Status of the Legal Profession in Computer Law - Essay Example

Law Practice Management Most legal scholars agree that the current status of the legal profession demands that attorneyscarve out a given niche, as opposed to general practice in order to remain relevant. The main reasons advanced for this is the need for lawyers to adapt to the competitive market for the legal services given increased internal competition among lawyers due to their increase in numbers, and also encroachment of areas that were exclusive to the legal profession by other professions. In essence, it requires that lawyers deal exclusively with those areas that they are best suited to offer their legal services. It entails targeting a specific market or community that is easily identifiable. The decision that was unanimously arrived at is that we should carve out our niche in Computer law. This area of law, deals with securing information that is stored and/or transmitted through computers. There is a horde of reasons for choosing this specific area of specialization. To begin with, our existing clientele mainly draws out from this area, and they have a capacity to sustain our entity in the short run and help us to breakeven within the first year of operation. Secondly, we have the necessary educational background, and passion for this specific niche, individually and collectively. In addition, this is a developing area, with a greatly promising future. Internet has had a profound impact on the society in the past few years and the nature of its dynamic changes creates a lot of emerging legal uncertainty. In addition, there is an increase in the number of legislations enacted in the recent past, such as Computer Security Act of 1987 and Health Information Technology of 2009. To add, it touches basically on every other sphere of law from, e-commerce, Intellectual Property (IP), privacy to online money payment systems. Moreover, it is cross cutting and is not limited in terms of boundaries, and it, in essence, makes boundaries more and more meaningless. More importantly, it has an untapped potential, and growth rate is exponential, given that the number of Americans using internet or having access to internet grows day by day. In addition, most organizations have automated their mode of operation and it is basically possible to complete all manner of transactions online. This market has few practitioners as compared to the potential market, and the existing market is highly untapped. The entity we have chosen to adopt and register is in the form of a professional association, registered as an S corporation under the laws of Florida. The structure of the professional association is that the three of us shall be shareholders, discharging the legal work. Below the shareholders, there shall be 2 experts, in field of I.T, telecommunication and software development. The experts shall draw a fixed salary, with a bonus that is pegged on the profitability of the association. \The associates shall follow in rank. The ratio of employed associates to the shareholders shall at the start be 0:1 but progressively increased to 2:1 depending on the productivity of the association and the work available. Below the associates, there shall be paralegals and other support and administrative staff needed most of who shall have internet and online marketing skills and back ground. This is because for an S corporation, the distribution of profit is exempt from 15.3% Medicare/ social security tax imposed on compensation income. There are several reasons for adopting this type of an entity. To begin with, the advocates shall not have personal liability for the liabilities that shall arise in the course of the ordinary business or from the malpractice of attorneys hired by the association. In addition, there are several incentives by the federal and state government which the association shall exploit, therefore helping the association to make savings. Such includes tax incentives includes a lower requirement for the payment of social security tax and Medicare tax. The importance of inculcating the I.T, telecommunication and software experts is to bring the technical knowhow as far as internet and technology is concerned. The experts also should aid in internet marketing of the services of the law firm in order to capture a larger market share and therefore cast a wider net. The experts will be under the duty of advising the attorneys on technical matters and developing and managing the information, communication and technology in the firm. It is technical knowhow that should be complemented with the legal services in the area of computer law. Raising capital to start the association perhaps forms the difficult part. To begin with, accountants shall be hired to evaluate the operating capital requirements, cover start-up expenses and reserves that can counter negative cash flow of the proposed association, 1during the year, and to propose any cost cutting measure that is necessary. In addition, the accountants should be tasked with establishing the least costly methods of raising capital. The association shall be divided into 9999 class A equal shares with each shareholder being at liberty to purchase a maximum of a 1/3 of the issued share capital. Partner’s contribution shall be treated as part of the equity of the professional association.2 In addition to class A shares, there shall be redeemable class B shares. Unlike class A, class B shareholders shall only participate in the share of profit, with no guaranteed minimum share of profit. In addition, class B shareholders shall not have any voting power. These shares shall be only be subscribed by lawyers authorized to own a share capital in a law firm so that this shall in tandem with legal requirements that non-lawyers should not own the equity of a law firm. The importance of class B shares is that they shall help raise capital for the association, while at the same time do not dilute the shareholding of the original 3 partners. Any capital deficit shall be addressed through borrowing that is secured loans. The importance of secured loans is that they are less risky and therefore cheaper as compared to unsecured ones.3 Such loans should attract a fixed rate of interest, to eliminate uncertainty that results from variable rate of interest. The