"AvoidAClaim" Blog

Clients will, understandably, get upset if they are treated badly or confronted with surprises. Make sure you appreciate how your words, actions, or inactions can annoy or even distress your clients. Here are some resolutions you can make to avoid doing the most common things lawyers do that annoy clients:

• I will promptly return phone calls: Unacknowledged or unreturned phone calls are some of the most common complaints about lawyers. To avoid these problems, set and control client expectations at the very start of the relationship. Establish a reasonable policy on how quickly calls will be returned (e.g., within 24 hours, by the end of the next business day, or whatever is appropriate for your area of law or clients). Inform the client of the policy, and abide by it. Set up a mechanism for staff to return calls within the established timeframe if you are not available.
• I will promptly reply to e-mails: In like fashion, emails that go unanswered are also a common client complaint. Some clients expect virtually instant answers to e-mail messages. Control this expectation by setting a policy on email communications (e.g. how and whento communicate by email, how long replies will take, alternative contacts and alternatives to email).
• I won’t make clients wait in reception: Do you remember how you felt the last time you were made to wait for an appointment when you had arrived on time? Don’t make your clients feel the same way. Get off the phone or stop whatever else you are doing if a client is waiting for a scheduled appointment.
• I will deliver on promises of performance: When it comes to deadlines, you can guarantee a happy client if you under-promise and over-deliver. Be realistic and don’t make promises to deliver if you cannot keep those promises. Be realistic in your assessment of what you can accomplish and by when. In like vein, be careful not to promise an unlikely or impossible outcome or resolution on a matter. Extra caution is warranted here as clients will hear what they want to hear when it comes to a promised outcome. To protect yourself, clearly document your advice to clients on what the expected outcome will be.
• I will be prepared for client meetings: Don’t kid yourself – clients can instantly tell when you are not prepared. Shuffling through papers, using the wrong names or facts, and other similar clues make clients think to themselves that they may have the wrong lawyer. Make sure you are properly prepared for client meetings.
• I will keep my clients informed and will communicate with them during long periods of inactivity: Clients always want to feel their matter is moving toward a resolution. But in litigation and other areas of law there can be long periods of inactivity as a matter of course. Keep them informed of the status of a matter and when they can expect it to move forward. Send copies of all incoming and outgoing correspondence to the client.
• I will not send large bills without warning or explanation: This scenario calls for an in-person meeting to explain the charges to the client. Better yet, avoid it altogether with a strict retainer policy.
• I will apologize if I fall down on the level of service my clients deserve: If you fail to do any of the forgoing things or otherwise come below an acceptable level of client service, acknowledge it to them, sincerely apologize, and make sure it doesn’t happen again.

Click here to see the full list of resolutions taken from New Year’s resolutions for a healthier law practice and a new you, which appeared in the December 2012 issue of LAWPRO Magazine.

In March of 2012 we posted a map that showed where fraud alerts from lawyers were coming from. It is these emails from lawyers that give us the information we use to post warnings on this blog. Nine months and 1,300 emails since we first did that post, here is the latest version of our “map of fraud”. We’ve heard from lawyers in 40 additional countries, sent out 90 new fraud warnings and almost exactly 50% of emails continue to come from lawyers outside Ontario. And we still have not had a fraud report from South Dakota!

You can still find yourself being sued for malpractice, even if you have done everything correctly. A well-documented file can help to explain what work was done or to justify an account and can be a lifesaver when it comes to defending a malpractice claim. A good paper trail can help show what work was done on a file long after your direct and specific memories of the file have faded. Here are some resolutions you can make to help you keep a better-documented file:

