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    Rules For Winning the War For Talent While Improving Profitability
    Monday, September 19th, 2022

    ♫ Together together
    Were winning together
    Forever and ever
    You’ll be remembered
    For every little thing you do for me…

    My latest  – and lead article: “Winning the War for Talent While Improving Profitability” just released in American Bar Association’s Law Practice Magazine. Co-written with my friend Steven Campbell CPA CA. https://lnkd.in/drNezZQt Deep dive into law firm finance in the context of today’s environment.

    Rules For Winning the War For Talent While Improving Profitability

    Law firms are facing another year of unique challenges in 2022.  The big three include:

    1. Associate recruiting, retention and compensation (including stay and year-end bonuses), compounded by firms adjusting to work/life balance resulting from associates working from home.
    2. Inflation and higher interest rates impacting a firm’s ability to raise rates to match or exceed inflation.
    3. Changing lawyer preferences resulting from ‘back to the office’ and hybrid working arrangements.

    We review the profit drivers that Robert (“Bob”) Arndt discussed in his 1988 book: “Managing the Economic Levers” published by the Section of Economics of Law Practice, American Bar Association as Bob’s advice is as relevant today as then and provides guidance in today’s environment.

    Bob broke down the business of law into five categories using an acronym that he called RULES:

    R = rates

    U = utilization

    L = leverage

    E = expenses

    S = Speed

    Traditionally law firms raised rates to increase profitability.  However, Bob suggested there are other methods, such as:

    • managing the client intake process (Bob considered this to be the most important point);
    • tailoring rates and billing policies to specific clients and matters;
    • managing rate and billing adjustments;
    • billing often and keeping the client informed;
    • tying partner reward structure to rate performance; and
    • reporting rates achieved.

    The business of law has changed since Bob first published his principles. We propose to build on the RULES principles by incorporating analytics and new approaches to matter management to provide ideas for improving profitability and client value in today’s environment.

    Rates

    There are four rates that firms should monitor to understand the impact of cash leakage on profits: Standard, Negotiated (Worked), Billed, and Collected.  Understanding the factors behind each rate provides insights into minimizing ‘cash leakage’ (or the reduction from billable hours worked to realized amounts), thereby improving partner profits.

    Standard Rates

    A standard rate is an attorney’s quoted hourly billable rate.  Standard rates are more aspirational than realistic: today’s profitability surveys ask about negotiated rates.  Interestingly, following the Great Recession, firms discovered that many clients measured their negotiating success by the percent discount achieved to standard rates.  Firms that did not increase standard rates learned that it put them at a price disadvantage for many years against firms that continued to increase standard rates annually.  With inflation running around 8% in Q1 2022, many firms plan to increase their standard rates by 8 –10%.

    Negotiated Rates (Worked Rate)

    Negotiated rates are agreed to adjustments from standard rates, ideally reserved for large clients with good credit and payment histories.  The average firm negotiates discounts from the standard by 7.7%.  Be watchful for deeper discounts: for a firm with a 30% profit margin, each 1% adjustment reduces profit by 3%.  When clients persist, evaluate whether an Alternative Fee Arrangement (AFA) or blended rate is appropriate.  If a client’s discount is significantly below the firm average, it may be time to terminate the client and seek more profitable work.

    Billed Rates (write-downs)

    Downward adjustments can occur when the billing lawyer feels the time worked exceeds the value the client received or agreed to pay.  The average firm discounts worked to billed rates by 8.2%.

    Sidebar:

    Poor supervision to original targets: Supervisors fail to monitor delegated work.

    Inexperienced lawyers: Junior lawyers learning curve and time written off for training.

    Staff turnover: New lawyers having to come up to speed.

    Client Guidelines: Lawyers failing to comply with client guidelines.

    Scope Creep: Poor client communication.

    Collected Rates (write-offs)

    Write-offs occur after an account is billed and the client is either unwilling or unable to pay the account. In 2021, partial or total account write-offs averaged 9.4%.

    Sidebar

    Sticker Shock: Insufficient discussion with client as to the expected fees. Risk of disrupting client relationship.

    Poor credit risk: Clients onboarded without ability to pay.

    Contingency fees: Time written off due to poor case assessment and / or risk sharing with client.

    Billed too late: Client refuses to pay as billed beyond client guidelines.

    Accumulated Leaks

    The amount of lost opportunity in this cycle is enormous.  Assume a firm with a standard worked value of $326 million, and using the average realization deduction percentages noted above, we arrive at a net cash collection of $250M.  As shown in the chart below, for every 1% improvement in realization, firm profit would increase by $3.26M.

    Actions firms can take to improve realization

    Working with an Am Law 200 firm during the Great Recession, when realization was dropping across the industry, we used informative analytics to help the firm improve the standard to cash collected realization by 4%.

    When presented with analytics like the table above, partners were amazed at the impact of discounts they readily agreed to give previously.  The partners embraced a new review procedure: all rate adjustments had to be centrally approved (in this case, by a retired partner).  When clients asked for a discount, the partner could honestly say they did not have the authority to approve the request.  If the client persisted, they were informed that their request had to be approved by a committee that reserved adjustments for extenuating circumstances.

    The benefits of this system were:

    1) it shielded the partner from being the person who had to say no; and

    2) it ensured that discounts were reserved for legitimate reasons.

    Further analysis revealed systemic issues that, once addressed, further improved realization.  These included:

    • Inconsistent standard rates: These were alleviated by implementing centrally set standard rates based on competitive rate information by practice, timekeeper seniority and geography.
    • Improved and centralized client in-take process: Clients were vetted for creditworthiness, past billing, collection, and profit trends. Retainers were required for new clients.
    • Improved matter intake process: All new matters required engagement letters that included the firm’s billing and collection policies.Partners were required to outline the scope and set fee budgets for all matters, proactively communicating and collaborating with clients.
    • Enforced standard client arrangements as set out in the client’s SOP (Standard Operating Procedures): Clients were informed as to their fee and evergreen obligations.Time entry systems were programmed for alerts for time or expense entries inconsistent with the client SOP.  This resulted in fewer pre-bill adjustments and audit exceptions, thereby speeding the time to
    • Centralized contingency matter acceptance with enhanced risk assessment.
    • Year-end discounts (thought to incentivize clients to pay accounts) were stopped.

    Utilization

    Utilization in the RULES context starts with the worked billable hours per timekeeper.  The 2022 Report on the State of the Legal Market: average billable hours increased from 120 per month in 2020 to 124[1] in 2021; an annualized increase of 48 hours per timekeeper.  It should be noted that 2021 results are still 120 hours per year lower than 2007, the year before the great recession.

    Effective Capture & Timely Record All Time:

    Studies show that when timekeepers record their activities, a significant amount of time goes unrecorded when worked in short durations, on mobiles, evenings, and weekends.

    Software solutions contemporaneously capture all activities performed on most electronic devices, including email, texts, phone calls, and most computer software applications.  Timekeepers can electronically review, amend, and submit these, capturing time that previously went unrecorded.

    Based on a survey of users one year after we implemented such a system, we concluded that the firm captured 3.7%[2] more time, contributing an additional 11.1% profit.

    The survey also concluded that the timekeepers spent 1.5% less time manually reconstructing and entering their time.  Given current demand increases, this productivity gain could translate into billable hours without increasing the total number of hours that timekeepers work.

    There are only so many hours in a day and most attorneys feel that they are giving all they have.  But there are still metrics that a firm should monitor to help attorneys ensure that their efforts are being used as productively as possible.  Some metrics are:

    • Percent of billable time to total time recorded: Many of us know attorneys that are first in and last out but fail to achieve targets.This identifies those attorneys that may benefit from time management coaching.
    • Uneven distribution of work: One firm introduced a Red Light / Green Light system. Attorneys choose a stoplight color from red to green, indicating how busy they expect to be in the coming week, month and quarter.  New work assignments were given to lawyers with matching expertise and availability (and to those that asked for opportunities in new areas of law).
    • Size of Clients: Analysis of major law firms indicates that attorneys working on smaller clients have lower billable hours.They experience small bursts of work for many clients instead of large blocks for attorneys working on more significant clients.  This conclusion was drawn from a client segmentation profitability analysis.
    • Freeze Hires: Based on a profitability study during the recession, a firm implemented a policy to freeze new hires for practices where total underutilization hours was greater than the equivalent hours of an FTE attorney.

    Leverage

    Leverage is the billable hours ratio of equity partners to other timekeepers and is one of the best drivers that lower rate firms can use to improve partner profits.  Take Cole, Scott & Kissane, a 2nd 100 firm with 541 lawyers in Florida.  The average profit per timekeeper was only $20K; yet the Profit per Equity Partner of $3.7M ranks it as one of Am Law’s 2020 survey’s most profitable firms.  Cole achieved this result through high leverage.  While leverage may not be a key factor for all practice areas, clients are increasingly seeing the value of delegating work to the least expensive, competent professional – thereby increasing leverage and profits through enhanced utilization of paralegals and other paraprofessionals.

    Firms could use leverage to turn the war for talent from being money-driven to offering enhanced training and mentoring, a holistic sense of purpose, and a better work/life balance.

    In the 2021 Above the Law Millennial Survey by Major, Lindsey & Africa, associates were asked what they would desire over increased salary.  The results:

    • 29% more time off,
    • 25% flexible work schedule,
    • 26% reduction in billable hours, and
    • 8% more time for career, training, and development.

    A Thomson Reuters survey indicates that associate turnover reached 23.2% in 2021 compared to 15% in 2020.  Moreover, TR estimated that the turnover cost for an associate is 1.5 – 2 times annual salary.  Based on an average 3rd year associate salary of $250,000, the cost to the firm would be $375,000- $500,000 per associate.

