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PROJECT PARTNERING: THE ROAD TO
ENHANCING YOUR PRACTICEby Jeffrey L. Berger, Esq.
Jeffrey L. Berger
specializes in management-side employment and business law, and related litigation in
Washington, D.C., and nationally. Other articles are available at www.bergerlaborlaw.com.
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Two roads diverged in a wood, and I --
I took the one less traveled by,
And that has made all the difference.
Robert Frost (1874-1963)
Lawyers in small, solo, and boutique practices often
face a difficult issue - when a client calls with a large case or lucrative matter that
exceeds the capability of the firm, what should they do' Traditionally, prudent
practitioners would refer the case to a so-called 'full-service' firm with greater
resources, or try to call in a big firm as reinforcements. Larger firms also face
situations where a client requires specialized legal expertise which they do not offer,
however, those firms are naturally reluctant to refer the matter to a competitor. To deal
with these issues, creative lawyers have begun to look at business models for partnering
and alliances used by their clients in such fields as computer services and construction
contracting, where several firms, each providing a specific and required expertise, work
together to perform a complex project that none could handle alone.
Just as computers and computer software have made it
easier for small law firms to have many of the advantages of large firms, i.e.
sophisticated word processing, case management, and research tools, electronic
communications now enable smooth collaboration among lawyers in separate offices in the
same city or in different countries. The project partnering concept is based upon
the premise that experienced lawyers in small firms can provide equal or superior client
services on most complex matters as compared to lawyers in large, full service firms. The
key is that these small and solo practitioners must spend the time and effort to create
reliable networks prior to the need or project arising, and thereafter establish
well-thought out operating plans to handle particular projects.
While this article focuses on small firm practitioners,
the concepts apply equally to lawyers in large firms who need to augment the scope of
services they offer. Having practiced in two large national firms, a small firm, as a
solo, and with the federal government, I am not suggesting that the project partnering
concept works successfully for all practice areas or all matters. However, lawyers adept
at thinking 'out of the box' will find this approach particularly useful in expanding the
scope of their practice and their business volume.
1. Defining the Need for Partnering
The concept of project partnering presupposes that a lawyer has a matter on which he needs
assistance outside that offered in his firm, has enough experience to recognize the
breadth of the issues beyond his own comfort zone, and has substantial value to add to the
matter, whether through expertise, litigation skills, or knowledge of the client or facts
involved. For example, a management-side employment lawyer whose bio-science manufacturing
client is seeking to negotiate the forced separation of a chief executive to avoid
litigation, may not have the tax and business expertise to handle the compensation and
corporate governance issues that are likely to arise. Likewise, if the executive is
claiming that his termination is in retaliation for raising environmental law and health
violations related to construction of the company's new facility, expertise in other areas
may also be required. Thus, the need for partnering may arise simply out of the desire to
get an experienced and quick analysis on issues that could either be red herrings or major
liabilities if litigation ensues.
The potential size of the matter is also a significant factor and has a practical effect
on a solo or small firm's ability to adequately represent the client. Discovery demands in
a class action can quickly exhaust a small firm's resources, leaving both the existing
matter and the firm's other clients at a serious disadvantage. Litigation may also entail
work in courts where the attorney is not admitted or familiar with local court customs, or
where prudence dictates that a local counsel take an active role in the case. In
contingency cases and 'alternative billing' arrangements where reduced rates are exchanged
for success bonuses, small firms may want to share the risks with others. Outside lawyers
may have similar expertise but can provide high-level research capabilities or stature in
a particular matter, which is another reason to team-up. Finally, especially for solo
practitioners, it is often useful and welcome to have the support and camaraderie of
working with a trusted colleague.
Clearly, these factors are not mutually exclusive and
may arise in ways not anticipated by even the most experienced counsel. Thus, it is
important to sow the seeds for creating project teams on an on-going basis in order to be
able to responsibly undertake a matter that goes beyond a particular lawyer's or small
firm's capabilities.