advantage of fixing this deficit through borrowing is that loans are allowable expenses that shall be deducted before determining the tax that is payable and any distribution to both the Class A shareholders and Class B shareholders. Such loan should be a long term loan, repayable in 5 years, with interest applicable of a reducing balance method. The source of the loan shall be from Sacco and other cheap financial institutions as well as other willing investors. Repayment of the loans shall be from the profits before distribution. However, in the first year of operation, since the firm is not expected to be profitable, such loan, both the principle and interest shall be paid out of the capital, and which should be topped in subsequent profitable years. The principal amount and interest due shall be treated as an expense of the business and shall be deducted from the income to arrive at the profits of the partnership. The capital contribution by the partners shall be treated as equity and shall not be repayable to the original shareholders, of Class A, unless one is leaving the association following the prescribed procedure for doing so. Class B shares shall be redeemable at the option of the partnership, and shall be redeemed from reserves of the association, such as the retained earnings. The marketplace response shall be slow but progressive depending on the reputation the association shall build. Few people know their rights under the computer law, but they get enlightened with time. The market, the potential of which is not well tapped, will be easier to create loyal clientele and more clients through referrals by satisfied clients. The association shall also act as outsource facility, for instance, for the drafting of online agreements and contracts, which shall save the clients the costs of maintaining in-house lawyers. Perfect client management shall build a reputation for the association, and enhance the response of the clientele and referral.4 Engagement letters shall be employed to create a rapport and trust with the new clientele, and establish an agreement on the basics to avoid future conflict with the clients. The next step shall be engaging in extensive and comprehensive advertisement to net a client base. Following the U.S. Supreme Court decision in Bates and OSteen v State Bar of Arizona, [1977] 433 U.S. 350, advertising of legal services has grown exponentially. Since the association is new, it shall be seeking to establish itself and build a reputation.5 The target market shall be the internet users, and most of whom shall fall under the ambits of the computer law, in addition to companies that heavily rely on computers and automation, for instance, to operate major infrastructure. The most important mode of marketing shall be through the use of internet advertisement. This is due to the fact that it is the best mode to capture our intended market. Secondly, internet marketing is limitless in terms of boundaries and can be accessed from any part of the globe. The third reason is because internet offers a cheap but effective method of advertising. Lastly, there is available technical knowledge from the experts hired and this shall help to exploit and maximally use their services. The advertisement shall be structured in a way to conform to the regulations prohibiting particular mode of advertisement such as commercial speech. A website shall be developed whereby a lot of articles that address computer law shall be uploaded covering all practical angles and the current affairs on the area of computer law. To add, advertisement shall take place through active blogging of current affairs in computer law and legal commentary on contemporary matters in this area of law. The essence of this is to build a lot of online presence such that any person using a search engine who uses any key words will be directed to the official website of the associated, where contact details of the association, the attorneys and the services offered are conspicuously present. In addition, pop up messages such as ‘ask lawyer online’ shall be employed to get contact details of the potential client who can be automatically emailed by the system.6 The nature of the work shall be classified into two: representation and office work. Representation shall entail actual representation of the clientele in the contentious and non-contentious matters, either through litigation in court or through alternative dispute resolution. This group shall comprise those whose rights under the computer law has been violated, or those facing cases of violating the same. The second group shall consist of that group seeking services such as drafting of legal agreements and contracts, and legal advice, which generally consist of office work. This group presents a greater and better opportunity, given the ability to get clientele from across the globe. The website shall be programmed in a way to allow clients to post their order and pay through the online money payment systems. Lastly, legal services shall be offered through sale of software that inculcates legal materials such as legal forms with instructions of how to fill them. With regards to the fee structure, client’s perception of the lawyer’s effort on his behalf determines their satisfaction.7 The fee structure shall be a hybrid form of structure, encompassing both billing per hour and contingent billing.8 This is because of the diverse nature of the work involved. For instance, billing per hour shall apply where litigation is involved, while most of the office work, for instance legal drafting, may be contingent upon the consideration of the contract. Sufficient records shall be kept to record the hours involved. 