    Let’s assume a firm with 100 associates working an average of 1,488 billable hours per year.  If total associate hours remained the same and the firm hired five additional associates, then average associate hours would drop down to 1,417.  By increasing leverage, the firm would have the opportunity to meet the associates’ priorities for fewer hours, flexibility, etc. and save costs over the long term.  How?  By cutting hours, a firm could potentially get to 2020 attrition rates, possibly lower.  Assuming no salary reductions (and average salary noted above), the net savings from lower turnover ($1.5M-$2.4M) would more than pay for the compensation of the additional associates ($1.25M), as shown in the chart below.

     

    If a firm were to follow this recommendation of increasing leverage AND addressing associates’ priorities for reduced hours, flexibility, professional development, etc, they would almost certainly improve associate satisfaction and retention.  In ‘Practice What You Preach’, David Maister’s survey results found a causal relationship between employee satisfaction and profit, where a 10% satisfaction improvement causes a 25% increase in firm profit.

    Expenses

    Most expenses, other than rent, are expected to increase with inflation in 2022.  If firms can increase negotiated rates equal to inflation, then partner profits will increase at the inflation rate.  Further Net Income Profit margin improvement will come to firms that reduce their space footprint; as rent is the largest expense following salaries, those gains could be significant.

    Speed

    Speed refers to the time lag from the date work is done to when payment is received.  Work in Process is time worked by not billed and Accounts Receivable is time that has been billed but not yet paid.  WIP+AR = ‘lock up’.  According to a recent PwC survey in the average firm, Lock-Up = 115 days.

    One firm reduced their lock up to 78 days in a matter of two years.  How could they do it?

    Different approaches have been used.  An imaginative approach came from a firm in Atlanta, GA.  They implemented a policy whereby lawyers would be paid a princely sum of $7 a day if they submitted each day’s time by 10 am the next morning.  The firm’s accountant stated: “You would be amazed at what lawyers will do for $7 a day”.

    Other approaches: E-billing systems check time for date worked vs date recorded: If too long a lag, the time may not be accepted.  Others watch hours recorded by day – and monitor for timekeepers attempting to game the system with time reversals.

    The results on profit and working capital are clear in the numbers.  Just a five day decrease in lock up increases PPEP [profit per equity partner] by over 2%.

    Here are recommendations to reduce lock-up:

    • Cash is King: Evaluate partners on cash collections as opposed to hours worked or billings. Link profit to cash collected, not accrual accounting.
    • Determine client profit based on collections: Partners do not get credit for work done until it is collected.
    • Timely Billing: Bill frequently and at time(s) where results were achieved (see the “graph of gratitude”). Bill half your clients in the first two weeks of the month and the others in the last two weeks.
    • Measure the Right Indicators: Billing rate and billable hours are not the best metrics for monitoring conversion and velocity: Billable hours and billing rates are too early in the work-to-cash continuum to be meaningful. Instead, focus on collected rates and cash collections, and tie evaluations and incentives to these targets.
    • Stop Work: Monitor lock-up and have a senior partner follow up with partners with delinquent clients: stop existing work, and cease taking on new matters.
    • Draws: Link draws to cash management – this has been suggested many times rarely implemented.
    • Engagement Letters: Use on all matters, incorporating billing and collection terms. Consider Evergreen retainers when appropriate.
    • Get Timely Information: Move to real-time reporting vs. printed reports that are outdated almost immediately.
    • Cut out the Speed Bumps: Client account audits slow down the collection cycle; ensure that e-bill accounts are audit-proof. There are real-time time capture tools that are very effective in ensuring client guidelines are met.

    Conclusion

    Working Smarter and not Harder is a well-worn maxim.  Today, by following the RULES and employing effective technology tools and informative analytics, we can achieve greater profit without flogging associates to death with their billable hour requirements.

    Appendix: Time Management Best Practices:

    Not wishing to appear tone deaf that associates feel they are overtaxed already, the following recommendations do not suggest that timekeepers should work more hours – only that they convert more of the time they have already worked to recoverable time by following proven strategies.  This further detail implements Bob Arndt’s Utilization principle and assists in reducing the time leaks noted above.

    Keep track of Time Spent on All Tasks (billable and non-billable):

    You need to know where you spend your time – billable and non-billable.  You can see which are the unproductive time wasters and concentrate on your productive tasks.  Today there are technological tools that will highlight time wasting activities.

    Create a To-Do list for Tomorrow at the end of today:

    Create your to-do list at the end of the day by recording all the things you need to accomplish while they are in your head.  You know what you have to do tomorrow.

    Identify Your Daily, Weekly and Monthly Goals:

    Write down what goals you wish to accomplish by the end of the day, the end of the week and the end of the month. Listing them helps you stay on task when interruptions and distractions arise.

    Prioritize Tasks:

    Time management is partly developing the ability to discern what needs to be done from the rest and then doing it – promptly.

    Create a To-Do list and sort your tasks into four categories:

    • Important and Urgent: Do these First – they are the most important work to be done today.
    • Important but not Urgent – Make room for these…they are longer term goals; schedule them into your day after the important and urgent tasks.
    • Urgent but not Important – These are Time Sinks… schedule them low in priority
    • Neither Important nor Urgent – Put on the Never Never list – they are not taking you towards any of your goals.

    Stop Procrastinating (Today not Tomorrow!):

    There are many reasons for avoiding a task, none of them good.  You may be avoiding something unpleasant, time consuming or fearing failure.  Failing to face up and deal with these only makes them worse.  Break a large task into smaller ones.  Do the most unpleasant task first.  Delegate an unpleasant task (remember to return the favour in the future).

    Stop being a Perfectionist:

    Perfection is the enemy of task accomplishment.  The 80/20 rule – 20% of your tasks will take 80% of your time.  Squeeze time burners into a time budget and do them as quickly as possible.  Remember “satisficing: Pursuing a course of action satisfying the minimum requirements to achieve a goal.” Send your results to the delegator asking if they wish more work to be done.

    Stop Burnout by doing the Important & Urgent things today:

    All of us have a ‘most productive’ time of the day.  Match that time with your most important and urgent tasks and use your best energy for your most important tasks.

    Seek a Time Management Mentor (Someone with good time management 
skills):

    
Mentoring is one of the benefits of working in a large firm.  Find a partner who is willing to take you under his/her wing and teach you what they know.

    Ask assigning Partner for a Billable Hours Goal for a Task (keep assignments on budget):

    When someone assigns a task, ask “How much time do you want me to put into this before we sit down for a review?” You both establish a block of time and a deadline for the task and avoid ‘project creep’.

    Take Short Breaks after each task completion:

    Reward positive behavior for task accomplishment.  Enjoy a short break and allow your brain to refresh.

    Block off Time to Achieve Tasks in your Calendar (keep 20% time uncommitted):

    Take your tasks and establish a time budget for each (hopefully with the delegator).  When you run up to your time budget, re-evaluate what needs to be done and discuss with the delegator.

    Limit Distractions and Interruptions:

    Interruptions are a factor of life such as email.  Squeeze email into three time slots (9 am, 1 pm and 5 pm) and for a fixed amount of time (20 mins).

    Work from a clean desk (clutter free desk):

    Clutter is a distraction and a sign of disorganization.  Work from to-do lists and get the papers off your desk.

    Stick to a Routine:

    A routine allows you control of your life, time and tasks and structure your time to best use.  You set aside the time for all the things you need to do in a certain order and priority.

    Estimate how long it will take you to complete a task and compare your time against your estimate.

    Break Complex Tasks into Smaller, Manageable bites:

    Break bigger tasks into bite-sized chunks and allocate those to your time schedule.

    Delegate if at all possible:

    Delegate tasks to the lowest common competent person who can accomplish them.  This will develop the skill of task management and supervision and allow you to use your time for the most important and urgent tasks in your day rather than routine matters.

    None of these suggestions require a timekeeper to work more hours; this is all newfound income that goes straight to the bottom line by eliminating leaks from the billable hour boat.

    One thing is clear. By paying attention to and tweaking the R.U.L.E.S., we can increase profitability, increase both associate retention and satisfaction and win the game of work – life balance. You will be remembered by your associates and partners for everything you do for them.

    Bios:

    Steven Campbell:

    Steven Campbell is a Consultant with Acumen Consulting, LLC.  He helps law firms develop strategies to improve performance, leveraging innovative analytics and his extensive law firm experience to provide insight and clarity.

    With over 25 years of experience in AmLaw COO and law firm consulting roles (including Thomson Reuters Elite’s Business Intelligence team), Steven has been a pioneer in data-driven profitability analysis and performance management in law firms.

    Steven’s deep understanding of law firm operations and challenges has enabled him to partner with firms to successfully design and implement data-driven strategies with enthusiastic adoption, achieving significant transformational results and enhancing both firm profitability and client value. You can contact him at: Steven@AcumenKPI.com  and phone 313 580 0468.

    David J. Bilinsky:

    David J. Bilinsky is considered a visionary in how technology and other forces are changing the practice of law and how legal organizations can take advantage of these changes.

    As the Practice Management Advisor and lawyer for the Law Society of British Columbia for 20 years he advised lawyers on ethics, practice management, and technology. He is a Fellow of the National Center for Technology and Dispute Resolution (NCTDR) at the University of Massachusetts and a Fellow of the College of Law Practice Management. He is the co-chair of the Law Firm Finance Board for the ABA’s Law Practice Division and past ABA TECHSHOW co-chair. He currently is the principal of Thoughtful Legal Management, a legal practice management consulting firm. You can contact him at daveb@thoughtfullaw.com and phone 778 697 7110.

    [1] To November 2021

    [2] Assuming a firm that had a 30% margin before the recovery of lost time, a 3.7% revenue increase translates into an 11.1% profit improvement.

    Posted in Budgeting, Business Development, Firm Governance, Issues facing Law Firms, Law Firm Strategy | Permalink | No Comments »
    AI and Law Practice
    Sunday, August 21st, 2022

    Artificial Intelligence

    ♫ They’ll never take my pride
    They’ll never take my strength
    They’ll never take my faith
    They’ll never take my trust
    They’ll never take my hope
    But I’m ready to go
    For the love that’s there for
    the takin’ (for the takin’)
     ♫

    — Lyrics custom generated by AI using “lawyers and change.”

