Popular Threads - November 2019

Credit Card Convenience Fees

Credit card processing fees are eating me alive. A few vendors are pushing me to charge 3.5% convenience fee so I no longer have to pay the credit card processing fees. I have been opposed to this until now. This fee has gone from being a "too small to worry about" fee to significant now that most clients pay by credit card. What are your thoughts on convenience charges?

This has been discussed in the past on Solosez and other listservs I belong to. Somewhere buried in the agreements you sign with the processors is a statement that you are agreeing to not charge any convenience fee. However, I've never heard of anyone who has ever been dinged for this by the credit card companies. Of course, I would certainly like to hear stories from others.

For A/R balances, I just eat the fee. However, I will sometimes ask for a convenience fee if someone is making a large deposit into my trust account at the beginning of the case. Overall, I just factor in the cost of credit card processing in my hourly rate.

Ryan Young, Virginia

I'd recommend raising your fees by 5% and giving a discount for payment in cash.

People feel better about getting a discount (or choosing not to) than they do about paying an additional fee.

Cynthia V. Hall, Florida

I've tried adjusting my rates to account for it, and may still do that. However, I feel I am overcharging those that pay by check. I am struggling with the added charge though. Someone suggested I offer a cash or check price and a credit card price. I am toying with it. 

Robert "Robby" W. Hughes, Jr., Georgia

It irritates people. Raise your fees 10% for the hassle factor would be my recommendation.

You also need to aggressively shop the fees on your merchant account.

Darrell G. Stewart, Texas

Darrell suggested that we "aggressively shop the fees on your merchant account."

I don't to a lot of credit card transactions so I haven't really spent much time thinking about this, but when I set up my credit card processing service I (perhaps naively) assumed that there were only two or three companies out there (LawPay, LawCharge, etc.) who could process lawyers' transaction properly (e.g. not deducting transaction fees from deposits into a trust account). Is the advice to aggressively shop the fees between those few providers, or are there a whole lot more providers out there servicing lawyers than I realized?

Andrew C. McDannold, Florida

I don't accept CC or Debit payments for the reasons that Andrew set out (Florida bar is quite strict about CC fees going into trust accounts; you can do it but 1) every dime better find its way into trust account, and any charges come out of business account and 2) Florida Bar says you can accept this for convenience of client but you cannot charge extra, i.e, no CC convenience fees; even if it's earned upon retainer, and not going onto Trust account. so, with me it's strictly cash or check)

 However IF I did, then I'd just raise my rates a little, I do know retailers who charge CC convenience fees (actually, the offer discount for cash/check) but they’re pan shops and gun stores; and have the retail ethics that you would expect from a pawn shop. Clients go nuts over the nickel and diming by lawyers; the charges for postage, small scale copying fees, stuff like that. I'd eat it; and simply raise my fees a bit to cover it.

Ronald Jones, Florida

I initially had my credit card processing through BB&T. They had it set up to deduct the fees from my operating account. I think most big banks could do that for you. I only switched to LawPay because they had compatibility with various practice management software.

Ryan Young

Some attorneys only take credit cards on work already performed. If so, funds can go direct to operating account (here at least). In such a case, any merchant account will do and you are shopping for the service/fee equation that makes since to you. Some mention Square, which would be an example of a vendor where this would work. Others use merchant accounts with Costco or Sam’s Club, while others shop the account through third parties.

If you are looking at taking credit cards on retainers, and putting funds in your trust account, I agree that LawCharge and LawPay are the only ones to my knowledge. I personally don’t like the dance on work yet to be performed.

Some talk about Paypal and Zelle, which also properly to my view deal with receiving funds for work already done. Zelle does have an enrollment option for business, but still says it “Zelle is a fast, safe and easy way to send and receive money with friends, family or others in minutes, between domestic bank accounts at U.S. financial institutions. Using just their U.S. mobile number or email address you can send money directly to their bank account right from yours with no fees” per its FAQ. Business accounts appear an afterthought with Zelle.

Paypal signup: https://www.paypal.com/us/home
Zelle signup: https://www.zellepay.com/get-started
Square signup: https://squareup.com/signup

I don’t have my accounts at a participating bank for Zelle, so I don’t know how to sign up there. I am happy to be illuminated. I speak from my research and experience only. Others may have more particularized details.

Darrell G. Stewart

Have you used a credit card within the past week? Of course, you did. You went to the gas station, you bought groceries, maybe you even bought something from Amazon or Macy's. Did you pay your ABA dues? I'm betting you used a credit card instead of shelling out cash or writing a check for those purchases. Of course, you did. And you like the cash back, the miles, the 21st century S&H Green Stamps that accompanied each purchase. Just how many of those vendors offered you a cash discount? How many of them imposed a convenience charge? None of them, right.

So, why should you be any different? You're accepting credit cards for the convenience of your clients and as a marketing tool. It's a cost you'll have to eat, just like the coffee your clients may have consumed. You don't have a pay toilet in your office, do you? If clients start crying, do you charge them for a tissue? 

jennifer j. rose, Mexico

And some states, like Kansas, don't allow you to charge the convenience fee back to the client/customer (unless you are a government entity).

Joseph A. DeWoskin, Kansas

I've paid a convenience charge both times I used a credit card at car dealerships. A litigation initial retainer is more in-line with a vehicle purchase down payment than the cost of a tissue. $10,000 x .035 = $350.

Ryan Young

Convenience fees not allowed in Colorado (except that government entities may impose them).

David Masters, Colorado

S&H Green Stamps? Boy—that brings back memories of sitting in my grandmother’s kitchen and pasting those things into books. But back to the present day….

Many of the gas stations in California have two prices posted—one for debit or credit cards, and another for cash. Typically, the cash price is 10¢ a gallon cheaper, and people tend to look at that number in picking stations, even though they plan to pay with a card. It used to be that the stations would give a “discount for cash” (and only post the “cash” price), but now they show both. I think that reflects a change in one of the federal banking regs, that no longer prohibits charging for use of a credit/debit card. 