9 Where billing per hour is concerned, the rate shall be an average of that charged by a given number of medium law firms in the area, that offer a similar, or an almost similar service. Thereafter, billing shall have to reflect the cost and overhead incurred, and adjusted to reflect a profit that can compensate the attorneys and staff involved. A computerized case management shall be instituted to ensure that clients who log into the website can know the amount of hours billed in the case, as well as be able to access the progress of the drafting of their documents such as contracts. With regards to clients retained through the internet, services shall only commence upon payment of a substantial amount of the expected cost. Compensation both of the attorneys and the staff should play twin role. It shall represent the payment for the value of the efforts put into the firm by the staff, in addition to being a management tool. Compensation for the employees should not only be fair, but they should see it as being fair. It should reflect that earned by similar employees in other medium law firms discharging similar or almost similar functions and workload. The compensation of the employees shall be composed of monthly salaries and allowances, and raises that are based on the annual performance of the association. In additions to the above, there shall be a variety of benefits that which is deemed fit by the shareholders but especially geared towards updating the membership with the changes taking place in the technology sector. The compensation for the attorney shall mostly be composed of salaries, rather than profit distribution. As an S corporation, it is the profit that is liable for taxation, while the wages shall be an allowable expense. Therefore, it is the individual partners who shall bear tax burden and account for the same. This shall help prevent instances of double taxation. Incorporating technology into the operations of the association shall be the key to the success of the business of the corporation given that the core business of the corporation revolves around computers and technology. Indeed, access to the desired market calls for extensive use of technology and online advertisement. This role shall be a preserve of the IT experts, who shall be tasked with developing a robust IT infrastructure in the firm. In addition to the infrastructure, the experts shall be tasked with establishing the case management software that reflects the nature of the target market.10 The essence of inculcating technology, apart from the necessity given the niche of the association, is that it shall reduce reliance on manual documentation, with the accompanying errors, and the time wasted doing so. In addition to case management software, trial support and litigation support software shall be relied on to increase the quality of representation and legal services that is accorded to our clients. In addition to the software, quality hardware shall ensure the quality and reliability of the computer systems. Of essence, quality internet connectivity hardware and video conferencing hardware shall be in place to ensure easy, cheap, faster and clear communication with clients. Consequently this should not only save cost and time wasted in unnecessary travel and meeting with clientele, but also provide a forum for contact with clients from other jurisdictions, and those who require retaining the services of the association from the website. Billings systems shall have to be automated to lend to make them more objective and therefore easy for the clients to accept the same and pay without disputes. The growth of the association shall be exponential. In terms of finance and economics, the existing clientele can help the firm to breakeven within the first year of operation. The association shall achieve profitability in the second year and by the third year; the firm shall be generating revenues that can assist in hiring more staff. In addition, by the third year, the firm shall engage the services of a professional manager for the association to remove administrative and management roles from the partners who shall be deal exclusively with the legal matters. In addition, the growth shall necessitate the hiring of a human resource manager who shall unsure that the human resource consists of professionals, and ensure that the human resource is robust, competent, motivated and ensure that the association is not over staffed or under staffed. By the fifth year, reserves generated should help the association to start redeeming class be shareholders at the stated price. In addition, any long terms borrowing is expect to have repaid in full and therefore, there should be a reduction in the financing cost of the association. In terms of growth, the association shall not exponentially increase its physical presence across the country by establishing branches everywhere. Instead, the firm shall invest a lot in an e-office, whereby clients can get basically any service from the comfort of their homes and/or offices. In essence, a central office that is manned by the IT experts shall be accessible through the use of modern communication methods especially video conferencing. By the 10th year, the firm shall completely redeemed class B shares and only class A equity shall remain. The firm shall hire associates, with no provisions for partnership, but with terms that will ensure that the association does not lose the services of experienced lawyers. The three future shareholders shall bring into the association a horde of things. To begin with, each shareholder shall infuse capital into the association. In addition, each partner should bring a clientele base that will be crucial and help the association to breakeven within the first year. Apart from the clientele, shareholders should bring in experienced and competent staff that shall form part of the implementation of the business ideas. Moreover, the shareholders shall bring in their experience and knowledge for the operation of the association. The choice of the others to be shareholders in the new venture is predicated on a number of factors. First, there is the need for the new partners to inject more capital to operationalise the association. Equity is a cheap method of raising capital because it does not require any future repayment. Secondly, it is in order to eradicate the disadvantages that are associated with solo practitioner, such as the rigidity of expansion and the ability to establish a sound clientele. Thirdly, the individuals chosen have a proven track record and expertise in the niche of computer law and as far as technology is concerned. To add, it is also in consideration of their ability to establish a new customer base, and the ability to add value to the association. Sources Altman Mary Ann and Weil Robert. An Introduction to Law Practice Management. New York: M,Bender. 1987.Print Read More