The Law Planet Blog

A recent blurb in the ABA Journal weekly newsletter struck a chord with me. A law firm in Boston has banned billable hours. What's next, not billing for faxes and copies? How will a firm ever make money without billing its clients in 360-second increments?

I like billing. It puts food on my family's table and keeps the lights on here at the office. On the other hand, I am terrible at keeping time records. I'm not inaccurate about it, it's just that I would prefer to do things other than record my time, particularly in those 360-second increments. Flat fee billing avoids the possibility of under-billing, which is my "problem" (I should be in a "meeting" - My name is Marc and I underbill. The crowd responds - Hello, Marc.)

I have worked on flat fee "projects" in the past and have been happy with them. It really enables the client to control their legal expenses and enables the lawyer to do the work without regard to cost to the client. There are any number of hourly cases I have settled where I knew that the settlement resulted in the disappearance of piles of anticipated billable hours.

But what if we had a flat fee environment? What if we had a menu for each case where a case of a certain size and type is handled for a fixed price, regardless of the timing of its resolution, either through settlement or adversary proceeding? What if cats and dogs could live together in harmony? Maybe the world is flat?

I like flat fee billing. I'm going to see if it can work for us. And when you see a cat grooming a dog, you'll know that flat fees are taking over the world.

That's the view from The Law Planet - Jupiter, Florida.

Posted by Marc S. Dobin | Permalink | Email This Post

Posted In: Law Practice Management

Bookmark:

It has been 20 years since the stock market crash of 1987. Many were predicting that this was the end of the world as we know it (Insert REM music here). Others saw the crash as a buying opportunity. It turns out that the buyers were probably right.

If we look at a chart of the major market indices such as the Dow Jones Industrial Average, the Standard and Poors 500 and the Russell 1000 have done quite nicely over the last 20 years. In fact, the "crash" shows barely a blip on a historical chart.

The 1987 crash brought an onslaught of arbitration claims. It wiped out billions of dollars of net worth and pointed out weaknesses in various systems. Daily trading volume on the NYSE was over 600 million shares during the crash period -- and the system was strained. Now, daily trading volume regularly tops 1 billion shares without a hitch.

This year marks the 215th anniversary of the execution of the Buttonwood Agreement, which marked the formation of the NYSE. Much has changed, including the fact that the exchange is now publicly held instead of owned just by its members. But the basics remain the same. Buy good stocks and remember the reason they were purchased during market downturns.

That's the view from The Law Planet - Jupiter, Florida.

Posted by Marc S. Dobin | Permalink | Email This Post

Posted In: Investments , Securities Industry

Bookmark:

Every stockbroker is required to register with the state in which he or she does business and with, at a minimum, FINRA (formerly known as NASD). A broker's background, as maintained by FINRA, can be found here. Every customer of a broker should look at the broker's background before trusting their life savings to a stranger.

And every broker is a stranger. No matter how much you know about your broker, you will certainly not hear of arbitration awards or regulatory sanctions. The new BrokerCheck generates a very user-friendly report in pdf format which can be saved for future reference. It contains the broker's employment history, registration history, any outside business affiliations and, if applicable, and regulatory/litigation history.

Most brokers have clean records or records with minor dings on them. Other brokers have plenty of dings but they may be due to a product failure, such as Limited Partnerships or firm research stocks. But a consistent history of such magic terms as "unauthorized trading" or "unsuitability" should give you reason to look elsewhere. It may mean that the broker you're speaking with has a difficult time complying with the rules. With over 50,000 registered brokers, you should be able to find one that suits your needs.

That's the view from The Law Planet - Jupiter, Florida.

Posted by Marc S. Dobin | Permalink | Email This Post

Posted In: Securities Industry , Stockbroker Issues

Bookmark:

The newly-minted securities regulator, FINRA just fined Morgan Stanley $12.5 million for failing to produce emails in its possession. To make this even more heinous, Morgan Stanley hid behind the 9/11 tragedy as the reason for its failure to produce. As it turns out, this representation was just wrong and Morgan Stanley knew it.

This problem came to light in a very public way when Morgan Stanley tripped over itself, numerous times, in Palm Beach County Circuit Court litigation with Ron Perelman. Mr. Perelman's lawyers pressed and pressed the firm for emails. And, magically, emails started popping up all over. Eventually, the judge decided that Morgan Stanley couldn't be trusted and shifted the burden of proof to Morgan Stanley to prove that it wasn't liable to Perelman.

We have litigated against Morgan Stanley. In all cases but one, the company fought production of obvious items, produced incomplete documents and stated that documents didn't exist, and then produced the documents when forced. In one case, we were told no documents existed and a witness showed up at a hearing to testify with a big stack of paper that was in a file outside his office.

Litigation is a battle. But there are rules and expectations of lawyers and clients to abide by those rules. Morgan Stanley was fined for more than an oversight and it was deserved. Perhaps this will serve as a warning to other firms who play games in discovery.

That's the view from The Law Planet, Jupiter, Florida.

Posted by Marc S. Dobin | Permalink | Email This Post

Posted In: Securities Arbitration , Securities Industry , Stockbroker Issues

Bookmark:

We have our office email domain, Dobinjenks.com and I have a multitude of personal addresses. The most frequent non-business email address I use is my Gmail account. I use the Gmail account for my personal email and I like the web interface design. And it's handy as a backup in case my main email domain is unavailable for some reason.

I was recently co-counsel with a friend of mine who was lamenting the remote access problems he was having with his mail server. Rather than try to redesign another firm's mail server (which I am equally capable of accomplishing or screwing up) I suggested a Gmail account to him. I sent him a Gmail invite and he was online with his new Gmail account in moments.

Shortly after we parted company, disaster struck. His regular email provider had a problem and he could not access external email. I learned this because he sent me an email from his Gmail account (should we call it a gmail?). He commented that the Gmail account was going to help him through the problem they were having.

The lesson learned here, of course, is the importance of having a backup. We always think about a backup as a tape drive or removable disk. But what if your office phone system dies? Can you get the calls redirected? What if the power goes out? Do you have a battery backup on your phone system to keep it alive during power disruptions? If your main email server goes down, do you have another means of getting emails? You do synchronize your address book to your laptop or some other device, right?

Google, by the way, is now marketing "Student" and "Professional" versions of its web applications suite. I don't think we'll be doing any heavy duty word processing with the Google word processor, but the overall product sure is tempting.

That's the view from The Law Planet - Jupiter, Florida.

Posted by Marc S. Dobin | Permalink | Email This Post

Posted In: Law Practice Management , Legal Technology

Bookmark: