Volume 18, Number 1
HOT NICHES: BANKRUPTCY, IMMIGRATION LAW, BUSINESS LAW, ESTATE PLANNING, AND FAMILY LAW
Today's hot practice niches in general practice take on hues much different from those of the decade or generation past. What's hot and what's not can change more quickly than hairstyles and auto bodies, and keeping in tune with hot niches means a lot more than being caught practicing law in white vinyl go-go boots to the tune of Sam the Sham and the Pharaohs. The retro look just isn't a sure bet when it comes to building a client base and bringing in revenue.
GPSolo asked an ensemble of leading practitioners across the country for their take on hot practice areas in the year 2001, and they gave us some surprising answers. Old tried-and-true areas such as estate planning and business law remain hotter than ever, jump-started by technology and entrepreneurship. Social change has altered the complexion of family law to embrace reproductive technology and alternative lifestyles. Transnational migration, coupled with an ever-changing bureaucracy, has lifted immigration law from storefront practices to sophistication. And when it all goes bust, bankruptcy law is right there to give the unlucky a fresh start.
Edward DiDonato, Neil Dornbaum, David Leffler, Daniel Evans, and Sondra Harris share their insights on today's hot niches.
Bankruptcy-Edward J. DiDonato
Any bankruptcy practitioner, especially one in a solo or small firm practice setting, must be experienced in the general practice of law. Bankruptcy issues are sometimes limited to concepts such as cash collateral, preferences, cram-down and plan confirmation. But, more often than not, everyday problems such as leases, commercial litigation, and vendor disputes will be the hot topics of the small business Chapter 11 reorganization.
Hot button topics. In the case of an individual, the debtor is discharged of virtually all debts. The debtor will not be able to discharge claims relating to recent tax debt, fraud, embezzlement, alimony, support, willful and malicious injury, and student loans. To deny the discharge, a creditor must file a complaint and meet its burden of proof. Defense of this type of action can be fairly complex and costly. In a more problematic case, numerous complaints may be filed, forcing the debtor and counsel to defend, defend, and defend. Plan ahead and ask the appropriate questions prior to filing the petition.
Billing. Lawyers in a bankruptcy proceeding are generally paid only upon court order. This can be both time-consuming and challenging. A fee application or motion must be filed in Chapter 7 liquidations, Chapter 13 cases, and Chapter 11 reorganizations. The pleading must include a schedule of services rendered and the date and the time spent on each task. Creditors and parties in interest receive 20 days' notice and may object to the fee award. After a hearing, an order should be entered within 60 days from the filing of the fee application. Obviously, this time frame is shortened without objection or lengthened when hearings and testimony or a court opinion are required.
Simply having an order does not get you paid. As the holder of an administrative claim, you are junior to the secured creditor or lien holder in every case. If the lien holder objects to your fee's being paid, the court will likely agree. In some cases, the debtor will simply not have enough money to pay you. If the debtor is a small business, it has numerous ongoing expenses. A small business must continue to pay its utilities, taxes, wages, and post-petition suppliers, and the services rendered by the lawyer may have, in the opinion of the debtor, diminished in importance.
The secret is simple: request and receive a retainer fee prior to the filing of the petition. This applies even if the client is your dear cousin Billy, twice removed. Receipt of the retainer will, of course, protect you and allow you to remain interested. The receipt of the retainer and application of the retainer fee must also be approved by the court. If the retainer received is too low, you are at risk. If it exceeds the fee approved by the court, you will be required to return the unused portion.
Staffing. Most cases filed by a solo or small firm will require one or two lawyers and a paralegal. Major cases obviously will require more lawyers and possibly the retention of special counsel to meet the needs of the case. One may require tax or pension counsel, special litigation counsel, or labor counsel. The bankruptcy court must approve the retention of all professionals. Counsel must also determine if an accounting firm will be required. Never lose sight of the simple question-how will they all be paid?
Marketing. Although the market has cooled in the last few years, with fewer bankruptcies being filed, it is safe to say that bankruptcies will continue to be filed. The root causes of bankruptcy-illness, age, competition, greed, and poor judgment-will continue. These root causes are as old as society itself.
Edward J. DiDonato of DiDonato & Winterhalter, P.C., in Philadelphia, has been a bankruptcy practitioner for more than 20 years.
Immigration Law-Neil S. Dornbaum
Immigration laws are extremely complex and undergo changes on a daily basis. There is a continuous flow of federal court and administrative agency decisions that impact daily practice, including those issued by the Board of Alien Labor Certification Appeals (BALCA), Board of Immigration Appeals (BIA), Chief Administrative Hearing Officer (OCAHO), and Executive Office of Immigration Review (EOIR).