• I will document the important conversations and communications on my files: It is just not practical to document everything on every matter, but you should document as much as you can in some contemporaneous manner (i.e. notes in a file, a formal confirmation letter or quick email to the client, detailed time dockets, a memo to file, etc.)
• I will make specific efforts to document and confirm major discussions and decisions on my matters: For the sake of reconstructing the work that was done on a matter, you want to make sure you record advice or instructions that involved significant issues or outcomes, and major client instructions or decisions (e.g., strategy discussions, settlement discussions, changes to previous decisions or advice), and send confirmation of key discussions and decisions to your client.
• I will be especially careful to document situations where my client wanted me to follow a course of action that I did not recommend or that could have possible negative outcomes: Every action you take and decision you make will be judged with harsh 20/20 hindsight. Clients have a tendency to not remember the advice they received as to negative outcomes, longer times for resolution or higher costs. Protect yourself in these situations by confirming these discussions with your client.
• I will also be extra careful to document my files with difficult or emotional clients: Take extra care to document your file if you are dealing with difficult or emotional clients as they may not hear or understand your advice (no matter how hard you try to communicate it) and are more likely to complain about it later.
• I will get signed directions for major decisions on a matter: On major decisions, a signed direction is your best option for confirming that a client did indeed give instructions to follow a particular course of action.
• I will use written offers to settle: Offers to settle have to address many details, and there are many opportunities for confusion or mistakes. A written offer to settle can help eliminate misunderstandings and miscommunications and make sure all details of a settlement are documented and confirmed.
• I will not document nasty or embarrassing things: In moments of frustration you might find yourself mad at your opposing counsel, the opposing party, the judge handling your matter or even your client. These thoughts should not be documented in your file as they could come back to haunt you in the event they are disclosed to your client in a malpractice proceeding.
• I will capture all manners of communication in my file: Some clients will use email as their primary communications channel. In this situation documenting email conversations is important to tracking what occurred on a matter. However, there is no need to print and store every email in the paper file, as long as you have the emails stored in an organized and regularly backed-up electronic form so you can retrieve them if necessary.
• I will keep draft versions of documents in the file: Draft or interim versions of a document can assist in showing how a file progressed, in particular if there are marginal notes reflecting discussions with clients.
• I will keep a copy of the final version in the file: For obvious reasons, having a copy of the final signed document in the file is essential. But, consider whether you really want or need to have the final signed original document in your file. Sending the original to the client means you can avoid the onerous and potentially costly obligations of taking care of the original as long as it is in your possession, including in your closed file storage.
• I will send interim and final reporting letters on my files: At significant milestones and especially at the end of the matter, reporting letters can confirm what work was done and the successes obtained for the client, and next or further steps to be undertaken on a matter, by you or the client. A final reporting letter should confirm that the retainer is terminated. (And in the final reporting letter don’t forget to ask a happy client for a referral to friends, family and business colleagues – some clients think you may be too busy to take on new matters, so politely disabuse them of that notion!)

Click here to see the full list of resolutions taken from New Year’s resolutions for a healthier law practice and a new you, which appeared in the December 2012 issue of LAWPRO Magazine.

• I will ensure I meet with my clients in person at least once: In most real estate practices the staff handle many aspects of the client’s matter. However, ultimate responsibility still lies with the supervising lawyer. Take the time to meet with the client in person to review the transaction and understand the client instructions, particularly with respect to the client’s intended uses of the property. Not every matter is straightforward, and you don’t want to have to be addressing a problem that was only noticed the day the deal is to be closed, or never noticed at all.
• I will remember that the lender is also my client in most residential transactions: Lawyers often forget, because they deal face-to-face with the purchasers, that the lender is also their client and is owed a duty of care. You have to provide any information to the lender that is material to the transaction. The lending clients can bring claims against lawyers for failing to disclose all the relevant information they knew (or ought to have known).
• I will make sure I take my instructions from the person with the true interest at risk in the transaction: At times it may be easier to gather information relevant to the transaction from intermediaries like a mortgage broker or real estate agent. However, in the event of a claim lawyers need to be able to show that they took their instructions from the person with the value at risk in the transaction, or at least have documentation from that person authorizing the lawyer to take instructions from the intermediary in all circumstances.
• I will document my conversations with and instructions from the client: This is the best defence you’ll have against a malpractice claim. The client may only be involved in one or two real estate transactions in their lifetime and will remember the details, while the lawyer who sees countless transactions will likely have little specific recollection of one matter. Keep notes of your conversations with the client and document what you discussed and what actions you took in a detailed reporting letter to the client.
• I will not give my electronic registration password to my clerks or anyone else: Only the lawyer who received the electronic registration credentials provided by the Ministry of Government Services is entitled to use the lawyer disc and password to register an instrument on title using the electronic system. And yet LAWPRO sees claims in which the lawyer allowed (or claims not to have been aware) that someone else in the office was using the password. As tempting as it may be in a busy real estate practice to let the clerk register instruments requiring a lawyer’s electronic signature…don’t.