    Artificial Intelligence (“AI”) was a science fiction concept that has walked out of fiction novels and into our lives.

    AI and e-Discovery:

    It didn’t take long for e-Discovery vendors to start incorporating AI into their products.

    AI started out by analyzing large document sets for the purpose of predicting document relevance in litigation cases. It then went further and suggested priorities of what needs to be reviewed. This process takes place much faster and cheaper than the older method of armies of associates reading every document in a data set. Using it early in the e-discovery process, and repeated as new documents appear, enhances the results.

    Based on learning garnered from past actions and outcomes, AI now grasps the overall e-discovery process and can suggest who should be interviewed, what new keywords should be searched and what should be placed under a legal hold.

    One of the newest applications in this area is Sherlock — merlin.tech’s digital bloodhound. They state:

    “Sherlock is our revolutionary, AI-powered digital document bloodhound. It is a smart, machine-learning algorithm designed to make it easier to find information in large document populations.

    They go further:

    “Sherlock’s strength is its speed, scalability and flexibility. It can analyze and rank a million documents in 100 milliseconds — 10 million in a second. It can then deliver new documents in order of likely relevance, allowing you to review and mark them relevant (“Thumbs Up”) or not (“Thumbs Down”).”

    You can send one document or many to Sherlock. It will analyze them, extract key terms, build an AI model on the document set and apply the model to millions of documents in milliseconds.

    AI and Transactional Practice:

    Is a client looking at a merger or purchase of a business? Submit the contracts of the target to AI and have it analyze them for errors, missing information, and inconsistent language so your client knows what to expect in the book of business they are looking to acquire.

    The Amercian Bar Association reports: “Such software can also ensure that language is applied consistently, no matter how many attorneys had a hand in the drafting. Through document comparison and automatic learning, software such as contract comparison tools can identify missing clauses or conditions, inconsistently used terminology or undefined terms, both within a single document and across a pool of similar documents.”

    Such contract and document review software can be invaluable when it comes to looking at large IP portfolios for example, by analyzing them and drawing insights therefrom.

    Developers here include leverton.ai, from the German Institute for Artificial Intelligence. It is a patented and award-winning product that uses AI to extract relevant data, manage documents, and compile leases in real estate transactions. The cloud-based tool is said to be capable of reading contracts at high speeds in 20 languages.

    Another developer is thoughtriver.com, a “contract acceleration” application, which handles contracts, portfolio reviews, and investigations for improved risk management. Its “Fathom Contextual Interpretation Engine” was developed together with machine learning expert authorities at Cambridge University.

    The company states that it designed the product to automate summaries of high-volume contract reviews. While users usually read content extracts, they can also read the meanings of clauses provided by AI. The system is also said to be capable of flagging risky contracts.

    AI and Legal Research:

    What started off as a simple idea of digitalizing case law now has some serious long-term implications for lawyers. These databases have gone well beyond just case law to incorporate all types of legal information, in multiple languages, from multiple jurisdictions. These big databases are tamed by AI research assistants, which use machine learning and natural language processing to aid your legal research.

    Take vlex.com. vLex is “The world’s largest collection of legal information, on one service.” It offers a wide range of legal titles and collections containing thousands of documents, with daily updates — all available on a single AI-powered legal research platform. It received the 2021 Legal Breakthrough Award for Vincent AI, its legal research assistant.

    vLex states: “Only with vLex can you access full-text Canadian cases, the entire Irwin Law collection of legal books and the Maritime Law Book, alongside coverage from over 100 countries, with authorities seamlessly linked across jurisdictions to enhance your legal research.”

    Unfortunately, another promising AI legal research initiative, ROSS Intelligence, which had started in 2014 at the University of Toronto, had to close shop in January 2021 due to the fact that a lawsuit by Thomson Reuters (“TR”) had left it without sufficient funds to operate. TR alleged that it stole content from Westlaw to build its own competing legal research product. ROSS is fighting the lawsuit and vows to come back. Bob Ambrogi quoting ROSS’s CEO Arruda in legalsites.com writes: “Once the litigation concludes, we hope to return to business as usual: innovating in the legal research space,” he said. “That might mean licensing the technology or using it in other applications, or it might mean building and iterating our platform as it exists today. But for the time being, we are focused on winning this litigation.” We hope ROSS emerges and pursues the promise of their innovations.

    There are other AI legal research providers as well, such as:

    alexsei.com — Alexsei produces memos referencing caselaw and legislation in select regions of the United States and Canada.

    AI in Litigation:

    AI is being used to analyze possible legal arguments and case strength by taking the case facts and using AI prediction technologies to forecast litigation outcomes. Legal analytics software can look at a judge’s past rulings, win/loss rates and other data points to look for trends and patterns in case law and predict a possible case’s outcome.

    AI can also be used to analyze a client’s legal position and determine if there are any logical inconsistencies, gaps in evidence, logic, or arguments in a client’s position. Once uncovered, the lawyer can then evaluate risks and see if there are additional documents, witnesses or such that can be used to tighten up a legal position.

    AI and the Human Interface:

    There are other benefits. Lawyers can do something that AI, at least at the present time, cannot — namely build a human-to-human connection. Relieved of the tedium of law practice, lawyers can spend their time learning the client’s business and building the bonds that will strengthen the lawyer — client relationship.

    Since lawyers are no longer chained to their desks performing mind-numbing hours of contract or document review, they can enjoy a higher quality of life and they can take on more of the type of work they enjoy. This is not only more satisfying, it taps into their creativity and purpose for which they went into law — namely to meet client needs. It keeps client’s better informed, it lowers stress, leads to a better work-life balance, and provides greater confidence in the results. Since AI is so much better at taking on large data sets (in whatever context) it can lead to saving time for the client and the lawyer, which in turn can reduce costs and increase satisfaction. AI can also lead to higher quality results, as the machine never tires, goes on a break, or gets ill.

    Change is happening to the law due to AI and lawyers are clearly lining up to take the love.

    (This article previously appeared at PracticeTalk in the CBA Publication Bartalk for August 2022.

    Posted in Change Management, Issues facing Law Firms, Law Firm Strategy, Technology | Permalink | No Comments »
    The War for Talent
    Monday, July 25th, 2022

    attract talent

    Web Vectors by Vecteezy

    ♫ People say they wouldn’t change a thing, even if they could. Oh, but I would
    Oh…oh, I, I’d done a lot of things different… ♫

    — Music and lyrics by D. Dillon, B. Anderson, recorded by Kenny Chesney.

    There is a war going on and not just the one in Ukraine. COVID, law firm management’s back-to-the-office movement, and the resultant calls for greater work-life balance from associates who have now tasted the forbidden fruit of working-from-home, have all compounded the whole associate retention, recruiting, and compensation landscape.

    In the 2021 Above the Law Millennial Survey by Major, Lindsey & Africa, associates were asked what they would desire over increased salary. The results:

    • 29% more time off;
    • 25% flexible work schedule;
    • 26% reduction in billable hours; and
    • 8% more time for career, training, and development.

    This clearly runs headlong into management’s goals for an annual increasing billable hour requirement or at least holding them steady from year to year.

    Associates, tired of waiting for change, are voting with their feet. A Thomson Reuters survey indicates that associate turnover reached 23.2% in 2021 compared to 15% in 2020. Moreover, Thomson Reuters estimated that the turnover cost for an associate is 1.5-2 times annual salary. Based on a 3rd year associate salary of $200,000, the cost to the firm would be $300,000-$400,000 per associate.

    What is the usual grounds for competition between firms for associates? Greater associate compensation — which in turn translates into increasing hourly rates charged to clients with resultant — and expected — pushback.

    Is there a win-win in this situation? I believe so. The solution is to adopt procedures that tighten up the financial boat and allow for a greater percentage of fees worked to be collected, thereby reducing the sheer volume of work being performed.

    There are a number of policy changes that can increase the bottom line without causing lawyer burnout. One is to reduce the leaks in the billable hour boat. This starts at the client intake process. By vetting clients carefully and mandating written retainer letters with evergreen retainer and collection clauses on all new matters, the resultant account write-downs and write-offs can be reduced to a minimum. Increasing billing frequency keeps the client informed on the state and cost of the work to date. Having associates and partners review files frequently with clients cuts down on “scope creep” and resultant sticker shock. Time capture software can reduce unrecorded time spent on mobiles, evenings, and weekends.

    A simple policy of requiring daily time submission cuts down on lawyers reconstructing their daily time entries with resultant missed entries. A firm in Atlanta, GA paid their timekeepers $7/day if the time entries were in by 10 a.m. the next day. Their CFO stated: “You would be amazed at what lawyers will do for $7 a day.”

    Another technique is to reduce “lock-up” — the time between time worked and time paid. Clients have introduced policies to refuse time that is too old; firms have backed this up by setting time and billing systems to reinforce this. Having a partner being told that the client will not be billed, and he will not be paid, for his 45 worked hours because they are too late certainly brings home the point of timely time entry.

    Bill in accordance with Jay Foonberg’s “Graph of Gratitude.” Jay Foonberg is both a CPA and a lawyer and the author of the venerable “How to Start and Build a Law Practice” (now in its 6th edition). In his graph, you can see when is the best time to render an account based on when the work was done. Gratitude does not age well — send your bill before it has eroded. By maximizing your account collections, you and your colleagues don’t have to bill 115% of your target collected income just to realize 100% of your collected fees target.

    While measuring billable targets and billable rates are fine, they are too early in the cash flow cycle to translate into cash in hand. Make sure you are measuring collected rates and cash collections and tie these metrics to performance evaluations to keep your time billers focused on producing work that leads to collections and not just monthly invoice targets.

