MANAGING AND PREVENTING DISPUTES
By Forrest S. Mosten
Author of "Unbundle Your Law Practice"
"I hate to see people in trouble who needn't have been."
Louis M. Brown
Father of Preventive Law
You like being a lawyer, and don't really want to be a mediator. You like representing clients from start to finish so ghost writing or sideline coaching does not appeal to you.
Relax. No one is going to make you mediate or unbundle. However, there are some lessons from unbundling that you can incorporate into your full-service practice that will make you more competitive in the marketplace and increase client satisfaction.
These new lawyer roles involve you serving as a manager (some prefer the title, guide) of your client's journey down the dispute resolution highway and/or serving an added role (now you're Full Service Plus) of preventive legal health care provider. Again, these roles can themselves be unbundled so that you take on just being a dispute resolution manager, just a preventive provider, both, or none.
LAWYER AS DISPUTE RESOLUTION MANAGER
No one could have predicted it 25 years ago. Today, rarely does a litigant get into a courtroom for the judge to hear a case without a number of court-ordered ADR Steps. In some jurisdictions, litigants may be required to participate in some or all of the following procedures:
· ADR Status Conference
· Required Mediation
· Evaluation or Appraisals of Assets
· Meet and Confer Requirements
· Special Masters
· Mandatory Settlement Conferences
· Conferences in the Judge's Chambers
In addition to ADR steps required by the court, there are a plethora of ADR options outside the courthouse that might meet the needs of a particular case. Some of the private sector ADR options include:
· Informal assistance from helpful third parties such as family members, neighbors, clergy, co-workers, or other people who know and want to help parties in conflict
· Party to Party Negotiation
· Lawyer to Lawyer Negotiation
· Settlement Meetings involving Lawyers and Parties
· Professional Consultants such as accountants, therapists, industry experts, or even, other lawyers
· Low Cost Mediation Centers
· Professional Mediators
· Private Trials
· Arbitration--Binding and Advisory
How does a client navigate this terrain. Most people live under the myth that if they hire a lawyer and if lawyer fees are paid, they will eventually get into a courtroom where they can tell their story and a judge will make a decision based on truth and fairness.
This myth may be true in 3-5% of cases every jurisdiction. The other 95% or more filings are somehow disposed of earlier. Sooner or later most clients come face to face with reality: " The real question is not whether or not I will mediate. I know I will have to, in one setting or another. The focus should be when I should mediate, with whom, who should be sitting at the table with me, which process should be selected, and how much will it cost me?"
Consumer advocates, legislators, judges, mediators, and many lawyers are urging for this reality to take place as early in the process as possible. Would you believe it possible that in at least one state, litigants must swear under penalty of perjury to the following statement before having the right to file their first pleading in a court :
"I am aware that it is the policy of the State of Texas to promote the amicable and nonjudicial settlement of disputes involving children and families. I am aware of alternative dispute resolution methods including mediation. While I recognize that alternative dispute resolution is an alternative to and not a substitute for a trial and that this case may be tried if it is not settled, I represent to the court that I will attempt in good faith to resolve contested issues in this case by alternative dispute resolution without the necessity of court intervention."
This language is required by Texas Statute 3.522 and has been in effect since September 1995.
The purpose of the Texas Law as well as professional rules (Colorado), ethical opinions (Kansas) and efforts in many other states is to provide litigants with informed consent before they blindly go down the path of full scale litigation. You also should be aware that legal malpractice plaintiffs lawyers use the informed consent theory when clients become dissatisfied with court results claiming they should have been better informed of settlement possibilities from the beginning (See Complete Guide to Mediation at 98). Finally, failure to inform clients about ADR options can expose you to claims of fee churning when litigation fees get out of hand (perhaps through no fault of yours) and failure to inform can be used as a client defense in fee collection actions.
This emerging ethical duty to inform clients of options to litigation can also be seen as a wonderful marketing opportunity for lawyers, full service and unbundlers alike. You can meet the consumer needs of your clients (current and potential) and meet your ethical duty at the same time. Some tips:
DISPLAY AN ADR PLEDGE IN YOUR OFFICE WAITING ROOM
Many bar associations have developed an ADR Pledge as a voluntary form of encouraging its members to conduct a conversation with every client about the options to litigation. While I was Chair of the Beverly Hills Bar
Association ADR Section, our Bar President led our Board of Governors to unanimously pass the following language in 1993:
ADR PLEDGE OF THE BEVERLY HILLS BAR ASSOCIATION
I recognize that there are various techniques available to help parties resolve disputes outside or in conjunction with litigation.