Click here to see the full list of resolutions taken from New Year’s resolutions for a healthier law practice and a new you, which appeared in the December 2012 issue of LAWPRO Magazine.

Effective file management provides the foundation for timely, valuable client service and appropriate management of client matters. Here are some resolutions to help you complete the critical steps in file management:

• I will complete a conflicts check before opening a file: Conflicts of interest can lead to ugly and expensive malpractice claims. The best time to catch and avoid a conflicts claim is during a thorough conflicts search before a file is opened. A thorough search looks for conflicts involving both the client(s) and others connected with a matter.
• I will open a file for every matter I handle: Doing “off-books” work not only bypasses firm administrative procedures and checks, it often leads to short-cuts and mistakes. Open a file for every matter you handle to make sure that the file is properly handled.
• I will use a tickler system for limitations periods and time sensitive tasks: Missed deadlines and procrastination are the second most common cause of malpractice claims. A formal tickler system that tracks critical deadlines and tasks is the best way to avoid missing deadlines.
• I will have signed retainer agreements or engagement letters in all my files: Start out on the right foot with a written retainer letter or agreement. It establishes your terms of engagement and should clearly identify who the client is and what you are retained to do.
• I will send a final reporting letter at the end of every retainer: A final reporting letter clearly signals the end of a retainer to a client. Along with a final account, it should summarize the work that was done for the client, including outlining the key terms of any documents or agreements, the outcome of the matter and any ongoing steps or obligations that the client has.
• I will not handle matters I am uncomfortable with: Dabblers are more likely to face a malpractice claim. If you are unsure or hesitant about handling the matter for any reason (e.g., unfamiliar with the area of law, a potential conflict exists, a matter for a relative or friend, or a demanding or difficult client), get appropriate help or refer it to another lawyer.

Click here to see the full list of resolutions taken from New Year’s resolutions for a healthier law practice and a new you, which appeared in the December 2012 issue of LAWPRO Magazine.

Clients can be demanding and will sometimes have expectations that will be unreasonable. Unmet expectations, even if they are totally unreasonable, are a recipe for unhappy clients. Setting and controlling client expectations is one of the best things you can do to ensure that you have a happy and satisfied client at each stage and the conclusion of a matter. Follow these resolutions to better set and control your clients’ expectations:

• I will carefully explain how the matter will proceed: While you may have handled a particular type of matter hundreds of times before, remember that your client is going through it for the first time. Make sure the client understands the process and steps that will occur as the matter proceeds.
• I will avoid legal jargon when explaining things to my clients: Don’t use legal jargon when explaining things to clients as it may confuse them.
• I will give the client a realistic indication of how long the matter will take: Clients will want their matter resolved as quickly as possible. Give them a true indication of how long the matter will take, and highlight any issues that might arise and delay a resolution of the matter.
• I will provide the client with a full picture of all costs and disbursements: Clients don’t want to spend money on legal fees and they will want to keep fees as low as possible. If you quote a range of fees they will remember the lower number. Give your clients a clear explanation of all fees and disbursements that they will or might incur. Be honest here – don’t quote a lower cost to please them. In the litigation context you should include a warning that they could be responsible for paying the fees of the opposing party.
• I will clearly explain to the client all possible outcomes or results: Clients always want a positive outcome to their matter. Unfortunately, not every client will get what they want. Make sure your clients have a clear appreciation of all possible outcomes, including negative or unpleasant ones.
• I will answer all my clients’ questions to their satisfaction: Carefully listen to and address any questions your clients ask. Do the questions indicate that they don’t understand something or that there could be another relevant issue you need to give advice on? Confirm the above information and advice in writing: In a personal meeting or phone call, unsophisticated and stressed clients who have worries and financial concerns may struggle to listen and understand what you are telling them. To avoid any possible confusion, confirm important discussions and advice in writing.
• I will immediately highlight for clients any unexpected changes that arise: Unexpected things can happen through the course of handling any matter. If something happens that will change the process, timing, costs or outcome of a matter, make sure the client is immediately made aware of the change and why it happened. Confirm this advice in writing.

