Previously I wrote about an emerging philosophy guiding law firm leadership through our Great Recession; namely that the supply of lawyers now outnumbers the demand for them, and that the legal industry is undergoing a permanent transformation. This is the second entry of a three-part blog, focusing on how legal services are becoming a commodity.
For the past few years there have been two diverging philosophies guiding law firm leadership through our Great Recession. The first school of thought has been that permanent industry-wide transformations are taking place, requiring both short-term and long-term renovations to law firms’ missions, visions, and business models. The second ideology has been that the legal market’s economic crisis is temporary, and conditions will return to relative stability when the pendulum “swings back” and the economy improves. More and more, the statistics are supporting the theory that the legal industry is facing a permanent evolutionary change. This is the first of a three-part blog I am submitting on the status of the legal industry and the challenges facing law firms.
Q: I recently started a home-based business selling various types of products over the internet and I am wondering whether to incorporate. I am concerned about personal liability, and have heard that by incorporating I will eliminate all personal risk. However, I also want to ensure that I maintain control of my business. Would you recommend incorporating? And, if so, what type of corporate entity should I choose? [name withheld]
Q: Joe, I am negotiating a construction contract and my general contractor wants a mandatory arbitration clause. I have heard you say many times you don't like them. Can you tell me why? [name withheld]
Q: How successful has your implementation of alternative fee agreements been this year, and how many of your clients have actually taken advantage of these alternatives? [name withheld]
This year our firm embarked upon a new venture that we believe will help us serve our clients better, and might even spark a new trend for local law firms. In short, we are now engaged in an innovative and rapidly growing field of legal project management. This program is consistent with the Lean Six Sigma philosophy to which we have already subscribed. We are among the pioneers in this area, and possibly the very first legal project managers in Central Illinois. We intend to take the lead in implementing these practices in a business law context. The world has changed, and clients need and expect more value than ever before for the fees paid to their law firms. Clients want their lawyers to “partner” with them to achieve their business goals and deliver value, not to merely send them a monthly bill showing how many hours have been spent.
We have received numerous requests from our clients for a brief commentary and summary of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In theory, this legislation was meant to create a sound economic foundation to grow jobs, protect consumers, monitor and control Wall Street, end bailouts, prohibit any future “too big to fail” institutions, and prevent another financial crisis. Whether the law accomplishes these goals remains extremely controversial and open to debate.
By Joe Van Fleet
This week brought a major setback for the evolution of business law firms across America. Since the very first law firms were formed, non-lawyers have been prohibited from holding any ownership interest in law firms, or in any way benefitting directly from the collection of legal fees as revenue. For the past two years, there has been a growing movement to abolish this requirement and permit law firms to organize in a manner in which they can be owned and managed just like other businesses. Some even advocate allowing law firms to go public. Nevertheless, at this year’s American Bar Association Annual Meeting on Monday, the ABA House of Delegates voted to postpone indefinitely any resolutions to support such a movement. Without the ABA’s support, any legislation allowing the transformation of law firm ownership is extremely unlikely.
Q: What are your thoughts on the Russian authorities prosecuting the punk rock band Pu**y Riot for criticizing Putin? Can they really do this, and can’t the United States do something to help those girls? [name withheld]
By Emily H. Wilburn
On June 28, 2012 the Supreme Court issued its opinion in National Federation of Independent Business v. Sebelius. I was driving to another county for court that morning, and the anticipation on the radio for the outcome was at a fever pitch. I laughed to myself about the anticipation because Supreme Court opinions are not easily decipherable and they do not come with a simple “constitutional” or “unconstitutional” checkbox. It takes time to digest the opinion and determine what the effects of the application of the opinion will be, and almost a month later it is still unclear what the healthcare landscape will look like in the next two years.
Many of the blog icons on this page have been created by Joe’s three children. They are so excited to see their artwork on Dad’s work website!