Asked and Answered

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

Q. For years our 14 attorney firm has operated under a formula based eat-what-you kill system. We are moving toward a more subjective-based system. We have been advised that we will need a compensation committee. What are your thoughts regarding compensation committees?

A. The components of your compensation plan and partner buy-in will be important to the success of your program. However, how you setup and constitute your compensation committee will be crucial. In a subjective system trust is paramount. How the members are selected, who serves on the committee, how the committee operates, and other matters must be spelled out and communicated to all partners. Here are a few ideas:

The Illinois Supreme Court has appointed Karen Hasara of Springfield, Illinois, to serve as a Commissioner of the Attorney Registration & Disciplinary Commission (ARDC). The ARDC is the Supreme Court agency that has administrative authority over more than 90,000 Illinois lawyers and investigates allegations of attorney misconduct.

Ms. Hasara, a non-lawyer, has a long history of public service in this state, beginning in 1975 when she was elected to serve on the Sangamon County Board. From 1980 through 1986, she was the Clerk of the Circuit Court of the Seventh Judicial Circuit, Sangamon County. In 1986, Ms. Hasara was elected to the Illinois House of Representatives, where she served the 100th District, until being elected to the Illinois Senate in the newly formed 50th Legislative District in 1992. In 1995, she was elected the Mayor of Springfield, the first woman ever to hold that office. She was re-elected in 1999 and served until her term ended in 2003. She currently serves as a Trustee of the Springfield Mass Transit District.

Ms. Hasara is a member of the Board of Trustees for the University of Illinois, the Board of the Illinois Equal Justice Foundation, and is active with the World Affairs Council of Central Illinois, the Rotary Club of Springfield, and the University of Illinois at Springfield Advisory Committee.

Book by April 27 and save $500 per couple!

Dear ISBA members,
We invite you to join us on our Fall 2012 ISBA President’s Trip – a magnificent tour of China!

Take a moment away from your busy day, close your eyes and picture yourself in a land steeped in thousands of years of history. Picture a place where the echoes of distant empires can still be heard above the urban roar of modern technology, where natural landscapes stand in stark and beautiful contrast to contemporary cityscapes. You are in a land rich in tradition and ripe with possibility.

Umberto S. Davi, of Willowbrook, a principal in the Western Springs law firm of Davi and Associates, has been elected third vice president of the Illinois State Bar Association. He will serve one year in each of three vice presidential offices and become president in 2015.

Davi, whose law practice concentrates in family law and real estate, was first elected to the ISBA Board of Governors in 1998 and was re-elected in 2004, 2008 and again in 2011. He has served on the ISBA’s 201-member Assembly and has been active on numerous committees.

A past president of the Justinian Society of Lawyers, Davi has served as president of the Willowbrook Police Pension Board for more than 10 years and is a Willowbrook Village trustee. He also is a member of the Board of Trustees of The John Marshall Law School. A native of Italy, he helped establish the Sicilian American Cultural Association.

Davi received his law degree from The John Marshall Law School, with Distinction, in 1982. A member of its alumni board, he was its president in 2005-06. He received his undergraduate degree in 1976 from Western Illinois University, in Macomb, where he was a member of the National Honor Society.

ISBA Director of Legislative Affairs Jim Covington reviews bills in Springfield of interest to ISBA members. This week he covers House Bill 3944 (eavesdropping), House bill 1205 (residential burglary), House Bill 2886 (statute of limitations and sex offenses), House Bill 281 (judgement debtors) and House Bills 4460 and 4461 (domestic violence orders). More information on each bill is available below the video:

Our panel of leading appellate attorneys review Thursday's Illinois Supreme Court opinions in the criminal cases People v. Wrice and People v. Torres and civil cases Innovative Modular Solutions v. Hazel Crest School District 152.5 and Citizens Opposing Pollution v. Exxonmobil Coal U.S.A.

CRIMINAL

People v. Wrice

By Kerry J. Bryson, Office of the State Appellate Defender

The Illinois Supreme Court recently issued its opinion in Reliable Fire Equip. Co. v. Arredondo, 2011 Ill. LEXIS 1836 (Ill. Dec. 1, 2011). The opinion enforced prior precedent that an employer’s legitimate business interest should be considered in deciding whether a restrictive covenant should be enforced, but it rejected the previously set “tests” and “formulas” employed by Illinois appellate courts in determining whether a legitimate business interest exists. Illinois lawyers should carefully consider the Supreme Court’s decision and reconsider their previous opinions to clients regarding the enforceability of certain covenants.

Lawyers Should Reevaluate Advice to Clients Regarding the Enforceability of Restrictive Covenants in Light of New Illinois Supreme Court Case

By: Joseph R. Marconi and Victor J. Pioli, For ISBA Mutual

Ever since the Fourth District Appellate Court’s opinion in Sunbelt Rentals, Inc. v. Ehlers, 394 Ill.App.3d 421, 915 N.E.2d 862 (4^th Dist. 2009), uncertainty has been pervasive regarding what factors a court should consider and what test(s) a court should apply in determining the enforceability of a restrictive covenant under Illinois law. On December 1, 2011, the Illinois Supreme Court rendered its opinion in Reliable Fire Equip. Co. v. Arredondo, 2011 Ill. LEXIS 1836 (Ill. Dec. 1, 2011) to lend some clarity to the issues.

Illinois State Bar Association (ISBA) President John G. Locallo (right) presented an oversize copy of the cover of the 100th anniversary edition of the Illinois Bar Journal, the monthly magazine of the ISBA, to Illinois Secretary of State Jesse White, in his capacity as State Librarian, on Tuesday, Jan. 31. An actual copy of the magazine was donated to the library for its archives and will be made available to the public. 

The 100th anniversary issue features an eight-page overview of how the publication has evolved over the years, both in appearance and content. It was authored by Thomas Hunter, a member of the Illinois Bar Journal Editorial Board and a clerk in the chambers of Hon. Richard P. Goldenhersh, Appellate Court of Illinois, Fifth District.

(Photo credit: John Wheeler)

Asked and Answered

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

Q. Our firm has been struggling for the past couple years. We have lost three key institutional clients, had partner defections to other law firm, and have suffered financially. We were a 40 attorney firm- six years later we are ten. We simply must improve profitability. What areas of our overhead should we attack first?

A. Many law firms waste considerable time trying to find ways to cut a pie that is too small up differently by implementation of new compensation systems or increasing the size of the pie by decreasing costs. While unnecessary expenses should be reduced - once they are reduced a repeated effort to slash costs proves fruitless as a strategy to increase the firm pie. The vast majority of law firm expenses are fixed or production-related. The percentage of costs that are discretionary is low, typically in the 20-30 percent range, and the number of dollars available for savings is small. The available dollars available for reduction disappear after a year or two of cost-cutting, leaving the firm with dealing with the effects of further cuts on production capacity. For example: