By Yves Faguy
Tag and save to delic.io.us

In most law firms, more toil means more money. And while that may suit lawyers anxious about meeting their annual billing targets, many small firms and solo practitioners are finding that clients want something different: a solution to their problems at a cost they can budget.

Catering to more consumer-oriented clients – and unburdened by bureaucracy and high overhead – these small practices are embracing alternative fee structures as a way to gain an advantage over competitors still beholden to the billable hour.

That structure – whether involving flat fees, capped fees, blended fees, or success fees – usually depends on the nature of the file and the client's needs.

Bill MacQuarrie, a partner at MacQuarrie Whyte Killoran, a small firm in Gloucester, Ont., says 90 per cent of his firm’s billing is now on a fixed-fee basis.

“Clients today are shopping around on the Internet and comparing prices,” he says. “To attract and maintain those clients, you have to offer a reasonably competitive fixed price.”

Embracing alternative billing involves close examination of a lawyer’s past habits and how to organize a legal practice more efficiently.

But the billable hour – so attractive in its simplicity and lucrative in its flexibility – is a hard habit to kick. The temptation to hike rates in the face of dwindling profits can be hard for many firms to resist.

Although adopting new methods makes good business sense, embracing alternative billing involves close examination of a lawyer’s past habits and how to organize a legal practice more efficiently.

To successfully introduce new fee structures requires organizing your practice and improving your project planning skills. This benefits not just the client, but also the firm, because the system encourages and rewards efficiency. A specific matter may appear to be worth, say, 10 hours of work. But by fine-tuning and improving the system, a lawyer may discover he can significantly reduce time spent on the file.

“We’re always looking at ways in our office to improve the efficiency of our workflow,” says Cory Furman, a partner at Regina intellectual property law firm Furman & Kallio. The four-lawyer firm does a lot of fixed-fee billing for routine, predictable work. “Those who leverage their system properly can do far better than by billing hourly,” he says.

Flat fees – for specific services, such as wills, patents, or the incorporation of businesses – are the most common type of alternative fee. But they’re not always appropriate, particularly as the firm has to assume cost overruns if the file drags on.

There is also a danger that the lawyer will be tempted to rush through a file. “There are problems with block fees,” says Eric Polten, a partner at the Toronto firm Polten & Hodder. “It can lead to slipshod work.”

Still, there's no shortage of other alternatives:

• Emphasizing value instead of time expended, contingent fees offer a results-based approach, where fees depend on the outcome of the file and the lawyer’s performance.

• With the blended fee – a method that encourages delegation – a client is billed the same hourly rate whether the work is performed by a senior partner or junior associate.

• Project billing involves a concept anathema to many lawyers: naming a price up front for managing a specific project from beginning to end. Again, the client can budget the cost with greater certainty. For the firm, however, it is important to carefully evaluate the project and plan for possible contingencies that could occur along the way. The lawyer may also charge a premium to cover some of his risk.

And the list goes on: capped fees, project billing, and ongoing retainers all represent different approaches to managing a firm and keeping its clients happy, by emphasizing value and timeliness.

Polten, however, warns that lawyers must nevertheless keep an eye on the money coming into the firm, particularly with contingency fees in matters involving complex litigation. Indeed, services provided on a contingency-fee basis often cost clients more than those billed hourly. “The real possibility of a lawyer incurring losses must be offset by bigger gains in another case,” he says. “In many ways, the certainty sought by clients is not always the fairest.”

According to Polten, some hybrid fee structures at least have the merit of forcing both the client and the lawyer to share the risk of unforeseen developments. Examples of these include a reduced hourly fee combined with a success premium, or contingency fees where the client pays disbursements, no matter the outcome of litigation.

“If the lawyer assumes alone all the risk, it can lead to excesses on his part,” Polten cautions. “The more contentious the work is, the more difficult it is to fix a fee and do a proper job.”

Yves Faguy is a freelance writer and regular contributor to National.

By Jared Adams
Editor
Tag and save to delic.io.us

If you work on more than one computer in more than one location, you’ve probably experienced the frustration of not being able to find or use the programs and files you need. While you can bridge some of the gaps by using a laptop as your main computer and taking it everywhere, laptops do have some drawbacks despite their convenience. The batteries have a finite life – as, too, do the laptops themselves. Even the lightest are fairly heavy, and the relatively small standard screens aren’t designed for long-term viewing.

Fortunately, with a little ingenuity you can fit the solution right into your pocket by creating your own portable office.

Enter the thumb drive, sometimes known as a flash drive, USB drive, or jump drive. Over the last few years, these thumb-sized portable storage devices have replaced floppy disks and CD-ROMs as the method of choice for moving files between computers. Small in size but large in storage capacity, these increasingly affordable peripherals can solve a number of storage problems. And while you’re probably already familiar with what they can do in terms of making file transfers easier, you might not know about one of their lesser-heralded abilities: they can act as a portable computer.

Our friend the thumb drive.

Here’s how you can make your own in six simple steps.

1. Get a thumb drive: Making the common thumb drive into your portable office suite is easier than it seems. Start with any drive with a reasonable storage capacity – 512 MB is probably the minimum. Both Future Shop and Best Buy (in both online and bricks-and-mortar formats), for example, carry a variety of flash drives in a wide range of sizes from $40 and up.

2. Get secure: Once you’ve got your drive and connected it to your computer’s USB port, allow your computer to read the drive and install any necessary drivers, and then you can start customizing your portable office. First, and most importantly, download a copy of TrueCrypt. This open-source application will let you encrypt and password-protect your USB drive, so that if it happens to go missing, you don’t have to worry about sensitive information being compromised (you can also set your drive to automatically ask a finder to return it to you).

3. Get inoculated: Your next essential is anti-virus software. If you’re going to be moving between systems, there’s no telling what viruses the host computer has been exposed to, unless you’re the only user of both systems. And if you’ve got critical data stored on your portable drive, you can’t afford to lose it. Pick up ClamWin portable and McAfee’s AVERT Stinger in order to check for and remove any virus that happens to hit itself to your portable drive.

4. Get connected: Now you can head to a site specializing in portable applications, like PortableApps.com or The Portable Freeware Collection, where you’ll find a number of programs custom-built for life on a portable drive.

Grab Firefox Portable for a web browser, and its companion e-mail client, Portable Thunderbird. Installation is as simple as moving the downloaded files to your portable drive and double-clicking on the install program.

(If you’re absolutely married to Internet Explorer and Outlook, you might want to take a look at CoCoSys’ Carry It Easy, which allows you to carry your data – e-mails and IE favourites – around while making use of a host system’s versions of the software. The catch? While most of the software listed in this article is freeware or shareware, Carry It Easy will set you back about $25)

5. Get tools: Now that your Internet needs have been taken care of, add some office software. OpenOffice.org Portable is the on-the-go version of Sun Microsystems’ OpenOffice suite: a word processor, spreadsheet, presentation manager, and drawing program, all compatible with Microsoft Office’s range of products, and acting in much the same manner – and it’s free. Again, installation is straightforward.

Your portable office is starting to take shape. Already you should be able to plug your drive into just about any computer and work away, without having to use any of the host system’s programs, and without having to worry about your confidential files being saved on a third-party system or accidentally accessing someone else’s confidential files while looking for one you’ve saved (always check to make sure you haven’t left any temporary files on the host system). Moreover, your portable system will become more and more familiar with time, especially if you haven’t been using the products up until this point.

6. Get flashy: With the basics taken care of, you can start looking at some bells and whistles. Consider adding some other programs, like Sunbird Portable for calendar and task management (or export your current Outlook calendar to portable calendar EssentialPIM).

With the rise in popularity of both portable drives and the idea of using them as mobile workplace solutions, just about any type of program you might need now has a portable version. Need to access PDF files? There’s Cool PDF Reader or Foxit Reader. Graphics editing software? There’s GIMP Portable or i.Mage. An RSS reader? RSSOwl or GreatNews will do the job. And the list goes on.

