Teaching for Success: The Business of Lawyering

Volume 40 Number 1

By

About the Author

Donald M. Lewis served as dean of Hamline University School of Law in St. Paul, Minn., from July 2008 through December 2013. He returns to full-time private practice in January 2014 at Nilan Johnson Lewis in Minneapolis, the law firm he cofounded in 1996.

Law Practice Magazine | January/February 2014 | The Management IssueWhen I became dean of Hamline University School of Law in St. Paul, Minn., in July 2008, I was a rare bird: a nonscholar, practicing lawyer chosen to lead a law school. I had 30 years of litigation experience but had published only one law review article, my third-year paper shortly after graduation from law school in 1978.

Before long—with the onset of the worst economic conditions for lawyers and legal education in decades—I realized that perhaps law schools needed leadership with more practice experience than scholarly credentials. Experiential, skills-based education and professional employment prospects emerged as key priorities for deans competing for students among shrinking law school applicant pools.

EFFECTIVE VERSUS SUCCESSFUL LAWYERS

One gap in the curriculum—not only at Hamline, but at the vast majority of law schools—became glaring to me: the lack of instruction on how to succeed in law practice.

The bulk of any law school’s curriculum is devoted to teaching students how to be effective lawyers: how to understand the law and execute professional legal tasks to the benefit of clients. Little time is spent on the business of law and how to make a living practicing it. After commencement and the bar exam, new graduates enter the profession with little understanding that business success relies on a completely different set of skills and tools.

To be sure, law schools have featured courses, clinics and workshops on lawyering skills related to practice management, such as initial client interviews. Instruction on professionalism and ethics is a long-standing requirement. Courses on accounting for lawyers—how to understand a business client’s income statement and balance sheet—are also commonplace. What has been missing was instruction on how to succeed at lawyering—that is, how to make money as an attorney while maintaining your personal well-being.

So, in the summer of 2010, I recruited two former Twin Cities law firm administrators and consultants—Judy Norberg and Carol Cummins—to join me in designing a new course entitled The Business of Lawyering. It was based upon the fundamental premise that a successful career in private law practice requires more than being a competent lawyer. Because law is a business, any new lawyer—whether a solo practitioner or law firm associate—must understand the law practice business model and operations in order to thrive.

LEARNING OUTCOMES AND COURSE DESIGN

As with planning any law school course, the first step must be to identify and state clearly the objectives. In The Business of Lawyering we expect students to achieve the following learning outcomes:

  • understand the operations of a law firm as a business, including key financial measures of law firm and individual lawyer profitability, such as hourly production, fee setting and billing, and realization;
  • recognize the role of marketing and the importance of client service and satisfaction in a successful law practice;
  • know the components of a basic business plan for establishing a solo or small law firm;
  • appreciate the interpersonal skills and workplace strategies for satisfactory performance and advancement in a law firm;
  • comprehend how the practice of law is shaped by technological developments and changing economic conditions; and
  • be better prepared to assess whether the private practice of law is a suitable individual career choice, and if so, what kind of practice would be a good fit for each student.

Having defined the objectives, we designed the syllabus to teach them to the students. It includes modules introducing students to the elements of a successful law practice, which are listed below.

Marketing. Terrie Wheeler, a professional marketing coach with Professional Services Marketing, introduces students to marketing action planning, focusing on the four “pillars of marketing”: growing relationships with existing clients, attracting new clients, increasing name recognition and creating effective communications. Each student drafts an “elevator” speech describing the unique value he or she can deliver to a prospective client. Providing service to existing clients that exceeds their expectations is emphasized as a critical component of business development.

Financial performance. Beyond explaining the basic business model for law practice (i.e., hours billed and collected generate revenue), our business of law class introduces students to the financial metrics that demonstrate financial health and the growth of a practice (e.g., realization rates, aged work-in-progress and accounts receivable, and profit/expense ratio, among others). Students are presented with local surveys of legal fees and provided examples of legal services agreements. They are educated on timekeeping software and complete an exercise of recording time entries based upon a simulated day’s work. We underscore that improving revenue does not necessarily require working longer and harder, but working more efficiently.

Law firm start-up. Students are introduced to the various forms of law firm organization and the variety of considerations influencing the choice of business entity (e.g., ownership and control, distribution of income, tax treatment, liability, and potential conflict and division). They walk through the checklist of essentials for a law office at the start: space and supplies, licensing and insurance, computer hardware, office and financial management software and services, and marketing. Given the substantial upfront costs, the importance of a detailed and realistic business plan is highlighted and an example simulated in class.

Technology and information services. Students are presented with the vision of the paperless law office, with cloud-based document management, shared electronic workspaces for collaboration with clients and e-bills. They also learn about the wealth of free online information services, databases and practice resources available to the solo or small-firm attorney.

Risk management. We expand upon traditional professional responsibility courses by explaining malpractice insurance and office management best practices that minimize the risk of malpractice claims. We review the ethical hazards that most frequently occur in a solo or small firm setting, most notably failures to act diligently and to communicate with clients. Students simulate the delivery of bad news and disclosure of mistakes to clients.