I understand that in many cases, Alternative Dispute Resolution (ADR) may be more appropriate for dispute resolution than traditional litigation. ADR includes, but is not limited to, mediation, voluntary settlement conferences, arbitration, and mini-trials.
I believe that attorneys should be knowledgeable about various methods of dispute resolution, and be prepared to fully explain ADR options to clients in order to insure their informed consent regarding the resolution of disputes.
I believe that clients are entitled to be informed about (a) comparison of the costs of litigation with the costs of ADR; (b) creative remedies not available in the court system; (c) time and privacy considerations; (d) comparison of potential results of litigation versus ADR; (e) preventive methods to avoid future disputes and maximize the client's overall quality of life.
I have read the Beverly Hills Bar Association (BHBA) brochure, "Alternatives in Dispute Resolution." I shall have this brochure or similar ADR handouts available and shall give such handouts to clients early in the attorney-client relationship where appropriate.
I pledge that I will discuss ADR with my clients and opposing counsel and recommend its use in appropriate situations.
DATE ATTORNEY'S SIGNATURE
NAME OF LAW FIRM
If you are interested in other ADR pledge efforts throughout the US, get on the web and click on www.mediate.com and turn to Mediator Resources. These initiatives are not just for lawyers. In 1990, the Colorado Bar Association adopted an ADR Pledge Program that businesses can display:
"In the event of a business dispute, our company is prepared to explore with the other party the resolution of the dispute through ADR techniques before pursuing litigation." What a great idea for you to raise with your next business client to help that company move to the cutting edge!
Just like a certificate from the Better Business Bureau, more and more clients and lawyers are looking out for an ADR Pledge when they walk into a lawyer's office for the first time. Your display of the pledge says you keep up with the newest trends in providing clients consumer oriented service and that you want your clients to have informed consent about all aspects of their decision making.
DISPLAY ADR BROCHURES IN YOUR WAITING ROOM
AND CLIENT LIBRARY
Attractive brochures are available from the ABA Dispute Resolution Section and your state and local bar associations discussing ADR, its benefits and concerns. Written in consumer friendly language, these brochures are inexpensive and tie in with both your ADR Pledge and your Retainer Agreement acknowledgment by the client that the ADR option discussion took place prior to commencing a financial arrangement between lawyer and client. MARKETING TIP: Put a label on the brochure with your firm name and contact information---it becomes an inexpensive advertisement for your firm.
MAINTAIN BOOKS AND VIDEOS ON ADR
Whether or not you dedicate space for a client library (see Chapter 5, page___), as a manager of dispute resolution you might provide educational materials on ADR to help fulfill your ethical obligation to discuss options to litigation. In your retainer agreement, you can provide a clause in which the client acknowledges that you have offered them the opportunity to utilize educational material that discusses the pros and cons of using appropriate alternatives to litigation.
HAVE A FULL DISCUSSION WITH YOUR CLIENT ABOUT ALTERNATIVES TO LITIGATION
If the ethical obligation is based on informed consent, you should provide sufficient information so that your client can properly decide whether to enter the court system. From a client satisfaction framework, this may the most important conversation you will ever have. As indicated in the 1994 ABA Comprehensive Legal Needs Study, satisfaction with lawyers is very high until clients touch the court system---then satisfaction plummets. If satisfaction results in fuller paid bills, more referrals, and even future return work, there is little more important to you than doing what it takes to increase client satisfaction at every turn.
If you need a checklist for that discussion of options to litigation, the following might help:
1. Disclose the appropriate options to the litigation process that might affect the overall result, cost, relationships, speed of resolution, control over result, and emotional impact on the client.
2. Compare and contrast appropriate alternatives to litigation with the court process in light of the above factors in view of the relevant facts and circumstances of the client's situation.
