Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our law firm is located in San Antonio, Texas. We have a total of 18 attorneys which includes me and two other equity owners that founded the firm and contributed capital, three equity partners that were made partner that did not contribute any capital, two non-equity partners, and 10 associates. The original three partners control the firm and make all of the decisions with little involvement or input from the others. They are not provided with financial statements or reports. The original three partners bring in virtually all of the business. We are faced with some hard decisions concerning partnership admission - non-equity to equity, associates to non equity, etc. Our compensation cost for attorneys is eating away at our earnings for attorneys that are worker bees and don't bring in any business. Your thoughts?

A. You may want to ask yourselves whether you want employees or partners. It sounds like the other three equity partners are not part of the inner circle and are not really functioning as part of the partnership. What are the criteria for becoming an equity partner? Is client development part of those criteria? Should they contribute capital? If they are not adding value to the firm - growth - you are diluting the earnings pool and reducing the size of the pie for yourselves. Personally, I think in a firm your size criteria for becoming an equity partner should, among other things, include client development and a capital contribution. They should have some skin in the game, contribute capital, and signup for their share of the liabilities. I also believe they should then be included in the inner circle.

This morning I was reading a petition that had been filed in the appellate court and kept stumbling over the phrase “the instant case.” What? Did the writer mean “this case?”

Steven Stark is his excellent book Writing to Win wonders if the phrase “in the instant case” means, “if you mix powder with milk, you get a case.”

Not to get my knickers in a knot here, but what’s wrong with “this case?” Just as silly to me are the phrases “the case at bar” or “the case at hand.”

“This” is a useful and accurate word. You use it all the time in casual conversation. Don’t be afraid of it.  

Join us in Chicago on September 7^th for a better understanding of how military service impacts the intact family, as well as the insights you need on child custody considerations in military service cases. Child law attorneys, military lawyers, and family law practitioners who attend this seminar will better understand the role that the military service plays in family law cases; get helpful information regarding the benefits available to service members and their families; discover how service-related disabilities – such as post traumatic stress disorder – can affect parenting and custody issues; learn the methodology of a custody evaluation; and receive best practice tips for representing service members in the family law courts.

The program – which qualifies for 6.5 hours MCLE credit – is sponsored by the ISBA Family Law Section andtheISBA Standing Committee on Military Affairs.

Click here for more information and to register.

President John E. Thies' first ISBA Member Update is an introduction and forecast for his presidential year.

ISBA Director of Legislative Affairs Jim Covington reviews bills in Springfield of interest to ISBA members. In this episode he covers the Radon Resistant Construction Act, Mechanics Lien Act, Trust modernization I, Trust modernization II, Order of protection and Child support and dissipation claims. More information on each bill is available below the video.

Radon Resistant Construction Act. Public Act 97-953 (McAsey, D-Lockport; Collins, D-Chicago) creates the Radon Resistant Construction Act. It requires all new residential construction include passive radon resistant construction. "New residential construction" is any original construction of a single-family home or a dwelling containing two or fewer apartments, condominiums, or townhouse. "Passive radon resistant construction" includes an installed pipe that relies solely on the convective flow of air upward for soil-gas depressurization and may consist of multiple pipes routed through conditioned space from below the foundation to the roof above. Effective June 1, 2013.

"New Face of Adoption in Illinois" and "Illinois: An Adoption Friendly State," presented by Illinois Law, will air on Chicago Access Network Television, Channel 21, in Chicago on Tuesdays at 10 p.m. in August and September. Illinois Law is a cable production of the Illinois State Bar Association. "New Face of Adoption in Illinois" will air on Tuesdays, August 14 and 28, and Illinois: An Adoption Friendly State will air on Tuesdays, August 21 and September 4. “Illinois Law” can also be viewed online at http://iln.isba.org/blog/illinois-law-video

If so, it's probably going nowhere, even if you don't call it by that name. So write Judge James Fitzgerald Smith and Julia Illman Maness in the latest Trial Briefs, newsletter of the ISBA Civil Practice & Procedure Section.

"A claim for negligence against teachers and educational institutions for the quality of education received sounds in the tort of educational malpractice," they write. "This tort, also described as educational negligence, is not cognizable in Illinois."

They go on to discuss the Illinois Appellate Court's recent ruling in Waugh v. Morgan Stanley and Co., Inc.. In Waugh, the plaintiff alleged that a flight instructor negligently trained a pilot. Read Smith's and Maness's analysis.

We’re channeling Jerry Maguire with this plea for help as every member of the Illinois General Assembly—all 177 of them—stand for election this fall.

ISBA members devote considerable time, effort, and expertise in support of our legislative efforts. But we need your help to protect your interests. Although I believe we are respected and effective in Springfield, it’s hard to play touch if everybody else is playing tackle. To make us more competitive, I ask that you consider contributing $50 or more to LAWPAC.

ISBA created ISBA LAWPAC (the Illinois Lawyers’ Political Action Committee) in 1978 to contribute to those candidates running for state senator and state representative who share your interests. LAWPAC is governed by a bipartisan board of trustees appointed by ISBA presidents. To encourage broad participation by our membership, LAWPAC has been funded solely by ISBA members who elect to add a $20 contribution to their annual dues statement. Typically, about 10-15% of our membership contributes $20 this way. If adjusted for inflation since 1978, this $20 would now be about $70.

The amounts we raise by this small amount are dwarfed by the amounts raised by similarly situated associations, such as the realtors, dentists, and CPAs. We have to be competitive in the State House. You may help us do so by contributing by credit card at this link or download this form to send a check to ISBA LAWPAC.* Thank you!

ISBA President John E. Thies was elevated to the position of President of the National Caucus of State Bar Associations at the recent ABA Annual Meeting in Chicago. The purpose of the caucus is to coordinate the efforts of state bar associations across the country in considering and proposing matters before the American Bar Association House of Delegates.

“State bar associations – including the ISBA – have a unique interest in many matters before the ABA House and within the ABA generally," Thies said after being named President-elect of the Caucus in 2011. "These associations are most closely connected to the practicing bar, and the administration of justice at the core level. Accordingly, it is important that state bars have a strong voice within the ABA. In leading the Caucus, I plan to work with other state bar leaders to make sure that this is always the case.”

The National Caucus has been an important resource for the ISBA in connection with the Association’s recent efforts to maintain the ABA’s current position against non-lawyer ownership and fee-splitting with non-lawyers. “The Caucus met in advance of the ABA’s August House of Delegates meeting, and was an important sounding board for us as we decided how to frame this debate in the House.” 

At its recent annual meeting, the ABA revised its Model Rules on Professional Conduct. Particularly, it adopted Revised Rule 105A   dealing with client confidentiality and technology and Revised Rule 105B on lawyers' use of technology for client development or marketing. Sean Doherty describes the significant changes in his article posted at Law.com, ABA Adopts Ethics Rules on Lawyers' Use of Technology. The changes to the Model Rules dealing with the use of internet for marketing is described in Internet Marketing Tools for Lawyers Addressed by ABA by Gyi Tsakalakis at Lawyerist.com.

One of the most significant changes is the ABA's expectation that lawyers will take time to educate themselves on the uses and potential risks of technology. Applauding this new acknowledgement of the need for lawyers to educate themselves about technology, Sharon Nelson posted at Ride the Lightning, "No more Lawyer Luddites."