January 2009 • Vol. 29 No. 1 | An E-Publication of the Los Angeles County Bar Association

Resolutions for a New Year: Enjoying an Ethical and Profitable Law Practice

By James I. Ham, vice chair, LACBA Professional Responsibility and Ethics Committee; member, Board of Trustees of California Indian Legal Services; and lecturer at law in legal ethics at the USC Gould School of Law. His legal practice focuses on State Bar disciplinary defense, professional ethics, law practice management consultation, and litigation. The opinions expressed are his own.

Mark Twain is credited with remarking that New Year’s Day “is the accepted time to make your regular annual good resolutions. Next week you can begin paving hell with them as usual.” Many of us look forward to the New Year for a start on old habits, and some say New Year’s resolutions go in one year and out the other. Despite the odds and the strong gravitational pull of habit and past practice that conspire to oppose change, here are some suggestions that, if adopted, will really help you sleep better, feel better, and have a less stressful legal practice in 2009 and beyond.

Promise One: Start building a rainy day fund. If the stress of having just finished the gut wrenching and unpleasant annual ritual of collecting accounts receivable for year end is still fresh in your mind, then you should consider whether your law practice needs more capital. If you drained your law firm’s bank account to make this year’s distributions, you are probably now looking at three to four more months of stress, fear, and loathing as your cash-starved law firm limps into the new year and rebuilds its cash position and accounts receivable. Just when you think your firm feels like it is back on its feet, you will be reminded that it is about time to start the annual year-end collection ritual again. Get off this fiscally imprudent, unhealthy, and risky treadmill. Resolve to take some of the money you successfully collected and leave it in your law firm. Pay the tax on the money you leave on the table, and then start collecting your accounts receivable on a regular, not a last-minute, basis. Adequate law firm capital reduces stress and disagreement among firm owners, permits lawyers to focus on client service, and allows law firms to better manage their cash needs.

Promise Two: Focus on your strengths. Seek help from experts or consultants who can accomplish administrative tasks more efficiently than you. This frees you up to focus on what you do best while improving the quality of your business information. Take, for example, client trust accounts. Monthly reconciliation is not only required by the State Bar but is relatively easy and inexpensive if done regularly. Large law firms have in-house staff to deal with such issues. Smaller firms and solos can rely on computer programs such as Quicken or hire a part-time bookkeeper to handle the number crunching. 

Promise Three: Communicate. Redouble your efforts to be responsive to client telephone calls and e-mails. Consider an office policy of responding to all telephone calls and e-mails from clients within 24 hours, even if only to acknowledge the contact. Then, calendar return calls to make sure they are made. 

Promise Four: Review your fee agreements. Are your fee agreements up-to-date? Do you have required conflict of interest waivers in cases where you represent multiple clients in the same transaction, or where you are representing a client in a matter that is adverse to another existing client or to a former client for whom you did substantially related work? Do you have a written agreement with each of your clients? If your fee agreement includes a lien or security provisions, does the agreement comply with Rule 3-300 of the Rules of Professional Conduct? Does your fee agreement include a statement regarding your right to return or dispose of the client’s file after a reasonable period of time? 

Promise Five: Schedule a client file “spring cleaning.” Now is a good time to assess how much you are spending on file storage for your former clients and to resolve to exit the file storage business. You may be able to dispose of old client files that don’t contain original client documents, original settlement agreements, wills, deeds, and other documents of intrinsic value. You can reduce the storage burden (and cost) by returning those files to the clients and retaining an inventory and receipt of what was delivered, or by destroying client files with client consent or in other appropriate circumstances. Closed files that are five or more years old are good candidates for review and possible disposal.

Promise Six: Contribute to your community. “Pro bono” means “for the public good.” You can give back to your community in many different ways, not just by providing free direct legal service. Most lawyers have interests and talents to lend to the community that deserve the title “pro bono.” Participating on local bar association committees, volunteering with community or nonprofit organizations, and many other volunteer activities are legitimate pro bono activities despite the narrow definition some legal groups prefer to ascribe to the pro bono concept. Lawyers can make a substantial contribution to their communities by following their passions. Your choices are not limited to handling traditional pro bono legal cases, although such work can be extremely rewarding and deserving of your consideration, especially in these difficult economic times.

Promise Seven: Don’t accept work you can’t handle. Redouble your effort to turn down work you are not experienced in handling unless you are prepared to make the substantial investment necessary to educate yourself to become competent in the field. Likewise, resist the urge to take on cases you believe are uneconomic for your law firm or for the client. You do a disservice to yourself and to your client when you accept a case you should have known cannot be handled at a price both the law firm and the client can accept.

Promise Eight: Be civil. We can be effective and strong advocates of our clients’ causes without being jerks. Zealous advocacy does not mean abrasive advocacy. When you are blinded by anger or revenge and stoop to cheap shots or uncivil tactics, you rarely succeed in advancing your client’s cause. Recently, a panel of the California Court of Appeal held it was unprofessional conduct—unethical—to take an opponent’s default without warning the opposing counsel. See Fasuyi v. Permatex, Inc. (2008) 167 Cal. App. 4th 681. Likewise, in an era of instant communication, it is almost always better to sleep on something rather than reacting immediately. 




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