Click here to see the full list of resolutions taken from New Year’s resolutions for a healthier law practice and a new you, which appeared in the December 2012 issue of LAWPRO Magazine.

• I will enter target dates a few days early to avoid last minute complications. Unforeseen circumstances can arise on the day a document needs to be filed. Setting your target date a few days before a deadline could prevent a snow storm, traffic jam or sick-at-home clerk resulting in a missed deadline.
• I will familiarize myself with the Limitations Act, 2002. We continue to see claims related to lawyers’ unfamiliarity with the new limitations rules. Take the time to review the rules and the related jurisprudence: See, for example, practicePRO’s limitations resources at practicepro.ca/limitations, and LAWPRO’s limitations casebooks, including this comprehensive review: www.practicepro.ca/ LawPROmag/LessonsLearned_LimitationsAct.pdf
• I will avoid administrative dismissals. Rule 48 of the Rules of Civil Procedure allows for the administrative dismissal of non-progressing actions. Be sure to take timely steps to move litigation forward.
• I will talk to my clients more often and not rely on email so much. Lawyers are increasingly using emails to communicate with clients, and this is resulting in misunderstandings. Clients and lawyers read things into emails that aren’t there, miss the meaning of what is said, or read between the lines and make assumptions. During a long litigation matter, arrange some face-to-face meetings, or at least a phone call if distance is an issue.
• I will make sure to have written confirmation of instructions and advice. As in all areas of law, this is a crucial to helping LAWPRO defend you in the event of a claim where you may have no recollection of the details years later. Take notes on your conversations with the client, and document in writing things like the details of settlement offers, the extent of what you will do in limited retainer cases, your advice on accepting (or not) offers, and the likelihood of winning or losing a case and the costs involved.
• I will create more detailed docket notes. Like the resolution above, this has the benefit of helping protect you in the event of a claim (e.g. “Conference with client re risks and costs of litigation” is much better than just “Conference with client re lawsuit.”) It also will help you determine if you are making money on a particular case by giving you a better understanding of the amount of time you and your staff are spending on it.
• I will review my file before closing it to make sure every task is accounted for. It’s a good idea to review your file before closing it and/or putting it into storage to ensure that nothing still needs to be done. If there is and it is part of your retainer, you should ensure that you complete the outstanding work. If it is not, confirm in writing to the client that it is the client’s responsibility to complete the work.

Click here to see the full list of resolutions taken from New Year’s resolutions for a healthier law practice and a new you, which appeared in the December 2012 issue of LAWPRO Magazine.

This is the text of an email fraud alert sent by LAWPRO to our insureds on December 21, 2012.

Just this week LAWPRO has dealt with two firms that were the victims of major frauds on their trust accounts. The time just before the holidays should not be a time for bad thoughts and frauds targeting lawyers, but unfortunately the fraudsters aren’t cooperating. We frequently see an increase in fraud attempts around the holidays as the crooks behind these frauds will actually use the distractions of the holidays to help them dupe lawyers and law office staff.

In one case the lawyer was duped out of $90,000 on a bad-cheque collection scam – the same type of scam LAWPRO has warned Ontario lawyers about many times. And what is really frustrating for us, the name of the scammer client (Cheng Wu of Wu Co. Ltd.) was posted on this blog. The lawyer could have avoided being a fraud victim by taking 60 seconds to cross-check the name of his client against the names of confirmed fraudsters on AvoidAClaim. See our Fraud Fact Sheet for a list of the red flags of a bad cheque fraud.

The other fraud reported to us is a scary one. A southern Ontario firm has suffered a six-figure loss from its trust account after an apparent infection by the Trojan Banker Virus or a similar virus. As a result of the infection, access passwords were passed to the fraudsters when the bookkeeper logged into the firm’s trust account. The trust account was at a major Canadian bank. This is a summary of what LAWPRO currently understands happened. See the bottom of this post for advice on how to protect yourself from being a victim of this type of fraud.

What is the Trojan Banker Virus

The Trojan Banker Virus is designed to steal financial account login information. Trojans are spread by e-mail attachments, visits to a website or the installation of a software program (usually something that looks harmless like a screensaver or game). Opening an attachment, clicking on something on a website or running a program will install the virus and infect a computer. After installing itself on a computer, this virus works as a keystroke logger to capture passwords and other sensitive information (i.e., it tracks the keys that are pressed and sends that information to the hacker). It can also create a “back door” that lets the hacker access and control the computer from a remote location.

This type of virus can also monitor web browser activity and will wait for the computer user to visit one of dozens of predefined banking or financial websites. The Virus then creates a pop-up window to replace and mimic the actual login page. These pop-up windows are customized for each financial institution’s website and are designed to spoof the appearance of the legitimate login page. User ID and password(s) information entered into these pop-up windows are captured and sent to the hacker. With this information the hacker can access the target’s bank account.

Summary of this fraud

In this fraud, the bookkeeper’s computer was infected. We do not know how at this point. She then had difficulties accessing the website of the firm’s bank and got a “This site is down for maintenance” message. On one of the screens that appeared on her computer she was asked to enter her name and phone number. This appears to have given the fraudsters her contact information as later that day the bookkeeper received a telephone call from someone, allegedly from the firm’s bank. That caller said she was aware of the login attempts and stated that the site had been down for maintenance. The caller then asked the bookkeeper to try logging in again. The bookkeeper did so entering the primary and secondary login passwords for the account on screens that appeared on her computer – the passwords were not given to the person on the phone. The second password came from a key fob password generator. This appears to have given the hacker both passwords and access to the firm’s trust account.

On each of the following two days there were similar phone calls to the bookkeeper from the woman who allegedly worked for the bank to “follow-up on the website access problems.” On each occasion the bookkeeper tried to login again and entered the primary and secondary passwords on screens that appeared on her computer. The fraudsters went into the account during or immediately after these phone calls and wired funds overseas. An amount less than the balance in the account was wired out each time. This was an infrequently used trust account and the firm had never done wire transfers from the account. The bank did not detect these frauds or stop the wires. The people behind this fraud appear to have had intimate knowledge of how to send wires from a bank account. The virus seemed to be aware that the firm had done banking at another major Canadian bank in the past.

How to protect yourself

Be aware of and be on the lookout for this type of fraud. At this point we are not aware of any other firms being victimized, but we suspect there are firms actively being targeted. These steps can lessen the likelihood that you will be a victim of this kind of fraud:

• Closely monitor the activity in your trust and regular bank accounts.
• Immediately investigate and talk to your bank if there are any problems or suspicious activity with your bank accounts or online banking access. Talk to your bank in person or through verified telephone numbers if there are problems. Remember that emails, fake documents and spoofed websites will have contact information for the fraudsters – not the real bank.
• If you do online banking, remove features that you do not use (e.g., the ability to initiate wires)
• Educate your firm staff about fraud prevention, in particular bookkeeping staff and other staff that handle cheques or payments.
• Be extremely wary of any calls or emails from your bank that deal with account information or access. Banks and other financial institutions will not ask you to reveal or change banking information in an email or phone call.
• Train your staff and lawyers to never open any emails or download any attachments from unknown senders. They should simply delete these messages.
• Install anti-virus and anti-malware software on all computers in your office. Make sure this software is configured to update itself automatically on a regular basis and that real time scanning is enabled (this will scan incoming emails and downloads). While it didn’t work in this situation, using brand-name anti-virus software should protect you from or warn you of an infection in most cases.
• If you ever find a computer has been infected with a trojan or other malware, you should immediately disconnect it from the internet and your network. Make sure the malware is removed before it reconnected.
• Use a firewall to block all unnecessary incoming and outgoing connections to your network.
• Enforce a password policy that requires the use of complex passwords and a requirement that passwords are regularly changed. People should be strongly discouraged from using the same password for everything.
• Ensure that programs and users of a computer use the lowest level of privileges necessary to complete their tasks. In other words, regular users should not have administrator level privileges to their computers.