In addition, regulations are promulgated daily, emanating from various governmental agencies, including the Immigration and Nationalization Service (INS), Department of State, Department of Labor, and Public Health Service. While immigration law is a federal practice, knowledge of the nuances of local practice-for example, differences in processing between one district office or Department of Labor certifying officer and another-must be considered in rendering proper advice to achieve an employer's immigration-related goals.
Hot button topics. The INS may approve in excess of 195,000 petitions each year submitted by U.S. employers on behalf of H-1B nonimmigrant workers alone. In addition, more than 20 different lettered categories allow individuals to enter the United States on a temporary basis, many of which allow for employment. These categories include H (professionals), L (intra-company transferees), E (treaty traders/investors), J (exchange visitors), O (persons of extraordinary ability), and TN entries (under the North American Free Trade Agreement).
Lawyers may work with businesses to assist in the securing of temporary and permanent work authorization for foreign workers, establish and maintain effective internal immigration law compliance systems (for I-9s), handle immigration-related discrimination issues, oversee labor condition application compliance, and respond to government enforcement actions under U.S. immigration laws. Billing. Most immigration practitioners working in employment-based immigration bill their clients on a flat-fee basis. This is because most employment-based immigration is event-driven and employers must establish their budget for immigration-related services. Billing is very competitive as many large corporations use more than one immigration counsel for their immigration needs. However, hourly fees may be more appropriate in responding to notice of deficiencies, notice of findings, or other inquiries issued by the Department of Labor, INS, or Department of State; or when filing multiple petitions under different employment-based categories. Hourly fees are the norm in the representation of individuals before the Board of Alien Labor Certification Appeals, an Administrative Law Judge, or the Board of Immigration Appeals. Hourly fees are also customary for lawyers who establish and maintain effective internal immigration law compliance systems (for I-9s), handle immigration-related discrimination issues, and respond to government enforcement actions under U.S. immigration laws.
Staffing. A lawyer may use the assistance of paralegals. Employment-based immigration may require consultation with co-counsel in the areas of tax, employment law, and criminal law.
Marketing. The companies employing foreign workers include Motorola, Oracle, Cisco Systems, Intel, Microsoft, Lucent, Pricewaterhouse-Coopers, Hewlett Packard, Ernst and Young, IBM, and AT&T, to name a few.
Immigration law offers the opportunity to work with pharmaceutical companies, high-tech firms, engineering concerns, and other businesses, including small business clients, who seek the services of professionals from foreign countries.
Neil S. Dornbaum is a partner in Rubin and Dornbaum in Newark, New Jersey. He has been a practitioner for more than 15 years. His practice is limited to immigration and nationality matters, with special emphasis on employment-based immigration.
Business Law-David J. Leffler
Recent developments, both technological and societal, are fundamentally changing many aspects of a business lawyer's practice. But where is the practice heading in the future? Like the swirls and eddies of a stream, the picture for business law practitioners will continue to change. You need to be aware of these constant shifts and respond accordingly to remain competitive in the unfolding business law landscape.
Hot button topics. A web presence and e-commerce are becoming more pervasive in business, and not just for large corporations. Small businesses are discovering the benefits of having a website in record numbers. As a result, expect intellectual property law to be a necessary expertise if you intend to practice business law in the future.
Any business client who intends to build a website will have to be counseled on the copyright and trademark issues that often arise. Has your client found the perfect photo for its website? Be sure to ask where the client got the photo. A client may see nothing wrong in saving a photo from another website and using it on its own website, completely unaware of the intellectual property rights governing the use of the photo.
Your client will most likely use a consultant to build the website. Be prepared to negotiate the difficult issues concerning whether your client or the consultant retains the ownership rights to the designs and other intellectual property created by the consultant.
Intellectual property issues also arise when your business client hires a consultant to design a software system to run its business, when hiring employees who might create intellectual property for your client, and from the proper use of off-the-shelf software so that the shrinkwrap license is not violated.
The world is becoming a smaller place, and the United States has become a major draw for foreign workers. Small businesses are finding immigration issues to be more common in this global marketplace. One option they are considering as a way to obtain qualified employees in these times of almost full employment is to sponsor an employee under the U.S. H-1B nonimmigrant visa program, which has recently been expanded. Because immigration law issues are not overly complex, it may be worth the solo lawyer's time to learn about this area of law, which is quickly gaining relevance to the small business owner.
Billing. More clients are expecting fixed fees, at least for assignments that are fairly defined in scope such as a contract with standard terms. The days when you could simply bill "for as long as it takes" are fading fast in an era where the Internet permits you to negotiate for everything from airline tickets to groceries, and send out shopping bots to get the lowest price on a wide variety of items. Furthermore, an increasing number of websites offer business owners advice on all aspects of their business, including do-it-yourself legal forms that make the whole legal process less abstract.