With your thumb drive loaded, you’re ready to go on the road. You should be fully equipped to work from any relatively new computer, although you may find some problems if your host computer is still running Windows 98 or early, un-updated versions of Windows XP, with a full suite of useful applications, and your information protected. And better, your “new computer” fits into a pocket, around your neck, or into your perpetually packed attaché case with ease. Just try doing that with a laptop…

Jared Adams is the editor of Addendum and assistant editor of National.

By Caron Wishart, vice-president of claims, LawPRO
Tag and save to delic.io.us

When the costs associated with real estate claims first started moving upwards in 2004, we took note that this was an area to watch. But when that same upwards trend gained momentum in 2005, we undertook a more detailed analysis of claims in this practice area, with a view to giving the real estate bar a heads-up on what could be a reversal of the trends of the early part of this decade.

Although the number of real estate claims has remained relatively stable, the cost of those claims has increased to 40 per cent of all claims costs in 2005, from just under 30 per cent in 2004 and 23 per cent in 2003. For the first time in several years, in 2005 real estate claims costs exceeded litigation claims – good news, perhaps, for the litigation bar, but bad news for real estate practitioners.

Real estate claims - causes of loss, 2003-2005

Although costly claims account for some of this increase, we're also seeing much larger losses in individual real estate files than previously, which likely reflects the higher property values and active real estate development opportunities.

Is this a blip or a sign of things to come? From a statistical point of view, it’s too early to know for sure. We do know, however, that this is a situation worth monitoring and communicating to lawyers in real estate practice.

One could also ask how this can happen, given the prevalence of title insurance in the market. Analysis of the underlying causes of loss indicates that claims made against lawyers don’t arrive from technical or search errors; rather, they arise out of failure to give good legal advice.

In fact, communication errors and inadequate investigation of facts account for 55 per cent of the number of claims reported. Clients retain lawyers in real estate transactions because they want guidance and want to be looked after. The legal advice given in connection with a real estate transaction is the most valuable contribution that a lawyer can make.

How can you ensure that you’re giving your client the needed advice? By paying attention at the two most significant points in a real estate transaction – the beginning and the end.

In the beginning

It’s important that lawyers pay attention to the “big picture” of the transaction at hand. Does the deal make sense? Are there indicia of fraud? Are you being asked to paper the deal? Are there conflicting clauses in the agreement or mortgage instructions? Are the people involved in the transactions the people you are meeting with?

Ask yourself the following questions. If anything in the intake process causes you concern, do you have a process to:

• identify the indicia of fraud?
• ensure your clerk or assistant brings concerns to you in a timely manner?
• ensure that you have a process to bring your concerns to the client’s attention?
• deal with a transaction if the other party isn’t represented?

This is by no means a definitive list of the questions you should be asking. The TitlePLUS client intake form can alert you to other matters of concern. This form is available at the TitlePLUS website by clicking on “Products and Services.”

In the end

The other significant time in a real estate transaction is at the end, as you’re preparing for closing. At this point, you need someone to pay attention to the details. If there are several people in your office, then assign the person who has the best eye for detail to become involved at this stage. If you’re a sole practitioner with limited support, then try to review this stage at the time of day when you’re best able to devote the time and attention to it. Once again, it’s important to keep asking yourself if the transaction makes sense.

• Are the funds being properly directed? If you’re acting for a purchaser, and some of the funds are being directed back to the purchaser, that should raise a red flag.
• Is your client asking you to take a personal risk? For example, has a client indicated on three separate occasions that he or she has forgotten his or her ID? If you don’t confirm ID, you could end up with a negligence claim against you in the event that the transaction is fraudulent.
• Has the deal changed significantly? If so, who needs to know about those changes? The client? The lender? The other side?
• Are there inconsistencies between the closing documents and the terms in the agreement of purchase and sale? If so, these matters need to be resolved.

If you’re focused at both the beginning and end of a transaction, the likelihood of a negligence claim against you is diminished. Once you’ve identified potential problems, it’s important that you have the processes and procedures in place to deal with those problems. You’ll then be able to provide your clients with the legal advice they expect from you.

