The Good Funds Rule

Don't let a client rush you into writing a check for their share of the settlement proceeds before the check clears the bank. A lawyer may be tempted to comply if he knows there is already money in the trust account to cover the check. However, if the client cashes the check before their settlement check clears, you have violated the "good funds rule" and could face disciplinary charges. Why? Because the money in the account belongs to another client, and the funds are not fungible.

Inform the client that you must wait until you receive notice from the bank that the check has cleared. Let the client know you will call the bank daily until you have notice the settlement check has cleared, then hand-deliver the client's check if necessary. And don't be tempted to give the client a post-dated check — they still may present it to the bank before the date on the check!


Are there potential malpractice concerns when you handle a cold call from a potential client? The answer is yes. Unintentionally establishing the attorney-client relationship, providing inaccurate legal advice (because of incomplete information) upon which the caller relies and creating a conflict of interest are just a few of the potential problems you can find yourself dealing with when handling cold calls.

If it is your policy to try to assist non-clients who call your office seeking assistance with a potential legal matter, keep the following in mind:

(1) Be sure to obtain the caller’s name, the names of other involved parties, addresses and phone numbers. Your procedures should include checking your conflicts system to be sure there is no conflict before proceeding with the call.

(2) Keep the conversation between you and the caller informational only. Do not give legal advice to a non-client over the phone. You may provide general information, but be careful not to address their particular situation. If the question from the caller is highly technical, inform them that in order for you to accurately respond to their question, you need more information and would be happy to set up an appointment with them.

(3) If you slip up and give legal advice to the caller; or, if confidential information is shared, send a letter to the caller thanking them for considering your firm. Confirm in writing what was discussed between you and the caller. State that the advice you provided on the phone is based upon the facts provided by the caller (and enumerate what those are) and that in order to obtain adequate legal advice for this particular matter, the caller should seek to engage an attorney of her choice. If a time bar is running, it may be necessary to provide the caller with that information as well.

(4) Include standard language that indicates that no attorney-client relationship exists between you and the caller until the caller makes an appointment with you and goes through the formal engagement procedures of your firm.

(5) Add the caller’s conflict information to your conflicts checking system.

The Cold Call: Golden Opportunity or Opportunity Lost? How can you tell the difference between a potential client and someone who just needs an answer to a quick question? Here are some client screening tips that can help you cull out the cold calls that will never turn into clients – and they don’t require any of your time.

Utilize your staff in initial client screening. Your staff can often ask just a few questions of the caller and obtain enough information to determine if the caller should be directed to a lawyer immediately or if the caller is simply looking for information - or free legal advice. If the services the caller is seeking are outside the expertise of the firm, the caller can be easily referred by the staff person to a lawyer referral service or a lawyer or law firm who the firm routinely refers that type of work to. If the caller needs services that the firm provides, the secretary can ask the caller to provide some basic information for the attorney to review before the call is returned. In addition, the caller can be sent a brochure describing your firm’s services, the legal process for the type of matter they have and the associated costs.

Use a standard telephone interview questionnaire form. Your staff can inform the caller that it is the policy of the firm to obtain some basic information about the matter for which the client seeks help before the attorney talks with a prospective client. If the client consents to providing some personal information and the basic facts of their matter, it is more likely they will turn out to be a real client. However, if they balk at this because they just want a quick answer to a question, you’ve just saved yourself some time.

Develop a brochure or other written information targeted to cold callers who are calling about services. By providing the "potential client" information about the legal process and associated cost they are about to "sign up for" in seeking legal counsel for their matter, you give the caller the information they need to determine if they can go forward under your terms. You can also include the telephone numbers of city, state and federal agencies who may be able to answer some of their questions.

Charge a consultation fee. A consultation fee may be charged for a face-to-face interview which can be applied to their matter if they decide to go forward. If not, the fee is non-refundable and you’ve been paid for your time up front.

Don’t lose the opportunity to represent the clients you want to represent because you’re so busy representing the clients you don’t want to represent. And, value your time. That and your expertise is all you have to sell. One can be sold over and over. The other can only be sold once.

Closing client files

Do you have an established (preferably in writing) procedure for handling client files once the matters contemplated in the retention have been completed? Have you ever pulled a closed file, only to find something that should have been done before it was closed?

Here are some points to keep in mind before you relegate a file to inactive status.

1. It is wise both from the client relations and file management perspectives to document to the client when the matters outlined in the original retention agreement have been completed. This is important so the client does not assume you are handling any other post-resolution duties or that you automatically will be available for future matters. It is also useful to define the close of a matter because rates charged by the attorney may change from time to time. If the client is clearly informed that each matter is separate, he or she is unlikely to expect that the fees charged in previous matters will necessarily apply in new matters. This is also a great opportunity to encourage your client to come to you with new matters and to refer friends or relatives to you for services.

2. A client file should be reviewed when a matter is concluded before it is relegated to inactive status to determine if all necessary follow-up has been completed. Appropriate calendar or tickler entries should be made for any pending follow-up, and the file should not be closed until it is completed. As long as a file is open, there should be at least one tickler or reminder regarding that file, even if it is an "arbitrary" event such as review of the file at a set time to determine if all pending items are finished and the file is ready for closing.

3. Keep careful records of the location of all inactive files - preferably computerized records that can be searched to immediately find the name and/or file number if you need to retrieve the file.

Exit Interviews

If you don't provide informational bills, you need to be sure alternate procedures are in place to keep your clients advised of activity in their cases.

Most solo and small firm practitioners probably do not spend the time to have exit interviews (at most) or exit surveys (at least) when an employee leaves. However, this could be a good opportunity to get somewhat honest feedback from departing employees. Unless the employee left under extremely unpleasant circumstances, someone in the office should take a few minutes to do an exit interview. Some questions could be:

• Would you share with me your comments about the firm?
• Would you share with me your comments about your supervisor?
• Was the training the firm provided adequate? If not, please explain what was lacking.
• Did the firm provide adequate resources to allow you to do your job? If not, please explain what was lacking.
• Would you recommend the firm as a place of employment to others? If not, please explain why not.
• In your opinion, were the benefits provided by the firm: Below Average; Average; Excellent?
• Were policies of the firm uniformly applied throughout the office?
• Would you work for the firm again?

Use the information to evaluate your firm's ability to attract and retain excellent employees!

Sincere Compliments

In our fast-paced professional world it seems we no longer take the time to compliment people on a job well done. A compliment is more than saying "thank you" — it is expressing that you noticed something extra about the person's efforts or attitude. Whether it is an employee, court reporter, court clerk, partner, bailiff, title researcher, or a secretary in an opposing counsel's office, if they are particularly helpful or kind to you, compliment them in a sincere manner. You'll make their day and — who knows — some time soon they may just make YOUR day! Positive attitudes are contagious — pass it on!

If you have never read Michael Gerber's classic book, The E-Myth Revisited, make sure you add it to the top of your fall reading list. Whatever stage you are at as a law practice entrepreneur, this book provides insight and education on how to successfully run your business. It is not so much a "how-to" book, as an "a-ha" book that will help you clearly see your practice in a whole new way!

This may be more useful for some of you at home rather than at work. Many of you probably only use one e-mail address even though your Internet Service Provider may allow you to have five or six at no additional cost per month. Here are some ways to make use of this extra capacity.

1) Give all family (or staff) members their own personal e-mail address. (Most have already done this at the office.) But there's really no point in doing this if you don't also sent up inboxes for each of the individuals (e.g., Tommy's Inbox, Sue's Inbox.) Then it is a very simple matter to set up a "rule" so that every e-mail that goes to that addressee is transferred to their inbox. Presto, everyone has their own private mailbox, which saves everyone time.

2) Concerned about disclosing your e-mail address online? Many web pages have registration features, information request features and other applications that request an e-mail address. Many physical stores and other forms now also request an e-mail address. How do you register in all of these places without getting inundated by junk e-mail as a result? Simple. Set up an e-mail address just for junk mail and create a "junk mail inbox" where everything sent to that address is automatically transferred. Once or twice a month you can check that inbox, just to make sure you haven't been notified that you are a sweepstakes winner or received a promotional e-mail that you might be interested in, but you don't have to deal with the spam on a daily basis.

Many niche law firms maintain web sites that contain interesting resources, ideas and links for other lawyers. But how can you efficiently find those sites?

Try using www.netcraft.com This search engine uses site names for searching. Try "*law" (law and an asterisk as a wildcard character). It should return about 800 websites (in alphabetical order) that end with the word, "law". Also try "law*" followed by an asterisk for web sites that start with the word law. Then prospect and mine the sites for valuable links and ideas.

Beware: If you use "law" only (without the asterisk), the search will return many more websites with the letters "l-a-w" anywhere in the name.

With the turmoil in the legal malpractice insurance market, some lawyers are choosing new insurance carriers to avoid significantly higher premiums, while others are learning their carrier is exiting the market and will no longer cover them. If you are changing insurance carriers, inquire whether the new policy includes "prior acts" coverage. Some malpractice insurance policies only provide coverage for acts or omissions committed on or after the effective date of the new policy. The policy may not provide coverage for acts or omissions prior to the effective date even though the claim was made during the time the new policy is in force. Some insurance carriers will provide this coverage for free or a nominal charge, others will charge a hefty premium. Take a minute to ask your new carrier about this coverage, and you might just save a whole lot of money and aggravation!

As part of your trust account reconciliation process each month, pay attention to outstanding checks. If they haven't yet been cashed, it could be because they haven't been received. Sometimes clients or others assume if they didn't receive the check that you didn't send it. They may just keep waiting, getting more and more distressed, instead of calling your office to find out what happened. Another possible reason a check has not been cashed promptly could be that the recipient is not satisfied with the amount and is holding the check while he or she decides what to do about it. Either of these situations results in dissatisfied clients and could even lead to a bar complaint. Most of the time, however, problems can be resolved if you contact parties who haven't timely cashed their checks and find out why.