Bar codes on steroids are what they’ve been called. The alien-like pattern is popping up everywhere and on everything. They’re almost as mysterious as crop circles, and they contain hidden messages, too. What are they? They’re Quick Response codes, or QR codes, and they’ve taken off as a new tool for advertising. If your law firm is not using them yet, you could be missing out on an important marketing and information-sharing tool.

Born in Japan, QR codes were originally created in 1994 by Denso Wave, a subsidiary of Toyota, to track auto parts. They have become wildly popular in Japan and throughout Europe for commercial purposes, and have recently gone mainstream in the U.S.

A QR code is a 2 dimensional barcode that can be decoded by your smartphone. It can include text, links or other information that can be read by smartphones. Scanning a QR code is simple, but users first need to download a QR code scanner, like QR Reader for iPhone or Barcode Scanner for Android. Once this type of scanner is installed, the customer can then simply point their smartphone camera at a QR code, and the code scanner will scan and read then code, pulling up URL’s, text, video, and photos.

QR codes can be found on the pages of magazines, on movie posters, in advertisements and even on TV and Web sites. QR codes are useful for their ability to contain large amounts of information in a tiny package. For businesses, they are extremely beneficial as an advertising tool to gain attention or a competitive edge and allow businesses to leave their mark on anything. QR codes have been seen on t-shirts, hats, pins, bumper stickers, and business cards.

How do you Generate a Code?

It’s simple. Users can generate a free QR code using a site like Kaywa.com or QRStuff.com. Creating one only takes a few minutes. But the benefits to your business will be far reaching and long lasting.

If your law firm or legal finance company is not using QR codes yet, you could be missing out on an important marketing tool. Adding QR codes to brochures, your website, or even on your business card can help you compress a great deal of information in a small space. For example, if you want potential clients to be able to access detailed information about your law firm from your business card, you do not need to cram in all your practice areas or recent case victories on a tiny piece of paper. Many attorneys have successfully been using QR codes on their business cards. Potential clients can scan the cards and get instant access to law firm videos, contact information, and detailed information about practice areas and law firm strengths.

If your law firm is hoping to strengthen social media, you can also Likify to add QR codes to marketing materials, and then link those QR codes to a Facebook “like” button. Then, if a client scans your QR code, it triggers a thumbs up “like” on Facebook.

As the overall condition of the economy continues to show little improvement, governments around the world are seeking ways to cut costs. In the UK, legislation has been introduced to cut legal aid funding in certain areas. Specifically, legal aid payments for criminal and civil cases could be reduced by 10% in October, 2011 with the same budget cut proposal being implemented for family cases in February, 2012.

The latest proposed legal aid cut of 10% falls on top of the 12.5% from the final days of the last Labour party government. This cut could precede a further proposal in place to almost completely cut all legal aid by October of 2012.

The current proposed cost reforms from government bodies in the UK do not only include this drop in legal aid funding. The Legal Aid, Sentencing and Punishment of Offenders Bill suggests cutting legal aid to some extent from a broad spectrum of cases, including medical negligence, welfare, housing and family issues. This proposed budget cut comes with an announcement that cutting legal aid from these areas could result in saving the UK government some £350m.

Obviously, such extreme cost reforms that affect the legal services of the public have not been met with uniform approval from all government representatives or the general public. The proposed reforms are expected to be met with strong opposition in the Lords this autumn.

Additionally, reductions in funding could lead to the closure of necessary legal aid centers as their lawyers are already working for a mere pittance compared to their legal peers. Several legal aid centers including Law for All, the Immigration Advisory Service, and Refugee Migrant Justice have either already closed or have announced plans to close due to such budget cuts in the legal aid system.

In a statement released to The Guardian in 2011, human rights advocates such as the director of the UK branch of Amnesty International, the executive director of Friends of the Earth, and the executive director of War on Want detailed their concerns over how the newly proposed budget cuts would affect the justice system for victims of abuse cases. Their letter mostly applied to concerns regarding how the budget cuts would hamper legal aid access to victims of overseas human rights abuses, stating that the new changes would result in, “severely reducing the ability of law firms to take on such cases.” By citing to cases that were formerly brought to the attention of the UK legal system as successful representatives of how justice was rightly served under the old budget system, the letter argues that the proposed changes could greatly hinder the access of victims in similar future cases to the UK courts.

Other groups, such as those with disabilities, have voiced their opposition to the Legal Aid, Sentencing and Punishment of Offenders Bill as well. The proposed legal aid cuts will affect the already-lacking access to legal aid for the hearing-impaired. The few hearing-impaired interpreters working at law firms across the UK are often funded by the portion of the legal aid budget that would be cut by the Legal Aid Bill. Without this necessary funding, these interpreters would no longer have jobs at their agencies and hearing-impaired citizens of the UK may struggle to obtain necessary legal representation.

