pay by credit card – for some it is the only option. Chasing down clients and their check books has become an outdated task. It’s not your firm’s responsibility to extend credit to clients, and that is exactly what happens every time an invoice goes unpaid. Let MasterCard, Visa, Discover, and Amex manage your clients’ credit lines, while you save your time and energy for operating, managing, and growing your firm’s practice.
LawPay is leading this progression online by being the preferred payment solution for attorneys. Designed specifically for the legal industry, LawPay offers a user-friendly tool for receiving credit card payments – the fastest way to get paid. Our secure solution is quick and simple, allowing clients to make payments anytime, anywhere.
For more information, visit our website or give us a call at 866-376-0950.
It’s No Fad: Progressing to Online Payments (Sponsored) was originally published on Lawyerist.
New federal regulations promulgated by the Consumer Financial Protection Bureau will apply to real estate lawyers. But they are also a pretty solid starting point for any lawyer or law firm.
Here’s a summary of the best practices, compiled by Law Technology Today’s Pegeen Turner:
How close is your firm to following these best practices?
Featured image: “Hand holding pen and checklist on a clipboard” from Shutterstock.
Best Practices for Protecting Client Information, According to the CFPB was originally published on Lawyerist.