I am glad to announce that Matthew D. Henderson will be joining Troutman & Napier, PLLC as an associate attorney. Matthew comes to us from the Fayette County Attorney’s office. Prior to that, he served as Judge Philpot’s judicial intern in Fayette Family Court. He will be bringing tremendous skills and knowledge in areas of criminal law and family law as well as estate planning and general litigation. With the addition of Matthew, Troutman & Napier, PLLC offers a full range of services and practice areas for our clients.
One of my repeated themes is to seek legal counsel early. This is a variation on the theme of seeking counsel when trouble first rears it head so that you can plan for the worst case eventuality. This post is geared towards those entrepreneurial spirits out there who are forging ahead with starting their own businesses. It takes an extra measure of courage to do this in this post-recession recovery period (I am not entirely convinced that we are post-recession, but let’s go with it). And, along with that extra measure of courage I recommend an extra measure of counsel.
For by wise guidance you will wage war, And in abundance of counselors there is victory. Proverbs 24:6 (NASB)
And, while starting a business is not as bloody as waging war, it is indeed a financial battle. So, I recommend getting counsel from a lawyer all the way from setting up the proper corporate entity to tips on financing that can save you down the road. While talking to a lawyer about your business idea may not be the most inspiring and motivating conversation, it can be a lifesaver for you finances. This is because lawyers are trained to think about and plan for worst case scenarios – those eventualities you do not want to contemplate. The conversation, then, may feel like it is taking wind from your sails. However, making sure the right documents are in place from the inception of your business all the way to how to sign on promissory notes can make a huge difference when times are tough.
For business law information, be sure to check out Bluegrass Business Law blog. There is a synopsis of recent case law on the Kentucky tort of intentional interference with contractual relations.
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 my profession calls upon me to take to explain options and the likely outcomes of each.
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.
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.
I came across this post by The G.A.L. regarding the downside of the traditional billable hour that most firms use. While G.A.L. is quoting another blogger in his post, here is my favorite quote:
Blind obsession with the billable hour not only destroys the relationship amongst attorneys and staff at a firm but inevitably between the firm and its clients.
I have wrestled with the best way to bill for various matters I have handled. As a rule, my firm foregoes billing on many items customarily passed on to clients by law firms. For example, we do not track and bill long distance phone charges, routine postage, copies, and mileage in our home county and a number of surrounding counties. Because I do not have a billable hour goal set for me, I find myself often rounding down the time I spend on a project rather than rounding up because my tendency is to think about my clients circumstances as much as my own.
I have contemplated using flat fees, and I have done so in some cases where the work involved is fairly predictable. I have also used flat fees in a family law matter simply because the client could not afford anything else. However, the downside to flat fees is that when the unexpected occurs, there is a built in disincentive to going the extra mile and one must consciously resist the temptation to do less.
While I still use time as a measure of cost to the client in most matters, there are various other ways that I avoid the billable hour trap and focus more on the value of the product to my clients. By “no charging” time that did not call upon my education and experience as an attorney, such as brief phone calls that just conveyed simple information, or that add to my experience and marketability, such as basic research in an unfamiliar area of law, I essentially do a form of value billing. However, I think this approach actually goes beyond what is usually meant by “value billing”.
Value billing just means that there is a set expected time it takes to prepare a certain document. For example, 1/2 an hour to draft a motion to compel discovery. A new associate may take an hour but only bills for 30 minutes while a seasoned attorney may do it in 10 minutes but bills for 30. Instead, I like to think my approach encapsulates value added to the client. I suspect there is no perfect solution to this dilemma, but I do know that it is only at a small firm or with a solo where one can find the freedom to experiment with better ways to bill.
Check out this post by Elusive Justice regarding child support. As E.J. points out, child support typically continues on through a child’s 19th year as long as they remain in high school. There are also statutory provisions for health care insurance coverage even beyond that. The women E.J. spoke of was trying to save money because she simply did not have funds to retain a lawyer. Unfortunately, that decision will probably cost her far more in the long-run.
This brings we to a point about small firms and solo practices that I very much like. I can give a short consultation to a person like in E.J.’s scenario either for free or a low fee. Even if I charge my hourly rate, just getting advise on that matter would have cost roughly $50 because it would not have taken long. A major savings over the fees she may rack up if the ex-spouse stops child support over the inadvertent agreement.
Anna Nicole Smith (Vicki Lynn Marshall) had the resources to hire the best lawyer around to draft her will. I would guess that she paid the lawyer drafting her 2001 will very handsomely. However, the language of the will would get a failing grade. Check out this critique by a law professor. Price does not guarantee quality. Interview attorneys before giving them your business and make sure they will give personal attention to the details whether you have many assets or few to leave behind. A few words can make a world of difference.
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- Interest Rates on Secured Claims in Chapter 13 Cases in the EDKY
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- When Business Owners Should File Bankruptcy
- To File or Not to File: Attorney decision making
- Deadlines for Filing Prepetition Tax Returns in Chapter 13 Cases
- Delinquent Property Tax Claims in Chapter 13 Cases
- Lessons Learned the Hard Way
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