2. Establishing and Maintaining
Relationships with Other Lawyers
A. Creating Your Community
While law practice management journals and business development seminars are abuzz with
networking techniques, an alternative method to enhance billings is to create a community
of practitioners on which you can rely for expertise and support. Small firm practitioners
who have had the benefit of working in a large national firms can often rely on their
former partners and associates, especially if they too have moved on to smaller practices.
This is likewise true of ex-government agency lawyers, although the breadth of expertise
among their former government colleagues will likely be narrower.
While it may be easy to identify those areas of
expertise that are beyond a small firm's capability, identifying reliable and competent
practitioners who can move in and out of practice teams is more difficult. One of the best
places to start is with lawyers with whom a small firm's members have previously practiced
and observed under the stress of deadlines and 'bet-the-company' decisions. Another good
source of identifying project partners is through work on local and national bar
committees and pro-bono projects where you can get a sense of a person's style,
commitment, and intelligence. A third technique is to be generous with your time and
expertise to others. Most practitioners have the need to brainstorm on matters in order to
get a reality check in an area they know well or to explore the issues in an area where
they have no expertise. A lawyer who is generous with her time can often establish a
network of practitioners who reciprocate, become comfortable working together, and rely on
each other when the matter moves beyond brainstorming. Moreover, after you have done this
for awhile, it becomes fairly easy to identify and adopt guidelines for when a colleague
is moving beyond the free advice mode, into one where you should either hang-up or begin
talking about your hourly rate.
Obviously, a small firm lawyer will come upon situations where she needs to look beyond
her network to find a lawyer in another jurisdiction or one with a particularly unique
expertise. Rather than looking in Martindale-Hubbell or the local bar directory, it is far
more effective to rely on your existing network to identify a lawyer in the jurisdiction
or speciality at issue that is at least known or trusted by someone you trust. In most
instances when you locate lawyers to assist you in this method, the commitment to do a
good job will be enhanced by their desire to live up to the referral that brought them to
you.
B.
What is Reasonable to Expect
When a lawyer brings an outside practitioner into a matter, he is obviously putting his
reputation and the welfare of the client on the line. If you are going to utilize a
project partnering approach, it is critical to have formed a community of lawyers on who
you can rely for a high degree of expertise in their field, quick responsiveness to your
needs, and a high level of professionalism. Basically, you need to trust them. Whether you
will obtain a response that is better or worse than you can expect in a large firm will
depend, in a large measure, on how well you have established your community, as compared
to the many factors that go into staffing matters in a large firm. It would be naive to
suggest that a particular lawyer would better off in one practice or another, given that
in many firms a lawyer's ability to draw on attorneys from other disciplines is dependent
upon such factors as the lawyer's status, the size of the matter, the depth of the firm's
bench, and the compensation system. In the project partnering format, the factors that
influence an outside lawyer's response are equally complex but somewhat different. Once
you establish that a particular lawyer or lawyers are your 'go-to' sources in a particular
area of expertise, future partnering will depend upon their responsiveness and the quality
of that response. In fact, one of the things that a small firm practitioner can market to
her clients is a community of experienced, highly skilled, specialized professionals, who
will hopefully bill at reasonable rates. While it is somewhat easier to establish these
relationships with lawyers in small firms, it is certainly possible and often beneficial
to have in your group lawyers from medium and large size firms who can bring a high degree
of firepower and resources to a particular matter. Of course, as discussed below, every
lawyer will have to consider whether involving another firm in a matter will put at risk
his relationship with the client.
C.
The Conversation and Cardinal Sins
Regardless of whether you are working with a solo, or
the head of a practice group in the largest firm in your town, it is critical to discuss
the ground rules for representing the client, i.e., who is responsible for what, and the
business and financial relationship. Obviously, the first step is for all lawyers under
consideration to conduct a conflict check. The difficult issues, however, known as the
'cardinal sins' of a project partnering relationship are being unreliable in the
timeliness or the quality of your segment of the work, and soliciting a client that
someone else has brought to the relationship. While the days of client loyalty disappeared
with the electric typewriter, it still is galling to lose a client to the active
solicitation of a colleague who you invited to assist in a matter.
