To Your Lawyer: “Would You Buy Your Own Legal Services?”

The theme of this post is for the legal services consumer simply to ask his or her lawyer the following question: “Would you buy your own legal services from your law firm, and why?”  And, I am not suggesting there cannot be a suitable, good reply to this question. I am saying the question helps consumers consider relevant factors in assessing legal services, including my recommendations below.

Among my persistent attempts to try and compel clients to consider preventive legal and tax planning to avoid down-the-road costly disputes and legal fees, I harp on the point that a legal services consumer faces the following economic conundrum when obtaining legal services, whether preventive or litigation, etc.:

  • There is realistically no way the consumer can gauge the quality of the legal services he or she receives; and

  • Without being able to assess the quality, the consumer has no idea of what the market cost is (or should be) for the legal services.

Considering the above two factors, and because law firms typically measure lawyer performance primarily on a lawyer’s billable hours, the consumer absolutely must keep a close eye on the efficiency of how his or her lawyer provides legal services.

Among the factors you, as a client, can consider are:

(1) Does your lawyer care about your situation or case? This might sound trite, but I believe most clients are able to perceive this important factor.  In other words, you do not want to be merely a cog in the wheel of your lawyer’s busy workload.

(2) Does your lawyer push down most of the work to lower level members of the law firm? This arises when your invoice shows 3 or 4 (or more) different billing lawyers, and in most cases newer lawyers, who are charging time to your file. Essentially, you are helping pay to train these other lawyers.

There is no doubt that some work can be handled well by newer lawyers in the firm; but keep an eye on whether these other lawyers are predominantly on the steep side of the learning curve. Require a balance by limiting this push-down approach. Let someone else pay the bulk of their training. Don’t just leave this factor open-ended.

Accordingly, and especially during the what-if, strategic, and developmental stage of your legal work, ask your lawyer to handle the bulk of your work himself or herself, without merely passing it down to a multitude of lesser-experienced lawyers. The judgment and experience of a more seasoned lawyer provide the greater value for legal services, compared merely to the lower hourly-rates of newer lawyers.

(3) Does your lawyer bring other lawyers to his or her meetings and telephone conferences, essentially as the note takers? How many meetings have you attended where the note-taking lawyers essentially say or contribute nothing during the meeting? Discuss this set-up with your lawyer and ask if (and why) this is necessary for your situation.

(4) Does your lawyer use email and other modern digital technology to enhance his or her efficiency? This may possibly reflect where your lawyer falls on the scale of creative openness to change and progressive ideas. [Some lawyers still refuse to use email and have their assistants print hard copies of their emails.]

(5) Do you get trailing U.S. mail hard copies of letters and memos from your lawyer 2 or 3 days after the matter has already been addressed or completed with earlier emails, phone calls, etc.? Tell your lawyer you do not need these hard-copy mailings to the extent of the related additional time charge and expense.

(6) Ask your lawyer, as part of his or her work, to provide you with short, bulleted, talking-point emails, letters, and memos. This suggestion goes to how much of your invoice reflects the time-consuming, law-review mentality among most lawyers (including me).

That is, by our nature and competitive law school training, we lawyers prefer that every single communication we provide to clients (and to anyone) be law-review perfect.  An A+ grade product.  This A+ approach is, no doubt, a necessary and essential goal for final court papers, briefs, legal documents, contracts, trusts, etc. And, a lawyer’s mindset and thought-process at all times must be at an A+ quality level.

But, for every email, memo, or draft document, if your lawyer clocks you for final, law-review perfection you will end up with a much larger legal bill than necessary.  Tell your lawyer on the front end: “For letters, emails, memos, etc., give me only a rough outline of ideas first and we can discuss them as we progress along, etc.” Then, as necessary, your lawyer can polish to law-review perfection the final communications or other documents. This recommendation goes directly to the time-efficiency and cost-effectiveness of your legal services.

(7) Finally, my late father was a lawyer. I am a lawyer. The point here is that most lawyers handle the bulk of their own legal needs.  Few lawyers (including me) face — as a consumer — the burden of paying a legal invoice. Lawyers can, however, be empathic and place themselves in the clients’ shoes so as to help better address how a client more effectively can obtain legal services.

Just Say “No” to Financial Institution Intrusion into the Financial Power of Attorney Arena

I increasingly get calls from clients who are concerned when they run into the following situation.

The financial institution where the client maintains an account tells her she must use only that financial institution’s power of attorney form, rather than her own power of attorney.

Furthermore, if the client stands firm on using her own power of attorney, some financial institutions will thereafter attempt to mandate that she (or the agent named in her power of attorney) sign an additional institutional form that operates as an overlay for the client’s own power of attorney.  This overlay form is captioned along the line of “ABC Bank Attorney-in-Fact Agreement and Affidavit for Non-ABC Bank Power of Attorney.” This form gives the misdirected impression the client can now freely use her own power of attorney, without the institutional power of attorney form.

The above ostensible “must” also sometimes includes the institution telling the client that its legal department will have to review the client’s own power of attorney. This often is where I get the phone call from my client.  And the word “must” generally never sits well with me in many situations.