Still others opposed to the proposed bill fear that any legal aid budget cuts made today could have an extremely negative impact on future generations. The chief executive of the Law Society Des Hudson argues that cutting funding for legal aid to young people in need of welfare and employment advice would not actually solve the problems faced by this current generation.

Just as American tort litigation varies across a wide spectrum of legal doctrine, damages measures and evidentiary thresholds, tort litigation in Europe is as divergent as the continent itself. With the vast number of Europeans conducting daily, multilingual business deals, traversing centuries-old roadways and branching business ventures onto the ever-expanding global and electronic marketplace, personal or pecuniary injury is almost inevitable. Whether parties are conflicted over a cross-continental tortious contractual interference or pursuing a personal injury claim arising out of a sideswiped Vespa, European tort litigation is as fascinating and complex as it is historical.

As is expected, European tort litigation involves intricate conflict of laws issues. With fifty countries operating in close proximity to one another, European civil courts are almost certainly inundated on a regular basis with diversity in terms of citizenship, language and legal codes. As such, the European Parliament and the Council of the European Union declared the controlling law in any diverse tort action to be that of the nation in which the injury occurred. Thus, a personal injury action occurring in Paris between a citizen of France and a citizen of Italy would be decided under the French civil code.  However, the Parliament and Council carved out an exception to this general rule in any tortious situation whereby the injury is substantially tied to the nation from which the defendant hails.

The European civil justice system varies widely from that which Americans are accustomed to and represents the evolution of civil codes derived from the sixth century Byzantine Empire. Principles codified in the Justinian Code remain firmly entrenched in Europe’s civil system- a system designed to avoid unnecessary legal contradictions and conflict. These concepts of civil law are in place throughout the vast majority of the continent as well as most of South and Central America and parts of Africa and Asia. Louisiana continues to implement the European civil code as well and remains the sole U.S. sovereign state to do so. The European civil system depends not upon common law judicial interpretation but primarily on legislative codes and succinct legal rules. Juries are rarely used except in criminal proceedings involving the possibility of significant loss of liberty. As opposed to the American common law system, civil code judges are not bound by precedent and are free to decide cases based on their interpretation of the matter.

The American tort lawsuit landscape practically embodies the word ‘adversarial.’ American tort lawyers are bred to seek the highest settlement or verdict for their client while simultaneously maneuvering the rules of evidence and discovery to gain the best possible outcome. American judges maintain a neutral role in the matter and are called to the bench after decades practicing law in the field. In stark contrast stands the European system which does not seek to establish a competitive antithetical climate but rather one of inquisition and noncompetitive fact finding. The concept of hostile witnesses and cross-examinations are virtually unknown to European civil lawyers. Within the context of European tort litigation, the judge takes a much deeper investigative role than would ever be appropriate in American common law courts and is free to question witnesses and appoint his own experts to testify on highly technical or scientific matters.

In summation, tort litigation in Europe is predominantly governed by ages-old principles of civil law and justice handed down from the ancient Roman era and the Justinian Code. The system is highly non-adversarial and involves an investigation from not only the litigants’ legal representatives but the judge himself- a notion unheard of in the American system. The nation within which the harm occurred generally applies its tort laws to the case as diverse parties are quite common in European systems. The European tort system represents complex legal notions steeped in history.

The biggest downfall of new businesses occurs when they fail to have enough money to cover start-up costs.  Start-up costs include back-up money you need until money from your actual billable hours is earned.  In developing a business plan many new firms add start-up costs very quickly and these figures can be intimidating and scary.  Ultimately, as long as you understand the costs of running a law firm you will be financially prepared to make it through the first few months.

First, take fixed expenses into account. Also known as overhead, these are the items you need to pay every each month. They include rent, utilities, salaries, cell phone bills, malpractice insurance, etc.  These figures are updated annually as salaries change and bills increase.  Be sure to perform a review of overhead at least once a year to establish opportunities to lower costs.  Many law firms go so far as to negotiate what they feel are fixed expenses with the landlord and may request a lower rent if building occupancy is low due to a bad economy.

Second, make sure to record variable expenses like taxes, unemployment insurance and other expenses.  If you tend to pat yourself on the back every time you’ve billed a five figure month, consider how much of that money should be directed to the Internal Revenue Service.  You’ll quickly note you actually earned far less than you thought. When it comes to salaries, you may use a payroll company.  Each pay day you will pay what is called ‘actual cash.’  The number is higher than what your employee earns since all the miscellaneous pay roll taxes are included.  Be sure you use the ‘actual cash’ value when you calculate the costs of running a law firm.