And, I’ve also noticed many smaller businesses that have a small sign (typically hand-lettered) saying there is a charge of ____¢ to use a credit or debit card for purchases under $_______. I think that’s a function of people using their cards for every purchase, even to buy a pack of gum.

Brian H. Cole, California

I thought that some cc processing companies also had something to that effect in their contracts with merchants. That may have changed though in the past few years.

IAE, I initially was getting killed on CC fees myself, but then found another vendor who worked with me and I've got a much better deal now although I do pay a flat monthly fee and a much, much smaller percentage fee. Overall, I'm pretty happy and I do quite a bit of CC processing. They had no problem working with the bank to ensure that the fees came out of my operating account and not my IOLTA. 

As for the young lady who abused her parents credit card, they could scare her by filing the charges against both of them. Boyfriend may have an out though as he could claim he thought she had permission. They could later drop charges or it's likely to be plea dealed down to nul pross. I had something similar years ago, and so I went to the prosecutor and judge and said that it was wrong to ruin this kid's life, but if you just scared the hell out of him, it would do a lot of good. It was a very effective technique. Case was nul prossed and kid got his act together and last I heard is doing very well. Of course the judge scared me too. 

Sterling L. DeRamus, Alabama

I'll chime in on Zelle.

Wells Fargo is the only large bank that I know of that allows Zelle for business. and that requires that the sender also have to wells Fargo account. to my knowledge, there is no Zelle for business between institutions yet.

Venmo for business is not allowed for services.

Dan Nguyen, California

The link I posted for Zelle has a list of participating banks.

Darrell G. Stewart

There were several simultaneous cases going on in CA (perhaps one fed and one state, or maybe a certified question?) and a law change re: passing on credit card fees to a buyer. Previously, saying it was 7 for cash, but 10 for card as a "discount" for the cash folks was okay, but saying it was 7 for cash and 10 for card as a "convenience fee" for the card was not okay.

The merchants successfully argued it was a 1st amendment issue, since the dollar amounts were the same.

The final result here was that, as long as the two prices are adequately disclosed, you can call it whatever you want.

Check your jx re: what you can and can't pass on to your clients. As a general LPM rule, though, if you aren't making what you need to make, you need to bill your time differently or lower expenses. Maybe that means passing on the fees to the clients, maybe that means increasing your rate, maybe that means decreasing your overhead someplace else so that there is room for the credit card fees.

Who doesn't accept cards, but whose work neighbors (also attorneys) do.

Corrine Bielejeski, California

Be aware of using Zelle. From what I read, it does not have any of the consumer protections from fraud or misuse that other services have.

Mitchell P. Goldstein, Virginia

There was a recent (I want to say November 2018) federal court case in Texas that ruled that Texas law prohibiting passing on convenience fees to customers was an unconstitutional restraint on merchants (ironically, state government entities were allowed to make the surcharge for themselves).

Here is an article discussing this --


I know there were cases from around the country on this issue, and that is why Texas followed suit. So, I think it would be difficult for such a prohibition to stand, except via contract or bar rules. We have included the right to charge this amount on retainers in our engagement letter, and play it by ear if a client will pay (or will balk completely). It is also a convenient way of "giving a discount" instantly by telling the client to pay with check.

Separately, we got burned by a client (paid via a third party) disputing a charge around this time, so LawPay had some helpful forms on this issue of chargebacks too. This is one reason to use a lawyer-dedicated service, otherwise it would be a nightmare for funds to be withdrawn by a big bank from your IOLTA.

Murtaza Sutarwalla, Texas

Anyone have a link to the Texas case or other cases? I have a client who might want to challenge the Colorado law that prohibits credit card convenience fees.

David Masters

The Texas case is Rowell v. Paxton - https://casetext.com/case/rowell-v-paxton

Here is an article on the other cases from around the country -- https://tfmlaw.com/2019/03/01/surveying-surcharges/ -- including the SCOTUS case that kicked it all of.

Murtaza Sutarwalla

U.S. Supreme Court case from 2017 - Expressions Hair Design v.

Schneiderman, 137 S. Ct. 1144

Italian Colors Restaurant v. Becerra, 878 F. 3d 1165 - Court of Appeals, 9th Circuit 2018- from CA Both are on Google Scholar

Corrine Bielejeski

LawPay works well.

Discount for prompt payment works sometimes. 

Roger M. Rosen, California

It's a cost of doing business. A write off for all of the income we generate!!

David Crosson, Pennsylvania

Right, but right now Zelle is for personal transactions only; of those banks that do offer Zeller, only a select few, if any, offer Zelle for business (meaning, it will work on your business account).

Dan X. Nguyen

Definition of Breaking and Entering

Criminal law is not my gig (at least not for the last couple of decades), but we had a recent incident in our neighborhood that has me curious.

Ex-girlfriend of a neighbor's son, probably high on something, pushed her way into neighbor's house (son tried to close door in her face and she pushed her way in), and once in, she spat on him and knocked a lot of stuff over until the police hauled her away.

So, the question I have is: is it breaking and entering if you push your way into a house when someone is actively trying to keep you out? Some other offense? Trespassing certainly applies, but it seems a pretty tame charge under the circumstances.

Possibly complicating factor: this happened during the daytime. My hazy recollection of the common law of breaking and entering was that it required entry at night for the purpose of committing some kind of felony.

I’m not sure about Virginia’s statutory law, but I think common law would classify it as breaking and entering (if memory serves, the “breaking” part was a very low bar, and opening an unlocked door was sufficient, as long as it was not wide open—so I would think that pushing your way in would also count). 

As for the “not at night” part, I think you are confusing B&E with burglary. At common law, burglary was a felony that required entering a residence at night for purposes of committing a(nother) felony (which could have been robbery, rape, murder, arson, etc.). 