So, just say “no” to the above institutional power of attorney forms. “No” to all of the forms. Stand strong with a persistent “no” and inform the institution you will use your own power of attorney, without signing any additional institutional forms dealing with the power of attorney.

So, why do I strongly recommend against these institutional forms (including the above overlay “agreement and affidavit for non-ABC Bank power of attorney”)? Because these forms in most cases include features that are targeted to benefit the financial institution, not you.

Among the key institutional form features are:

  1. The agent must agree to indemnify the financial institution against a broad range of items;

  2. The institution’s form mandates what specific state law controls, which might be a state other than the principal’s home state.  Or, a state other than where the agent lives, etc.;

  3. The form requires an agreement to arbitration for issues that arise with the power of attorney.

Also, back to the above legal department mandate. Don’t be alarmed if the financial institution runs your power of attorney by their legal department. Just give them a pdf or photocopy for that purpose. I have had these run-thru-the-legal department situations occur numerous times with no negative consequences. And, with my clients not thereafter signing any of the institution’s forms.

And, quite frankly, if I am an agent acting for my principal under a power of attorney and my principal, if incapacitated, cannot weigh in on these institutional form requests, I (as the agent) likely do not have authority to agree to the institution’s mandate without some preexisting agreement or discussion with my principal. This is likely a reason financial institutions are now pushing these power of attorney forms on their customers as early as possible.

In order to help give you the strength to say “no”, I recommend you make sure you have an updated, comprehensive power of attorney in place that you can point to when you push-back against these financial institutions.

Also, as an important aside, in Georgia the statutory provisions for having a power of attorney under O.C.G.A. Section 10-6-140 state expressly that the Georgia statutory form power of attorney is not the exclusive method of creating the agency.

Therefore, Georgia law acknowledges use of either a Georgia statutory form power of attorney or your own format of a power of attorney. I have not seen the above financial institution mandate tested fully against the backdrop of Georgia law, but my view is an institution will be hard-pressed to succeed with its own-forms mandate against the existence of these Georgia statutes.

Finally, the New York Times had a good piece last year (May 6, 2016) about this same power of attorney push-back from financial institutions. Click here for the link.

I Need to Practice What I Preach

IRA Beneficiary Designations —

Backdrop for this post is that we lawyers typically take great care of our clients, but due to time-limits, fatigue, family, etc., tend to disregard our own personal affairs.   I candidly state that most evenings I look at my personal in-box as I am about to leave my office and sigh with a routine “I will take care of that later .   .   .”.    The problem is my client work constantly displaces this personal “later”.

The point of this post is that I recently rolled over my 401(k) plan into an IRA.  As part of the roll-over process the new IRA custodian sent me various papers, emails, and contacted me with a few phone calls as part of the process.

A month later (yesterday) I finally looked at my to-do list about the IRA account beneficiary designation and realized I had no designation in place.   I quickly prepared a new IRA beneficiary designation with my wife as primary beneficiary, kids as secondary beneficiaries.

Without going into the income tax horror that would have resulted if I had died without this designation in place, let’s just say it would have been stupidly very costly to my family.

The point of this post:

Stop what you are doing now and verify (with a call or email to your retirement account custodian) and make sure your beneficiary designation is up to date. Yes, right at this moment. No delay.










Recent Georgia Trust Law Proposals

Georgia has some excellent, pending trust law proposals on the table. The essence of these proposals is an expansion of flexibility for modifying and changing trust documents.  Also included are new trust decanting provisions and an extension of the Georgia rule of perpetuities period to 360 years (currently 90 years).

Click here for a pdf copy of the proposals (dated December 13, 2016).

This blog post is not for the purpose of merely summarizing the proposals.  Rather, below are a few of my initial observations (point Four is the take-away point):

One.  I have for many years been a fan of designing as much flexibility within a trust document as possible, making sure the flexibility is consistent the client’s preferences.

Two.  Flexibility can affect significantly the down-the-road tax savings options and asset protection features of the trust document.

Three.  In the past, generally, the only way a client could obtain this flexibility was with inclusion of built-in, adaptive written provisions within the trust document, prior to most states changing their trust law to allow more flexibility.

Four.  My key point is that clients must keep a very close eye on who — under these new Georgia proposals — ends up holding this flexibility and how does the flexibility positively or negatively affect the client’s wishes for the design and structure of the trust document (assuming these Georgia proposal are inacted).

In other words, clients (and their advisors) will need to think about whether they wish to limit or restrict any of these state-law provisions.

Overall, however, I believe these pending proposals are an improvement of the Georgia trust law and can be applauded.







When Someone Tells Me to Jump . . . I Don’t.

I harp frequently on the notion that most people are much too willing to follow the demands of others.   I don’t.

This willingness allows  others to frame your situation, rather than you first applying your own framework, before you decide whether and how you wish to respond to, agree, or disagree with the other person.