Third, variable costs can sometimes greatly affect the costs of running a law firm.  A great example is the cost per copy of renting a copy machine.  Others include client lunches, temporary employees, or office supplies.  These expenses can cost up to a few hundred dollars each month.  Since they are money you can’t control, you should try to pick a per month average.  The good news is that an increase in variable costs usually signifies an increase in business.

Finally, there are certain costs that are necessary to keep your business running, such as promotion and advertising. They are items you know you need to promote your law firm but costs you don’t consider regularly since they occur sporadically throughout the year.  Continuing Legal Education is one, as are advertising costs and networking memberships.  These costs recur year after year so be sure to choose a realistic yearly average.  Most likely, you will have about four professional memberships to professional organizations.  Count in others, including Yellow pages ads and website domain hosting, to get a true picture.

If you have been considering the costs of running your own law firm, you might have been under the assumption you can nail up a shingle and starting earning plenty of cash.  For a fortunate few, who obtain the right residual clients early on, this is absolutely possible.  For the rest, you will need to create a business plan that accurately captures your overhead costs and variable expenses.  Be honest with yourself about assigning realistic numbers to these items in your business plan.  If the numbers seem high, you will be less affected by lower realities.  You will use this number to calculate how much you truly need to get started as part of the cost of running a law firm, so make sure you cover all the bases discussed in the above points.

Law firms expend significant resources to increase name recognition.  In other words, law firms are eager to brand their name. ‘Branding’ is a marketing term that refers to the creation of a name, symbol or design that differentiates one product from another. Law firm firm branding creates a unique situation requiring the company to brand their expertise and dominance within a specific legal niche.  Law firms choose to brand themselves for a number of reasons including increasing awareness or expanding legal expertise.

Law firms often experience more difficulty branding their name then other types of companies.  While other businesses can increase their marketing and advertising budget to see results, law firm branding requires a public persona of credibility within the profession. Fortunately, there are a number of ways in which a law firm can increase its brand and credibility.

Law firms can hire a company or person to help them with their image such as a public relations expert or a marketing firm.  These businesses specialize in coordinating letterhead, business cards, newsletters, websites, etc. Prices and expertise vary widely, so this is a considerable undertaking – one that requires a marketing budget and the effort of finding the right company. Law firms are best-suited by finding a public relations or marketing firm with legal marketing experience and proven success within the industry as not all public relations professionals have the skills to market a law firm. A good legal marketing firm will also be aware of state legal ethics and rules of professional responsibility as many jurisdictions heavily regulate the use of attorney marketing and advertising.

Law firms could also develop a tagline, or a branding slogan, that will associate the firm with a particular saying. One simple sentence or phrase should be used in all marketing materials and should capture the image of the company. The main advantage of a tagline is that it will be easier for potential clients to remember the law firm which increases the chances that a potential client will contact the firm.

Another option for law firms eager to brand their company is to issue press releases to the media.  Press releases are used by professional journalists and writers looking for interview sources and article subjects. Today, online press release sites such as PRweb.com also ensure that press releases are available through all online news outlets. This practice increasing firm visibility to a wide audience of readers. Press releases can also be incorporated onto a law firm’s website in its news or blog section to increase search engine optimization.

Ideally, law firms must seek to become as knowledgeable as possible in their area of law.  By focusing on one area, a firm can eventually become synonymous, thus branded, with that area of law.  This could entail writing scholarly articles about the niche, appearing on the news and giving talks about the topic. As many of these endeavors are particularly time-consuming, law firms may be required to hire a legal intern to help enhance these branding efforts.

Firms often brand themselves in everyday conversations and exposure during events, conferences or even board meetings. Associates and partners should always carry a business card and law firm publications whenever they travel. Always be sure to exchange information with any person who shows interest in the firm or its legal niche.

Notoriety as the firm that gives back is never a bad idea.  Donating to local charities will pay dividends in public credibility. Along similar lines, offering pro bono work can be a useful way to generate publicity. Firms can make donations to the charities of their choosing, appear in marathons, participate in charity events and otherwise lend a helping hand around the community- all while donning apparel displaying the firm’s brand. While participating in charitable activities, remember that the brand is each attorney and how they handle themselves.

There are many more ways a law firm can develop its brand.  Many firms do not considering branding a top priority and this is where those concerned with branding will have the advantage.  Through proper planning, coordination, and drive law firms can create a brand perfectly representing their tagline, legal niche and charitable focus.