Thus, it is important to establish at the outset what the ground rules are for
solicitation of business, client contact, mailing of client newsletters, invitations to
seminars, and other activities that your colleagues may inadvertently or deliberately
engage in once your client is put into their database. For ongoing project partnering to
be effective, the lawyer with the initial client relationships should expect that those
lawyers who he brought into a matter will immediately communicate if the client has
contacted them about doing other work. In the best of all possible worlds, the colleague
involved outside your firm should inform the client that he or she will first discuss the
matter with you before undertaking any work directly with the client. In my experience,
clients, especially those involved in business, appreciate this high road approach, and it
usually results in increased business for all involved. Obviously, lawyers who cross the
line on client relationships will be quickly removed from the project partnering ranks.
Indeed, the most effective remedy is to let others in your legal community know about the
offending lawyer and increase your own marketing efforts to find new clients.
D.
Structuring the Relationship
While there are many different ways to structure your relationship with other attorneys on
a particular matter, the touchstones are: 1) the applicable rules of professional
responsibility, 2) the financial arrangement, and 3) the responsibility for various tasks.
Using the District of Columbia's Rules of Professional Conduct for discussion purposes,
there are a number of rules and bar opinions that effect the project partnering
relationship; each practitioner must review the rules of the applicable jurisdiction. The
District of Columbia and most other jurisdictions have rules concerning competence, under
which the lawyer who refers another outside his firm may conceivably be held responsible.
Likewise, the requirement to consult with the client as to the means to pursue his
objectives, appears to require disclosure as to how the lawyers involved intend to
structure their representation. Rules that require keeping the client reasonably informed,
seem to require that all lawyers involved in the representation work together towards this
end. The District of Columbia necessitates a written representation and fee agreement for
new clients, which raises an issue discussed in detail below, i.e., whether each solo or
law firm involved in project partnering should have separate fee agreements. Most
jurisdictions also have rules concerning division of fees which require disclosure to and
consent by the client. Rules of conduct concerning communications about legal services,
both orally and through firm names and letterhead, must also be observed so that the
client is not mislead as to the services that any firm involved in a project is offering.
In actuality, the rules of professional conduct make
structuring these relationships easier. Lawyers who err on the side of compliance will
likely have the most clear understandings with the client and among themselves. While it
may be more convenient to have one lawyer do the billing for everyone, in most
circumstances, the most prudent course of action is to have each firm enter into a
separate written representation agreement with the client. Likewise, it is highly
preferable for the lawyers involved in the partnering relationship to have a written
agreement laying out their relationship. This is particularly important in contingency
cases, but is nonetheless useful in the event that there is conflict between the members,
dispute over payment, or conflict over responsibility.
In the most basic hourly billing format, each lawyer is paid for the hours he or she
works. Nonetheless, this does not account for the situation where the client does not pay,
pays late, becomes unable to pay, or disputes the fees on a particular lawyer's work. This
type of issue is obviously difficult to work out and in some instances is most reasonably
resolved by the primary lawyer taking the responsibility for resolution, even if it means
paying the other lawyers first. Obviously, the larger the matter and the more fees
involved, the more important the written documentation of the relationship between the
lawyers becomes. Moreover, for particularly complex matters, it makes sense to have a
written 'business plan' outline for how the matter will be handled. Nonetheless, if you
are working with people you trust and with whom you expect to continue an ongoing
relationship, if a conflict arises between the agreement and what you feel is the right
thing, you all should attempt to balance long term and short term goals. Finally, when the
matter is completed, there must be a clear understanding of who retains the records, who
has responsibility for issues that may arise in the future, and who has responsibility for
communicating with the client.
3. Relationship with the Client:
Marketing Project Partnering
Small and solo firms can use the project partnering
concept to effectively market services to clients, especially business clients who may not
normally view them as viable alternatives. The concept can be presented as a value-added
approach to practicing law, in that it may enable the small firm to offer high level
services at lower fees, due to lower overhead, while having access to high level
assistance from experts. In particular, project partnering avoids situations where a
lawyer feels compelled to use the services within his firm in a particular area, even
though a particular colleague may not be the lawyer's first choice.