Here are some other basic security “best practices” you should consider following:

• Disable AutoPlay to prevent the automatic launching of executable files on network and removable drives, and disconnect the drives when not required.
• Turn off file sharing if it is not needed. If file sharing is required, use ACLs and password protection to limit access. Disable anonymous access to shared folders. Grant access only to user accounts with strong passwords to folders that must be shared.
• Turn off and remove unnecessary services. By default, many operating systems install auxiliary services that are not critical. These services are avenues of attack. If they are removed, threats have less avenues of attack. This is commonly referenced as “hardening” a computer.
• If a threat exploits one or more network services, disable, or block access to, those services until a patch is applied.
• Make sure all computers are running the most up-to-date software, especially on computers that host public services and are accessible through the firewall, such as HTTP, FTP, mail, and DNS services.
• Configure your email server to block or remove email that contains “executable” file attachments that are commonly used to spread threats, such as .vbs, .bat, .exe, .pif and .scr files.

Please seek help from a knowledgeable person if you do not have the technical expertise to implement the above protections yourself.

The following is the text of an email blast from Homewood Human Solutions (but sent by the Law Society) to welcome Ontario lawyers and paralegals to the new Member Assistance Program or MAP.

This message can also be found on the web here.

Dear Law Society of Upper Canada Member,

On behalf of Homewood Human Solutions™, welcome to your Member Assistance Program (MAP). We are a trusted Canadian company with over 33 years of experience offering confidential Assistance Program services.

Knowing the unique challenges faced by lawyers and paralegals, we have designed a comprehensive and confidential program for you. Some of the key features of the program include 24/7/365 live access to a more comprehensive suite of services encompassing counselling, consultation and resources, work-life balance solutions, as well as an expanded counsellor network in Ontario and nationally.

Understanding the time demands on lawyers and paralegals, counselling is available in person, by telephone, or online. Appointments are booked quickly at your convenience. Counselling services cover a variety of issues including: substance abuse and addictions, personal or work-related stress, anxiety, burnout, depression, anger, relationship or family issues, grief or bereavement, or other personal or work-related challenges.

In addition, work-life balance support is available through our Plan Smart—Lifestyle and Specialty Coaching services to help you manage those unexpected, day-to-day life issues or life transitions. Whether you want to better understand the connection between physical health and emotional well-being, or you need to acquire suitable childcare or family care options, help is available. Coaching is offered related to: parenting, elder / family care, financial or legal concerns, career planning, workplace issues, pre-retirement, shift work, nutrition, weight management, and smoking cessation.

For knowledge seekers of a self-learning nature, we also offer a variety of online resources and tools for anywhere, anytime e-learning. You can select from: the Health and Wellness Companion, an online health resource containing interactive health risk assessments and access to a comprehensive library of medical information; a variety of e-Learning Courses developed by a psychologist specialized in health promotion; child / eldercare service locators, and health libraries offering trusted information on physical and emotional wellbeing.

Integral to the MAP design is a peer volunteer support program. Homewood Human Solutions has a long history of supporting a wide variety of peer programs, consulting and developing new peer initiatives, as well as designing and implementing customized basic and advanced training for peers. The new program will offer peer-to-peer addictions support and new opportunities including developing peers in the area of mental health. It will work to de-stigmatize mental illness and attract multicultural peers to work within the diverse legal community and encourage support and ‘help seeking’ across the profession.

Homewood Human Solutions provides services to members of several provincial law societies, law firms, legislative offices, as well as lawyers working in the public sector. We are accredited by Council on Accreditation (COA), and have standardized practices for service delivery, ensuring consistent, confidential, professional, and high-quality service. Also, anyone who uses the MAP is guaranteed complete confidentiality within the limits of the law and professional counselling guidelines. We adhere to privacy responsibilities defined by PIPEDA along with the Privacy Act and privacy rights enforced through provincial and territorial law.