    Lastly, pay draws based on accounts paid, not fees billed. Cash is king and notwithstanding accountants and their accrual systems, you can’t spend cash you haven’t received.

    These are a sampling of the techniques that can be implemented by law firms to increase their bottom line without flogging associates and partners to death and hopefully increasing associates quality of life. We can do a lot of things different.

    Time Management is the Flip Side of the Coin to Billing Time

    Better time management can reduce long hours in the office spent meeting your billable time goal. Here are a selection of time management best practices:

    Keep track of time spent on all tasks (billable and non-billable): You need to know where you spend your time — billable and non-billable. You can see which are the unproductive time wasters and concentrate on your productive tasks. Today there are technological tools that will highlight time wasting activities.

    Prioritize tasks: Time management is partly developing the ability to discern what needs to be done from the rest and then doing it — promptly.

    Create a To-Do list and sort your tasks into four categories:

    Important and Urgent: Do these First — they are the most important work to be done today.
    Important but not Urgent: Make room for these… they are longer term goals; schedule them into your day after the important and urgent tasks.
    Urgent but not Important: These are Time Sinks… schedule them low in priority.
    Neither Important nor Urgent: Put on the Never Never list — they are not taking you toward any of your goals.
    Ask assigning partner for a billable hours goal for a task (keep assignments on budget): When someone assigns a task, ask “How much time do you want me to put into this before we sit down for a review?” You both establish a block of time and a deadline for the task and avoid “project creep.”

    Break complex tasks into smaller, manageable bites: Break bigger tasks into bite-sized chunks and allocate those to your time schedule.

    This article is excerpted from an upcoming article on the Rules For Winning The War For Talent While Improving Profitability by Steven Campbell CPA and David J. Bilinsky for the American Bar Association’s Law Practice Magazine. Steven Campbell is a Consultant with Acumen Consulting, LLC. Steven has been a pioneer in data-driven profitability analysis and performance management in law firms.

    (This article previously appeared at PracticeTalk and Tech Tips in the CBA Publication Bartalk for June 2022.

    https://www.cbabc.org/BarTalk/Articles/2022/June/Columns/The-War-for-Talent

    https://www.cbabc.org/BarTalk/Articles/2022/June/Columns/Time-Management-is-the-Flip-Side-of-the-Coin-to-Bi)

    Posted in Business Development, Issues facing Law Firms, Law Firm Strategy, Trends | Permalink | No Comments »
    Getting Serious about Cybersecurity
    Monday, June 20th, 2022

     

    ♫ Listen
    Do you want to know a secret
    Do you promise not to tell, whoa oh, oh…

    – Music and Lyrics by Lennon-McCartney, recorded by The Beatles

    Back in December 2017, I wrote the following cybersecurity article as my regular column “PracticeTalk” for  The Canadian Bar Association’s BarTalk.

    I thought it was opportune to update it and republish it and here in light of current developments at Microsoft and elsewhere that take a positive step forward for security on the web.  While businesses take proactive steps to harden their online security, the same may not be true of families and individuals. With so many individuals working from home or in hybrid environments, I thought it was a positive step for Microsoft to announce that they have made the Microsoft Defender app, a new online security application for Microsoft 365 to Personal and Family subscribers beginning June 16, 2002.

    What does Microsoft Defender App do? For one, it reaches across multiple operating systems and devices, since most families have a mix of Windows, macOS, iOS, and Android devices in their households. I believe this is a major step forward in viewing security from an overall ownership perspective rather than on an operating system or device-centric perspective.

    Secondly, what does it do? Microsoft states:

    Microsoft Defender App includes continuous antivirus and anti-phishing protection for your data and devices,  and will enable you to:

    • Manage your security protections and view security protections for everyone in your family, from a single easy-to-use, centralized dashboard.
    • View your existing antivirus protection (such as Norton or McAfee). Defender recognizes these protections within the dashboard.
    • Extend Windows device protections to iOS, Android, and macOS devices for cross-platform malware protection on the devices you and your family use the most.
    • Receive instant security alerts, resolution strategies, and expert tips to help keep your data and devices secure.

    You can get the link to download Microsoft Defender for all your devices here: https://www.microsoft.com/en-ca/microsoft-365/microsoft-defender-for-individuals?rtc=1 

    Here is the original column:

    We don’t have to worry about being hacked. We are one of the biggest law firms and have a whole department concerned with IT Security.” However, Bloomberg Law reported that Mandiant, a cybersecurity firm has stated that 80 of the 100 biggest US law firms have been hacked since 2011.

    We don’t have to worry about being hacked. Hackers only go after the big fish, not us.” But, parachute.cloud reported that: 28% of all data breaches involve small businesses in 2022.

    The fact is that while large law firms can throw considerable resources at cybersecurity, hackers are also throwing large resources back at them seeking valuable confidential information for resale on the black market. After all, information is money. Smaller law firms are also targeted on the basis that they are easier to attack and criminals can demand quick cash by holding a law firm’s data hostage. Such ransomware attacks are high in volume and don’t require any middlemen.

    In Law Firm Data Hack, Part 1 in lawpracticetoday.org, Sharon Nelson and John Simek stated that: “Nearly 50 law firms were targeted by a Russian cybercriminal who posted on a cybercriminal forum seeking a hacker to collaborate with him. He hoped to hire a black-hat hacker to handle the technical part of breaking into the law firms, offering to pay $100,000, plus another 45,000 rubles (about $564). He offered to split the proceeds of any insider trading 50-50 after the first $1 million.”

    Cynet.com reported that a Providence law firm was held hostage for a $25,000 ransom. However, the decryption key initially failed to work and the firm had to pay more. It lost $700,000 in billings alone.

    Large or small, a law firm’s secrets, reputations and finances are placed at risk in a hack. As a result, managing partners of all sizes of law firms have yet another thing to worry about.

    There are two major components to law firm security. One concern is the vulnerability of the system’s hardware and software. The other concern is the vulnerability of the “carbonware” – or in other words, the humans using the system.

    According to LexisNexis, there are six key security steps for law firms to take.

    • The first is to put all your IT security policies in writing and hold training sessions around them to maximize security awareness for all employees.
    • The second is to inventory all your data and detail who has what permissions or control over the various parts of the system.
    • The third is to only grant access on a “need to know” basis. That way, even if someone’s credentials are hacked, the hackers don’t get access to your entire system.
    • Fourthly, keep all your systems updated and patched. I am amazed at the number of lawyers who are still using outdated browsers, operating systems and anti-virus suites.
    • Fifthly, ensure that you have adequate insurance that will cover you depending on your loss (see Insurance Issues: Risk Management, 2017: No. 2 Summer – a Guide to Insurance for Private Practitioners by the Law Society of BC).
    • Lastly but not least, have a “breach ready” response plan so you have pre-planned how to respond if you experience a cyber breach. The boy scouts’ advice on “Being Prepared” applies here!

    By taking steps now, you can diminish the possibility that your reputation and financial well-being will be damaged by a hack. After all, you don’t want someone asking if someone wants to know one of your secrets….

    What steps can you take to protect yourself and reduce the possibility that you will be hacked aside from installing Microsoft Defender?

    A selection of the top tips (this article, which originally appeared in 2017 has been updated to 2022):

    • Use strong passwords and a password manager. CyberNews.com  has a great article on creating a strong password and recommended password managers. Most password managers will generate strong passwords for you. GRC.com and other sites will generate a new, unique strong password for you every time you visit (that you can then copy and paste into a password manager, such as Keychain for the Mac). WireCutter in the New York Times reviews the best password managers for 2012. Don’t use the same password everywhere and don’t keep passwords in a document on your PC!
    • Use two-factor authentication. This inserts an extra step before you can sign into websites to access email, Facebook and others. The site sends a code to your phone by text that you have to enter after entering your name and password. Without this code, the website won’t let you in. Even if hackers gain your password, without access to your phone they are locked out. Cloudflare.com has a useful article on two-factor authentication and how to use it. TechRepublic.com has a PDF, written for non-techies, along with links on how to set up two-factor authentication on many services. You have to sign up to TechRepublic but it is free. (PDF: How to set up two-factor authentication for your favorite platforms and services.)
    • Be careful with emails! Email phishing scams come in many forms. MalwareBytes.com has a great article: What is Phishing  and How You Can Protect Yourself.
    • Protect your mobile devices. Cellphones are tantalizing devices for hackers seeking ways to break into business networks. The PreyProject.com has a great article on the 20 ways to secure your mobile phone with tips for both iPhones and Android. Rogers.com reported that nearly 1 in 4 people will experience loss, theft or damage to their wireless device in 2017. Unfortunately, I could not find an equivalent statistic for 2022.
    • Take steps to protect your business from ransomware. Cbia.com published Fourteen Tips to Protect your Business from Ransomware attacks. I would add one more tip: Back your data up in a secure, encrypted online storage service such as sync.com. Cloudwards.net has a review of sync.com and lists it as the best cloud storage in Canada. Sync.com is the overall winner as it is a zero-knowledge storage service (meaning that they have end-to-end encryption and you and only you have access to the decryption keys).

    When it comes to IT, one can think that you have adequate protection, that is, until you get hacked. I looked for Canadian data, but Cloudwards.net reports that:

    • Ransomware cost the world $20 billion in 2021. That number is expected to rise to $265 billion by 2031.8,
    • In 2021, 37 percent of all businesses and organizations were hit by ransomware.
    • Recovering from a ransomware attack cost businesses $1.85 million on average in 2021.
    • Out of all ransomware victims, 32 percent pay the ransom, but they only get 65 percent of their data back.
    • Only 57 percent of businesses are successful in recovering their data using a backup.

    Spending money on security and prevention is always money well spent.