A lawyer who feels that she has established a reliable
project partnering network should discuss the expanded services that can be provided with
a client prior to the need arising. In doing so, the primary lawyer will hopefully foster
the relationship whereby the client views her as a broad based legal advisor, rather than
a narrow provider in a speciality area.
4. Interaction with the Client
As part of structuring the project partnering agreement with other lawyers, it is
important to determine who is going to talk and meet with the client, as well as who is in
charge. When the primary lawyer has a long-standing relationship with the client, knows
its business, and may even know the facts of the particular case, it is probably more
efficient and more comfortable for the client to maintain the primary lawyer as the point
of contact. Even so, for a lawyer to know the right questions to ask in a matter is often
difficult and inefficient when he lacks familiarity with the substantive legal issues.
While these communication issues are similar where lawyers are working together in a firm
or in a project partnering relationship, a key issue is who is in charge in making these
judgment calls. This should be established early in the relationship so as to avoid
duplication of effort and unnecessary costs.
While each firm may have a separate representation
agreement, the primary lawyer should likely be responsible to handle and review the
invoices from each of the partnership's members, and be able to explain and defend them to
the client. The lawyers should have agreed upon a billing format and rates prior to
commencing representation to avoid issues with the client over such things as widely
different billing rates or detail in billing formats. Throughout the representation, the
primary lawyer should discuss with the client whether he or she is satisfied with the work
being performed by each of the team members.
In assembling the team of lawyers, the primary lawyer should also consider such factors as
clout with opposing counsel, which aspects of the case are the 'dog' versus the 'tail' in
relation to staffing choices, and how the various personalities will work together among
themselves and with the client.
5. Touchy Subjects
A perennial issue with most firms is the collection of fees. As discussed above, this can
become more complicated in project partnering, since a firm providing a small, but
important, portion of the work may not be able to stay involved if not promptly paid.
While some of these issues can be dealt with by fee arrangements with the client,
ultimately the primary lawyer must provide for these contingencies up-front or be willing
to dip into his or her own pocket if necessary to keep the work going.
Another tricky issue is dealing with opposing counsel.
In my experience, a properly structured project partnering relationship can be presented
as a formidable and deep bench to traditional law firms, especially if its members are
known and respected in the legal community. A lawyer's ability to attract competent and
well-respected practitioners to work with is based upon his own reputation and efforts in
establishing a community, and the nature of the case. Another area that must be considered
is when an outside lawyer does not work up to the level required. If this arises, it is
important to intercede early and discuss the matter with the lawyer at issue and, if
necessary, replace him, with appropriate explanations to the clients. In most instances,
clients retain the services of a lawyer either by referral or by a long-standing
relationship. It is important to solve any trust problems that arise, even if it means
having a difficult conversation with a colleague.
6. Reputation
The key to this entire undertaking is establishing your
reputation in the legal community as a competent lawyer who can be trusted, working to
enhance that reputation through your project partnering relationships, conduct with your
adversaries, and volunteer, work on bar associations, and community activities. As in most
things, what goes around, comes around, and this is especially true when establishing your
own roads to project partnering.
(This article is an expanded version of a District of Columbia Bar Association seminar,
'Project Partnering to Enhance Your Practice,' presented on November 18, 1998, by Jeffrey
L. Berger, Esq., and Mark London, Esq. See also 'Small Firm Lawyers Team Up To Win,'
Lawyers Weekly USA, March 20, 2000; and 'Law Firms Restructure to Meet Marketplace
Demands,' Ohio Lawyers Weekly, May 8, 2000.)
© 2000 Jeffrey Berger
The Berger Law Firm, P.C. 1825 Eye St. N.W., Suite
400,
Washington, D.C. 20006.
Phone: (202) 861-1361 Fax: (202) 861-1362
Legal advice is case specific and is not intended to be provided by this article.
The Berger Law Firm, P.C. may not be held responsible for any consequences
that may arise in connection with the use of or reliance on the information provided. |