Business of Law

610 ABA Journal articles on Business of Law.

Tech training helps lawyers meet client expectations
Tech training helps lawyers get up to speed to meet client expectations.
Simulations test law firm system security
As technology evolves, threats and vulnerabilities evolve, too. To not be caught on the back foot, firms are using simulations to find vulnerabilities and build or bolster their cybersecurity systems, as well as cultivating firmwide culture change to train employees.
Legal analytics track gender diversity at law firms
Legal analytics can study the gender of attorney appearances in court to see whether a firm has true gender diversity.
Technology has not replaced need for paralegals
Although more lawyers are performing the work of paralegals, job prospects for trained assistants seem good.
Large law firms’ secret information from big-money clients entice cyberthieves
If personal and confidential data are the currency in today’s electronic world, then law firms are sitting on a gold mine.
Prepare, practice, protect: A strategy for defeating cyberthreats to lawyers

Corporate litigator Jane Doe sat down at her desk Monday morning and logged on to her computer. She opened an email appearing to be from a client that read: “Hi. Could you please take a look at this document? It’s urgent.” Doe clicked on the attachment. Two weeks later, a hacker website published confidential documents that one of her most important clients had given the firm in connection with a lawsuit alleging environmental violations. Doe’s client called, furious, to inform her that she was discharged, and that the client was considering a lawsuit against her firm.

Every week brings news of major new cyberattacks—the stealing of personal information from Equifax and the federal Office of Personnel Management, the Petya and WannaCry ransomware worms, the Russian hacking of the Democratic National Committee’s emails, to name a few. Indeed, the cyberthreat from criminals, hacktivists and state actors is growing. The costs associated with these malicious activities are staggering: Last year, the Commission on the Theft of American Intellectual Property estimated that the annual cost of IP theft in three major categories may be as high as $600 billion and that the low-end total exceeds $225 billion, or 1.25 percent of the U.S. economy.

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ABA Journal series: Cybersecurity and the law

Law firms have not been immune. In fact, they have been a ripe target:

  • Several major New York City law firms working on public mergers and acquisitions were hacked in 2014 and 2015 as part of a sophisticated insider-trading scheme.

  • In 2012, hackers believed to be linked to the Chinese government obtained confidential documents related to solar panel designs by hacking into a prominent Washington, D.C., firm.

  • A Panama-based law firm was the target of the largest data theft ever by volume: A hacktivist website obtained 11.5 million individual documents stolen from the firm (2.6 terabytes of data), which contained confidential financial information about the firm’s clients.

  • Among the many entities victimized by the Petya ransomware attack this past year was a BigLaw firm that was forced to take some of its email servers offline for an extended period.

Man in front of American Flag

John Carlin

The nature of their work and the resulting sensitive data make law firms enticing targets. Law firms conduct due diligence and internal investigations, negotiate settlements, provide advice on regulatory issues, and handle important contractual negotiations and litigations. In the course of their representations, they often have access to a wide range of confidential client information, including trade secrets and other intellectual property, financial data, business strategies and national security information. All of this can be valuable to criminals seeking monetary gain, to businesses seeking a competitive edge or to foreign intelligence services.

Technology enhances the risk. Records that a law firm once kept on physical pieces of paper in file cabinets now reside on data servers or in the cloud. Lawyers increasingly communicate using mobile devices or email. Firms’ use of a growing number of devices that are connected to the internet—the “internet of things”—creates new vectors of vulnerability. While these developments may have made the logistics of legal practice easier, they have also introduced additional opportunities for illicit access.

Cybersecurity and the Law
Our yearlong series explores cybersecurity and how lawyers can better safeguard their confidential information. See our first installments:

Prepare, practice, protect: A strategy for defeating cyberthreats to lawyers

Large law firms' secret information from big-money clients entice cyberthieves
Ethics opinions have to reflect the present and future—not the past

One of the most enduring purposes behind the ABA Model Rules of Professional Conduct and corresponding state ethics standards is to protect clients and the public from “overreaching, overcharging, underrepresentation and misrepresentation.” (See Ohralik v. Ohio State Bar, 1978.)

More than a century after the 1908 adoption of the association’s first set of guidelines, the ABA Canons of Professional Ethics, the clients whom ethics standards protect and the lawyers governed by them have changed drastically. Yet in substance and form, ethics standards remain stagnant—and the same lofty principles that once inspired the best in lawyers will soon render us irrelevant.

ARCHAIC RULES

In substance, today’s legal ethics standards are so utterly out of sync with the lifestyle, social conventions and technology savvy of today’s consumers that they actually breed mistrust.

