February 2004

1. Where you practice law may be the next question to ask.
2. Check your credit
3. One example of breach of fiduciary duty to partners

Articles

1. Where you practice law may be the next question to ask.

   Technology has changed the way we practice law, now may be the time for some firms to experiment with where we practice.

   Lest you fret that your office may be down-sized, I suggest you read Ron Friedman's article on this topic in the January/February issue of the ABA's Law Practice Magazine. He suggests that many lawyers today are already in a sort of virtual law office when they are in trial for weeks or even months at a time away from their central office; that they work out of their homes or hotel room at night, waiting to return to the courtroom in the morning; and that many lawyers work out of their "home office" for days and then go into the central office for services and meetings that they don't have access to from their home office.

   Ron's article is an interesting and thought-provoking examination of the issue.

2. Check your credit

   It's important to have "clean credit" and to stay on top of your current credit ratings. "Identity theft" is a significant issue today; and insuring that the information is accurate in these reports is essential. It's in your best interest to make sure that the information they obtain represents you (and your business) well.

   One common misconception is that if all of your credit cards are paid up, your credit rating will be excellent. In actuality, credit scoring is a very complex process, and one of the factors considered is how much open credit you have. If you have a handful of cards that you got some time ago (because you just couldn't pass up that on-the-spot discount if you signed up that day, for example), realize that it can be a liability. Creditors assume that you could max out every single one of your cards, even if they currently are paid in full or haven't been used in a while.

   A good habit is to request credit reports from each of the three leading credit reporting companies periodically, sometime once a year, depending on how active you are in financing your activities and purchases. You can order your reports online or via the telephone, and each costs about $9. (Some will try to up-sell you on other reports, but for basic purposes, you won't need those.) The companies and contact information:

   • Equifax: 800-997-2493
   • Experian: 888-397-3742
   • TransUnion: 800-888-4213

   Ordering three reports at the same time to see how they compare is an interesting research experiment, in terms of customer service, data reporting formats, and accuracy.

   According to Terri Lonier, who wrote this article and did just that, ordered all three at one time, the information contained on each report was essentially the same, but with some significant differences. The reports required some follow-up cleanup work.

   She says Experian's report was the easiest to read, with a much cleaner graphic layout than the dense rows of data and figures on the others. One revealing item on each report is the number of times your credit status is "pinged" by companies who want to sell you something. Each report gives a list of the companies who have "knocked" on the door (and get limited information) as well as those companies who get a full report (say, when you went to get that car financed).

   If you haven't reviewed your credit reports lately, it may be the best $30 you spend this quarter. Keep in mind that it can take several weeks for credit reporting companies to update and correct information. It's better to grab 15 minutes and make three phone calls to stay on top of a situation that can have a profound impact on your business. (From Working Solo e News) I’ll let you know what happens when I take Terri’s advice and order these same reports.

3. One example of breach of fiduciary duty to partners

   A one-time Salisbury, MD lawyer will spend six months in jail after being convicted of stealing $60,000 from his former law firm, the Maryland Attorney General's Office said Tuesday. Sullivan, 48, was accused of stealing money from the Salisbury law firm of Long, Badger and Robertson from 1996 to 2001.

   According to the statement of facts presented at Friday's hearing, when Sullivan became a partner in the firm in 1995, he entered into an agreement that client fees from all the attorneys were collected into a general fund to be divided at the end of the year.

   An investigation within the firm discovered some time later that Sullivan would receive payment from his clients, keep it for himself and then report the accounts as uncollectible. He admitted to taking about $60,000 during his tenure with the firm. Investigators from the Maryland Attorney General's Office found Sullivan asked clients to make checks payable to him, and that he cashed them or deposited them into a personal bank account.

   Moral: Accounting and financial information is not to be ignored. If you are not interested or able to "follow the money", have your accounting do a monthly mini-audit to report any unusual or suspicious actions taken within the firm.