How to hire a lawyer

When starting a new business it is a good move to look for and hire a lawyer. Not only are there tax concerns and legal paperwork to deal with, but having the advice of counsel can come in handy with many businesses. A good business attorney will give you guidance about things such as zoning compliance, trademark and copyright rules, lawsuits and liability.

Like doctors, lawyers have also become highly specialized. When looking for the right lawyer for your business, here are some skills to look for:

  1. Contracts You will need an attorney that can prepare and understand standard contracts. These will include contracts that you need for clients and customers as well as those that other parties may want you to sign.
  2. Business Organization Your lawyer can help you decide the right business organization. Some businesses are an LLC (Limited Liability Corp.) while others are incorporated. This designation is important to your taxes and the way that you will do business.
  3. Real Estate When it comes time to lease a work space you will need an attorney to help you understand and negotiate these documents. Often, leases are in favor of the landlord. The right lawyer may find ways to make the lease more beneficial for you and your growing business.
  4. Taxes and licenses You may have an accountant that is handling your taxes. But your lawyer should be able to register your business for federal and state tax identification numbers and understand how your taxes will be effected by basic business actions.
  5. Intellectual property This skill is coming into more demand with the advent of so many internet businesses. The vastness of IP law means that you may have to consult with a specialist if you have a particular need. Nevertheless, your attorney should be able to advice you when that need arises and have some contacts that can assist you when the time comes.

Now that you know why you should hire a lawyer, where should you start? A great place to begin is the American Bar Association. There are also commercial lawyer referral services that will help you find a lawyer near you.  Hiring a lawyer is crucial to any successful business so don’t wait until its too late to get started.

Article via Entreprenuer

Photo JBC Legal – Business Photoshoot by Siomara M. [Creative Commons Attribution-NonCommercial-NoDerivs]


Private Capital for Funding Law Firms Serving Low and Moderate Income Clients

By Richard Granat

One of the obstacles to the development of innovative software solutions that automate part of the legal service delivery process resulting in lower, more affordable legal fees is the absence of capital. Traditional methods of legal service delivery based on hourly billing rates out of reach for low and moderate income clients.  Capital investment is required to create innovative web-based software solutions that can enable low and moderate income clients to either solve legal problems on their own as pro-se litigants, or to enable law firms to offer legal solutions at a more affordable price point.

The major obstacle to making more capital available to law firms, is the prohibition on investment in law firms by nonlawyers enshrined in the ABA’s Model Rules of Professional Responsibility and replicated in the state rules of professional responsibility that regulate lawyers in their state. [ See Rule 5.4 – Professional Independence of a Lawyer ].

There has been little innovation within solo and smaller law firms to develop client-centered, web-based applications that provide a low cost solution to low and moderate income clients. Instead innovation is centered in the vendor community that provides tools to law firms, usually as a SaaS service for a monthly subscription fee. A good example is our own DirectLaw virtual law firm platform that provides a client-centered document automation application, and other tools that enables a law firm to unbundled legal services for a fixed fee to clients online. While the value of innovation outside of the law firm, within the vendor sector of the legal industry, is not to be minimized, it is the lawyer within the law firm that has the most nuanced view about what their clients need and want. The lawyer within the law firm also has the primary interest in figuring out how to develop and manage the delivery of legal services so that for certain kinds of legal problems a scalable, volume-based business model can be implemented.

Innovation requires capital. It is capital intensive to develop software applications and new delivery systems for legal services. Solos and small law firms that serve individuals and families do not have access to capital. Whatever innovation is taking place in the delivery of legal services is happening outside of the legal profession in organizations like LegalZoom financed by venture capital, or the within legal aid programs funded in part by the Technology grant program within the Legal Services Program, or outside of the United States. [See also, blog post from Lexicata – How Law Firms Can be More Like LegalZoom ].

There has been much controversial discussion with the legal profession on modifying the ownership rules that apply to law firms, with little result. For example, the American Bar Association created last year a Commission on the Future of Legal Services to address the access to justice problem, under the under the leadership of then ABA-President William C. Hubbard.   The Commission convened a National Summit on Innovation in Legal Services, in May 2015 where private investment in law firms as a prerequisite to innovation was on the agenda. But I have yet to see any progress on this issue within the American Bar Association. Unlike other countries, private investment in law firms as a way to develop new ways of serving a latent market for legal services is dead on arrival when it reaches the ABA’s House of Delegates, although 80% of the U.S. population can’t afford the cost of legal services and is unserved by the legal profession.

The evidence we have seen in the United Kingdom, where the legal profession has moved towards de-regulation, and where capital can flow freely into law firms, suggests that the United States will remain a laggard in innovation in the delivery of legal services until this problem can be fixed. In the UK, LegalZoom is taking advantage of this de-regulation by becoming an ABS [ Alternative Business Structure ].  As a private company, operating in the UK, LegalZoom can offer legal services directly to the public. LegalZoom plans to use this opportunity to develop and experiment with new end-to-end legal services for consumers with the idea that in the far distant future these innovations can be imported into the U.S. legal market.