3. If the client decides that an alternative to court litigation is the most appropriate vehicle to resolve the matter, you should reasonably investigate ADR resources within the community. Such investigation should include, at minimum, the following:
(a) Training and experience of the mediator;
(b) Contents of the mediation contract utilized by the mediator in view of the American Bar Association standards for lawyer mediators in family disputes;
(c) Style and approach of the mediator;
(d) Accountability of the mediator to the parties and counsel;
(e) Explanation of the role of counsel in representing the client throughout mediation and other ADR options.
Some of the functions of the dispute resolution consultant include:
· Advising the client on selection of lawyers and other professionals;
· Educating clients on the various options of dispute resolution;
· Explaining how each option works;
· Advising the client as to the benefits and detriments of each option;
· Comparing the options and how they work in the present case;
· Advising as to which option should be utilized;
· Advising how to set up dispute resolution options;
· Advising how to process strategy throughout the mediation or other option;
· Advising as to conflict preventive strategies and language.
FOLLOW UP WITH A LETTER REFLECTING ADR DISCUSSION
You will find that clients appreciate this discussion of ADR options early in the case and your follow up reinforces your competent manner of handling this consultation. It also serves to memorialize your fulfillment of this obligation. Just like clients who convert from coaching to full service because handling the case becomes overwhelming (See Chapter 3), when clients learn about the options and try deferring filing in court, you are a hero both ways. If the less intrusive avenue settles the case, you are credited with guiding them toward a fast low fee result. And if it doesn't work and you need to go the court litigation route, it will be remembered that you didn't push to get there--in fact you urged restraint. When the fees begin to mount, you will be blamed less often for churning or advising the more expensive route---this helps preserve your stomach lining--and your stock portfolio.
PREVENTING FUTURE CONFLICT AND MAXIMIZING LEGAL HEALTH
We can learn so much from the medical field. Maybe because medical wellness is so understood (alas, but not yet achieved), patients will undergo surgery, but only as a last resort. Less invasive procedures are preferred. Yet, prevention is universally regarded as the most highly regarded approach both to prevent catastrophic disease and to maximize quality of life. Unfortunately, old habits die hard, it feels burdensome to defer gratification, and uncomfortable to plan and strategize healthy living.
Think about the last time you went in for your regular medical checkup (if you did. If not, maybe you it is a hint at this problem. Let's assume the doctor said everything looked good--and, you could use a few pounds. It was worth coming in---and paying some money (hopefully your insurance carrier paid most of it, a very good investment). I'll bet that you felt relieved and gratified that you took the time and spent the money to get a clean bill of health. Your doctor didn't have to find something wrong for you to value the professional services rendered. And about the recommended weight loss---it's up to you. The doctor wasn't going to personally monitor your diet, spy on you at the gym, or accompany you to the scale each evening. You know enough to make good choices and know the consequences of making bad ones,
This is the concept of prevention. Actually it is unbundling at its roots. Your doctor does some things, you do others. You are given information--then you are treated like a grown-up to make your own decisions--yet the doctor is there to give you more support and services if you need it
Prevention is now accepted as an operating principle in both medical practice and national health care policy. There is even monthly magazine called Prevention that is often sold right next to TV Guide at the supermarket check-out counter (so you know prevention has caught on!)
Like management of current conflict, preventive law can be practiced within a full service practice. Yet, by its very nature, preventive lawyering is unbundled lawyering. You help your clients identify symptoms of legal disease. No further action may be taken. Or if it is, someone else may do it. The role of diagnostician is separated from that of service provider.
The following are some ways that you can help your clients improve their legal health---and their satisfaction with your services. This is true even if the client came to see you for a specific identifiable legal problem (think angina) and not to examine asymptomatic latent symptoms affecting overall legal health.
USE RESOLUTION OF CURRENT DISPUTES AS A PLATFORM
TO PREVENT FUTURE CONFLICT
Mediators often refer to the Chinese Symbol of Conflict and Opportunity being the same word. In many ways, people with legal problems come to a lawyer when the most pressing symptoms mandate that visit: They've just been sued, they're been laid off from work and need redress, they've just gotten sick and need a will, or they've run out of money and need debt relief. The first duty of the legal practitioner is to stop the bleeding or the pain. Then what? Do legal clients need or want their lawyers to go further?