Create your own checklist

If you haven’t already done so, take a few moments to create your own checklist for indicia of fraud. You can probably create the checklist in less than an hour and achieve a permanent improvement to your office procedures – and reduce the likelihood you’ll become part of the claim statistics.

Caron Wishart is vice president of claims at LawPRO. This article originally appeared in the Summer 2006 issue of LawPRO magazine. Reprinted with permission.

By Indra Balassoupramaniane
Tag and save to delic.io.us

Some sole practitioners swear by hiring a legal assistant, while others say they can easily do without help around the office. Has the advent of new information technology changed how things are done?

Is this the face of your new assistant?

Robert Hugh McCulloch, from Treherne, Man., says the usefulness of an assistant is clear. “I couldn’t run my office without an assistant,” he says. Although McCulloch has integrated new technology into his practice and is comfortable with all his legal software, he still makes use of three assistants. “They’re indispensable in freeing me from certain tasks and letting me concentrate on my work as a lawyer,” he says. “For example, one looks after reception and all the administrative tasks, another handles accounting, and the third assists me in preparing legal documents.”

But Richard Buchan, a lawyer practicing in Whitehorse, feels that new legal software and other tools allow him to easily perform tasks traditionally reserved for assistants. “By using voice recognition software, I can do most administrative work myself without losing much time, as it’s all automated.” Buchan feels it’s simply a matter of organization and costs. “Hiring an assistant is a major cost for a sole practitioner,” he says. “This means he has to work more and concentrate on his work as a lawyer in order to earn more income. In my case, I have fewer financial constraints and can spend part of my time on administrative tasks.”

In the end, how a lawyer wants to run his or her practice determines whether or not the services of an assistant are needed. For McCulloch, legal assistants are essential to creating a good relationship with clients. “Certainly, new technologies allow me to perform all the administrative work, but I need someone to answer the telephone and, particularly, to take care of clients,” he says. “I feel it’s very important to offer this service to my clients.”

As for Buchan, his type of practice allows him to manage his files and receive clients at his office. “It all depends on the clients you have and the type of relationship that you have established with them. My practice is very specialized and my clients come to see me for my expertise, not for a commercial service,” he explains. “In return, I’m able to offer very competitive fees, as I don’t need to pass on expenses related to infrastructure or salaries through the fees I charge.”

Indra Balassoupramaniane is a freelance writer and regular contributor to National.

Tag and save to delic.io.us

Stress is the result of any emotional, physical, social, economic, or other factors that require a response or change. While it’s generally believed that some stress is okay (sometimes referred to as "challenge" or "positive stress"), when stress occurs in amounts that you can’t handle, both mental and physical changes may occur.

"Workplace stress" is the harmful physical and emotional responses that can happen when there’s a conflict between demands on the employee and the amount of control an employee has over meeting these demands. In general, the combination of high demands in a job and a low amount of control over the situation can lead to stress.

Stress in the workplace can have many origins or come from one single event, and can impact on both employees and employers alike. As the Canadian Mental Health Association says:

Employees who start to feel the "pressure to perform" can get caught in a downward spiral of increasing effort to meet rising expectations with no increase in job satisfaction. The relentless requirement to work at optimum performance takes its toll in job dissatisfaction, employee turnover, reduced efficiency, illness and even death. Absenteeism, illness, alcoholism, "petty internal politics," bad or snap decisions, indifference and apathy, and lack of motivation or creativity are all by-products of an over-stressed workplace.

(From: Canadian Mental Health Association, "Sources of Workplace Stress" Richmond, British Columbia)

Good stress, bad stress

Some stress is normal. In fact, stress often provides us with the energy and motivation to meet our daily challenges, both at home and at the workplace. Stress in these situations is the kind that helps you "rise" to a challenge and meet your goals such as deadlines or finding new clients. Some people wouldn't consider this challenge a type of stress because, having met the challenge, we’re satisfied and happy.

However, as with most things, too much stress can have negative impacts. When the feeling of satisfaction turns into exhaustion, frustration or dissatisfaction, or when the challenges at work become too demanding, we begin to be affected by stress overload.