The bottom line is that you can’t really innovate without access to capital – it is the fuel of innovation. For solo and small law firms that serve people, rather than large corporations, capital is not available for innovation unless the lawyer or law firm has generated capital from their practice and makes a conscious decision to invest in software automation and web-based solutions.

An example of a law firm that has accumulated capital (because of litigation against the mortgage servicing companies and the banks in the robo-signing scandal during the U.S foreclosure crisis) is IceLegal, P.A., a small law firm based in Florida. IceLegal, under the leadership of Thomas Ice, is launching its own access to justice initiative.  The firm has also created its own LegalYou video channel for educating pro-se litigants.  This is a project of the law firm (not of a private company), and will  provide low cost legal solutions to Florida residents. If LegalYou is a success it will serve a new latent market ignored by most of Florida’s law firms. LegalYou is the exception rather than the rule.

One would think that Internet-savvy, recent law school graduates would be motivated to serve a latent market for legal services by developing innovative solutions, but handicapped by large student loans they are forced into career roles that provide sufficient cash flow to amortize those loans. Risk-taking is not an option for them.

A Proposal: Safe Harbor for Law Firms Serving Low and Moderate Income Clients

To increase the flow of capital to law solos and small law firms who wish to serve only low and moderate income clients with automated legal solutions, I propose that:

  • The American Bar Association amend Rule 5.4 to permit private investment in just those law firms that serve low and moderate income clients exclusively.
  • Personal injury and other contingent fee practices would be excluded from this exception as capital is self-generating for successful firms in these practice areas.
  • To comfort those who are concerned that the independence of the lawyer is compromised by this proposal, the law firm must remain at least a 51% owner of the law firm. Private investors can be minority shareholders only.
  • It is relatively easy to create an income generation screen to capture just low and moderate income clients for the law firm, and exclude those of higher income. The data from this intake process can be archived and audited to comply with the exception to the rule.

Creating this exception opens up the opportunity for smaller law firms to take advantage of crowd-funding opportunities, the angel investor community, and the new SEC rules that permit crowd-funding investment. Further, the rich relatives and friends (if they exist) of a young lawyer could fund the new lawyer’s law firm, and get a return on investment, without the lawyer risking disbarment because of violation of the 5.4.

An argument can also be made that enabling law firms that serve primarily corporate entities can create capital on their own without additional incentives and should not be able to take advantage of this safe harbor. Most large law firms represent corporate entities (banks, insurance companies, health care organizations, drug companies,  manufacturers, financial organizations) whose legal positions are opposed to many consumer interests.  These firms should have to use their own capital to become more efficient so as not to tip the balances against the consumer even more than it is.

One would think that this modest proposal to enable innovation designed to increase access to the legal system for clients who can’t afford the high cost of legal fees would be an idea that that American Bar Association and state bar associations might entertain or even discuss.

However, given that the structure of regulation of the legal profession is controlled by the legal profession, this idea will probably be dead on arrival.

Article via eLawyering Blog, 4 December 2015

Photo: the shadow of justice via Jack [Creative Commons Attribution-NonCommercial-NoDerivs]


Competent lawyers must be knowledgeable about technology

More and more evidence is being brought to light that competent lawyers need to be able to understand technology to truly be considered competent. Take Model Rule 1.1 as set forth by the ABA, for example. Even though states are not required to include Model Rules in their regulations for lawyers, 49 states have adopted Model Rule 1.1, which states that lawyers must be able to provide competent knowledge to their clients. To be able to provide competent knowledge, the lawyers themselves must fully understand the advice they are imparting. Comment 8, an addition to Model Rule 1.1, addresses the fact that lawyers need to continually educate themselves on the technology relevant to their practice if they are to be considered competent enough to advise on it. While not every state has adopted Comment 8, it is being slowly incorporated by a list of states, a list which will likely grow in the future.

Outside of Comment 8, lawyers are starting to have to deal with issues such as cloud computing and metadata, which often require not only tech advice from experts but also knowledge about ethics regulations. Sometimes permission from regulators must be obtained in order to ask experts. To avoid potential problems, lawyers should look into the opinions on the ethics surrounding each type of technology that have been expressed by their state, which can be found on the ABA’s website. Outside the realm of ethics, many states have expressed opinions on what technological knowledge should be required for lawyers. In 2014, for example, the California Committee on Professional Responsibility and Conduct stated in their Formal Opinion 2015 that although issues like e-discovery are new, the idea of competency is not, and competent lawyers need to be knowledgeable since “in today’s technological world, every case has the potential to involve e-discovery.”

The world is evolving, and law is starting to catch up as formal regulations are set around technological knowledge. To truly stay competent, lawyers need to be familiar with using technology and stay up to date on the latest news surrounding technology with which their clients may be involved.

Article via The Lawyerist, September 10, 2015

Photo: iPublishing, iReading, iEnjoying via Charis Tsevis [Creative Commons Attribution-NonCommercial-NoDerivs]