In other parts of the world, participants in mass demonstrations for social justice are often met with violent, firearm-laden opposition. Here in the U.S., demonstrators – most notably the “Occupy Wall Street” movement – receive only the occasional pepper spray (so far). As a result, many Americans proudly feel that –while we’re not perfect — we’re doing a pretty good job of upholding the rule of law.

Until recently, that kind of anecdotal evidence were pretty much the only available bases for making judgments about where in the world justice can be obtained and where it can’t. Now, however, the World Justice Project (WFP) is starting to provide far more objective evidence about this all-important element of modern civilized life.

Backed by the Neukom Family Foundation, the Bill & Melinda Gates Foundation, LexisNexis and law firms such as Sullivan & Cromwell, White & Case and Fulbright & Jaworski, the WJP has mounted a massive, establishmentarian, quasi-scientific survey attempting to nail down exactly how closely individual nations adhere to the rule of law. This survey is aptly known as the Rule of Law Index (Index).

WJP representatives have devoted more than four years to developing, testing and vetting measures of lawfulness based on principles that are internationally accepted, even within countries having vastly different social, cultural, economic and political systems.

Within the 2011 version of the Index exists 52 factors that support four primary aspects of the rule of law:

1) The government, its officials, and its agents are accountable for their actions;

2) Clear, publicized, stable and fair laws protect fundamental rights, personal security and property;

3) Laws are enacted, administered and enforced through accessible, fair and efficient processes; and

4) The legal system is manned by competent, independent, and ethical people in large enough numbers who reflect their community’s demographics and who have adequate resources to do their jobs effectively.

Unlike other Indices, the WJP does not rely on aggregated data from third party sources, on self-reported data from governments or on information from other vested interests. To date, WJP has investigated adherence to the rule of law by surveying more than 66,000 ordinary citizens around the globe living in nations that contain more than half the world’s population. WJP researchers also by elicited in-depth analyses and opinions from more than 2,000 legal practitioners and academics with expertise in civil and commercial law, criminal justice, labor law and public health. Because of these unique and original data-gathering procedures, the WJP assess each nation’s adherence to the rule of law in practice rather than in theory.

The resulting WJP Rule of Law Index enables anyone to comprehensively assess a nation’s law-related practices, identify its strengths and weaknesses in comparison to other countries and — as annual reports continue to be published — track changes over time.

So how does the U.S. fare on the newest Rule of Law Index? OK, I guess, but with plenty of room for improvement. Here’s a quick run-down of our nation’s scores (with a score of 1.0 being best):

Factor 1 – Limited Government Powers

This includes such measures as well-defined government powers, legislative and judicial restraints on government powers, penalties for official misconduct and orderly transfers of power.

The U.S. earned a ranking of 0.73, only 16th among the 66 nations most recently evaluated by WJP, only 10th out of the 12 nations in our region, and only 16th out of the 23 nations with levels of wealth and economic development similar to ours.

Factor 2 – Absence of Corruption

This factor primarily measures to what extent public officials use their office and powers for private gain.

The U.S. earned a ranking of 0.78 on this scale, only 17th in the world, again only 10th out of the 12 nations in our region, and only 17th out of the 23 nations with similar wealth and economic development.

Factor 3 – Order and Security

This factor measures the amount of violence in everyday life, including individual use of violence to redress grievances, as well as the general extent of civil and criminal lawlessness.

The U.S. earned a ranking of 0.86, which is a higher raw score than we earned on the previous two factors, but not much better in rank. We’re only 13th in the world on this score, although we’re 6th out of the 12 nations in our region, and 12th out of the 23 nations with similar wealth and economic development.

Factor 4 – Fundamental Rights

Here WJP attempts to measure various types of discrimination, due process of law, freedom of expression and religion and public assembly, the right to privacy, and labor rights.

The U.S. earned a ranking of 0.73 on these measures, which puts us an unexpected 19th in the world, 11th out of the 12 nations in our region, and 18th out of the 23 nations with similar wealth and economic development.

Factor 5 – Open Government

This Factor measures the degree to which laws and government operations are well publicized and easily understood, with relatively stable laws and ample opportunities for public participation in any political or legal changes.

The U.S. earned a ranking of 0.72, which seems a little low, but puts us 12th in the world, 8th out of the 12 nations in our region, and 12th out of the 23 nations with similar wealth and economic development. This may be our highest score of all eight Factors.

Factor 6 – Effective Regulatory Enforcement

This is intended as a measure of the impartiality of government operations, including speedy and fair due process, and restraints on unfair “takings” of private property.