    (originally published in PracticeTalk and Tech Tips in the Canadian Bar Association’s BarTalk magazine:

    https://www.cbabc.org/BarTalk/Articles/2017/December/Columns/Guarding-Your-Confidences

    https://www.cbabc.org/BarTalk/Articles/2017/December/Columns/What-steps-can-you-take-to-protect-yourself-and-re)

     

    © 2022 David J. Bilinsky

    Posted in Issues facing Law Firms | Permalink | No Comments »
    Family Law: Does the Status Quo need Fixing?
    Monday, June 13th, 2022

    divorcing couple

    (Image by Mohamed Hassan – Pixabay)

    ♫ Now it’s time for change
    I feel the the future
    In the hands of our youth… ♫

    — Music and Lyrics by D. McDaniel & N. Sixx, recorded by Mötley Crüe

    Does family law need deep structural changes in how it resolves disputes? John-Paul Boyd, QC, an accredited family law arbitrator, family law mediator, and parenting co-ordinator, in an article in The National (Feb. 2019) entitled: “Family Justice in Canada is at a Breaking Point”, wrote the following:

    “[W]e should consider removing family law matters from the courts altogether. These are disputes that could be moved into a specialized administrative system offering both adversarial and non-adversarial dispute resolution alongside: education on parenting after separation, child development and conflict management; social services providing parenting, housing and employment support; and financial and mental health counselling, parenting assessments and similar services.”

    John-Paul notes that the current system sees up to 80% of family law litigants as self-represented. High fees simply place lawyers out of reach for the vast majority of people undergoing family disputes. One can ask the question as to how long this can be sustained before the public views the social contract given to courts and lawyers to resolve such disputes as being broken and needing replacement.

    The Canadian Forum on Civil Justice (“CFCJ”) prepared an infographic on the “Cost of Family Law Disputes” from data from the Canadian Research Institute for Law and the Family’s (“CRILF’s”) “An Evaluation of the Cost of Family Law Disputes: Measuring the Cost Implications of Various Dispute Resolution Methods” report. They looked at Collaboration, Mediation, Arbitration, and Litigation and found that while Litigation was viewed at the most useful dispute resolution process for high-conflict disputes (such as: risk to an adult or child, risk to property, allegations of violence or substance use, mental disorder, or alienation), Mediation and Collaboration were most useful for low-conflict disputes (such as hearing the voices and preferences of children, disputes about care and parenting, child or spousal support, and division of property and debt). Almost all lawyers using collaboration and mediation agree that the results achieved are in the interests of the children.

    CFCJ found the average cost to resolve high-conflict disputes as follows: Collaboration was $25,110, Mediation $31,140, Arbitration $40,107, and Litigation $54,390. For low-conflict disputes the average costs were: Collaboration $6,269, Mediation $6,345, Arbitration $12,328, and Litigation $12,395. Clearly the financial costs drop and the social outcomes are higher when alternative methods to litigation are utilized.

    John-Paul Boyd, QC echos these findings: “[T]he public purse would be better spent supporting processes that are child-centred, holistic, cooperative to the extent possible, and promote the capacity of family members living apart to resolve disagreements on their own.”

    The studies show that the current system is not working for the vast majority of people with family law disputes. Now is the time for change.

    What other solutions to fixing Family Law have been proposed?

    Along with J.P. Boyd, QC’s suggestion of removing family cases from the courts and placing them into a special administrative tribunal aimed at promoting the well-being of children, he advocates greater use of unbundled legal services and non-lawyers assisting clients with legal problems.

    Here is a sampling of other solutions proposed to fix Family Law:

    Nick Hilborne wrote an article in legalfutures.co.uk entitled, “Family lawyers need to replace billing targets with new business model” (August 5, 2021) in which he interviewed Gillian Bishop, co-founder of pioneering London firm Family Law in Partnership (“FLiP”). Ms. Bishop stated: “Family lawyers should scrap billing targets and develop a new business model.” To Ms. Bishop, billing targets are a dead weight around the necks of many, many practitioners and lead to many young lawyers working longer and longer hours each day in order to hit them. “I have heard so many times that to record five hours chargeable a day you routinely have to be in the office twice that time. Just crazy.”

    Ms. Bishop stated, “a number of commercial firms now operate without a billing target model, showing that ‘it can be done,’ and the challenge was to create a variation of that model or ‘another model altogether’ that worked for the family law sector.”

    She also stated that she “would like to see greater use of collaborative law.”

    FLiP has taken some steps along a new path. Three years ago, FLiP started the first training scheme in psychologically based supervision to help family lawyers manage work-related stress and Ms. Bishop said, “that supervision should be compulsory for family lawyers.”

    In the UK, there is a major overhaul of family courts to protect domestic abuse victims. The Ministry of Justice published a press release stating:

    “Fundamental reform of how the courts hear cases, through a new investigative approach, will be trialed as part of the Integrated Domestic Abuse Courts pilot — these consider family and criminal matters in parallel in order to provide more consistent support for victims. Emphasis will be placed on getting to the root of an issue and ensuring all parties are safe and able to provide evidence on an equal footing — without the retraumatising effects of being in court with an abusive ex-partner.”

    The Ministry stated, “that this move came after an expert-led review into how the family courts handle domestic abuse and other serious offences had raised concerns that victims and children were being put at unnecessary risk.”

    In an article entitled, “A New Approach To Nesting In Family Law,” Aylward Game Family Law, in Australia, states:

    “Frequently after parents separate, it is the children who switch homes between the parents, with varying degrees of frequency. This means it is the children who are subject to the demands of frequent packing up and moving house in order to spend time with each of their parents. We have in the past reflected that it must feel a little unfair to the children to be subject to this arrangement, which can be very disruptive.

    The idea behind nesting turns this on its head, and the children stay in one house and the parents are the ones who move in and out. This seems to place the best interests of the children at the top of the list of priorities, which is in line with the Family Law Act in Australia.”

    (originally published in PracticeTalk and Tech Tips in the Canadian Bar Association’s BarTalk magazine:

    https://www.cbabc.org/BarTalk/Articles/2021/October/Columns/Examining-the-Facts

    https://www.cbabc.org/BarTalk/Articles/2021/October/Columns/Solutions-Put-Forward-to-Change-Family-Law)

    © 2022 David J. Bilinsky

    Posted in Trends | Permalink | No Comments »
    Light at the End of the Tunnel…
    Monday, May 23rd, 2022

    ♫ There’s a light at the end of the tunnel
    There’s a chance that it ain’t gonna rain
    There’s a light at the end of the tunnel
    And for once it ain’t a fast moving train…♫

    Music and Lyrics by Don Cook, Keith Whitley, recorded by Keith Whitley.

    On May 12, 2022 the British Columbia Court of Appeal issued reasons in the case of:

    Trial Lawyers Association of British Columbia v. British Columbia (Attorney General), 2022 BCCA 163.

    The case concerns the establishment of British Columbia’s Civil Resolution Tribunal and in particular, its jurisdiction over ‘minor’ injuries in motor vehicle accidents.

    The history of the case is summarized in the headnote:

    In 2019, legislation came into force that granted to the Civil Resolution Tribunal (CRT) jurisdiction to decide liability and damages for minor injuries (a statutory category) resulting from motor vehicle accidents. Aspects of this jurisdiction are exclusive and others are shared with the Supreme Court of British Columbia. In brief, the CRT was given exclusive jurisdiction to classify an injury as a minor injury. This triggers a presumption that the associated damages are below the tribunal limit amount ($50,000). The CRT has presumptive, but not exclusive, jurisdiction to adjudicate the liability and damages when the presumption that the damages will be below the tribunal limit amount has not been rebutted. The legislation directs the Supreme Court to dismiss or stay matters that are within the jurisdiction of the CRT unless it would not be in the interests of justice and fairness. Parties may apply for judicial review of decisions of the CRT, with decisions relating to liability and damages being reviewed on roughly the appellate standard of review.

    The Trial Lawyers Association of British Columbia and several plaintiffs in motor vehicle claims challenged the scheme, arguing in part that the grant of jurisdiction to the CRT offended s. 96 of the Constitution Act, 1867. They argued that the scheme impermissibly granted to the CRT a jurisdiction that was dominated by the superior courts at the time of Confederation. The challenge was successful, with the judge declaring the relevant provisions of the legislation to be of no force or effect.

    The Trial Lawyers were successful at trial before Chief Justice Hinkson of the Supreme Court. On appeal, The Honourable Chief Justice Bauman stated:

    In a summary trial before the Chief Justice of the Supreme Court, he concluded that the Province’s scheme offended s. 96. He struck down certain provisions in the legislative package.

    I have concluded that he erred in doing so.

    In so doing, concurred by The Honourable Mr. Justice Butler (with Dissenting Reasons by The Honourable Madam Justice Bennett), the majority of the court has resuscitated the ongoing experiment in access to justice represented by the BC Civil Resolution Tribunal in the area of automotive injury resolution.

    A bit of an explanation is required. The CRT – or Civil Resolution Tribunal – is a creature of statute. The CRT is Canada’s first online tribunal. It is part of the British Columbia public justice system and it represents an example of moving public justice out of the ‘bricks and mortar’ world into the ‘clicks and order’ world of the Internet and Online Dispute Resolution. It represents a growing body of thought called Court-related dispute resolution.

    What is court-related dispute resolution? The National Center for State Courts (https://www.ncsc.org/odr/guidance-and-tools) states:

    Court-related Online Dispute Resolution (ODR) is a public facing digital space in which parties can convene to resolve their dispute or case.

    Three essential components differentiate court-related ODR from other forms of technology-supported dispute resolution:

    The first is that the program operates exclusively online. In contrast to other court programs that provide an online interface with which to accomplish discrete tasks (e.g., e-filing, video hearings), ODR users do not otherwise interact with the court for traditional in-court procedures or events.

    The second is that the program is explicitly designed to assist litigants in resolving their dispute or case, rather than a technology platform to support judicial or court staff decision-making. Dispute resolution inherently includes the potential to challenge the validity of claims or to raise affirmative defenses; court-related ODR is not merely a platform for defendants to negotiate a payment schedule to satisfy debts.