Many lawyers are rather myopic when it comes to figuring out their own client marketing opportunities. Business Guru Thomas Peters estimates that it costs 5x more to go out and get new clients than it does to maintain a satisfied client. (see Thriving on Chaos, 1987). If this is true, every time a client comes to you with an identifiable symptom of legal trouble, you should not only use your energy and talent to try to solve the presenting problem, but be vigilant or symptoms of other legal needs as well as be proactive for unidentified or asymptomatic legal trouble.
Let's use a common illustration of a traditional curative only lawyering and contrast it with a proactive preventive approach.
Margaret Burns comes to you because several of her computer consulting clients are not paying her. They are late, behind, or totally deadbeat.
Traditional Approach: With a caring non-judgmental thorough consultation, you get the overview of her collection problem and then review the top priority accounts asking for contracts, invoices, and correspondence to support each case. You then discuss the options from write-off , to slowly escalating letters, to referral to a collection agency, to filing suit. You also compare the cost, time, stress, and other consequences of each option. Margaret then decides what she wants to do and whether she wants you to do the work
Preventive Approach: You do everything the traditional lawyer does. However, as a Legal Wellness Health Care Provider, you might consider some or all of the following preventive law techniques:
START WITH PRESENT PROBLEM AND
Recently, I had my first gout attack. It was painful. All I wanted was something, anything, to let me walk again. After my doctor dispensed an anti-inflammatory, I was able to make my weekend golf match! Then, and only then, was I ready to talk about prophylactic medication, diet change, and a monitoring plan.
In the same way, Margaret needs her presenting problem met. She needs cash flow from her receivables. Both the curative and preventive lawyers are starting with a collection plan. The preventive lawyer will then invite a conversation as to what can be done to get present and future clients to pay. In essence, use the history of Margaret's problem to mould the future. Louis M. Brown, the Father of Preventive Law (1909-1996) called preventive planning moulding hot facts capable of being shaped as opposed to obsessing over cold historical facts, which by the way is the entire process of lawsuits, mulling over what happened to assign blame.
By taking a brief legal autopsy of what went wrong with Margaret's clients that got her in your office, you might explore some fixes. These remedies could be purely legal such as making sure the client signs a written contract with proper language before Margaret starts fixing their computers. The fix could be financial, so that Margaret could ask for deposits, even replenishable deposits before she starts work. The remedy could do with other relationships in her life, so that maybe she needs better child care or a housekeeper to take pressure off of her so she can get her consulting work done in time and decrease complaints and non-payment due to her customer dissatisfaction due to time delays. Or, the solution may be emotional or psychological within Margaret herself: if she can overcome her ambivalence about charging for her time or asking clients (many who have become friends), she might find it easier to keep both a current cash flow and good client relationships.
Your preventive approach could help Margaret explore all of these variables, and many more. The first result is insight: she might discover that people who owe money are resentful at their creditors. Relationships are important to Margaret so she might learn a counter-intuitive lesson: getting people to pay timely and in full helps her business and personal relationships.
After insight, you can help your client explore options for action ---followed by a decision as to a plan for action. Timing of the action is contemplated, cost (financial, emotional, and other) are explored, as is, who would do the work? For Margaret, you may or may not draft contracts. If not, you might give her some referrals. You certainly will not do psychotherapy, so referrals are needed there. You won't look after her children or clean her house. So Margaret will explore those issues on her own.
Using this unbundled approach of bifurcating diagnosis and service and then further dividing tasks between the client, preventive lawyer, and other professionals, you are truly helping your clients improve their legal health. Just like the patient who is advised to lose a few pounds, most clients will do nothing, or not do enough. Your non-critical support and understanding of this human frailty may help your clients improve their lives.
USE DISPUTE RESOLUTION CLAUSES
Even if you are able to collect 100 cents on the dollar (good luck) for Margaret, that doesn't mean Margaret is in as good a position as if
her clients had paid her in the first instance or she could have been able to resolve the situation with her clients without your involvement and expense. First, you probably won't have such great success. Even if you do, legal and short term financial victories may be short lived---relationships may be irreparably severed, and business good will destroyed.
Conflict is pernicious and destructive, even if ultimately resolved. However, if it cannot be avoided altogether, it can be contained. With such containment comes a limitation of the ravaging that conflict can cause.