My recollection is that B&E was something on the order of an “imperfect” burglary—if an act didn’t satisfy one of the elements of burglary, it could still be B&E. So if it was not a residence, or not at night, or not for purposes of committing a felony, it could still be B&E.

Brian H. Cole, California

Breaking and entering isn’t usually a stand-alone crime, but rather an element of burglary as you suggested. Criminal trespass is the most likely charge, but some states have adopted new laws to specifically address home invasions which includes the situation you described. Regardless of how it is changed, this type of disturbance is frequently plead as disturbing the peace via plea agreement.

Duke Drouillard, Nebraska

Not a VA lawyer, either, but I agree with Brian.

Once had a client who was high on PCP, walked into the neighbor's house across the street, took the family's breakfast - a BIG plate of creamed chipped beef, while the family was sitting at the breakfast table - back to his house and ate it before the cops arrived.

Not a burglary because it was daytime and the value of the breakfast didn't rise to a felony.

As I recall, he pleaded guilty to criminal trespass as a misdemeanor (no B&E in PA) AND he had to return the plate.

Russ Carmichael, Pennsylvania

This is very state law dependent; I had a case where one woman (my client) was sitting in a car and her sister reached in thru the open car window and tried to grab her; she wound up being charged with assault and burglary of a vehicle for reaching in. Don't remember if she was convicted of it.

 I'm seeing trespassing and assault at the least, don't know about B&E.

 Ronald Jones, Florida

The "actual" crime may be state law dependent. Not sure if that "fits" a B&E, but you have an assault and battery and possibly a home invasion as well.

Phil A. Taylor, Massachusetts

Methinks you are confusing breaking and entering with common law burglary (breaking and entering the dwelling place of another at night for the pu9rpose of committing a theft or other crime therein). I did just that in my initial consideration of the question.

I think this is a state specific question and you will need to go to the B&E statute and see if all of the elements of the crime are present if so, it is B&E, if not it is not.

John Martin Miles, Georgia

My only thought is that if felonies were still punishable by death, we'd see a LOT fewer of them.

Oops, I forgot, no more law, only equity. Where's my binkie anyway?

Art Macomber, Idaho

Interesting thought Art. As a general deterrent to committing felonies, it historically hasn’t had a significant impact, but it is 100% effective at eliminating recidivism.

Duke Drouillard

Duke, that's the most even-handed treatment of the topic I have ever seen.

Robert Thomas Hayes Link, California

We have a variety of statutes to cover breaking and entering: Va. Code § 18.2-92. Breaking and entering dwelling house with intent to commit another misdemeanor.

If any person breaks and enters a dwelling house while said dwelling is occupied, either in the day or nighttime, with the intent to commit any misdemeanor except assault and battery or trespass, he shall be guilty of a Class 6 felony. However, if the person was armed with a deadly weapon at the time of such entry, he shall be guilty of a Class 2 felony.

Va. Code § 18.2-91. Entering dwelling house, etc., with intent to commit larceny, assault and battery or other felony.

If any person commits any of the acts mentioned in § 18.2-90 <http://law.lis.virginia.gov/vacode/18.2-90/> with intent to commit larceny, or any felony other than murder, rape, robbery or arson in violation of §§ 18.2-77 <http://law.lis.virginia.gov/vacode/18.2-77/>,

18.2-79 <http://law.lis.virginia.gov/vacode/18.2-79/> or § 18.2-80 <http://law.lis.virginia.gov/vacode/18.2-80/>, or if any person commits any of the acts mentioned in § 18.2-89 <http://law.lis.virginia.gov/vacode/18.2-89/> or § 18.2-90 <http://law.lis.virginia.gov/vacode/18.2-90/> with intent to commit assault and battery, he shall be guilty of statutory burglary, punishable by confinement in a state correctional facility for not less than one or more than twenty years or, in the discretion of the jury or the court trying the case without a jury, be confined in jail for a period not exceeding twelve months or fined not more than $2,500, either or both. However, if the person was armed with a deadly weapon at the time of such entry, he shall be guilty of a Class 2 felony.

Va. Code § 18.2-89. Burglary; how punished.

If any person break and enter the dwelling house of another in the nighttime with intent to commit a felony or any larceny therein, he shall be guilty of burglary, punishable as a Class 3 felony; provided, however, that if such person was armed with a deadly weapon at the time of such entry, he shall be guilty of a Class 2 felony.


--Where the prosecutrix in a case of breaking and entering with the intent to commit assault and battery testified that she opened her door only about one foot, and thus the defendant had to push the door open additionally in order to enter the apartment, and where she also stated that she expressly told the defendant to remain outside when she went to get him a glass of water, this testimony established both an actual and a constructive breaking and entering by the defendant. Johnson v. Commonwealth, 221 Va.

872, 275 S.E.2d 592 (1981)


.FORCING VICTIM TO OPEN DOOR IS CONSTRUCTIVE BREAKING. --Given the lack of any qualifications, the phrase "to gain entry" in a jury instruction permitted the jury to find defendant guilty of burglary under Section



by way of a constructive breaking if defendant forced the victim to open a door no less than if defendant had forced the door open. Lay v.

Commonwealth, 50 Va. App. 330, 649 S.E.2d 714, 2007 Va. App. LEXIS 326



Ryan Young, Virginia

Thanks! That Johnson v. Commonwealth case is particularly helpful. I thought the bar for the "breaking" part of B&E was pretty low.

Kevin Grierson, Virginia

How to Transfer Ownership of Closely-held Corp?

I have a client who wants to buy out his "partner." They did not get official stock certs and the 2 are the only shareholders.

What documents do you need? I am thinking an agreement between them? If an LLC I would do a transfer of membership interest certificate. Thinking out loud here.

What do you need to make that happen?