Here the U.S. earned a ranking of 0.70, only 15th in the world, 9th out of the 12 nations in our region, and only 15th out of the 23 nations with similar wealth and economic development.

Factor 7 – Access to Civil Justice

This measures the availability and affordability of legal remedies, the lack of delays, discrimination and corruption in meting out justice, and related matters.

The U.S. earned a ranking of 0.63, a dismal 21st in the world, 11th out of the 12 nations in our region, and 20th out of the 23 nations with similar wealth and economic development. In some respects, this is our poorest showing within the Index.

Factor 8 – Effective Criminal Justice

This measures the effective investigation and timely adjudication of crimes, the correctional system’s effectiveness in reducing crime, as well as the integrity and impartiality of the criminal courts.

The U.S. earned a ranking of 0.69, only 20th in the world, 11th out of the 12 nations in our region, and 20th out of the 23 nations with similar wealth and economic development — nearly as poor a showing as our Civil Justice score, above.

Despite what some critics say, we’re not yet a Banana Republic. But neither are we a “shining city on a hill,” and we have much work to do if we want to become one. While the 2011 Index covers 66 nations, next year’s WJP Index is planned to report data gathered from 100 countries.

Source: The World Justice Project, Rule of Law Index (2011); available at: http://worldjusticeproject.org/sites/default/files/wjproli2011_0.pdf

If you watch the nightly news, you may have noticed how often attorneys are in demand.  Whether it’s the latest glamorized murder trial, or a new change in legislation, we rely on the opinions of legal experts to keep us informed.  You may have even wondered how you can be the one in front of the camera providing your opinion on important legal matters.  There are three strategies you may consider to get your legal practice in the spotlight using public relations and media:

1) Write about it.

There are many media outlets looking for expert opinions on the hottest legal topics.  How do you find them? Visit Yahoo; you’ll notice there are topics on the right hand side that are “trending.”  When you click on the link to the articles, you’ll see names like the Huffington Post shown as the source.  When you visit the website for the Huffington Post there will be links to ‘write for us’ or ‘become a reporter.’  Make sure you are choosing reputable sources to apply to as a contributing writer.  If you are going to write for free, consider if there is still a merit to having your pieces published.  For example, a very well trafficked online publication is an excellent place to have your name, web site and company information appear as a contributing source. Appearing in legal trade publications and legal magazines is also an effective way to establish yourself as an expert.

2) Use social media to get your opinions heard.

The most important aspect of using social media to garner PR attention is your bio.  The three sentence blurb you create for Twitter must contain the key words, repeated a few times, for what you are trying to be the media source for.  You can choose words like ‘criminal law expert’ or ‘domestic violence attorney’ but make sure you give a great deal of thought to just the right combination of words.  Your expertise must be very clear. It’s not just about readability, it’s about searchability.

3) Consider developing a press packet to send to all the local media sources.

If getting on the news is important to you, you may need to pitch yourself to the right people.  Hire someone to take head shots and take a fresh look at your resume. You can send press packets to local media sources. Visit the websites of local reporters, televisions news stations, and newspapers. Many of these websites have links for experts. You can also call newsrooms to find out whether they accept press packets.

Assuming you intend to pursue news media, you will need to be prepared for a bit of annoyance over the hours news channels keep.  Your first spot on a cable channel can mean getting up at 4 a.m. for a 10 a.m. airing.  You may also be commenting on the most mundane topic you can imagine.  Consider it a test run.  If you look good on camera and your personality comes through, you may be asked back.  After a few return visits, you have the potential to become the go to person on a particular legal topic.  Any time there is a breaking criminal story, you would take precedent over any other source they may have.

The payback of using PR and media in your legal practice, of course, is that it positions you as the expert in your field.  Compare this to the following Coke has.  The brand is well recognized around the world.  You want to think of PR attention the same way: If you are perceived in a positive light, you will get more business.  Finally, the best thing about PR and Media is the cost: It’s free.  Free publicity … once you position yourself in the right places.  Usually, you have to pay quite a bit for advertising.  If you haven’t jumped on board with using PR and Media in your legal practice just yet, start with the above steps.

With the advent of newer technologies in the 21st century, there has been an accompanying increase in intellectual property (IP) cases that involve copyright, patent, trade secret and trademark issues. Not surprisingly, just as the number of lawsuits has increased in the last decades, so has the cost of bringing IP cases to trial. One of the major factors contributing to the high litigation costs is collecting discovery.