    Third, the program is hosted or supported by the judicial branch. It is not a form of private ADR, but instead integrates and extends dispute resolution services offered by the judicial branch into digital space to serve citizens efficiently, effectively, transparently, and fairly.

    Chief Justice Bauman summarized the challenge to the jurisdiction of the CRT as follows:

    [1] Canada’s Constitution creates a division of legislative powers between the federal parliament and the provincial legislatures.

    [2] In respect of the judicial system and the judiciary, by s. 92(14) of the Constitution Act, 1867, the provinces “may exclusively make laws” in respect of matters coming within the subject: “The Administration of Justice in the Province.”

    [3] In the language of the cases there is a “subtraction” from that exclusive power reserved to the federal executive by s. 96:

    96 The Governor General shall appoint the Judges of the Superior, District, and County Courts in each Province, except those of the Courts of Probate in Nova Scotia and New Brunswick.

    [4] Again, in the language of the cases there is much more to s. 96 than first meets the eye. It goes beyond a mere power to appoint judges to effectively preclude the provinces from creating courts or administrative tribunals with powers that parallel or mirror the “core jurisdiction” of the Superior Courts described in s. 96.

    [5] Here, the Province of British Columbia has vested an administrative tribunal, the Civil Resolution Tribunal (“CRT”), created by the executive branch, with a certain jurisdiction over the resolution and disposition of so-called “minor injury” claims arising out of motor vehicle accidents in the Province.

    [6] The question before us is whether it has done so within permissible bounds given the jurisprudence that has developed around s. 96.

    In essence the question became: Are the courts tied to the format of the courts as outlined in 1867 in  s. 96 or can a province create an administrative tribunal (the CRT) that represents an ‘experiment’ in access to justice that can exist as part of the Justice System?

    The Court recognized the broader implications raised by the challenge to the CRT and the Chief Justice stated in his reasons as follows:

    Important Societal Objective

    [147] I will deal with each of these factors in turn but I will begin with the last factor—an important societal objective. It is likely error to give any one factor predominance in the analysis but to my mind this factor is a very significant one when one accepts Chief Justice Wagner’s concern with not interfering “with the ability of the provinces and territories to experiment with new forms of access to civil justice.”

    [148] The need for “experimentation”—for innovation—in access to civil justice for victims of minor injuries suffered in motor vehicle accidents in British Columbia is self-evident in light of the EY Report. That report makes clear that the existing system of compensating for minor personal injuries in tort is threatening the viability of the public insurer, ICBC, and equally the actual compensation recovered by the victims of these minor injuries. In this latter regard, “In BC today, claimants receive less than 60% of their premium as benefits, with the remainder going to scheme costs including legal costs and disbursements. Best-in-class schemes around the world return approximately 80% of premiums as benefits to claimants”: EY Report at 54. I note that the EY report does not break this down specifically for minor injuries. It highlighted that more was being distributed as legal costs (24%) than to minor injuries (20%) or non-minor injuries (17%).

    [149] In light of the EY Report, one can only conclude that there were serious issues facing British Columbia with the tort regime in place before the legislative action before the court was taken.

    [150] If my tone suggests that I have concluded that the concerns identified by the EY Report and the executive branch are well-founded, I hasten to say that this judgment is not the remit of this Court. It is for the legislative branch to so conclude. I am concerned only with determining if there is a rational basis for the concern—a rational basis for the societal objectives evidenced in the legislative reforms before the Court. On the basis of the evidentiary record, and in particular the EY Report, there most certainly is. It is not for the Court to pass on whether the legislature “got it right” with its reforms. It is not for this Court to say whether the Civil Resolution Tribunal will actually perform as promised. In this regard the evidence of Professors Daly and Susskind provides a rational basis for the legislature believing it to be so. With respect to the judge below, it is not for us to require the appellants to prove the efficacy of the “solutions” the legislature is applying to the problems it has identified.

    The Chief Justice goes on and then states:

    [167] In my view, the legislative scheme before the court represents an integrated, comprehensive effort at reform directed at a social mischief starkly identified by the other branches of government.

    By no means do I advocate that the CRT is a perfect solution or that it does not have faults. It represents a new way of dealing with legal disputes and as such, it can, and indeed should, be modified, changed and adjusted to address perceived shortcomings. The world is watching the CRT and waiting to see if the concept can be applied to other courts and proceedings in other jurisdictions. It would be a major setback for access to justice innovators to see the CRT’s jurisdiction erased and the experiment stopped.

    The decision may, and most probably will,  be taken to the Supreme Court of Canada. I for one hope that the Supreme Court of Canada follows the lead of Chief Justice Bauman. For those of us who advocate for greater access to justice, who advocate for innovative approaches to addressing injustice and providing cost-justified solutions to everyday legal problems, who advocate for solutions that take advantage of all the barrier-breaking power that technology developed in today’s information age can provide, and for solutions that are not hide-bound by the structure of the justice system prevailing in 1867, the words of Chief Justice Bauman represent a light at the end of the tunnel…

    (Full disclosure: the writer is a Fellow of the National Center for Technology and Dispute Resolution at the University of Massachusetts https://odr.info and has written and presented on Online Dispute Resolution worldwide).

    © 2022 David J. Bilinsky

    (Concurrently published both on http://slaw.ca and this blog.)

    Posted in Technology | Permalink | No Comments »
    How Successful Law Firms Really Work
    Monday, May 16th, 2022

    How Successful Law Firms Really Work

    ♫ Nobody does it better
    Makes me feel sad for the rest
    Nobody does it half as good as you
    Baby, you’re the best…♫

    Lyrics and music by: Marvin Hamlisch, Carole Sager, recorded by Carly Simon.

    I haven’t done a book report in a good long while.  But I am going to make an exception this time.

    A book has come along that every lawyer who wishes to run a firm at its peak should not only have on his/her shelf but it should be well-thumbed, stained from coffee spills, its cover torn from constant use and sitting on the corner of their desk within arm’s reach for quick reference. I am speaking of “How Successful Law Firms Really Work” by David L. Ginsberg and Robert A. Feisee, published by the American Bar Association, Law Practice Division (“HSLFRW”)

    A few books have been written that outline how to run a law firm. “How to Start and Build a Law Practice” by Jay Foonberg, now in its 6th edition, is perhaps the grand-daddy of them all. But Ginsberg and Feisee have taken all the collective wisdom of running a law practice and condensed it into 332 pages of sage advice. Is it the bee-all and end-all of law practice management books?  No – but it is an excellent compilation and overview from a 50,000 foot perch, of the things that you should consider in keeping all the balls of legal management in the air.  From here you would be well-versed into jumping into any number of books that address the specific needs of law firm management for greater in-depth knowledge.

    Who is it aimed at?  HSLFRW focuses on the operation of a small to medium sized law firm. It is designed to aid you in the step-by-step creation of your customized business plan by addressing the issues raised in each successive chapter. But it is more than that. It integrates and builds on each chapter by illuminating and then integrating concepts so that you come out of the process with an appreciation of how each pillar upholds the operation of a law firm works and with its companions.

    The book starts with a chapter “How to Use This Book” which starts a reader off on the right foot in terms of how to make the most of what is set out in the subsequent chapters.  The premise is that lawyers, no matter how brilliant, may lack basic business skills; and it seeks to help lawyers of all levels master and implement proven business strategies.

    The book starts with questions of ownership and how to structure your team for maximum effect. Since all firms rise or fall by their people, human resources comes next. Moving on to training, it deals with issues of how to mold your staff and professionals into an efficient and productive team.

    Managing your time is next, since you will have to be able to schedule management tasks as well as legal work into your daily schedule and keep all pots, so to speak, on a constant simmer.

    With the fundamentals taken care of the book moves to clients:  Who are your ideal clients and how do you market to them and then manage them.  What does your legal product look like and how do you deliver services within a clearly defined scope of work.  What is your role relative to your clients?  Emphasizing that ethics underpins all that you do, a chapter on how to stay out of trouble is next.

    Then we jump to more of the nitty-gritty of running a firm.  Finances, budgeting and managing money is next; followed by technology and systems. Since firms run on procedures, there is a chapter on how to develop procedures customized for your firm.

    Next is your office environment – how does your firm look and how does it operate?  Which one are you – a business or a profession – and the implications of viewing your firm each way and what is your definition of success?

    Strategic Planning – both short and long term – are included as are emergency planning and wellness: how to care for yourself.

    Lastly the book concludes with the statement that you are now ready to run your own firm.

    Whether for lawyers just starting out or for lawyers seeking to make partner or better yet, managing partner and desiring knowledge to take them to the next level, this book is a tour-de-force. At $85 for non-ABA members, $68 for ABA members (all USD) it is a steal. You can order it online from the ABA here.

    This book is so good it makes me sad for the rest.  I have but one regret with regards to it…I wish I had written it.

    © 2022 David J. Bilinsky

    (Concurrently published both on http://slaw.ca and this blog.)

    Posted in Budgeting, Business Development, Change Management, Firm Governance, Issues facing Law Firms, Law Firm Strategy, Leadership and Strategic Planning, Technology, Tips | Permalink | No Comments »
    Are the Courts Slip-Sliding Away?
    Monday, May 9th, 2022

     

    Attribution 2.0 Generic (CC BY 2.0)

    ♫ Slip sliding away, slip sliding away
    You know the nearer your destination, the more you’re slip sliding away… ♫

    Lyrics, Music and Recorded by Paul Simon.

    Something extraordinary is taking place in Ontario.

    Family law lawyer Russell Alexander of Russell Alexander Collaborative Family Law Lawyers of Toronto and six other locations in Ontario, Canada has started an online petition on Change.org entitled: “Petition to Amend the Requirement For In Person Court Attendances.”