Not a Utah attorney.

I don't really for all corporations do certificates any more, at least here in Florida. Our statute specifically states, " Shares may but need not be represented by certificates," but then goes on to put really specific requirements of what needs to be put on the certificates, if used. I can't even tell you how many times I've seen small family or 2-person corporations who do certificated shares but don't do the share issuance right (thanks, mailaway services!) So, I can put in the bylaws that the shares of the corporation aren't certificated, and the corporate ledger controls, and define only one class, which is what most of my clients prefer (though I'm not dealing with any tech startups or businesses with rapid expansion plans.) So what do the bylaws say (let me guess - there are no written bylaws, either)?

Yes, I'd do a written agreement. And when you do the exchange of money/closing, I'd have a special meeting of the shareholders confirming or approving, if needed, the transfer of shares (waiving notice if needed), have both sign the minutes, and the secretary update the ledger.

Again, not a Utah attorney, so check the statutes to make sure nothing in particular is required.

Cynthia V. Hall, Florida

A simple Sell or Purchase document outlining the terms of the transaction. Include in the agreement a specific power of attorney for the purchaser to be able to sign any and all documents presented to him to effectuate the sale.

Robert "Robby" W. Hughes, Jr., Georgia

Generally speaking, when it comes to corporations one gains ownership by buying shares of the corporation, whether the corporation's shares have been certificated or not (state law specific. If state requires certificates, I suppose there is a provision to issue such certificates after the fact). The partners need to enter into a buy/sell agreement.

Roman R. Fichman

Lots of moving parts here. Will company continue operations? Can you review the corporate records, charter, bylaws, meeting minutes? Will the stockholders be cooperative? Did he have a will? Where does his stock pass? Was he due any dividends, salary?

Rob Robertson, Texas

Echoing what folks said above:

1. Agreement for the sale. It can be signed & closed at the same time, but see points 2 and 3 if you have any issues to resolve prior to closing.

2. Complete diligence of the corporate records especially on any sale or potential springing sale (i.e., a 3rd partner is present or becomes a partner, who is unknown to the buyer-partner, e.g., silent investor, lender to seller, current or past spouse of seller). The two should be pretty familiar with operational liabilities so the sale agreement can be pretty "light" on this - consider an indemnity to cover past problems equal to shareholding percentage or to reduce price equal to assumed liabilities.

3. Check material contracts for "change of control" provisions and if any 3rd party consent is needed like a landlord, insurer, or a company lender.

4. Have a meeting and/or written consent to the sale, resignation of directors and officers, possible appointment of new D & O, ratification of past acts if appropriate.

5. File change of owners with Utah Division of Corporations and Commercial Code (and any other jurisdictions it is doing business in).

6. Redo and adopt corporate documents to accommodate the sole partner - don't rely on old corporate docs for this as it creates confusion.

Above all, check everything first with a tax professional as the sale will trigger capital gains & other federal and state taxes in year of sale. The structure should be consistent with tax advice. This is the biggest concern I see.

Murtaza Sutarwalla, Texas

National Business and Fictitious Business Name Registration


Does a business based in California (corporation) that does business in all 50 states have to file a fictitious business name statement in all states/counties in which it does/intends to do business in or just the county in which it is based?

Are there any resources that can stream line multi-state/counties registrations, if in fact they are required?


What do you mean by "does business in all 50 states"? Is the business web-based or are there physical locations in every state?

Kevin Grierson, Virginia

They are physically located in California but they'll have clients in all states.

Scott D. Wu, California

Yes, there are services. Registering as doing business in each state should be carefully analyzed and omitted where possible under the varied state rules.

Darrell G. Stewart, Texas

It’s not a straightforward analysis for all states. Need to incorporate (or organize) in one jurisdiction and the qualify in other jurisdictions. All states allow adoption of a fictitious name but California is a little more difficult. (Some businesses in some states cannot operate under fictitious names). The first question is in what states is the client doing business.

Roger Traversa, Pennsylvania

To add to what others have said….

Having “clients” in all 50 states does not necessarily mean that the corporation is “doing business” in all 50 states. 

In fact, just to complicate the analysis, there are multiple definitions of “doing business” in a state. 

For instance, for purposes of personal jurisdiction, there is a separate analysis for “specific” jurisdiction (whether a client in the state can sue the corporation for liability arising out of the directly-related activities) versus “general” jurisdiction (whether a third party that has not done business with the corporation can make the corporation respond to a lawsuit in the state). 

Then there are the separate analyses of whether the corporation is required to pay taxes to the state, and whether the corporation must register with the state because it is “doing business” there. 

Then you get in to the analysis of whether the corporation is engaged in solely “interstate” business that the states cannot regulate, as well as the impact of a rule that engaging solely in “mail order” business is solely interstate (it’s been a while since I looked at this, but I seem to recall that the USSC ruled one way, and Congress then passed an exemption, but I could be wrong). 

Finally, as the cherry on top, some courts hold that if a corporation registers in a state where it is not required to do so, that the corporation voluntarily submits to the jurisdiction of the state for all purposes. 

So, you’re talking about a complicated analysis. 

Sorry to be the bearer of bad news.

Brian H. Cole, California

Why are Lawyers Considered Bad Businesspeople?

Hello all. Hope all of you are enjoying the long weekend.

A lot of people say that lawyers are bad at business. I wanted to know why people say this. And is this true?

A) Sentences which start, "A lot of people say..." make me nervous.

B) Sentences including a phrase like, "...lawyers are..." are make me nervous. One thing lawyers are /not/ is homogenous.

So, my first response would be to answer the question with a question: 

"Who, in particular, said such about which lawyers, and was there perhaps more context to help guide my thoughts?"

Robert Thomas Hayes Link, California

Yes, definitely true.

One example, look at how many retiring or close to retiring attorneys have not made a plan to try to transfer the asset of the goodwill of their practice as an asset to be passed on.