Today, most discovery documents are no longer submitted in hardcopy form but are transferred electronically, which has simplified much of the process. However, the attorney hours necessary to go through so many electronic communications – especially in complex patent cases – add up substantially.  In addition, attorneys generally need computer forensic experts to access electronic communications, which can add to discovery costs.  In many cases, the cost of litigation may outweigh the possible financial gain, driving many attorneys’ decisions to settle out of court.

Since 2001, the American Intellectual Property Law Association (AIPLA) has conducted semi-annual surveys in an attempt to determine typical IP litigation costs. The AIPLA divides the surveys into three major risk categories for potential recovery: (1) less than a million dollars; (2) $1-25 million; and (3) more than $25 million.

In AIPLA’s 2007 economic survey, the median litigation cost (including all IP areas) was estimated to be $600,000.  In the latest 2009 AIPLA survey, the medians for the various IP cases remained flat or increased.  For example, the median costs for discovery in a copyright case exceeded $700,000 (from 2007 to 2009) where the risk was more than $25 million. At the same time, discovery costs for copyright litigation involving risk of less than $25 million remained nearly unchanged.

Given these numbers, if the potential recovery is less than a million dollars, the cost of bringing a case to trial can be cost-prohibitive.  Even where the risk is $1-25 million, the median cost can be as high as $2.5 million according to AIPLA’s 2007 survey numbers.

Additionally, statistics provided by the Federal Judiciary covering the period from March 2001 to March 2007 indicate that the number of IP cases filed increased by over 3,100.  This trend seems steadfast despite the high cost of litigation.

Another noticeable trend that has developed over the last two decades is the acquisition of IP “boutiques” by general law firms. Boutique firms that specialize in IP law add value to generalist firms as the synergies of IP expertise combined with the resolution efficiency of the parent law firm can significantly contribute to the bottom line.

Bringing a case to a speedy resolution goes a long way towards bringing down costs.  However, AIPLA’s 2007 report shows that an increase of IP attorneys in a firm may lead to an increase of IP enforcement costs.  For example, in the case of patent litigation with less than $1 million at risk, firms with 1-5 IP attorneys handled cases for an average of $437,000. Where the number of attorneys increased to 6-75, that average cost rose to $726,000; where the number of attorneys was 76 or more, the average cost was $896,000, which is almost 90 percent of the maximum recoverable amount.  These costs include discovery as well as incidental costs such as filing,  depositions, interrogatories and preparation.

What can be done to stem IP litigation costs? Being proactive with respect to one’s intellectual property is certainly a good start.  Attorneys should strongly recommend to their clients to  establish best practices to mitigate future IP controversies. These best practices may include using indemnification provisions; regularly monitoring industry trends; and using secure storage mediums.  In cases of trade secrets, the use of iron-clad confidentiality agreements and non-compete agreements that are lucrative can offset possible problems when an employee decides to leave a firm. Law firms can also cut costs by streamlining procedures for receiving electronic discovery data.

By Haydee Camacho

While support for third-party litigation finance has grown as an accepted vehicle providing plaintiffs the necessary resources to see their claims through to resolution, the industry has come under fire from critics and the media for potential ethical violations. In June, 2011, the New York City Bar Association addressed such ethical issues by publishing an opinion about third-party non-recourse legal funding. It stated that legal finance is “….a valuable means for paying the costs of pursuing a legal claim, or even sustaining basic living expenses until a settlement or judgment is obtained.”

In response to industry critics, the American Legal Finance Association (ALFA) was established in 2004 and set out to establish industry standards in the legal funding industry. Of preeminent concern is addressing issues of transparency in transactions and providing full disclosure to plaintiffs. ALFA has also worked with legislators in Maine to pass legislation regulating the conduct of the legal funding industry and worked with legislators in Ohio to pass legislation overturning an earlier court decision that made legal funding unavailable for Ohio litigants.

Like the practice of contingency fees, litigation funding is designed to narrow the bridge between wealthy defendants and under-resourced injured plaintiffs.  “Litigation funding provides the staying power for clients to let his or her attorney do their job and get them a fair settlement because the attorney for the insurance company will try to give less if someone is desperate.  They will try to take advantage of that,” said Harvey Hirschfeld, President and Director of Law Cash, and Chairman of ALFA.

In addition to granting plaintiffs easier access to the courts, proponents of litigation finance cite plaintiffs’ increased leverage and bargaining power against large, wealthy defendant corporations with deep financial resources. From a November, 2010 article New York Times article by esteemed attorney Susan Lord Martin states: “Defendants in lawsuits often have insurers to finance their litigation expenses; litigation finance firms merely play that same role for plaintiffs, leveling the playing field….[s]uch financing can allow a plaintiff to remain in the legal battle long enough to have a realistic opportunity to achieve legal success.” Ms. Martin is the Cypres Family Distinguished Professor of Legal Studies in Business at the Zarb School of Business at Hofstra University and Director of Hofstra’s Center for Teaching and Scholarly Excellence.