Dispute Resolution clauses can do the job. These attempt to contain conflict by keeping disputants as far away from the courthouse as possible. The clauses require people in conflict to communicate with each other--starting with the least invasive approach. If the problem is resolved, nothing more needs to be done. If a conflict remains, an artfully drawn dispute resolution clause will increase the invasiveness of the intervention, the time and cost to participate, and the loss of control of the participants on an incremental basis with the assumption that even the most invasive option is better than court.
Mediation is the foundation of most dispute resolution clauses. Seen as less preferable than conflict avoidance, mediation keeps a bad situation from getting worse and helps parties retain as much control and empowerment as they choose and still settle a dispute. Since private mediation settles about 90% of the time, it is seen as the last stop on the dispute resolution journey. Pre-mediation steps are even less involved and more empowering than mediation---the steps that follow an unresolved mediation are more involved and less empowering.
Some suggested clauses are set out at the end of the chapter. The key options, which can be drafted or negotiated in any order are:
· AGREEMENT TO DISCUSS---Parties agree to raise concerns and problems before they ripen into conflict. The means of discussion (telephone, fax, email, in person), the location (office, home, Starbucks, Church) and ground rules for discussion can be worked out in advance (no interrupting, right to stop discussion, etc). < P>
· WRITTEN NOTICE OF PROBLEM OR DISPUTE--- Before any action is triggered, the party with a concern or need must set it out in writing--with a proposed solution. If the receiving party agrees to the proposed solution, nothing else needs to be done. If the proposed solution is not acceptable, the clause might call for a response (with a proposed solution), and timing for a response, and counter response. It is possible for the clause to require another round of discussion (you might know it as "meet and confer"(before moving on to the next step.
· FOUR WAY MEETINGS WITH LAWYERS AND PARTIES---if people are used to dealing with lawyers and their counsel are collaborative problem solvers (see Stuart Webb in Chapter 8), this might be a productive pre-mediation effort.
· REQUIRED MEDIATION--- Although mediation is always voluntary in that no one is ever required to enter into a settlement unless it's consensual, contractual requirements to mediate prior to litigating have been generally upheld by the courts. Court required mediations settle at the 60% rate and contractually required mediations settle even more frequently.
A mediation clause should deal with selection of mediator. It is generally best to name a person or ADR organization with back up selections if the selected mediator is unavailable or unwilling to serve. The allocation of payment between the parties for the mediator's services should also be set out.
Timing is very important in two respects. First, the amount of notice required before a mediation is held. Also, the minimum amount of time that the parties are required to mediate (one day, 5 days, 3 hours, two three hour sessions held within 7 days of each other, etc.
Since parties rarely are as cooperative when the mediation is needed as they are when they agree to the clause in the first instance, a court or appointed binding arbitrator should be given authority to resolve disputes regarding the mediation process.
· EVALUATION (CONFIDENTIAL OR NON CONFIDENTIAL) OF DISPUTED ISSUES
Sometimes, parties cannot consensually resolve issues without the input of an expert. They don't need a full blown trial--just a work-up of the issue by an accountant, appraiser, therapist, or industry expert. Rather than having a war of "hired guns" who may be adversarial and positional in their own right, you can insert a provision for a neutral expert to render an opinion inside or outside of the mediation framework. This opinion can be oral or written, and it can be limited to the settlement discussions or admissible later in a court or arbitration (For a fuller discussion, see Confidential Mini-Evaluation, Complete Guide to Mediation at 296).
· COURT LITIGATION---You can insert a provision to contain the litigation so that you can have a managed limited war. See section on Mediated Case Management earlier in this chapter. < P>
· BINDING ARBITRATION--This option is well known. Some tips: You can provide for pre-arbitration mediation by the same neutral or a person different from the arbitrator or previous mediator. Provide for either no appeal or a contractually agreed review or appeal process outside the courts. You do not want a "final" award being contested endlessly in the court system. If so, what's the point of giving up procedural and substantive rights in arbitration? Always name an arbitrator and back-up and arrange for allocation of costs. Finally, if some issues involve precedent or public policy, you may choose to unbundled the arbitration process specifying which issues are included and which ones are not. Much litigation has arisen over whether arbitrators have authority to award punitive damages or injunctive relief. Be clear!
REQUIRED MEDIATION AFTER ARBITRATION
Often, neither side is happy with the result of litigation. Not a finely tuned process, verdicts, awards, and court orders are often ambiguous or fail to cover important points. If one side is happy, the other probably is not. This is a recipe for appeals, rehearings, or enforcement disputes.
Required mediation after litigation included in a contractual clause can give the battered parties a needed buffer against post trial litigation. It may to be the "winner's" advantage to assure a controlled secure result rather than sit on huge paper victory. Just look at how the Goldman family is struggling with their $33,000,000 Judgment while OJ plays golf every day!
Dispute Resolution clauses can be used in ways that you probably haven't yet tried. How about in drafting wills and trusts? In settlement agreements of current litigation? In life insurance policies? In counter offers in home sales to supplement the boilerplate language? Finally, what about in your own client retainer agreements?
EXPLORE UNIDENTIFIED (ASYMPTOMATIC) UNMET CLIENT LEGAL NEEDS
When you go to an orthopedist with a neckache, what do you expect the doctor to do if the doctor sees a growing tumor on your shoulder? Is your expectation any different if there is a tumor on your hand that is visible?
What about if the doctor asks you how you are feeling, and you say you have been feeling a bit dizzy at times, actually fainted a couple of times, but said you were OK?
In each instance, it would be malpractice for the doctor to do nothing. At the very least, any competent physician would recommend that you see an oncologist, a neurologist, or both---as fast as possible.
Most lawyers do not view their role in the same way. If a symptom isn't raised by the client, most lawyers assume that everything is OK. Actually, even when the lawyer knows other legal problems do exist, they may do nothing. Such inaction is the norm rather than the exception in law practice today. And, it is both harmful to the client and dangerous for the lawyer. Client harm is obvious---legal tumors can grow into malignancy without low threshold removal.
The danger for lawyers is less obvious. The case of Nichols v Keller (cite) should be enough for lawyers to rethink a limited approach. In that case, a personal injury lawyer was found negligent for failing to handle or a separate third party claim arising out of the same facts as the personal injury case for which the lawyer was retained. We can hope that the court's
decision would have been different if the lawyer had at least written the client a letter indicating the existence of the third party claim, confirm that it wasn't being handled by the law firm, and make some referrals well prior to the running of the Statute of Limitations.
The danger to our profession and to your own practice of such a restricted approach is also worthy of discussion. One of the reasons lawyers do not have a higher public image is that we are not viewed as helpers. Defensive lawyering may prevent malpractice claims on one hand, but we are losing major market share because we fail our clients' overall legal health as our concern.
PREVENTIVE SELF QUIZ
Take a short preventive self-quiz to assess how proactive you are with your clients in identifying and probing their latent legal softspots:
If a client is worried about being evicted from a low cost government subsidized housing project, do you inquire about whether they have obtained other governmental benefits (i.e. foodstamps, social security disability) for which they qualify? _____ _____
If an employee complains about being wrongly evicted, do you ask about whether they have a homestead on their home? _____ _____
An owner of a 25 employee business is concerned about how to deal with an employee with an
A parent is being sued for an increase of child support--do you ask about the life insurance portfolio? _____ _____
A debtor inquires about Chapter 7 relief. Do you ask if there is renter's insurance for their belongings? _____ _____
Clients come in for soft tissue injury following an auto accident. Do you ask if the client has a will? _____ _____
In each instance, the clients may have legal soft spots outside of the presenting problem. How can you ever identify them all to be of help?
You can't. The very best you can do is to adopt a preventive attitude that the overall legal health is important and that you will be committed to taking the time and client-centered focus to have a conversation about the client's life. In rural areas, it's called shooting the breeze over the fence. It's called chatting---non directive, open agenda, and unhurried. Clients feel cared for. And within the apparent casual nature of this chat, you can be aware of legal soft spots that might affect the life of the client.
To give you more structure, preventive lawyers have devised two types of diagnostic tools, the Client Legal Check-up for individuals and the Corporate Legal Audit for businesses.
Invented by Professor Louis Brown nearly 30 years ago, you can see a sample copy at the end of this chapter (or on my law firm's website at http://www.mediate.com/mosten). A similar checkup was given to lawyer members of the ABA Section of Law Practice Management (the publisher of this book). Over 90% of the lawyers who filled out the check-up did not have a valid will! Imagine the results for your clients. If your firm does wills, the income from drafting simple wills for only 25% of the clients who fill out a legal check-up would be major found revenue for you--to say nothing of protecting clients and their heirs.
As indicated in Chapter 8, the American Association of Retired Persons has a major program to administer legal check-ups in conjunction with public legal seminars for the nation's elderly. Why can't you do that in your own law office as community outreach? It is relatively inexpensive (you can use your waiting room or conference room as a classroom) and it is a wonderful way to ease younger associates into client generation through teaching. Give it a thought.
Corporate Legal Audit:
Building on the work of Louis M. Brown and Anne Kandel in their book Corporate Legal Audit (cite), progressive law firms have been working along and non-lawyer partners (Arthur Anderson comes top of mind) have been marketing corporate audit services. Just as every business needs a yearly set of financial books for preparation of tax returns and annual reports, more and more corporate legal departments are routinely looking for asymptomatic softspots that could be given attention in order to maximize legal risk management, avoid claims, and put company energies into positive areas to increase profits.
The ABA has supported these efforts for many years. The ABA Section of Law Practice Management has established a Preventive Law Taskforce headed by Thomas Gonser, former ABA Executive Director, a former corporate counsel and Trustee of the National Center for Preventive Law. This Taskforce will be identifying models of legal audit that can be adapted to the unmet legal needs of businesses too small to have a legal department.
So how can you offer legal audit services to your business clients? The first step is to look at the long range. Clients that prosper have more legal work---and and can pay for it. Your value as lawyer is only part technician, it is more consiglieri. For example, let's say you are defending a company whose truck hit a pedestrian while making a left hand turn. In addition to your traditional defense strategies, could you imagine have the following conversation with the company's owner (and perhaps the automobile liability carrier):
"We'll be able to settle this case at an acceptable level and fortunately the victim is completely recovered and back at work. But I am wondering whether you have ever looked at the claims history of your company, say over the last five years, and made a determination of how many of your trucks were involved in accidents while they were in the act of making a left hand turn?"
You might wonder, "What right do I have poking into their business? After all, you are a lawyer, not an automobile safety engineer. Like a legal checkup for individuals, the client may not act on your suggestion--but I can guarantee that most business clients are thrilled to have a lawyer interested enough in their business to appreciate your question. And if they do decide to conduct such a study, you may be in line for helping plan the study and/or evaluate the results. In any case, you have helped the company look at and perhaps improve its legal health---and this is often rewarded by at least return business to your firm if trouble should strike again.
A quick footnote: This example is derived from an actual company for which Louis Brown conducted a legal audit. It turned out that so many of the company's accidents resulted from left turns that the company made a new policy of not permitting its drivers to make any left turns. Never. The company's claims went way down. This is a result of lawyers working hand in hand with business not just to solve legal problems but to avoid them in the first instance. This is consistent with the Mission Statement of the National Center for Preventive Law:
"….Preventive Law is largely a focus and practice of the legal profession. But it is not limited to what lawyers do. It includes as well the principles of business management, the management of personal matters, public education, and the organization and delivery of legal opportunities and government services."
MONITOR YOUR CLIENT'S LEGAL HEALTH
Have you ever received a post card from your dentist indicating that it is time for your semi-annual dental checkup and teeth cleaning? Good dental hygiene and good business development are combined. Have you thought about monitoring the legal health of your clients in the same way.
It is rather straight forward to initiate a legal health monitoring program. The only tools you need are an electronic calendaring system (ACT, Palm Pilot, etc), someone to maintain and monitor it, and the belief that maximizing legal health is both optimal client care and good business for your practice.
Assuming the last tool is in place, let's look at the first two. Your calendaring system should be able to go forward at least three years, but longer range planning is even better. The system should link you with your support staff and one day technology will link the retrieval dates to a word processing system that can automatically generate client letters. Today, you will have to balance the two systems.
If you do litigation, you probably already use some form of a calendar tickle system to alert you of deadlines and to manage work flow. If you do transaction work, you might calendar letter response dates, drafting schedules, tax deadlines, and the like.
Establishing a legal health monitoring program is building on these existing systems to add dates or events that naturally flow from a client plan, an enforceable agreement, a passage of time, or a life cycle event.