Nicholas Bowers, New York

Robert, you are right. It does not apply to everyone. But I hear it from numerous sources, like blog posts, consultants, and other lawyers.

But I've been hearing it lately from people who want to change the ethics rules to allow non-lawyers to have ownership stakes in law firms. They think that lawyers are not efficiently running their practices and a nonlawyer could change that.

These are the common arguments I have heard.

1) Most have no prior business experience. They are not taught this in law school.

2) Reluctant to take risks.

3) They don't want to run their own firms

Perhaps they are wrong. But can lawyers run their practices more efficiently? I would like to hear responses from people that are not sponsored by a case management software company.

Steven Chung, California

Agree with Robert's comments----like anything else, plenty of exceptions.

That having been said, the 2019 Clio Report outlines many problems that need fixing with the practice of law:


Dave Rakowski, Pennsylvania

Not sponsored by a case management company---just someone who reads ;)

Dave Rakowski

I think lawyers have the same issues that electricians, doctors, plumbers, accountants, etc. have. That is, a lot of us/them may be very good at our profession but that doesn't translate into being good at running and growing a business (and of course many are, it's not homogeneous). I realized this with contractors after I became a home owner. A lot of them are great at doing whatever they do, but are absolutely terrible at running a business. Doesn't matter though as, in Detroit at least, there is so much demand for so few contractors that they have business just by virtue of having a license and being decent or better. That is a saving grace that our profession probably doesn't have at the moment in most markets.

Noel French, Michigan

As others note, it is a generalization; and not all attorneys are bad at business; in fact some of the best businessmen I know are attorneys (who generally left practice of law and started other business).

 Nonetheless, a lot of them are. Here are some reasons some attorneys are bad businesspeople:

1) they don't see themselves as a businessperson; they see themselves as a lawyer and a professional. And there is a tension between being a professional and being a businessperson; the nature of law practice is frequently the lawyer puts the client interests ahead of their own. Which is bad business. For instance, I have discussed PI referral fees in the past; I make occasional but decent money from PI referrals; either existing or former clients or in some cases walk ins or call ins, asking me if I do PI work. Or existing client comes in for something entirely different; and I happen to learn they have a PI case. I won't say this 'happens all the time' but it happens frequently enough; on average one or two times a year. 

 I immediately take the information and ask if I can refer them to another attorney; they invariably consent; I make the referral to a local PI attorney I know, and am comfortable with; and who PAYS REFERRAL FEES, yes, he pays me a percentage of what he recovers. Sometimes the case doesn't pan out, he doesn't take it; but a lot of times he does, and he does his stuff, usually settling but sometimes taking to trial; and sooner or later he calls me to say he has a check. The referral fees are usually in mid-4 figures to low 5 figure range (you can figure it out, PI work in Florida is typically done at 1/3 of gross recovery and he's paying me 1/4 of his fee; so it it settles for $100K he gets 33 and I get just over 8 of that). If it's more than that I get more, if less then I get less. I encourage anyone who is not doing PI work to cultivate a relationship with a PI lawyer WHO PAYS REFERRAL FEES (and yes, I know some jurisdictions limit this but if it is allowed then do it). I was doing CLE presentation on probate back in June and mentioned this as an aside, at break one of the attendees came up to me and told me that her probate firm had made over $200,000 on one wrongful death referral. Yowza. 

Nonetheless, every time I mention this, there is some pushback from some people; the objection is usually to the effect that by accepting a referral fee the lawyer is violating some sort of duty to the client; as near as I can tell the argument is that the lawyer is selecting the PI attorney on the basis of paying a referral fee, not necessarily the best attorney to handle the case. Listen, when I make a PI referral I do so to the best PI attorney I know; I'm not going to make a referral to someone who I think is going to undervalue or quickly settle the case just to settle the case; because I want as much money out of it as I can get. Nonetheless, some lawyers refuse to accept referral fees; that's' bad business.

Also, lawyers frequently tend to have bad long-term planning; good short term, OK medium term, but lousy long term. I have known a bunch of lawyers; good lawyers, who have been in practice for decades, who get to the end of their career and they have been paying rent for decades. When I was a young'un and went to my first CLE on probate, I had lunch with a guy who was nearing retirement; who had been doing EP and Probate for decades. I asked him how he liked it; and he said that he enjoyed the practice area; but then he kind of grimaced and said "the one regret I have, I've been paying rent for 30 years, all that money down the drain, I should have bought a building". Likewise, I know very experienced attorney locally, he does very well, and in the spring, he had some problems; long story short was he had moved his office and had internet/phone problems. That's fine, but he then said. Oh, I've been renting a place for 22 years, the landlord tried to double my rent and I had to move. I'm sympathetic but I'm also thinking, man, why you rent for 22 years; you should have bought or built. Or I had lunch with very nice, very lovely young lady lawyer a few months ago, she's doing well; she'd been in practice 5 years; I kind of tried to suggest to her that maybe she needs to think about buying or building her office; she's currently renting from another lawyer. I don't know if she got the hint but my point is a lot of lawyer just kind of "go with the flow", and rent and at the end of their career they have nothing to shoe for the rent. I understand; not everyone can buy or build; and in some cases, it may make economic sense to rent (if prices to buy are outrageous; or if you are in a declining real estate market) but man, at least you have a building to either sell or possibly rent. Why would you rent for 20+ years? It's bad business in a lot of cases.

And, just, business stuff; you can be the greatest lawyer in the world but if you can't get paying clients you are going out of business; I'm not saying you shouldn't focus on law but you also need to do good, effective marketing, advertising, stuff to get clients in. And get them to pay you actual money. If you don't do that, or do that effectively, that's bad business.

Ronald Jones, Florida

Here's your answer right here, in your question:

"I've been hearing it lately from people who want to change the [ethics] rules."