How stress impacts you

When the feeling of satisfaction turns into exhaustion, frustration or dissatisfaction, or when the challenges at work become too demanding, we begin to be affected by stress overload.

Stress can have an impact on your overall health. Our bodies are designed with a set of automatic responses to deal with stress. While this system is very effective for the short term "fight-or-flight" responses we need when faced with an immediate danger, our bodies deal with all types of stress in the same way, and that’s where the problems start.

Experiencing stress for long periods of time (such as low-level, but constant, stressors at work) will activate this system, but once activated, the system doesn't get the chance to "turn off." The body's "pre-programmed" response to stress has been called the "generalized stress response," and includes:

• increased blood pressure
• increased metabolism (e.g., faster heartbeat, faster respiration)
• decrease in protein synthesis, intestinal movement (digestion), immune and allergic response systems
• increased cholesterol and fatty acids in blood for energy production systems
• localized inflammation (redness, swelling, heat and pain)
• faster blood clotting
• increased production of blood sugar for energy
• increased stomach acids

(From the Basic Certification Training Program: Participant's Manual, Copyright © 1999 by the Workplace Safety and Insurance Board of Ontario).

Luckily, there are usually a number of warning signs that help indicate when you are having trouble coping with stress before any severe signs become apparent.

Warning signs

There are many different signs and symptoms that can indicate when someone is having difficulty coping with the amount of stress they are experiencing:

Physical: headaches, grinding teeth, clenched jaws, chest pain, shortness of breath, pounding heart, high blood pressure, muscle aches, indigestion, constipation or diarrhea, increased perspiration, fatigue, insomnia, frequent illness

Psychosocial: anxiety, irritability, sadness, defensiveness, anger, mood swings, hypersensitivity, apathy, depression, slowed thinking or racing thoughts; feelings of helplessness, hopelessness, or of being trapped

Behavioural: overeating or loss of appetite, impatience, quickness to argue, procrastination, increased use of alcohol or drugs, increased smoking, withdrawal or isolation from others, neglect of responsibility, poor job performance, poor personal hygiene, change in religious practices, change in close family relationships

The phases of stress

The signs and symptoms from stress tend to progress through several phases or stages. The phases can be described as below:

(From: Anschuetz, B.L. "The High Cost of Caring: Coping with Workplace Stress" in Sharing: Epilepsy Ontario. Posted Nov. 29, 1999)

Dealing with stress

Since the causes of workplace stress vary greatly, so do the strategies to reduce or prevent it.

Where stress in the workplace is caused, for example, by a physical agent, it is best to control it at its source. If the workplace is too loud, control measures to deal with the noise should be implemented where ever possible. If you are experiencing pain from repetitive strain, workstations can be re-designed to reduce repetitive and strenuous movements.

In many cases, the origin of the stress is something that can’t be immediately changed. Therefore, finding ways to help maintain good mental health is essential. Fortunately, there are many ways to be proactive in dealing with stress. In the workplace, you might try some of the following, as suggested by the Canadian Mental Health Association:

Laughing is one of the easiest and best ways to reduce stress. Share a joke with a co-worker, watch a funny movie at home with some friends, read the comics, and try to see the humour in the situation.

Learn to relax, take several deep breaths throughout the day, or have regular stretch breaks. Stretching is simple enough to do anywhere and only takes a few seconds.

Take charge of your situation by taking 10 minutes at the beginning of each day to priorize and organize your day. Be honest with your colleagues, but be constructive and make practical suggestions. Be realistic about what you can change.

(From the Canadian Mental Health Association, "Sources of Workplace Stress.")

Improving mental health

Ten general tips for mental health include:

(From: Canadian Mental Health Association - National Office. http://www.cmha.ca/)

Adapted from an article by the Canadian Centre for Occupational Health and Safety. Copyright 1997-2006 CCOHS.

By Jared Adams
Editor
Tag and save to delic.io.us

Office software, accounting packages, web browsers, e-mail clients, case-management applications – you probably figure you’ve already got everything you’ll need when it comes to computer software.