    What are they petitioning for, you ask?  Good question:

    “We, the undersigned lawyers and paralegals who practise family law, hereby petition to the Attorney General of Ontario and to the Regional Senior Justices, that there shall be immediately put in place an overriding direction that all court attendances shall be presumptively virtual unless the parties and their counsel agree otherwise or if the court for good reason orders that a particular attendance shall be in person or hybrid (ie. some may attend virtually and some may attend in person).”

    They state the issue as follows:

    “The Issue

    1. The Chief Justice and Regional Senior Justices at both Ontario court levels (Ontario Court of Justice and Ontario Superior Court of Justice) have issued Notices to the Profession that stipulate revised practices and standards to determine whether various types of court attendances shall be in person or virtual.

    2. While the directions are not always consistent, there is a disturbing trend to emphasize the necessity for in person attendances as opposed to virtual attendances.”

    Their petition has garnered 987 signatures as of the date of writing.

    It seems that many people agree with Russell that the move to virtual hearings has has a number of benefits and increased access to justice.  A selection of the reasons for signing the petition highlights many of them:

    • Diego Cariaga writes: “Virtual hearings will continue to spare lawyers and clients of unnecessary stress and costs since for the vast majority of litigation matters it is not necessary or helpful to appear in-person (as COVID-19 has demonstrated)”
    • Catherine Haber: “I am a practicing family lawyer with many years of experience.Virtual hearings are far more cost effficient for the public.There is little advantage to more costly in person hearings.”
    • Tom Dart: “Virtual appearances lower costs to the client where they are represented. We need to look at the attendances from the client perspective. Where clients can’t access the internet, in person may be the only method. In person should be reserved for such cases. I agree with the other reasons submitted as well.”
    • Rachelle Laforge: “Prior to the pandemic, the court system was operating with technology and resources from the 90s at best. The court system has not been at the forefront of innovation but was forced into it during the pandemic.One of the positive outcomes of the pandemic has been that the court system was catapulted into present times as far as technology goes.Innovation is about solving real problems. Virtual court hearings provide:- More access to justice (anyone with a phone can have access…no need to drive, fly, cab it to the court house and pay for parking)
      – Costs have been significantly lowered for clients (no need to pay lawyers to drive to court houses and wait around on running lists)
      – Ease of presentation of documents – which sometimes need to be voluminous in cases of coercive control (I had a case where I needed the judge to consider 117 messages from a dangerous self-rep where he wrote emails with Bold lettering, coloured text and coloured highlights)…
      – Zoom hearings provide for opportunities to have break out rooms where parties and lawyers can quickly jump in and out of…cant do that quickly in person;
      – French speaking parties can get counsel from anywhere in the province to attend without incurring prohibitive costs;
      Clients in northern Ontario and other small communities are limited for representation due to conflicts…virtual proceedings provides for clients to be able to go outside their community for representation without the prohibitive costs of travel.”

    Russell Alexander sets out the case for keeping virtual hearings as well:

    The Case for Dropping the Presumption

    This risk is remedied by the use of remote/virtual case conferences, because it actually improves access to justice and the expeditious resolution of disputes in several ways.

    First, let’s revisit the odds of settlement: If only 10% of cases resolve at the first case conference, it may be a fair inference that these same 10% would also resolve their matters via a Zoom case conference. This renders the in-person experience to be arguably unnecessary.

    Second, the costs savings of Zoom conferences are significant. No travel, no parking, no traffic. Court security line-ups, confrontations, and courthouse conflicts are all eliminated. There is no more sitting around for several hours or the entire day. Legal expenses each of the lawyers representing the parties are also significantly reduced.

    Third, access to justice can only continue to improve. Clients can choose their preferred lawyer from anywhere in the province. Lawyers will be more readily available for the currently under-served northern and rural communities. Clients with legal aid certificates will be more likely to secure a lawyer.

    Fourth, technology and the internet heighten accessibly to the justice system, as compared to having to travel several hours to the courthouse and back. Most people can access a case conference through Zoom – even if its with the assistance of a friend, family, or employer. Justice “hubs” can be set up at libraries or the SCJ’s family law information centres, or in empty SCJ courtrooms, for parties who cannot access the required technology. There are many other innovative ideas to address the issues of technology and connectivity.

    Fifth, the court can implement procedures to screen and assist victims of domestic violence who are involved in family court matters. This will also help to regulate and prevent litigants who perpetrate domestic violence from using the litigation process to exact further harm, harassment, and psychological damage on their ex-partners.

    Sixth, the toll on peoples’ mental health of going to court in-person, confronting their ex-partner, dealing with conflict and potential health risks lingering from the pandemic can be remedied by via Zoom case conferences. Parties can conduct their hearing from the safety and privacy of their own homes.

    Seventh, the rise of self-represented litigants is a problem that plagues the Family Court system. Remote hearings by Zoom have stymied this, somewhat. It has helped those who would otherwise have to resort to self-representation, by freeing up more Family lawyers. Those lawyers could keep practicing and serving clients remotely, despite health concerns, daycare, and other needs. For example, clients in rural and northern communities were retaining lawyers with legal aid certificates from the GTA and other larger centres.

    If in-person hearings return to the old norm, many Family lawyers will simply no longer practice family law. That is the benefit of a law degree: We can choose to practice in any area of law that does not require in-person attendances. (And the list is endless: Wills, estates, real estate, corporate, tax, business and so on). An exodus of Family lawyers will result in fewer lawyers accepting legal aid certificates, and increased time and expense associated with in-person hearings.

    All of this will result in alarming spikes in the number of self-represented litigants.

    Plus, self-represented litigants often require greater time and resources to adjudicate their matters. They may be unable to focus on the legal issues. They may not understand the law, fail to comply with the Family Law Rules, and be unaware that there are rules of evidence and court-issued practice directions that they need to follow. They can sometimes be vexatious. All of this often results in mental and emotional strain on the judiciary, and can lead to burnout, inertia and the justice system’s slide to entropy.

    To emphasize the point with the court, Russell and his crew are holding a virtual press conference May 10, 2022:

    Panel of Ontario Family Lawyers to Hold Virtual Press Conference Calling for Courts to Continue Remote Hearings
    Lawyers say so-called ‘Zoom divorces’ save clients’ time and money and should continue

    Their press release states as follows:

    WHAT:

    A panel of veteran Ontario family lawyers will host a virtual press conference to discuss the recent Notice to the Profession from the Ontario Superior Court of Justice ordering the return to in-person court attendance. The thrust of these pronouncements is that many court hearings will revert to in-person from virtual, which will mean less access to justice and higher legal costs for many clients.

    The panel recently started a petition that has received over 900 family lawyer signatures thus far in attempt to reverse the decision.

    The media is invited to attend the press conference to learn more about what this means for family lawyers in Ontario and those seeking divorce. There will be an opportunity to ask questions.

    Registration is required to attend via Zoom by completing the sign-up form below.

    WHERE:

    On Zoom: https://us02web.zoom.us/webinar/register/WN_zw6hCGIlT36zQ-7vGpAPBQ

    WHEN:

    Tuesday, May 10, 10 a.m. ET

    WHO:

    The Ad Hoc Committee for the Preservation of Access to Justice consists of:

    • Russell Alexander-Founder and Senior Partner at Russell Alexander Collaborative Family Lawyers, practicing for 24 years (Called to the Ontario Bar in 1998)
    • Gene C. Colman-Founder of Gene C. Colman Family Law Centre, practicing for 43 years (Called to the Ontario Bar in 1979)
    • Natalie Derbyshire-Partner at Stanchieri Family Law Professional Corporation, practicing for 16 years (Called to the Ontario Bar in 2006)
    • Brian Galbraith-Owner and Founder of Galbraith Family Law Professional Corporation, practicing for 32 years (since 1990)
    • LisaGelman-Founder of Gelmanand Associates, practicing for 27 years (Called to the Ontario Bar in 1995)
      Gary Joseph-Managing Partner and Chair at MacDonald & Partners LLP, practicing for 44 years (Called to the Ontario Bar in 1978)
    • Karen Kotansky-Managing Partner at Gelman and Associates, practicing for 28 years (Called to the Ontario Bar in 1994)
    • Nafisa Nazarali-Managing Associate Lawyer at Russell Alexander Collaborative Family Lawyers, practicing for 12 years (Called to the Ontario Bar in 2010)
    • Ram Shankar-Founder of Shankar Law Office, practicing for 28 years (Called to the Bar in India in 1994. Called to the Ontario Bar in 2014)

    I will be watching the press conference with interest this coming Tuesday. The move to virtual court hearings, in my opinion, was a positive one and should be continued for all the reasons noted above and more. It remains to be seen if this novel approach to achieving change in the profession will ultimately be successful. But it is certainly aimed at keeping the changes that have occurred in the courts from slip-sliding away…

    © 2022 David J. Bilinsky

    (Concurrently published both on slaw.ca and this blog.)

     

    Posted in Change Management, Issues facing Law Firms, Law Firm Strategy, Leadership and Strategic Planning, Technology | Permalink | No Comments »
    Changing Methods in Legal Education – Something New is Coming
    Monday, May 2nd, 2022

    Law

    License details
    Creator: Daniel Kulinski
    Copyright: Daniel*1977, 2009

    ♫ Something new is going on tonight
    I like this grove, it makes me feel so right
    Darling you know you better hold on tight
    Something new is coming on tonight… 

    — Music and lyrics by A. Mae, N. Yanofsky, F. Golde, J. Faulker, H. Hancock,
    J. Watley, A. Cymone, R. Kleiner, Q. Jones and recorded by Andrea

    In April 2021 I wrote a column on CILEX, the Chartered Institute of Legal Executives (“CILEX”) in the UK for my regular column PracticeTalk for the Canadian Bar Association. As of June 2021,  CILEX was offering the CLIEX Professional Qualification (“CPQ”) program that offered a different path to becoming a legal professional in the UK. At that time there was a lot of talk about what CILEX’s entrance into the market might mean for students, for the legal profession, for regulators, for the public and the like. Well I thought we could take a step back and see where CILEX is today.