What does it mean to be "bad businesspeople"? Does it mean they make too much money? (That certainly doesn't apply to me.) I have successfully managed an IT consulting firm, so I DO have business experience.

The biggest difference I see here is that clients - "unsophisticated" individuals in particular - don't understand how business works, and therefore cannot realistically value our services. They will grumble, but will pay, $75/hr for an auto mechanic or a plumber. But for a professional with at least 3 years of postgraduate education who must take (paid) continuing education every year and carry $1M+ in professional liability/malpractice insurance, they think we're overpriced. I have potential clients balk at paying a reduced fee of $100/hr ($50 min) for certain initial consultations, but I had no problem getting business clients to pay $300/hour for my technical services.

I have an MBA, and I didn't learn this in law school; when I was in school - not that long ago, as this is my second career - the Law Practice Management classes taught you things like how to maximize your billable hours to get bonuses, how the partnership track worked, how to deal with the management team, etc. It was presumed that anybody who had any role in managing a law firm got to that role by working in a firm for years, even decades. There wasn't even a nod to solos and small firms. I tried, as much as I could, to pick MBA classes that focused on the way small businesses work, albeit in part because I was interested in them as a potential clientele.

One of the things I learned in business school and law school is that business people are all about exploiting risk. Risk is the justification for reward. The business of lawyers, on the other hand, is the mitigation or elimination of risk. These concepts, on some level, put two of our "hats" at odds. It affects the way we do business; sure, people would love for us to do everything on contingency. What they don't realize is that firms that specialize in contingency cases will do so almost exclusively when they know that the other side is insured; they're not taking great risks (there is risk, to be sure), they're shifting the risk. Try getting a big, advertises-on-TV PI firm to take your minor accident with soft tissue damage on contingency. They'll tell you to take whatever the insurance company is offering; it's simply not worth their time. Can these people not see the risk inherent in making legal services all about profit and shopping the lowest bidder? People have houses, jobs, citizenship, retirement funds, etc. at stake! Are we ready to let just anybody practice medicine, 'cause hospitals are expensive?

Can we be more efficient? Perhaps, if we all worked out of our homes. I rent a small services-included office, because it's the most cost-effective solution I can find in my small city, and when you add in things like fax services, e-mail, websites, software, computers, research services, subscriptions, malpractice insurance, CLE, yada yada, the first $35K or so I bill each year goes to someone other than me. Then, of course, I have to pay SE tax on everything after that. I stopped doing court-appointed, state-paid defense work a few years ago because the state cut the reimbursement rate from $75/hr (a break-even at best, especially if you consider time waiting in court that can't be billed because it won't be reimbursed, etc.) to $55/hr.

Part of the solution - which would be much safer for clients, and have far-reaching benefits in other domains, is to spend some frickin' money on education. People don't understand how their local, state, and federal governments work, much less our legal system.

Indirectly, "they weren't taught this in law school" is not at all an argument for giving other people OTC law licenses. It's an argument for updating law school curricula to deal with extant realities.

Another part of the solution is acknowledging that insurance companies and government have created a perilous legal landscape, allowing Big Business to run over the public rough shod. Legal Aid is the answer there: highly-dedicated, very competent people who serve a limited clientele on a limited number of issues. It's a VERY cost-effective use of money.

And you kids get off my lawn!

Richard J. Rutledge, Jr., North Carolina

If you're quick-on-the-click when the page loads, and immediately click the "Download PDF" button before the data collection form loads, you can get it without giving up your contact information to a marketing list...

Richard J. Rutledge, Jr.,

I've tried to download that Clio report several times now. I even tried Rick's quick-draw clicking. It seems to just stall out. Is there another way to get the report?

Ryan Young, Virginia

If true, it's probably because they had no training in business prior to law school. Business is just any other skill, you aren't necessarily born with it, but you can learn it, just like learning how to change a tire. Business ain't rocket science.

Once you learn that law is not only a profession, which is a rather nebulous term, and realize you are basically a salesman, you will get better at running your practice.

Bobby Lott

Back in the day, I mean way, way back, the School of Law at the University of Texas at Austin required 8 hours of undergrad accounting.

I complied. Glad I did.

Hook 'em, horns.

Rob Robertson, Texas

Amen to that Bobby. I’ve been on this list for 20+ years and have seen repeated discussions of "initial consult". How you handle it, whether you charge for it, how long you spend on it. And I repeatedly make the point that I don't call it an initial consult. I call it what it is, or should be, a "Sales Meeting". The object of the Sales Meeting is for me to determine if I can make money off of the deal, and if so, for me to close the deal. To get the client to give me a check or sign a contract. Everything else is secondary. I'm not there to give legal advice or solve the clients' problems; once they pay me, I'll work on that stuff but initially it is to evaluate whether I can make money off of it. If I can't then the meeting ends. If I can make money off of it then I close the sale, or try to; tell clients what's involved, how long it should take, what it will likely cost, what I will do for them. If at some point they balk, then the meeting ends. 

 Ronald Jones

You can't say it any better than that!

Bobby Lott

Great point Bobby---the book that helped me get the right mindset around the whole sales thing is "To Sell is Human" by Dan Pink.

Dave Rakowski

Speak for yourself.

As to sales, I cut my teeth on Zig Ziglar and Dale Carnegie and Tom Hopkins back in my twenties, and was a telemarketer for Time/Life books in High School, the L.A. Times in my late twenties. Which is just to say, it's an informed opinion I offer.

Your view, however, is increasingly prevalent, much to the shame of the profession and the larger social group.

Robert Thomas Hayes Link

That is certainly one way to look at it.

If that is your only exposure to sales and marketing, I can understand your narrow view.

Bobby Lott

Why are attorneys *considered* bad business people? Because in the inherent conflict of interest between attorneys getting paid and doing the right thing for the client, we are expected to do the right thing for the client. Sometimes that means attorneys work without getting paid (like when a judge won't let an atty out of a case when the cl has stopped paying ...).