As an organization with a core focus on mental health and addiction, and bench strength in clinical quality, we are committed to supporting all members in achieving their health and wellness goals.

To connect with your MAP, contact us by phone: 1.855.403.8922 (TTY: 1.866.433.3305) or visit us at: www.homewoodhumansolutions.com/MSA/lawsocietyuppercanada. Private, confidential support is available by phone, in person or online.

Sincerely,
Homewood Human Solutions

This article is by Nora Rock, corporate writer/policy analyst at LAWPRO.

How was business in 2012?

1. Great!
2. Meh
3. I’m not sure…

If you answered 2 or 3, this post is for you.

To do: Resolve to improve your financial management skills in 2013.

We’ll deal with #3 first: If you don’t know what your financial results were for the year, you’re not on top of your practice finances. There’s a correlation between well-managed finances and financial success. Also, financial management and practice management exercise similar mental muscles. Roll up your sleeves and do some number crunches.

If you’re looking for resources to help you brush up, practicePRO offers the free download of its booklet “Managing the finances of your practice”. This booklet provides a comprehensive review of various steps you can take to better manage the finances of your practice, both at the start-up stage, and when your practice is well established. It also highlights some of the longer-term financial planning issues you should consider in preparation for the day you wind-up your practice.

To do: Set a financial goal for 2013.

If you know what you earned in 2012, but you’re not sure whether that number amounts to “success”, it may be that you neglected, at the beginning of the year, to set a financial goal for yourself. It’s easy to pretend that your success or lack thereof is dependent on factors outside your control, like what types of matters happen to come through the door. But you know this isn’t true. Every successful business needs a goal. Consider what you earned this year, the factors that contributed to that number, and the extent to which you can influence those factors. Then set a goal for next year.

To do: Bill monthly, or at least more regularly, in 2013.

If you answered #2, are your billings up-to-date? No? Then bill. Every matter.

There are various reasons why lawyers fail to send regular or timely accounts, but the result is often the same: Problems collecting. Clients know they have committed to pay you. They are expecting your bills. In general, clients prefer regular, manageable bills over big fat surprises. Consider billing every matter monthly; if that’s not realistic for your type of practice, bill AT LEAST quarterly. If there is nothing to bill on a matter, send a progress report.

The end-of-year bill/progress report should be given special attention, and you can assist your financial analysis efforts by collecting these reports (either by saving copies of the individual letters, or incorporating the contents of the letters into a master spreadsheet). That way, you’ll have an organized overview of the status of your practice.

To do: I will analyze my financial performance in 2012 and identify changes to make in 2013.

If you’re not satisfied with your revenue for the year, take the time for a detailed year-end review. One aspect of that review should be an analysis of your revenue patterns. Which kinds of files are profitable for you? Are there types of retainers you might avoid next year (for example, does a certain kind of file require travel to a distant tribunal and attendant travel costs that clients resist reimbursing?)

You should also take the time, once a year, to think about your rates. How do your rates compare to those of your competition? What will the market bear? What might you do – obtain special training, delegate tasks to juniors, improve efficiency – to justify a rate increase?

On the topic of efficiency, are you estimating your time accurately? Accurate advance estimation of work required on a matter permits good communication to clients about money, and good communication about money helps you get paid.

Are you overspending on disbursements? YOU view your fees and disbursements as separate items, but both bills come out of the client’s one wallet. Controlling disbursement costs will make clients happier about paying your fees.

To do: I will feel good about being well-compensated for excellent service.

Finally, think about your attitude toward money. As thick-skinned as we often believe we are, many of us can’t help but internalize certain tired old stereotypes, like the lawyer-as-greedy-predator. Unless you actually ARE a greedy predator, get over it. If you provide a quality service, you are entitled to be paid a fair price. Failing to charge a reasonable price for your services puts your business at risk. Broke lawyers can be dangerous lawyers. Run your business like a business. This doesn’t mean you need to turn down every modest-dollar file or refuse to contemplate pro bono work, it means you need to budget your time effectively so that you can be both profitable and charitable.

Here’s to a (financially) successful 2013!