    The original column:

    In an article published February 21, 2021 in legalfutures.com entitled “Legal education and training: Unfit for purpose,” Professor Chris Bones states: “The revolution starts now. Legal education and training is not fit for today, let alone the future….”

    Prof. Bones is Chair of CILEX, the Chartered Institute of Legal Executives (“CILEx”) in the UK. CILEX is the professional association for 20,000 Chartered Legal Executive lawyers, paralegals, and other legal practitioners in England and Wales. They are recognized in England and Wales as one of the three core approved regulators of the legal profession alongside barristers and solicitors.

    CILEX offers education and training to become a legal secretary and an apprentice program that leads to being a paralegal, advanced paralegal or Chartered Legal Executive and Chartered Legal Executive Lawyer.

    While traditional lawyers are generalists on graduation, CILEX lawyers can achieve a specialist designation on graduation in: Dispute Resolution; Criminal Litigation; Residential Conveyancing; Commercial Conveyancing; Employment Law; Business & Commercial Law; Family Litigation; Wills & Probate; or Immigration Law.

    CILEX claims that their professionals are demonstrably more diverse and representative of the UK population than their peers in other branches of the profession. CILEX does not restrict access to candidates with a specific set of prior qualifications; it opens up the profession to people from all backgrounds, including those who have not gone to university.

    Their education program requires their students to work in a legal environment from the very beginning of their studies. CILEX states that students apply their learning to practical scenarios and build and refine the skills of a practising lawyer as they progress. They claim that their model requires their employers to validate their experience and competence at every stage, meaning practical, work-based skills are “baked-in” to the training and that CILEX trainees become adept at using legal expertise to address real-world challenges for their clients from the outset.

    They recognize that legal technology holds immense potential to benefit both the consumer and the legal services provider by improving efficiency, by reducing costs and by enhancing accessibility. CLIEX states that they support the responsible uptake of technology and innovation in the legal sector, insofar as such progress continues to benefit the consumer.

    CLIEX states that they have a focus on technical expertise and practical skills with the development of the core behaviours required to create forward-thinking, commercially minded, adaptable lawyers who really understand the clients they serve.

    The CLIEX Professional Qualification (“CPQ”) program “sets new standards in practice-focused training and work-readiness, broadens access to legal careers and develops professionals at all levels who are equipped from the outset to add real value to their employers and clients.”

    Students will be able to register for CPQ in June 2021. Something new is coming.


    According to CILEX, as of November 2021: “Some 140 new CILEX Fellows* and Advocates** swore an oath to mark their qualification at the annual graduation ceremony held by CILEX (Chartered Institute of Legal Executives) on Saturday.

    They were joined by a further 237 members, who were recognised for becoming Graduates, the step before becoming a CILEX Fellow.”

    CILEX Fellows have completed the academic stage of training, have been in qualifying employment for at least three years and have met the relevant work based learning outcomes. They are authorised by CILEX Regulation.

    CILEX Advocates are Fellows who have gained extended rights of audience in their practice area, allowing them to undertake advocacy in certain proceedings.

    CILEX Graduates have completed both their CILEX Level 3 Professional Diploma in Law and Practice and their CILEX Level 6 Professional Higher Diploma in Law and Practice, or equivalent studies.

    CILEX President, Caroline Jepson praised the graduates for their hard work and perseverance, recognising that so many achieved qualification while studying alongside full time work.

    She stated:

    “I have a plea for you today, and it is this – let us hear your voice. Join us in elbowing our way through the elite snobbery and let us together shut down those perceptions which have held us back for far too long.

    “Help us create a legal profession that is ‘qualification-route blind’ – one that appoints, rewards and promotes based on merit alone. Build pride in CILEX and help us reach the point where CILEX lawyers are automatically recognised and valued as specialist lawyers.”

    It seems that the experiment continues and these new legal professionals journey to find their new groove continues…

    © 2022 David J. Bilinsky

    Posted in Law Firm Strategy, Leadership and Strategic Planning, Legal Education, Trends | Permalink | No Comments »
    Uber and Lawyers: What is in the Public Interest?
    Monday, April 25th, 2022

    Uber and Lyft

    ♫ So let your trumpets blow
    Round the walls of Jericho
    Let your mighty voices sound
    Until the walls come tumbling down…♫

    – Music, Lyrics and recorded by: John Fullbright

    Back in December 2015 I wrote a column on Uber and the Practice of Law for my regular column PracticeTalk for the Canadian Bar Association.  At that time, Uber, Lyft and other ride-sharing services had not yet come to BC and there was a lot of talk about what Uber’s entrance into the market might mean for passengers, for Uber and other ride-sharing drivers, for taxi drivers and the taxi industry, for safety of such rides and the like. Well I thought we could take a step back and see the effect that Uber and Lyft and other such services have had and reflect on the lessons that disruption can have for the legal industry, particularly what lies in the public interest.

     

    The original column is as follows:

    What do Uber, the taxi-replacement service, and the practice of law have in common? This was recently posted by a friend in Facebook:

    Transportation in the new digital economy; Vancouver is Uber-free, but I tried it in Sacramento. Download the app and fill in basic information (e.g. credit card) in advance. When ready, the app confirms pickup location, takes your destination address, estimates the fare and wait time for pickup, and (if you approve) calls a driver. Best feature: when you arrive, just step out of the vehicle and go; payment is automatically charged to your card. No fiddling with charge cards, signatures, etc. A very positive experience – I will definitely use the service again.

    Uber is a disruptive technology/service that is changing the face of ground transportation in cities where it has taken hold. Does Uber hold any lessons for the practice of law? To start, let’s look at the commonalities of taxis and the practice of law. Each:

    • Has a monopoly that excludes competitors.
    • Calculates the fare at the end of the ride.
    • Is highly regulated.
    • Extols the virtues of their regulations as protecting the public’s interest.
    • Claims that their exclusivity is necessary to ensure the proper operation of the market for their services.

    What are the differences between taxis/the practice of law and Uber?

    • Uber app estimates your fare in advance.
    • Uber app shows the route you will be taking.
    • Uber collects feedback from riders and uses this to ensure quality control.

    Uber claims that they offer predictability, lower prices for a similar product, greater convenience, reliability and quality of service by focusing on the client experience.

    What evidence is there in support of Uber’s arguments? Well, the Competition Bureau says ride-sharing services are good for consumers, calling them innovative and likely to create lower prices and better service (http://bit.ly/1Nj0Xcg).

    What happens when Uber comes into a city?

    • The condition of taxis suddenly improve.
    • Uber itself begins to face lower-cost competitors.

    Certainly there are many detractors and negative aspects of the Uber model. However, Uber is an example of the emerging platform business model, in which competitors can enter a marketplace for virtually zero marginal cost against entrenched competitors.

    Can this happen to lawyers? Clients don’t necessarily want a lawyer; they want a solution to their legal problem. Does it matter to them if a lawyer or a non-lawyer provides the service?

    I have often said that the hardest law to repeal is the law of economics. In this case, Uber and similar services have the law of economics on their side.

    Investopedia, in a column entitled: “Uber Advantages and Disadvantages” by Mohamed S. Jalloh, a financial analyst at Broadridge and an Investopedia contributor, looked at what happened when a disruptive technology and business model was introduced into a service industry that had been, up to that time, granted a monopoly on providing bespoke ride services. Did the forecast negative impacts of introducing ride sharing materialize?

    Mohamed lists the key takeaways:

    • Ride-sharing services like Uber have disrupted the taxi and limo industry,
    • Uber has become a prime example of the gig economy at work.
    • Uber’s advantages include door-to-door convenience, safety, and reliable quality.
    • Uber’s disadvantages include its surge pricing and the negative effects of replacing steady jobs with gig work.

    There is no question that the disruption has had deep implications. Mohamed states:

    Bright-yellow taxicabs once dominated the streets of Manhattan. By 2020, there were four times as many ride-sharing vehicles on the streets as taxis. Those vehicles were summoned by apps offered not only by Uber and Lyft but by Via, Juno, and Gett.

    Riders have to register with a particular service and their credit cards lodged, resulting in the loss of autonomy for their actions. In this way, both problematic riders and drivers are weeded out of the system. Both drivers and passengers are encouraged to rank each other, resulting in low rated drivers driven out of the system and low rated passengers banned.

    OK you say – there is a vast gulf between providing legal services and providing a ride in a car. I get it. But the big question is, what implications does a disruptive model such as Uber and Lyft have for the legal profession? Both taxi drivers and lawyers claim they require a monopoly over their services to ‘protect the public interest’. Did this argument stand up when looking at the Uber experience?

    The answer is a mixed bag.  No question the availability of options for seeking transportation services expanded. However, the cost of said services were not necessarily reduced, given ‘surge pricing’ which allows Uber to increase fares at high-travel times. Passengers are provided certainty (they knew the cost of the ride before they step into the car), the cleanliness of the rides  were stated to have gone up and the speed of the service over a cab increased (since the credit card is on file, the passenger just has to step out of the vehicle at their destination – no fiddling with credit cards and / or cash). However, since Uber and Lyft in Vancouver were restricted in the areas in which they could operate, the taxi industry still retained its monopoly outside of these areas.

    But in terms of the big question of whether maintaining a monopoly was necessary to protect the public interest, there is no question that the answer was resoundingly, no. The public interest was not mortally wounded when the taxi monopoly disappeared. The taxi industry, however, definitely took a hit. And we all know that the interests of the taxi industry do not necessarily align up with the public interest.

    This has lessons for lawyers. Consider that if we do nothing, as lawyers we may let our mighty voices sound until the walls come tumbling down….

    © 2022 David J. Bilinsky

    Posted in Issues facing Law Firms, Law Firm Strategy, Leadership and Strategic Planning, Technology, Trends | Permalink | No Comments »