Chuck Newton

Low Maintenance Law Practice

Back when I ran a large bankruptcy practice I recall too often going into the office most day to get out much substantive work only to feel stymied by all of the maintenance issues that would just pop up.  The receptionist did not show up, the equipment was not operating property, a lawyer could not cover court, the TV stations wanted to discuss the next quarter's spot buys, the lease was coming up, we were out of supplies, the ads were not working and, most frustrating of all, meeting with the firm's bookeeper only to be told we need $30,000 or $40,000 by the end of the week and we only had $15,000.00 in the bank.  The West Law salesman was there and wanted to meet with me.  One of the paralegals was having a personal problem.  Some other staff person was not getting along with one of the attorneys.  Some judge was upset.  The maintenance staff was either messing with loose papers on someone's desk at night or someone felt they were not doing their job.  The CAM charges hit and they needed to be investigated. We need your time records everyone.  Where are your time records?  One of the firm's cars was not operating properly.  Somebody wanted a raise, a particular day off, need to come in later or leave earlier.  The problems were really endless.  And, on top of all of that I still had my portion of the bankruptcy and litigation practice with which I had to deal.  The point is that growing a larger firm, or even being a part of it, is very time consuming and frustrating if for no other reason you have to have meetings to keep everybody on the same page.  Your management tasks go through the every loving roof.

So especially now when some new law graduate tells me of his or her plan to replicate this structure, I usually just say, "Best of luck".

I have said it before, and I will say it again, when you opt to build a large traditional firm, no matter what the practice areas, you will find yourself tugged on from nearly every direction.  There are not enough hours in the day, and your family typically comes last.  I would many times get up at 5 in the morning and not get home until 10 o'clock at night or later.  I would often have to bring the children to the office and put them to bed on the office floor while my wife and law partner and I finished up our legal work we could not get done during the day.

Is this what you really want?  If so, power to you.  But, here is the thing.  No matter how big the office got, no matter how many lawyers and staff we hired, no matter how many offices we opened, there was never enough money.  This is because growth eats cash.  Lots and lots of cash.  It also, and more depressingly, eats up all of your time.  So, in the end, you are bringing home only a small percentage of what the firm makes, you go into debt, and your maintenance of the firm supersedes what it is you wanted to achieve in the first place.

So, I thought there had to be something better.  I got rid of all types of cases I did not want to do myself (all of the consumer bankruptcy cases), I divide the offices and cases up between the attorneys that wanted them, and I moved myself home to work.  People thought I was crazy.  But, I built a law firm based on little more than a broadband connection, a phone, a chair and a table.  I have now been at this exclusively since 1999.  As the new year approaches I will have been doing this for 10 years.

The point is that this is a low maintenance practice.  I can make as much or more than I was actually bringing home in the old practice, participate in the actual care and feeding of my children, and have more time for no other reason than all I have to work on is my referral marketing, and the few cases I elect to take.  I get to be a lawyer.  But, the ultimate reason is that I do not have to commute to work, I did not have to keep my children in a day care center before and after school, and my maintenance issues are few.

I have not spoken about it much of late, as there are so many other issues to discuss, but you really should try to the low maintenance way of life.

Would You Rather Be A Third Wave Lawyer With No Money Or A Traditional Lawyer With Less Than No Money -- Debt!

Boy, have we had a rough time in Houston, Texas of late.  Not only are we dealing with the terrible economy, but we were hit by hurricane Ike not long go.  As for me it meant the lost of about three weeks worth of income, lost time, and an even larger delay in other attorneys getting around to discussing settlement.  Trials have been put off, and business is still not coming in the door like it was for most of the year.  At the same time, at least for me, the university three of my children attend was hit by the hurricane, but they do not really care to delay or make other arrangements concerning tuition payments.  Let's just say the last couple of months have not been the most pleasant.

I tell you this because regardless if you were in the path of Ike, you might be feeling the pinch of the sour economy as well.  And, nobody can really deny that hurricane or no hurricane we all run into these money pinches all of the time.  There are statistics that show that people would rather talk about their sex lives than their money situations.  It is that private.  Either that or money is really pornographic.

The news among Big Law is not much better.  Most are reporting that they will take on fewer lawyers, and most will offer fewer internships next year and beyond.  Sure there may be exceptions, but most firms that I know of are actually letting attorneys go.  They are, in short, cutting back.

Most law firms, big and small, and most solo practitioners, are entering what is known as the "cost-cutting mode" in that they now find themselves stuck between rising costs and stagnant business.  Most have cut capital spending to the bone for now, and many will start to reduce inventories -- read lawyers, staff, consultants, etc.  The theory is that by making cuts early and controlling costs early, that you can avoid a more serious problem later.  All firms have to get and keep their earning and overhead ratios in check.

If they do not keep these ratios in check then they may very well enter the so-called "death spiral".  Law firms and lawyers who cannot or fail to control costs will run up debt.  Then the servicing of that debt becomes even another cost they cannot afford, which requires the firm to take on even more debt.  There are lawyers and law firms that will implode, and possibly file bankruptcy, in a few years, but the problem started now.

So, am I trying to scare you?  Not really.  I am making it despite these set backs, even if they are not pleasant.  The point is that you have to start eliminating waste.  Now all of us probably disagree on what represents real waste.  My views are pretty dramatic.  But, the truth of the matter is that once you start to eliminate waste -- things you really do not need to earn a proper living -- the extra money trickles straight to the bottom line.  Sometimes it even flows into savings accounts.

What these difficult times yield in the way of insight is that shrinking your law practice or law firm is often more profitable, in terms of real profit or the amount of money actually leaving your practice and making its was into your wallet or purse.  The key, I think, is to start looking at your law practice as yourself, and not as a firm.  What is in your best interest?  Quit living for everybody else, and start working for you and your family.

I work at home most of the time.  I work with a cell phone and a notebook computer.  I sometimes have to drive to court or to meet with referral sources.  But, apart from some expenses like a virtual PBX and a subscription to Basecamp, a little bit of paper still and some printing cartridges, what I earn is not much higher than what I keep.  My point is that as bad as bad times can be on you, they are never as bad as when you have little or no overhead.

Shedding your office, your staff, and the fake trappings of success, you can save a lot of costs.  Maybe you will not earn as much, but if you choose your remaining cases well, you will almost always get to keep as much or more than you did in a large firm.

It is really a stop gap situation.  In a home based or a Third Wave practice, if times get tough your earnings can fall to zero.  When things pick up, you might have to start over, but you do not have to start from behind.  That is almost never true in a traditional practice.  The reason is that when times get tough, the income stops but the outflow does not stop.  Your staff still wants to get paid, the landlord still wants the rent, the utilities for the office still want to get paid, then there are equipment leases and the like.  The real possibility is that you fall below zero.  You go below ground level in the bad times.  Then if you survive, you are not just starting off new, you are starting from behind.  You have to earn a lot of money just to get to zero.  You have to yearn even more money just to get to broke.

I would ask you to take some time during this tough economic period to reevaluate your situation and figure out everything you can cut.

Elections And Trial Strategy

I do not know if this is really what they teach in law school, but it seems it is how the world divides itself.  I recently completed a trial and it occurred to me that the arguments pretty much reflect the style of the campaigns during this election cycle.  I am not sure why I did not notice it before, or maybe I did but just never tried to equate the two.

Most trials, and really any litigated matter whether it goes to trial or not, seem to come down to one side that is focused on the objective facts and their application to the law, and the other side it is all about character.

Now, it is not that I do not take a shot now and then, but I am and I have always been and objective facts and law kind of person.  Get the elements down for an actionable claim and apply the objective facts as they connect and enhance the elements.  Time lining is the key for me.  I time line facts so I can see them in logical order.  It is not that some facts are not open to attack or the conclusion cannot be contested, but for the other side it is usually about the character of the other party.  It goes beyond the diacritical nature of the response.  It goes beyond the quintessential facts.  It is all about the personification of the the other side, the other party or the opposing counsel.  It is all about an attack on the moral or ethical strength of the one accusing.  It has little to do with the facts as it has everything to do with the fiber of the other party, the integrity of the opponent, the personality of the one on the other side.  It is all about caliber, constitution, complexion, mettle, mystique, nature, repute, temper, type, tone or trait of the other.

The strategy is to say that nothing that the person says (no matter what the objective facts) can be believed because the one bringing the action is an oddity, a wack, a card, nut, freak, eccentric, queer, spook, clown, basket case, or weirdo.  Maybe the words to describe the other side are not this strong, but the point is made.

I, of course, find this all rather abstruse because, I guess, I try to approach a trial as more emotionless, less personal, more matter of fact, a little instinctive, and maybe too monotonous or standardized.  Witnesses, testimony, exhibits relating back to the elements for an actionable claim.  Maybe the word should be textbook.  It is just easier and more comfortable for me to leave the personalities out of it as much as possible.  And, it is always a little shocking to me how far the other side will go on this character attack track.

I understand fully that some people have been more successful at working toward their character, their values, their honesty and integrity that others.  I understand people of character have strong convictions.  But, there is a always a fine line between distinguishing the character of the parties and coming across as self-righteous.  Besides, the attack repeated trial strategy seems to me to go against the good character distinction at some point.  First, we are not all saints and many, like me, are probably far from it.  But, a person of character believes in the inherent dignity of all people and treats everyone with respect, even those whose ideas and ideologies evoke strong disagreement.  So, when a person of character makes character the point to often and too forcefully, do they not soil themselves with violating this tenant of good character in doing so?

In the long run, I think most judges and most juries can look past the attacks if the objective facts are presented competently, but it takes work. I have learned that if my client has character flaws to just own up to it upfront so we can get past it and get on to the objective facts.

In criminal law during law school we learned that criminal defense attorneys often make the prosecutors, the police, the system, or the law subject of the trial, but I will also point out that most of these defendants lose.  So, I am not sure of the ultimate effectiveness of this tactic.  I just feel more comfortable dealing with the obvious and try to leave the atmospherics alone.  But, like the politics before us, I understand that the character argument is something with which I must deal.

A Lawyer Walks Into A Bar . . .

This is an interesting movie or documentary.  Go here to see the clip.  I think it represents the love - hate relationship between lawyers, business, people, plaintiffs, defendants and, as it turns out Christian fundamentalist.

Obama Runs Constructive Criticism Ad On McCain

Everyone Marry A Beer Heiress Or Write Best Selling Books

Ronnie, Howard & Andy For Obama

See more Ron Howard videos at Funny or Die

By By Barkley Good By

There have been established some pretty good for-profit law schools in this country in the last so many years, but as it turns out that has not been true for Barkely School of Law.  According to Law.Com, what was formally known as American Justice School of Law, a new group of investors took over the school after American Justice filed for bankruptcy.  Established in Paducah, Kentucky the law school has had an amazingly bad history.  Founded in 2004 the law school was formed.  In 2007 a group of students sued the school claimig a number of misdeeds, including the delay in the disbursement of loans for living expenses, for failing to notify students timely that the schools was not ABA accredited, and for not maintaining the facilities.  This suit was settled in February and a the new group of investors took over and renamed the school Barkley.  Now Barkley heads into bankruptcy and the school is kaput.  The problem ultimately will be the debt, loss of time and direction for all of the students that had placed trust into Barkley.  This is probably going to give a black eye for the for-profit movement in the United States.

I Am Afraid This Hits Too Close To Home To Be Too Funny

FREE Tuition For UC Irvine

How cool is this?  I have already graduated from law school and yet this makes me want to go to University of California - Irvine.  A top tier university with a brand spanking new law school that wants to attract you to attend while it works toward accreditation.  But, let us face facts.  How is UC Irving not going to get accredited and then zoom toward the top.  But, for students that enroll in UC Irving next fall will get their entire legal education for FREE according to the ABA Journal.  To the first 60 students entering that is a potential savings of $100,000.00.  It is expected to cost the University $6 million, and they have already raised half the money to cover it.  Get those applications in. Getting accepted would almost like winning the lottery.