“[Litigation finance] is not for everyone,” said Mr. Hirschfeld. “Sometimes people are in the wrong place at the wrong time, they get in an accident, they’re out of work, they don’t have cash sitting in the bank, their friends can’t help, and they’re faced with a terrible situation.” He noted  that the credit crisis of 2009 triggered a drop in the value of housing and a subsequent drop in available equity for homeowners, diminishing home equity loans as a possible resource for litigation funding. “We never get in the way of the attorney-client relationship,” he added.  “We fund life needs only–a client is about to lose their home, a child cannot go back to school. Almost 80 percent of what we fund is going to stop an eviction or foreclosure. “

A major criticism of litigation funding is that it encourages frivolous claims.  This argument is weakened by the fact that it is in the best interests of a litigation finance company to advance money only to those plaintiffs who, in the company’s determination, have a strong chance of succeeding. “We are only going to take cases that have merit,” said Mr. Hirschfeld. “We look at cases where the attorney takes the case on contingency. If the plaintiff loses, we don’t get anything back. No one in their right mind is going to take on a frivolous case.”

Industry opponents also argue that litigation finance has led to a proliferation of settlement activity in the court system. In one study of civil lawsuits published in the Journal of Empirical Legal Studies, data concluded that between 80% and 92% of cases do settle. The findings, which are based on a study of 2,054 cases that went to trial from 2002 to 2005, also noted that most of the plaintiffs who decided to pass up a settlement offer and went to trial ended up getting less money than if they had taken the offer.

Perhaps a compromise between legal finance skeptics and proponents is possible. Many states have taken steps in initiating shorter disposition times for civil lawsuits by disallowing some cases to linger on the court’s docket for years. This would not only be a much needed reform in the court system but would also address concerns pertaining to consumer protection and settlement proliferation as it pertains to litigation finance. Thus, lawsuit reform could be achieved without over-regulation of the legal finance industry.

According to Professor Michael Heise of Case Western Reserve University School of Law, “prolonged case disposition time frequently correlates with an increase in litigation costs and threatens evidentiary quality as memories fade, evidence spoils, and witnesses and litigants die….[d]elays frustrate plaintiffs and erode public confidence in the civil justice system….and generate benefits [only] for those with the financial ability to withstand delays or otherwise benefit from them.”

Reductions in time delays would not entirely eliminate the gap between every plaintiff’s resources and needs. There will always be plaintiffs who need assistance to meet their financial obligations while they wait for resolution. The benefits of litigation financing would still be available for those clients who most need its services, continuing to provide access to the judicial system and greater bargaining power.

By Robin Hensley

Most personal injury attorneys offer toll-free numbers or free consultations to ensure that potential clients can reach them. To make these efforts worthwhile, attorneys need to be able to transform potential clients into actual clients – but how can a law firm or solo practitioner do that? Business development expert Robin Hensley graciously agreed to an interview with The Legal Finance Journal, sharing her insights:

Q: What are some do’s and don’ts that attorneys should remember when trying to land a potential client?

A: I always tell my clients to research a potential client’s industry as much as possible. It is well worth their time to stay updated on happenings within the industry so that they can be conversational with those potential clients when the opportunity arises. Know what would keep a potential client up at night. Know what their concerns are and what caused those concerns. For example, if a potential client is on the public board for a company, learn all about that company. What has been in the news lately about that business? Is it doing well or poorly? Are there any breaking news stories of which you should be aware? What are the economic labor statistics about the industry? Has there been a sudden growth or drop in employment in that industry? It is what you know about the smallest of concerns in your client’s industry that might really impress a potential client. I have chaired the audit committee of Superior Uniform, a NASDAQ company, for eleven years. Over the years, we have found that people will sometimes approach us not knowing anything about the uniform business. We are always impressed when we are approached by people who know about the minutest details of our business, such as whether or not the price of cotton is currently too high.

Another great way to keep up with what’s going on in a potential client’s world, is to subscribe to print or online media that they read, whether they are trade publications or otherwise. If I read “Uniform Today,” then subscribe to it and read back issues. Knowing the past, present and future news about your client’s industry can make you extremely versatile in being able to talk about these topics with you client.