For many business owners, law has become close to a commodity, with a market price that can be negotiated. These perceptions can hamper your ability to bill your time at even the lower rates of a small law firm, making the building of a solid relationship with the client that communicates professionalism and trust more critical than ever.
Staffing. The key to effective staffing for the solo or small firm business lawyer of the future is hiring multitalented employees. A primary employee should be able to type; possess good language skills; display a pleasant telephone personality; be comfortable researching both factual and legal items on the Internet; and know how to use a variety of computer software programs. You'll know that you've really hit pay dirt when you find an employee who, in addition to all of these "basic" skills, knows how to handle computer problems and can set up a small local area network.
Marketing. Twenty years ago, marketing would not even be considered an appropriate topic for the practice of law. Today, there is a vast array of books, seminars, software programs, and consultants to assist lawyers in their marketing efforts. Check out marketing resources at http://marketing.lp.findlaw.com/.
Research the effectiveness of a product before spending the time and money to purchase and use it. An excellent place to inquire about a particular product and get lawyers' responses describing their real world experiences is Solosez, the ABA listserv for solo attorneys and small law firms that presently has about 700 subscribers. You can sign up for Solosez at www.abanet.org/solo/solosez.html.
David Leffler is a solo business law practitioner in New York City who represents a number of Internet and new media clients. His practice focuses on entrepreneurial and growing companies. He serves on the advisory boards of USLaw.com and the New York Infotech Forum, a breakfast meeting held monthly in New York City for information technology companies.
Estate Planning-Daniel B. Evans
Estate planning has become more of a hot practice than ever, thanks to the ongoing transfer of wealth from aging parents-who are searching for the best way to preserve and protect their wealth-to their Baby Boomer offspring. Also, clients are increasingly wealthy from recent successes in real estate ventures and the stock market. Meanwhile, lawyers are struggling with technological advances and increased client expectations as they deliver estate planning services.
Hot button topics. Some of the following estate planning techniques that have evolved and become more popular in the last few years include:
Grantor retained annuity trusts (GRATs) allow a grantor to contribute property to a trust and retain an annuity of a fixed amount for the term of the trust. At the end of the term, the remainder passes to the beneficiaries without any additional tax. The gift tax values of the annuity and the remainder are based on certain assumptions about interest rates, and the hope is that the trust will earn more than is assumed, so that the remainder will be worth more than assumed for gift tax purposes. However, the rules regarding both the drafting and valuation of these trusts are complex, and the IRS has changed the rules several times in the last few years, making it difficult to stay current on what is or is not allowed.
Qualified personal residence trusts (QPRTs) allow a grantor to transfer a personal residence to children or other beneficiaries, retain the right to live in the residence for a term of years, and pay gift tax only on the discounted present value of the future remainder. However, these trusts are afflicted with numerous qualification rules and some uncertainties in application.
Charitable remainder unitrusts are frequently used to defer taxes on capital gains. Appreciated stocks or properties are contributed and then sold, and the proceeds can be reinvested without any federal income tax until the income or gains are distributed back to the grantor (or other beneficiaries). Once again, new qualification rules (such as the required charitable remainder value of 10 percent and new definitions for "flip" unitrusts) have kept estate planners on their toes.
Family limited partnerships must be considered for many wealthy families because the IRS continues to lose court battles over their formation and valuation. A client who funds a limited partnership with marketable securities can frequently obtain substantial gift tax discounts for the partnership interests. This is because of the lack of marketability of the interests and the lack of control for minority or limited partners.
Changes in the federal estate tax unified credit (applicable exclusion amount) sent many estate planners scrambling to review estate plans. The prospect of estate tax repeal (recently vetoed by President Clinton but still an issue for the next Congress and the next president) has many clients looking to lawyers for guidance.
Technology. Estate planning software can include the latest changes to the unified credit or guidance for the valuation of GRATs or QPRTs, as well as provide charts or graphs that help explain the estate plan to the client and show the value of the lawyer's services. New drafting software can include the clauses required by the latest IRS regulations and allow the estate planner to produce documents faster. And the lawyer needs to draft faster, because more and more clients are expecting the kind of overnight service that they get from FedEx and the Internet.
Billing. The time is long gone when lawyers could charge $50 or $100 for a will and hope to earn a larger fee when the client died. And the time is also passing when a lawyer could tell the client that the fee will be "reasonable" and based on a "standard hourly rate." Clients aren't comfortable not knowing what the fees will be, and the use of computers for estate planning has made hourly billing less attractive for lawyers doing more work in less time. The combination of client expectations and technology has moved more and more estate planners toward fixed fee agreements and away from hourly billing.