Imagine an encounter with an alien that hails from a planet where placing one’s hands around a new acquaintance’s throat is intended as a sign of respect. Yet without this background, you’d understandably feel distrustful and threatened if greeted by a stranger who has a firm vise around your neck. The same is true of ethics standards in the modern world: They require lawyers to act in a manner that is so alien in today’s society as to arouse suspicion. Consider the two following scenarios.

Case 1: Penny Prospect, a mom seeking a divorce, arrives at your office for a consult. You think the meeting went well, but you never hear back. It turns out your instincts weren’t wrong—Penny was leaning toward retaining you—until she viewed your profile on LinkedIn and saw a disclaimer that states: “This profile is attorney advertising.”

In a decade of using LinkedIn (including as recently as that morning when she updated her profile in anticipation of searching for a higher-paying job), she has never seen a disclaimer like this. She knows LinkedIn’s user agreement prohibits advertising. Doesn’t this lawyer understand terms of service?

Penny’s concerns aren’t allayed when she clicks a link to the lawyer’s blog and once again sees “This blog is attorney advertising” underneath the blog caption. Penny doesn’t bother to read the posts; she assumes that if they’re advertising, they won’t be very valuable.

Penny wonders what’s wrong with this dude. He’s so caught up in promoting himself online that he won’t have time to handle her case. Ultimately, Penny heads to LegalZoom, which doesn’t have the same advertising disclaimers, and signs up for the do-it-yourself divorce package that includes attorney review.

Case 2: Noah Newbie is a recent business school graduate seeking to incorporate an online business. After the meeting, you hand him a 15-page retainer agreement and ask him to sign it and send it back with a check.

Noah leaves the office and tosses the retainer agreement into the trash can. He doesn’t understand a word of it. Plus, he’s always paid bills by credit card. He’s not sure that he still has a checkbook.

He decides to search his lawyer’s ratings online, but there’s not a client review or testimonial to be found. Because Noah always checks ratings before making a purchase, he’s disconcerted about why he can’t find any for his lawyer: Were they so bad she paid to have them removed?

Then Noah discovers a site called Avvo Answers, where he can ask questions about incorporating a business for $39. Noah searches for a New York lawyer. When he can’t find one, he discovers that several bars, including New York, have banned lawyers from doing business on Avvo. Apparently, it’s unethical for the site to take a cut of the $39 fee you pay to talk to a lawyer.

Noah doesn’t get it. Isn’t it a common online business model for the platform providing goods or services to take a cut of the sale? That’s how Etsy and Airbnb work—heck, Uber is killing it. Noah can’t believe this rule is really intended to protect clients. It’s probably a way to force clients to have to trek to a stuffy, old lawyer’s office and fork over $1,000.

It looks like his mentor, who heads a successful startup, was right after all: Noah is going to have to start his corporation at Rocket Lawyer by himself. Noah sighs, thinking it was easier to find his fiancée online through a dating site than it is to hire a lawyer.

REAL RULINGS, FALSE FEARS

These aren’t fantasy scenarios; they are based on actual ethics opinions. New York County Lawyers Association Formal Opinion 748 (2015) requires disclaimers in LinkedIn profiles. State Bar of California Formal Opinion 2016-196 treats a blog as advertising that’s subject to advertising rules if the attorney makes known their availability for service. And New York State Bar Association Ethics Opinion 1132 (2017) finds Avvo Answers and similar sites to constitute unethical fee splitting, as did a 2016 advisory opinion from the South Carolina Bar.

Building the 21st-Century Law Firm: See the rest of our coverage.

As these examples bear out, the parade of horribles that regulators envision—fee splitting with nonlawyers injecting their interest into the attorney-client relationship, testimonials and reviews that might dupe clients into hiring an unqualified lawyer, making objective and useful information online available through a LinkedIn profile or a blog without prominently labeling it as advertising (I’m stumped to figure out what kind of harm that could ever cause)—doesn’t intimidate today’s clients at all.

Most of today’s clients have seamlessly, thoroughly integrated social media and “sharing-economy” platforms, as well as online payments and content-based marketing, as part of their daily lives. They’ve acclimated to the cultures of each online universe they inhabit and grown adept at distinguishing between causal informational websites and biographical profiles, and chatty personal exchanges and paid advertising. So when lawyers can’t conform their conduct to these mores, they’re first viewed with suspicion or annoyance and, ultimately, ignored.

Market to manage electronic documents in a state of flux
Last year, more than 30 major e-discovery companies were acquired or merged, or they disappeared. To an outside observer, it looks like an industry that is shrinking or contracting. But at the same time, venture capital firms poured millions of dollars into startups and upstart companies offering technology to manage electronic documents in litigation. It’s enough to make lawyers wonder: Is it an industry in decline or on the rise?
Software provides real-time predictions on how potential jurors might vote

Voltaire’s software can search through billions of data points, including public records and social media posts, and pull up all kinds of information on prospective jurors. The software, powered by IBM Watson, also uses deep psycholinguistic and behavioral analysis to discover the biases and views of prospective jurors.