Lastly, go to industry meetings. These are great places to learn about what’s going on because you are surrounding yourself with conversations that take place in your potential client’s office. You are like a fly on the wall, able to catch all the tidbits of information that may not be publicly available. You can ask people in that industry face-to-face the questions that you may not get answers to by Googling the information or flipping through trade publications. You will learn real life emotional reactions to what is going on in their world, which could be just the thing that sets you apart from your competition and the key to winning that client in the long run.

Q: What are some common mistakes that attorneys make when trying to get a client? How can these mistakes be avoided?

A: My experience has taught me that attorneys tend to think that all it takes to win a potential client is to talk a lot about their firm and its accomplishments. While it might be good for a potential client to know that your firm has an impressive success record and that they are fully-staffed and geographically diverse, it’s also important to emphasize why your firm is different from your competition. Know what sets your firm apart from your competition, especially the unique and special aspects of your firm as they apply to this particular target.

There are always going to be clients that no matter what, will say “no” to hiring you. If this ends up being the case, there is still opportunity for learning and growth. Take the time to ask your client to share why you lost the pitch. There are a plenty of people who are willing to share the reasons they chose not to hire you.

Having a follow-up plan for that client is also a great idea. They might have had a bad experience with the firm they ended up hiring. They might want to hire someone else now, but have so much on their plate that they forgot to call you. Have a plan to follow up with them in six months to one year.

Q: After landing a client, how can attorneys keep them happy? How can an attorney build a long-term relationship with clients?

A: A great way to keep a client happy and build a long-term relationship is to make the relationship as personal as appropriate. Know what your client is passionate about outside of work. Do they like golf? Strike up conversations about the last golf tournament. The key here is to keep up with what’s going on in their world. Whatever they like, know at least a little about it so that you can have that in common with them.

A client that I have been working with for over five years, Linda Finley, Shareholder at Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, says, “it is no longer good enough to know the kids’ names, you need to know the dogs’ names.”

What Linda means by this is that it is best to know as much about a client as possible and appropriate. Don’t talk about business only with them. For example, if you are meeting a potential client on a Tuesday and there is a Braves game that night, strike up a conversation about that and see what comes of it. Take every opportunity you can to learn what a potential client likes and dislikes, reads about and cares about. If you end up getting hired, you now have the opportunity to build a strong long-term relationship with them. Learn something new about them every time you speak on the phone or meet in person. Every chance you have to talk with your clients is an opportunity to learn more about them, which can lead to an even stronger long-term relationship with them. The closer you get to them, the greater chance you have to be the only firm they will ever hire again.

Q: What are some mistakes that attorneys make when interacting with clients? How can these mistakes be avoided?

A: I have heard the same complaints from the attorneys I coach about what their clients are saying. The most common complaint is, “I cannot reach my lawyer when I need them.”

Often times, attorneys are so busy with urgent legal matters with clients that returning client communications that are of a non-urgent nature tend to get pushed further down their to do lists. Although they don’t intentionally ignore any of their clients, attorneys sometimes forget that they must also email and call back on non-urgent matters in a timely manner. Unfortunately, even though attorneys do not want any of their clients to feel neglected, going too long without returning emails and phone calls can make them feel that way. Attorneys must always remember that their clients have different perspectives on the attorney/client relationship than they do. The client wants to be heard and answered in a timely fashion. That means, don’t wait days to respond to your client’s phone calls and emails, rather block out a portion of your calendar daily for this task. Interaction with your clients is critical to building and sustaining a long-term relationship with them.

When attorneys work on cases with their clients, the follow up is easy and natural. When there is nothing going on with a client’s case, they tend to forget that follow ups can be just as important and valuable, even if not directly related to business. Some examples of how to take your client to lunch, off the clock, in order to discuss things; find out when their next industry meeting is and ask if they wouldn’t mind you joining them; and, find out when their new company plant opening is happening and ask if you can tag along, if appropriate.

Another key aspect of any relationship is the ability to listen. Listening is by far the most important and greatest skill that you can have, whether in an initial meeting when you are first pitching a potential client or if it is a client you have had for years. If you listen to only one person at the office, it should be your client. They are what drives your business and who keeps you busy. They are the absolute final say in what will happen at work tomorrow and what they say should not be ignored. When you listen to them, make sure to ask them questions at the appropriate times. This will show them that you are really listening and interested in what they have to say. It is listening that will keep your potential and long-term clients happy.

ABOUT ROBIN HENSLEY

Robin Hensley, President of Raising the Bar, is one of the country’s leading business development coaches specializing in coaching attorneys and CPAs who are at the top of their game, to maximize their rainmaking skills. Learn more about Robin at www.raisingthebar.com or on her blog at www.theraisingthebarblog.com.