· Client Plan--Perhaps a client is unhappy in a current business and is thinking of going into a new firm, adding a new partner, or even retiring, At the conclusion of your client conference, a decision is made for the client to think about the options. You and the client could agree to touch base in 90 days. You could then calendar your system for 80 days to alert you to write the client a reminder letter, at 90 days, and perhaps at 120 days to follow up if there has been no client response.
· Enforceable Agreement--Perhaps your client just completed a settlement of a dispute or positive transaction which provided that your client has an option to buy a piece of real estate in one year. You could calendar:
10 months--Follow up and allocate work flow time if exercise documents need preparation
11 Months--Urgent follow up
11 months, 15 days--Last Chance
· Passage of Time--Perhaps you drafted a will or wrote a letter securing your client's airline frequent flyer miles. Nothing seems pending. Calendar for 6 months or 1 year or 2 yrs established either by agreement with your client or by office policy. This is a legal health wellness review (the dentist's card!) keeping in touch with your clients and inquiring on the state of their lives in general, and their legal health in particular.
· Life Cycle Events--You settled a personal injury law suit for Mary Jones, age 42. She is married to Paul Jones, age 50, and they have one child, Jason, age 15. You might calendar the following dates:
3 months--Inquire about Mary's recovery and if she has made plans to invest the settlement. Suggest that you could recommend professional financial planner. Inquire about will or other estate planning
9 months--Jason is about to qualify for driving age. Invite parents and Jason in to the office to discuss possible legal ramifications of car ownership, insurance, liability, etc.
2 years--Jason is about to attain majority. Invite parents and Jason about legal and financial ramifications of independent living: checking accounts, maintaining health insurance, voting, Jason's own will, financial planning for college.
4 years--Write Paul and Mary about Paul's early retirement options, financial and estate planning, new career possibilities, in home care insurance, etc.
6 years--Jason about to graduate from college. Raise financial planning including payment of school loans, negotiating first job contract and home agreement, possible future co-habitation and pre-marital agreements
5 years--Write to inform Mary and Paul about their ability to withdraw Retirement Funs without penalty at age 59 ½
You get the idea. The purpose is for you to be of service and to let your clients that you care and are available to help. Most clients truly appreciate this care--most lawyers initially feel that it is intrusive, smacks of self financial interest, and is too much work. Remember, even if clients choose not to come in, you will be in their minds--and if they have moved, you will get a current mailing address. If they do come in, just because you uncover a latent legal need, it does not mean clients have to act on it---or that you have to do the work. Each time they come in you can give an updated client legal check-up to update their situation.
Most preventive practitioners conduct this monitoring without fee. With your calendar system and form templates, the cost of this monitoring is minimal.
Some unbundlers charge for the wellness review, others treat it as a client service. Remember, it costs about 5 times as much to obtain a new client as it does to keep your current clients--and it is much less expensive to market.
1. Learn and be able to describe the options to litigation that exist in your community both inside and outside the courthouse;
2. Before your clients file their first court pleading, make sure that they acknowledge that you have advised them about ADR options . Use a letter, recitals in your retainer agreement, or both.
3. Sign an ADR Pledge and display it in your waiting room to demonstrate your commitment to resolving conflicts and saving fees for clients;
4. Provide ADR books, brochures, and video tapes in your waiting room and client library;
5. Consider making preventing future legal trouble a central value in your firm;
6. Include mediation clauses for future disputes in every settlement and transactional agreement that you prepare;
7. Put as many buffers as possible between your client and the courthouse;
8. Identified legal problems (angina) are only the tip of the possible legal trouble. Probe the soft spots for asymptomatic unmet client legal needs;
9. Take the Preventive Lawyer's Self Quiz to assess your preventive mindset;
10. Give personal legal wellness check-ups to your clients when they first come into the office and throughout your relationship with them;
11. Offer your corporate clients the opportunity to participate in a legal audit to determine their current legal health;
12. Monitor the legal health of your clients forever--there may be a closed case but never a totally closed client file;
13. Develop a non-litigation calendar with a computerized tickle program to monitor your clients legal health
Take a Client Legal Check-up Yourself--How is Your Legal Health? What steps are you going to take to improve it? Tell your clients about your own experience.