In 2012 I wrote a blog post on this same notion.   Click here for my post.  Dozens of times I have had clients end up in costly litigation because they either signed documents they could (and should) have avoided or agreed to something otherwise unnecessary.   Often a client’s response is something along the line “I didn’t want to make them mad.” or “I didn’t really think about it.” or “They told me it was OK to sign the document.”, etc.

Whose framework applied?

A couple days ago my family and I watched the movie “Compliance”. This is an extremely powerful movie (2012 R-rated) about how readily, and easily, people follow the direction and command of others, to a horribly tragic result in this movie.   Click here for a link to the Compliance movie site.

No spoiler here.  But, this movie struck my entire family very powerfully.   The depiction of events also seems unbelievable, until you read Wikipedia and other sources about the movie being based on a true happening at a McDonalds in Kentucky (that resulted in both civil and criminal proceedings).




Inside a Lawyer’s Mind: Deep Thinking

I preface this blog post by stating I am virtually paperless in my law practice.   My notes, case research, documents, are nearly all on my iPad.  This has greatly added to my overall efficiency and organization.   Click here for my earlier post about my use of this iPad technology.

But, I continue to grapple with how best to deal with the onslaught of incoming emails each day. Essentially, how do we daily all best handle 60 to 100 emails and remain focused and efficient with our work?   This is a universal question not limited to lawyering.

My best approach to date is to identify three or so tasks each day that I focus on completing to the exclusion of everything else.   For example, let’s say I am preparing a motion for summary judgment.   Ideally I set a predetermined time frame in which I strive to finish that work.   I find this self-imposed pressure of a finite, targeted amount of time helps greatly with my efficiency and focus.   Otherwise, these tasks with an open-ended time slate, at least for me, tend to dilute my effort and attention especially with the mass of other possible distractions.

Also, the above set-up requires closed-door, uninterrupted deep thinking.   I, therefore, move away from my desk to another area of my office and concentrate, especially without my desktop computer calling out to me the persistent siren call:  “Check and respond to your emails!”

On this notion of deep thinking, I recently stumbled across a great podcast, titled “The Value of Deep Work in the Age of Distraction”. It is excellent and should be required listening for all of us.   Click here for the podcast link.   I urge you to listen to this podcast. You will likely be enthusiastically recommending it to others.










Divorce and Asset Protection Trusts

This post is not new news.   But, I had occasion a couple days ago to refer to the Delaware case below in my lawyering work.   I believe it provides some discussion points that many clients and practitioners may find important.  I purposely do not add my views or suggestions about these points.   They speak for themselves, at least to the extent of  being check-list items for asset protection planning.

This 2014 Delaware trust opinion involves a Delaware irrevocable dynasty trust created by a divorcing husband’s father, and including the husband’s sale to the Delaware trust of the son’s business, etc.  The sale was structured as a defective income tax sale [a BDIT sale for you tax readers].  The husband also is a beneficiary of the Delaware trust.

In the next sentence I include a link to a pdf copy of this 2014 Delaware Court of Chancery opinion in IMO Daniel Kloiber Dynasty Trust u/a/d December  20, 2002 C.A. No. 9685-VCL (August 1, 2014).   Click Delaware Case re Kloiber for a copy of the opinion.

At the time of this 2014 Delaware opinion the husband and wife were in the midst of a contested divorce in Kentucky. With the above trust purposely having been designed to exist only under Delaware law, during the course of the Kentucky divorce the husband — without success — asked this Delaware court for a restraining order to prevent his divorcing wife from pulling the Delaware trust into the Kentucky divorce arena.

The Delaware court’s comments I refer to below are in support of the court denying the husband’s request for the temporary restraining order. The Delaware court, therefore, did not have a judicial need actually to answer these jurisdictional questions. Rather the Delaware court’s Kentucky v. Delaware jurisdictional commentary helped the court support its denial of the restraining order request.

I make only the following three points for purposes of this blog post:

One is the Delaware court’s raising of the question that the husband as seller of his business to the Delaware trust is possibly deemed merely a third-party rather than a trust beneficiary (as to the sale). Accordingly, this sale to the trust and the husband as seller are possibly not matters limited to or bound by Delaware trust law.

Two is the Delaware court’s discussion about the wife’s claims against the trust (in the Kentucky divorce) possibly not being subject to or bound by Delaware trust law.  The Delaware court stated that the wife — at the time of the pending Kentucky divorce — was no longer a beneficiary of the Delaware trust because of the trust’s definition of a spouse, etc. The trust includes a “moving definition” of spouse that applied to cut this wife out as a trust beneficiary once she and her husband separated at the time of the divorce action. Therefore, the Delaware court suggested the wife arguably is merely a third-party not bound by Delaware trust law, who can assert her claims against the trust in the Kentucky divorce proceeding.

Three is the Delaware Court’s apparent, broad embracing of the constitutional Full Faith and Credit Clause in relation to the Kentucky divorce action and the wife’s fraudulent transfer claims against her husband in the Kentucky court.

Finally, I make clear here that I am not licensed as a lawyer in Delaware and, as with all my blog posts, my above comments are not legal or tax advice that a reader may rely on, particularly under Delaware law.