Managing risk during a quarantine slowdown

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The last several months have been wholly unprecedented, in many different ways. Lawyers have experienced the challenges of working and practicing law from home. The ongoing quarantine and shutdowns also have impacted different types of practices in different ways.

Litigators, for example, have had wildly variant experiences over the past several months. Some have faced court closures, delays or stays in cases, while others have been taking remote depositions and appearing in court by video call. Lawyers who practice in employment or insurance law, for example, may find their practices booming during this time, while lawyers who practice in other areas of the law may find themselves with more time on their hands than in years past.

For lawyers whose practices have been disrupted by the pandemic, an increase in free time can create risks. Below are some tips for managing risks in the face of unexpected free time.

Pay attention to collection efforts

As clients and firms face economic pressures, it is important to stay on top of outstanding client invoices. Managing a law practice involves a financial element of ensuring that lawyers are paid for their work.

Normally, lawyers may use the end of the calendar year to focus on billing and outstanding collections. However, due to the financial realities, many firms are prioritizing collections now, or, at a minimum, checking in with clients regarding their financial needs and any impact current circumstances are having on the lawyer’s previous understanding of the fee arrangement. This can help reduce the likelihood of financial pressures or misunderstandings later in the year and can help alleviate the pressure of the year-end rush.

Take precautions when considering the use of AFAs

Some clients, who themselves may be experiencing a disruption, may ask you to change your fee structure or billing arrangement, causing you to consider Alternative Fee Arrangements. For instance, certain clients may request to transition from an hourly fee structure to a flat fee arrangement that will allow the client to budget appropriately. However, when making changes to existing fee arrangements, courts and state bars will look to confirm that any changes made to existing billing arrangements are equitable to the client’s interests. While mid-representation fee changes can be common (particularly, for example, with yearly hourly rate fee increases), nonroutine changes can be subject to increased scrutiny.

ABA Model Rule of Professional Conduct 1.5 addresses the factors to be considered in determining the reasonableness of a fee. Among the factors to be considered are:

  1. The time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
  2. The fee customarily charged in the locality for similar legal services;
  3. The amount involved and the results obtained;
  4. The nature and length of the professional relationship with the client;
  5. The experience, reputation, and ability of the lawyer performing the services;
  6. Whether the fee is fixed or contingent;
  7. The likelihood that the acceptance of the particular employment will preclude other employment by the lawyer; and
  8. The time limitations imposed by the client or by the circumstances.

Considering the aforementioned factors may help to protect lawyers from accusations of manipulation, particularly if the client or the practice are facing financial pressures that warrant revisiting the original fee arrangement.

Continuing legal education

During their downtime, lawyers may take the opportunity to develop or continue to maintain their knowledge. For some, this may mean taking the time to learn about new developments in the law or meeting their state’s continuing legal education requirements. Others may try to educate themselves in the ways that the pandemic is affecting their clients and their industry on the federal, state, and local levels. By becoming informed in the ever-changing developments, lawyers may be better positioned to support their clients or even reach out to clients to ensure their COVID-specific needs are being met.

There are many online resources that provide CLE programs on a number of topics, both practice-specific and unique to these uncertain times. Some law firms are even hosting their own CLE programs for in-house lawyers or clients or members of the bar. Hosting such resourceful programs can provide an opportunity to educate and demonstrate cutting-edge expertise during this tumultuous time.

While some attorneys have been returning to work in their offices, many attorneys are still working from home. Those attorneys may think that going on vacation will be no different from working from home, given that they have maintained less of a physical presence in the office over the last several months. However, it is still important to implement practices on the last day in the “office.”

On the last day before vacation, most attorneys will turn on the “out-of-office assistant,” record the “out-of-office” voicemail message and confirm who will be monitoring communications or providing back-up support during the vacationing attorney’s absence. Having an “out-of-office checklist” may be the most reliable tool available to the vacationing attorney. Additionally, it can be helpful to have a contingency plan in the event an unexpected development requires the immediate attention of the vacationing attorney.

For some attorneys, the idea of completely disconnecting from the law practice is simply too much. Those attorneys can set up a daily contact point. Typically, this includes a set time, place and procedure for someone in the office to reach the vacationing attorney to provide reassurance that everything is under control.

Beware when dabbling

A significant risk of downtime is that lawyers may feel pressure to expand their work into more booming practice areas to make up for other deficits. However, there are risks in “dabbling” in high-risk practice areas that are not within the lawyer’s expertise or knowledge. This is not only because lawyers may be more likely to make a mistake when engaging in unfamiliar areas of the law (leading to a claim), but also because there are certain practice areas that receive a higher number of malpractice claims (or a higher value of malpractice claims). Indeed, some insurance policy applications require lawyers and firms to specify the types of law in which they practice before issuing a policy. Dabbling outside of those areas could put coverage at risk.

In addition, the professional rules require lawyers to act with competence in their practice. ABA Model Rule of Professional Conduct 1.1 provides, “A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Thus, while it is typically appropriate to associate with a more experienced lawyer when working in a new practice area, there can be risk where a lawyer is doing so without that guidance.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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