Well, in this month’s edition of 5 Sites, we take a look at five downloadable software programs that are small, straightforward, useful in ways you might not expect, and available at the low, low, rock-bottom price of free (although some developers do ask for donations – and if you find the program useful, you should probably consider chipping in).

1. McAfee AVERT Stinger http://vil.mcafeesecurity.com/vil/stinger/. While it’s no substitute for real-time virus protection, Stinger is a lightweight virus checker and removal tool. If you’ve got reason to suspect that your computer – home or office – has picked up a nasty bug from the Internet or from other file transfers, Stinger does a great job of tracking it down and removing the problem. While Stinger might not come with the support resources you get with other anti-virus applications, it’s effective at solving your virus problems quickly, allowing you to get back to what you’re supposed to be doing. As a bonus, store a copy on a thumb drive and you’ll have a great way to deal with an infection that bogs your computer down so much it won’t run other applications.
2. Eraser http://www.heidi.ie/eraser/. Once you’ve deleted a file, it’s gone forever, right? Not quite. There’s a whole industry based around charging you exorbitant sums in order to recover lost data. And while the ability to recover data is sometimes useful – if you just accidentally deleted your client’s entire case file, for example – it can be a privacy and confidentiality issue in other situations. If you’re selling or giving away an old computer or hard drive (or want to make sure a thumb drive is fully erased), use Eraser to wipe out your data so that the files are unrecoverable and your clients’ confidentiality is assured.
3. Bullfighter http://www.fightthebull.com/bullfighter.asp. Sure, the document you just wrote is perfectly readable to you, but can your client read it? If you’re not already an expert in clear writing thanks to CBA PracticeLink, Bullfighter, a small Word plugin, will scan your work and let you know if you’re venturing into incomprehensibility. Bullfighter will flag jargon – it has a particular dislike for overused “corporate words” like “leverage” and “global” – and its Bull Index feature will also provide an analysis of sentence length and total up the Flesch Reading Ease score. All in all, a great tool to keep you on the path towards clear communication.
4. KeePass Password Safe http://keepass.sourceforge.net/. You’ve got a password to log in to your computer, one for your e-mail, one for the local network, one for your home e-mail, one for online banking… you’re not using the same password for all of them, are you? Or, worse, using “password” as your password? KeePass lets you build a database of all your passwords – it’ll even generate random passwords for you, to obtain better security – and then encrypt the database and lock it with a master password. Now all you have to do is remember one master password, and you have access to all of your random passwords. No more sticky notes on your monitor, with the password to your savings account required.
5. CCleaner http://www.ccleaner.com/Computer running slowly? If you’re fairly sure that your computer’s free of spyware – Microsoft Defender (available free to Windows users) or Lavasoft’s AdAware SE Plus for small business ($32) are good choices – check out CCleaner, which removes unneeded temporary files from your computer. Plus, CCleaner will examine your registry – the list of active programs your computer runs through when it starts up – and remove any unwanted leftovers from programs you’ve already uninstalled from your computer that may be dragging your computer down. Use it on a regular basis to ensure your computer’s always up to speed.

This month on CBA PracticeLink, the law practice management site for solo and small firm lawyers in Canada, learn how to develop innovative alternatives to the billable hour. Law practice guru Ed Poll walks readers through some common alternative billing options, including blended hourly rate, fixed or flat fee, premium pricing, value billing and more.

Also new on CBA PracticeLink…

Podcasts:

• New Ways to Practice Work/Life Balance  (audio download)
• Podcasting: The Latest Addition to the Legal Marketing Toolkit (audio download)

Articles and tips:

• Hiring and Working with Support Staff: A Guide for Solo and Small Firm Lawyers
• Ten Ways Law Firms Lose a Lot of Money
• Making Your Law Office Client-Friendly
• Win-Win Negotiation Skills for Lawyers

Plus, don’t forget to check out our section devoted to starting out and going solo, which now includes Flying Solo, the popular CBA Guide to Solo Law Practice in Canada. For all this and much more, visit http://www.cba.org/practicelink.