Law Practice Management - Essay Example

Most legal scholars agree that the current status of the legal profession demands that attorneys carve 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 a 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 Saccos 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 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, 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. 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. Read More