For the most part, attorneys often aren't trained to be good bosses, run HR departments, manage offices, do their own advertising, etc. They are trained to solve legal problems. Full stop.

On this list, obviously we have a high degree of lawyer business people, so I think we are going to skew a little higher on the "lawyers as business people" scale. That said, you have people who are more comfortable asking for money than others. If I could get the same work/life balance and client control working for someone else, I'd probably do it. That said, a boss probably wouldn't like my schedule and all of my volunteering during the workday.

Corrine Bielejeski, California

Funny, how effective the old counterfactual can be, eh? If you need your sales duck to be bigger than mine, that's ok too, but don't send pictures. Do, if you are so inclined, consider helping keep the profession professional rather than something for used car salesmen to look down on.

That's not accurate either. Mum sold used cars one season, and I know my momma don't look down on you.

Take the last pot-shot if you like. I might revisit the topic under a different subject line.

Robert Link

Cute. As for potshots, not intended, as I am sure you didn't mean anything by your original one.

Bobby Lott

Because Legal Zoom and CLIO and others are dumping loads of bread into steering the narrative in that direction in hopes of getting, bad, legislation passed.

Robert Thomas Hayes Link

As usual, I agree with Ronald along with Bobby in this case. The best lawyers are invariably good salesmen. Perhaps some prefer to characterize it as the art of persuasion, but there is no substantive difference. A lawyer's job is to persuade clients, opposing counsel, judges, and juries.

Clients don’t think of lawyers as an infallible fountain of wisdom and law. Even the guy slinging hamburgers at McDonalds realizes that SCOTUS rarely has a 9-0 decision; there is always another point of view on most issues. If a client has a choice between a lawyer who graduated at the top of his class or a lawyer who married the judge’s sister; they will usually go with the latter. It isn’t likely your client thinks you are the best lawyer; it is more likely he just thinks you are the best he can afford.

Duke Drouillard, Nebraska

Robert, I'm not questioning your sales experience; you may very well be quite experienced; nonetheless, a lot of attorneys are bad to middling at best at sales. Leaving aside the people I've seen on this list for the past 20 years; I have seen this in my own practice. I needed a specialized attorney for a particular matter; I called someone that I know and trust and said who should I go to? I was given a particular name, fine, called him up, gave him a 5 minute explanation of what the problem was ( it was with the state highway dept) and asked if he was interested and could handle it. he said "yes, I'll need a $5,000 retainer" and then I asked him "Ok, so what does that $5,000 retainer cover". He acted like I slapped him; he took umbrage at my asking what I was getting for my money. I wasn't being nasty but that's a perfectly legitimate question. You know something? That's bad sales.

 And, unfortunately some, a lot, maybe, not all, but at least some attorneys seem to take the attitude that the value of their services should be self-apparent to the potential client. In some cases, yeah, maybe it is. But a lot of clients need to be have explained to them what they are getting for their money; what the process is; what the lawyer will do. Maybe not detailed explanation but they need to be sold on it. It's sales and a lot of lawyers are bad at it. 

 In addition to which, it's not just 'sales'. It's bad business practices. I know an attorney who has been in private practice since 2003 in a partnership. First two partners and now one.

 In that time, he has had 2- count them, Two, separate bookkeepers embezzle from him. OK, I can see this happening once, but after the first time you would think he'd have some procedures in place and be a bit more cautious. And one partner, the one who has now left the partnership, was taking "undisclosed distributions" from the partnership; technically it wasn't 'embezzlement' because he was a partner and had the right to take the distributions but you know, he didn't TELL the other partners. Which led to tax consequences. I'm sorry, that's bad businessperson. If you can't keep track of your dang money coming in and going out of the business? That's bad business practice.

And, it's not just 'small firm" There was very prominent Florida PI firm, lots of lawyers, maybe a dozen or 15 partners, years ago, had one partner die. The managing partner found out that the firm did NOT have enough cash on hand to buy out the widow of the deceased partner We are talking like mid 6 figures, which certainly is not a small amount of money but for a firm with a dozen or 15 partners and anotehr 50 or so associates? They can't come up with a few hundred thousand? I'm not saying they need hundreds of thousands of dollares in cash sitting in a bank account but they should have enough reasonable liquid assets plus maybe a line of credit to take care of this stuff. That's bad business.

Ronald Jones


I'm loathe to disagree with you, and will not do so flippantly.

The question is, "best at what?" and "best how?" Every firm needs its rain-maker, and surely the tap-dancing required to sway a jury is salesmanship, too often at its worst. But does this make transactional attorneys less-than? Is there any point to salesmanship if the "i"s aren't dotted, the "t"s are not crossed, the fine print is not read and understood?

I think not.

It's one thing to say "salemanship" is useful, even invaluable. It's another thing to say that's what lawyering "really" is. And it's another thing entirely to say that the profession should be reduced to a retail service. That's a position aimed to make certain fat cats fatter, not to make the profession better in any reasonable sense of the words "profession" or "better".

Robert Thomas Hayes Link


Thanks for the reply, and the tone, which I would be wise to emulate. 

Sorry I jumped salty. I found not one word to disagree with in your note. I might call it "bed-side manner" rather than "salesmanship", or I might call it "customer-service", but more likely I'd call it "professional communication skills", the "it" being what the dude lacked on being asked what five-thousand dollars covered. And while a legal education should, can, and often does educate our colleagues in proper business functions, if only by way of showing us how things go wrong and end up in court (and case books), many of our colleagues fail to take the benefit of that part of our education.

On a slightly tangential note, there's a page or two in Malcolm Gladwell's "Blink" that references studies suggesting "likability" 

rather than objective competence as the best predictor of future malpractice claims. I think that would support the "it's all salesmanship" claim, allowing for context and nomenclature. I'd also suggest client selection goes a long way towards one's "likability" rating, but maybe that's taking us too far afield. 