Start financial protection before opening your law firm
Here are a handful of insurance tools you should consider heavily when starting your firm. Some are necessary at your firm’s inception, while others should simply remain on your mind and be explored further as your firm evolves.
Practical cybersecurity for law firms: How to batten down the hatches
How do you protect your law firm from ransomware, malware and other cyberthreats? The costs of ransoms have significantly gone up from a few hundred dollars to the $1,000-plus range for the decryption key to unlock the affected files.
Law firms borrow a concept from the NFL to address lack of diversity in their leadership ranks
In a Diversity Lab project, 55 participating law firms will agree to abide by the so-called Mansfield rule when making decisions on leadership opportunities within the firm.
Lawyers employ algorithms to guide pricing, advertising and advising
Drew Vaughn, founder of NuVorce, a divorce law firm in Chicago, created a cost-benefit formula that turns a consultation into a flat-rate fee structure.
21st Century Law Firm: Ask Daliah

Attorney Daliah Saper has been answering readers’ questions online about building a 21st-century law firm. This augmented version of her column looks at time—timekeeping and time-saving.

Dear Daliah: Any tips for tracking time better?

Dear Readers: We have all faced the black-hole time warp. You worked 10 hours, but your billable hours only record 4½. Where did all the time go? You were so busy that you had a granola bar for lunch at 4 p.m. just to soak up all the coffee from the morning client marathon.

Keeping track of all your time often fails because you’re distracted by the hundred different things coming at you or because you can’t re-create your day at the end when you finally have time to breathe.

Here are three ways to capture your time effectively.

the AUTOMATIC way

Stay ahead of the game, and use practice management software that integrates your billing and has customizable workflows all in one. Not being able to consistently reconstruct time can bankrupt a practice.

I asked my friend Alvaro Arauz at 3a Law Management, a legal practice consulting firm in Atlanta, for some technology recommendations. He says cloud-based software you can access from anywhere with an internet connection, such as Clio, MyCase or Rocket Matter, is used by many firms. These platforms can automate standard billable tasks, such as basic discovery, emails, text messages to clients, court hearing confirmations or cover letters.

The 0.2 and 0.1 hours can add up in a day but can be easily lost. With the proper services, predefined tasks convert into time slips with a click of a mouse without having to remember if everything was billed in the scope of the assignment. Keep in mind, the time slips can always be adjusted in the prebill phase.

The two things any firm of any size can streamline, Arauz says, are phones and accounting. Not managing either effectively also can make or break your practice.

Part of the accounting headache is the chore of reminding and following up with clients about payments. Then there’s the actual collection of payments; in some firms, it’s a bookkeeper’s part-time job.

New options are available to the modern lawyer, and PaySimple is exactly what it says—a simple software program that lets you schedule payments and accept e-checks and credit cards while it automates your billing process. Even the established merchant services LawPay and QuickBooks allow you to send a link to clients via email for them to pay their invoices or retainers.

Arauz says to take it all a step further by using practice management software that syncs with LawPay and QuickBooks. If the structure of your website allows it, which most do these days, there also are payment portals that can be added for either potential clients scheduling a consult online or existing clients who received an automatic emailed invoice.

The second thing to delegate are the phones. There are a variety of live answering services that range from $99 to $800 per month—services such as Ruby Receptionists, My Receptionist and PATLive. They give your clients the impression that your practice has a front desk ambassador. Just remember the old adage that you get what you pay for, and try to stay in the $200 to $500 range.

Ruby Receptionists is a quality and tested company. Script how you want your phones answered—when they get transferred immediately, i.e., when a judge calls; when to email your staff—and monitor it all with monthly reporting logs.

If you have a high-volume practice or a large number of weekly potential intakes (personal injury, bankruptcy, med-mal), Legal Intake Professionals will handle your entire intake process. Equally customizable on how to prioritize calls, it adds the extra level of capturing details that most answering services do not provide.

Once the intakes come in, a paralegal or an attorney contacts the potential client to engage them formally. However, the monthly price is slightly higher than most services but still less than the salary and payroll liabilities of an intake specialist plus a receptionist.

For the ultra-high-volume intake firms, there are plug-ins for your website or case management software that will email intake forms to potential clients and then enter them into your internal system automatically. Capturing the case information and data entry is the bottleneck of the intake process. Delegate it to the potential client and technology, Arauz says, all from an iPad on a couch in your waiting room.

 

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