Staffing. The increased use of computer technology has also changed the staffing needs of estate planners. The traditional secretary is less needed because computers make drafting documents and preparing client presentations easier. What is more often needed is a paralegal who understands the legal issues and can use the computer to prepare the tax projections and document drafts for the lawyer's review.
Marketing. New technologies, new legal issues, and increased client awareness are all creating additional marketing opportunities. Internet websites can attract new clients. Changes in the law also provide opportunities to send out client newsletters. And media coverage of estate tax issues have raised concerns among many people about estate planning issues.
Daniel B. Evans is a solo practitioner and estate planner in Wyndmoor, Pennsylvania, and the author of two ABA books, Wills, Trusts, and Technology: An Estate Lawyer's Guide to Automation and How to Build and Manage an Estates Practice.
Family Law-Sondra I. Harris
When you think about family law, the usual topics that spring to mind are divorce, custody, support, equitable distribution, and perhaps adoption. However, family law today includes far more than these classic topics.
Hot button topics. One example of societal change reflected in the law is that most lawyers have never drafted a cohabitation agreement, yet it is more than likely that within the next several years at least one couple will walk in and request one. The couple could be heterosexual or homosexual. They may be adopting children or going through assisted reproductive technology. They may already have substantial assets. They may already own real property as joint tenants or tenants in common.
Remember, you can only represent one party in such cases. While it is tempting to represent both, especially if the parties apparently are in agreement, to do so would be perilously close to a violation of the canon of ethics and is clearly a conflict. It is impossible to properly represent two people when they have an adversarial relationship. No matter how convinced they are when they are in your office that they want exactly the same thing, when the relationship breaks up a year and a half later, the first person they will blame is the lawyer who represented them both.
Family law is on the leading edge at both the beginning and the end of life. Problems that were never dreamed of in law school are becoming commonplace. Family lawyers need to be well versed on the topic of artificial reproductive technologies (ART). Numerous legal problems arise out of ART: Who are the parents? Who owns the frozen embryos if there is a divorce? Does a parent have a duty to support a child born years after a divorce? Can a husband's new wife carry a frozen fetus created with the first wife's egg? Can a widow be fertilized with her deceased husband's frozen sperm? If she does, is that child eligible to inherit property or collect Social Security? Can frozen embryo be adopted by third parties? All of these are new and novel issues, most of which have not been litigated in any state. Often, when they are litigated, they are idiosyncratic to the facts presented and therefore don't set any precedents.
At the other end of life, family lawyers deal with the issue of who has the right to make life and death determinations. Often, wills are drawn up as part of divorces. As part of the new estate plan, new health care proxies and powers of attorney should be executed. Clients should be made aware of the problems of not having a health care proxy or a living will. Every state has legislation now that provides for such documents. Without such a document, chaos may erupt when the family is least capable of dealing with it. It is a family lawyer's obligation to try and prevent a family from being torn apart at a time of crisis and to help a client make sure that his wishes are followed. Most of your time will be spent helping the client confront his own mortality and deal with these issues in the present, rather than putting them off.
Billing. Almost all traditional matrimonial law is done on an hourly billing schedule. However, a flat fee may be more appropriate for some of the cutting-edge issues in family law, such as litigation involving reproductive technologies. Family lawyers may also wish to charge a flat fee when they find themselves drafting cohabitation or ART agreements rather than litigating cases. Remember, you may have to start from scratch, rather than relying on your trusty forms library, for cases involving new and novel issues.
Cohabitation agreements, ART agreements, and even living wills are not necessarily one-time encounters between lawyers and clients. People need new wills, cohabiting couples may purchase property, and new parents will want to work out estate plans.
Staffing. Whatever brings your clients into your office, it is extraordinarily important that both you and your staff treat them with the appropriate interpersonal skills. Family law is unlike any other kind of law because it deals not only with legal issues but also with emotions. Many of these clients need a lot of handholding. For that reason, you need at least one staff person who has excellent interpersonal skills and is able to listen and understand that while she cannot give advice, she can allow clients to vent. This saves the client money, saves you time, and creates a bond with the client that makes the practice of law certainly more fun.
Marketing. You need to let the public know what legal problems can be handled through your office. Certainly, client newsletters are a helpful tool. Writing articles for local newspapers allows the general public to hear about new ideas and gets your name out. Often, civic groups such as public libraries or schools run adult education programs, which can be a forum for lawyers to discuss current topics in family law.
Sondra I. Harris is the senior member of Sondra I. Harris & Associates, P.C., in Woodmere, New York. Besides practicing family law, she is a frequent speaker and writer on issues involving alternative families.