Robert Thomas Hayes Link

Hi Robert-

I doubt that we disagree as much on the issue as we do the semantics, but you also set up a straw man argument by expanding my position far beyond anything I said. It appears that you associate a negative connotation with the term salesman. There are certainly numerous examples of people who regard themselves as salesmen that bear a closer resemblance to grifters and conmen. So I suppose it becomes necessary to define "salesman" for the purpose of this discussion. From my point of view, a salesman is a person who possesses a thorough knowledge of the products/services they are selling and enough experience to determine which product/service is the best fit for their customer/client; then using that knowledge, persuades the customer/client to purchase the product/service which will give the client the greatest satisfaction and provide a mutual benefit to both salesman and client. Ideally, if given the opportunity to rescind the sale later, neither party would exercise the option because they both benefited from the transaction. Not sure why you don't think a transactional lawyer needs those skills, but I think they are essential.

Duke Drouillard

I went to a recent Ethics CLE which was an update of malpractice and ethics claims. It was an excellent presentation from a local firm here who defends lawyers in such cases. They really did their homework in presenting the CLE.

The evidence they presented clearly showed that many, many lawyers are horrible at expressing or even discussing fees with clients. The experience detailed above regarding "just give me a $5,000 retainer" is the root of a large portion of complaints that end up before a disciplinary review. They had some surveys of young lawyers that clearly showed they were uncomfortable even discussing fees with clients. Does the $5,000 cover everything? Will I be expected to give you more money? What do you anticipate the fees will be? Obviously, that can vary widely in litigation, but, these are all reasonable questions.

Ryan Young

One problem is that the term "sales" has gotten a really bad rap in the U.S., and most likely the world. From Willy Loman to your local "tote the note" car dealer, they tend to be seen by the public as little more than crooks, looking to scr*w people out of their money.

To be successful at pretty much any career, one must be a good salesperson, if nothing else, than in selling yourself. 

In the legal profession, the most basic form that takes is "why should I hire you over the lawyer down the street?" 

Chances are, the client doesn't care where you finished in your class, or even know what law review is...he does care how you handle his problem.

My .02

Bobby Lott

I'm bundling several points in this reply.

First, as far as the $5000 goes, I certainly would have reviewed any contract before I made a commitment; but that should have come after he did a bit of sales; telling client what they are paying for is pretty basic sales.

Second, I do agree that "Sales" has a bad reputation, and lawyers don't like to hear that they are in the 'sales' game. I frequently make this analogy:

We, as lawyers, talk about "tire kickers" , people who contact you, get info, waste your time and fail to hire you. You know what I'm talking about.

The phrase Tire Kicker is right out of used car business. It, literally, means the guy who comes on the lot, asks a bunch of questions, maybe looks at cars, maybe even takes a test drive but has no intention of buying. That's the origin of the phrase.

And, I know, Lawyers HATE this analogy; but to some extent your job as a lawyer is to close the deal. On every car lot you've got several salespeople. And they keep a "board" a whiteboard with each sales person’s name on it and the number of deals they have closed each month. And on nearly every lot, one person, usually a man, but not always, has considerably more sales than anyone else; you have a dozen sales people, most of them may have 3, 4, sales a month, maybe one guy has 6 but Frank over there has 12. or 15, or 20.

He outsells every other salesman on the lot and he may outsell all of them put together, particularly if it's a small lot. He closes the deal. Or he ends the sales pitch when he sees someone is a tirekicker. Someone comes on the lot, the 'next' salesman gets them. They work in rotation. When it's Franks turn, he quickly determines whether he can sell the person. If he decides he's a tire kicker, he gets rid of them. And he moves back into rotation, he doesn't spend a lot of time on a sale he can't make. If, however, he thinks he can make a sale, he pushes it. And he's good at it. Maybe it's high pressure, maybe it's flattery, maybe it's appealing to what the person wants or needs; oh, you've got three small kids, tell you what I got a minivan here. Middle aged guy without a wedding ring, Oh, let me show you this convertible, nice Miata, fun to drive and you'd look good in it. Blue collar guy, I got a deal on a nice used Pickup. Whatever. And he sells. Technique varies but he sells and he outsells the other salesfolk. He sizes up the potential customers; he doesn't always make a sale but he makes more sales than anyone. 

I get that lawyers dont' like to think of themselves as used car salesmen and I don't blame them. But there are ALL SORTS of techniques of sales, depending on the product and the customer. High End Stuff, Veblen Goods sales techniques for them are very different than for laundry detergent Veblen goods are types of luxury goods [https://en.wikipedia.org/wiki/Luxury_goods] for which the quantity demanded increases as the price increases, an apparent contradiction of the law of demand [https://en.wikipedia.org/wiki/Law_of_demand], resulting in an upward-sloping demand curve https://en.wikipedia.org/wiki/Veblen_good [https://en.wikipedia.org/wiki/Veblen_good]

Think, Rolex Watches. Or Louis Vuitton Rolex is a nice watch; but nobody buys it to tell time. Likewise, Vuitton luggage, that's nice luggage but it doesn't do any better than American Tourister.

And sales in law; there's all sorts of approaches. The big PI mills, you know the type; "Insurance Companies Fear Us because we take stuff to trial. We Fight for You" "I got Client X $YYYYYYY at trial". But business law, different approach, family law, a third approach. 

There's nothing inherently wrong with sales in law; it's a fact of life; you might not like calling it sales but that's what it comes down to.

And my overreaching point is, not all lawyers are good at this; it can be developed and it can be done without screaming or being unethical; it's showing the client what you can do for them for what they are paying you. That's all sales is; why should you, client, pay me your money; but if you can't answer that question, you are going to have trouble staying in business.

Ronald Jones