Work/life balance. In The E-Myth Attorney, Michael Gerber describes a successful lawyer as one who “works balanced hours, has little stress, enjoys rich and rewarding relationships with friends and family, and has an economic life that is diverse, fulfilling and shows a continuous return on investment.” The reality is that most attorneys are overworked, frustrated and anxious about their livelihood. At the extremes, they fall into depression and substance abuse. We have presented panelists, including a psychologist, to counsel students on how to avoid the perils of an out-of-control law practice.

Future of law practice. The final class session explores change in the legal profession. Special attention is given to the works of Richard Susskind (author of The End of Lawyers) and other scholars who predict dramatic transformation of legal services and their providers. Students consider how technological efficiencies, the expansion of compliance professionals who do not have law degrees and pressures to reduce costs will alter the law practice landscape.

CLASSROOM ACTIVITIES: THE SAMPLE LAW FIRM

There is no casebook for The Business of Lawyering. Several hardcover texts on law practice management have been published; however, given the pace of change brought by economic uncertainty and technological advances, we have preferred to direct students to a variety of articles and Web-based resources on aspects of business and professional development. In the two most recent sessions, we have required the purchase of only one book: Arthur Greene’s The Lawyer’s Guide to Increasing Revenue (ABA, 2012).

The course does not rely on Socratic inquiry, and we try to reduce reliance on lectures. The class is relatively small—about 20 students—which promotes student engagement. Our primary pedagogical tool is class simulation. Our students focus on the activities of the Sample Law Firm (SLF), a fictitious seven-lawyer firm founded 12 years ago by Sam Sample in the made-up Middletown, a college town of approximately 50,000 people. SLF’s diverse practice mix, as well as its assortment of small business and individual clients, presents a menu of problems for class discussion.

For example, a regional real estate development business, dissatisfied with the service it has received from a big-city firm, seeks a fresh relationship and perhaps cost savings by using a smaller firm with local roots. Can SLF deliver? Students divide into two groups to role-play. One group devises the pitch for the law firm while the other listens and questions, acting as if they were members of the real estate company.

In another example, a coin laundry equipment company hires an SLF associate when an apartment building owner, dissatisfied with the washers and dryers that it has leased, abruptly removes the machines from the premises. The associate aggressively investigates, retains an expert without notifying the client and sends a hefty invoice that exceeds the value of the equipment. A “difficult conversation” between the attorney and the client disputing the bill is demonstrated to the class.

Other issues arise. The three SLF equity partners meet at year-end to review associate performance. They evaluate common law firm performance metrics for each over the last three years: production hours, receipts collected as a “working” attorney, receipts collected as a “relationship” attorney, realization rates, professional development and community service activities. Students are asked who is on track for partnership and who is not.

In a final scenario, a key employee of a major SLF client has switched employers, potentially violating his noncompete clause. Just as SLF’s litigation associate is leaving at the end of the day to join her husband for his 40th birthday celebration, Sam Sample asks her to start working on a temporary restraining order for filing the next day. Students explore how the associate can satisfy both her spouse and founding partner.

In many instances, these SLF discussions are guided by guest lecturers, including Hamline law alumni in small-firm practices in suburban and rural communities. Their professional narratives reinforce a central theme: that building and maintaining personal relationships are at the core of any successful business, and especially one as service-oriented as law practice.

ASSESSMENT AND EVALUATION

Assessing student performance is divided into two components: five or six short assignments (usually 400-word written exercises such as the elevator speech) that account for one-third of the final grade and a take-home final exam for the remaining two-thirds. By the end of the class, students are sufficiently familiar with the SLF firm, and the SLF narrative and personnel provide the backdrop for a series of final exam questions based on predicaments typically presented by clients, attorneys and their staff. Our most recent exam (submitted electronically, of course) asked students to describe how they would (1) disclose a missed deadline to a client, (2) react to an associate’s time entries that exceed the client’s budget, (3) request a shift of client responsibilities from a senior partner, (4) allocate bonuses among associates with varied performance metrics, (5) balance time obligations between billable work and bar association leadership opportunities and (6) evaluate the organization and business plan for an associate departing to form his or her own practice.

At the conclusion of The Business of Lawyering, as with any Hamline Law course, students complete evaluations of both course content and delivery. Reactions to the course to date have been very positive. Students are attracted to experiential offerings such as The Business of Lawyering that connect traditional legal instruction to work-based skills. Students especially enjoy exposure to guest attorneys who provide invaluable practice and career advice. For that reason, we have reduced reliance on lecture and PowerPoint and expanded the invitations to practitioners to guide discussion and class exercises.

In this increasingly challenging economic environment, legal employers continue to demand that new law school graduates bring more value to their enterprises. Simultaneously, law students expect more experiential education options that create that value. Learning to practice financial success and personal fulfillment should be at the center of any skills-based curriculum. Even in its infancy, this class is demonstrating its worth at Hamline as a bridge to practice. It is here to stay.

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