WHAT I LEARNED AT THE NAELA 2000 UNPROGRAM

By Thomas J. Murphy

After procrastinating for several years, I finally made it to the NAELA’s Unprogram, held each February in Dallas.  It was the first time that I had attended the event although I had heard a great deal about it over the years. I always had a reason not to go.  I realize now that this was a mistake.   I am writing this article to pass on many of the wonderful ideas that I heard as well as to provide a glimpse of what the Unprogram is like.

The Unprogram is a three day conference with no pre-arranged schedule (hence the name “Unprogram”).  Several times a day, a message board would simply state that discussions on particular topics would be given in a specified room, usually lasting about 90 minutes.  There was typically eight to ten discussion groups going on at any one time.  There was no structure to these discussions – it was meant to be very informal and interactive.  The topics did not deal with any substantive law issues.  Rather, they addressed the business of running a law practice -- office procedures, caseload management and other assorted headaches.   For the first time ever, registration was capped at 150 participants.

Over the three-day event, I went to as many discussions groups as I could.  The one overriding theme that I picked up on was coping with an avalanche of new and continuing business  No one seemed overly concerned about attracting new business.  As a result, marketing a practice was not discussed much as I would have thought.  The consensus seemed to be that it was not a matter of priming the pump but rather how to control the floodgates.  (One of the best pieces of advice I heard was “Before you increase the size of your practice, you have to get organized”).

.  Here is what I gathered from the various discussion groups:

Advising on retirement planning.  For me, this was the most useful discussion that I attended.  The members leading the discussion emphasized that advising on retirement plans should become a huge and lucrative area of our practices.  Never before have people accumulated this much tax-deferred money.  They emphasized that, once you understand the basic concepts, the law is not as complicated as generally perceived.  Financial advisors can readily find the easy answers on their own or through in-house counsel.  But they have great difficulty finding practitioners who can answer the hard questions and who are objective and unbiased (ie, not earning a commission by selling a product).  We need to become the source for these answers and there are some useful tools in helping us analyze these issues.  The software by Brentmark and Pendicalc were given high praise.  These programs allow you to compute all sorts of “what if” scenarios for the client, such as should the client pursue tax deferral or purchase life insurance instead? 

The new IRS regs on minimum distributions had just been issued when the Unprogram took place.  Members of the group emphasized that this presented a real marketing opportunity.  Several members had already scheduled seminars on the new regs for CPAs, CFPs, stockbrokers and other financial advisors.  They were also preparing more general seminars on the new regs in conjunction with newspapers, retired teacher associations, credit unions and charities.

(On a personal note, I was unable to quickly arrange these types of seminars before tax season hit.  But I took their advice and immediately scheduled seminars when the tax bill was passed in June, 2001.  My seminars were a great success.  The rooms were packed and most of the attendees were financial advisors or other professionals.)

Value billing and other fee matters.  Virtually all attendees are flat-feeing a large portion of their practice.  Flat fees are being used for two reasons.  One is that elderly clients dislike paying $200 per hour and up for advice.  The other reason is that flat fees better reflect our expertise and the efforts undertaken to obtain that expertise.  The billable hours lost due to attending seminars plus the out of pocket costs of travel, lodging and the like can easily equate to $20,000 per year or more.  These are expenses that many other attorneys are not incurring.  This makes our advice that much more valuable, especially in times of crisis.  As one member put it, “we are the fireman with the biggest hose”.

There was repeated concern that we were not doing a good enough job in explaining this expertise to our clients and their children who, after the parent’s death, may question the fee.  The consensus was that, when a fee dispute erupts, practitioners need to do a better job of explaining what we are doing and of the benefits received by the clients. 

In this regard, there was nothing short of horror stories coming out of New Jersey.  Several New Jersey attorneys told of fee arbitrations where the attorney was ordered to return the entire fee even where a spenddown was successfully accomplished.

            In view of all this, there was a strong consensus among all attorneys to refund the entire fee when a client complains and to refrain from suing clients who will not pay.  Such matters were viewed as a costly diversion.  It is best to walk away.

            The importance of a written fee agreement was also emphasized.  Several attorneys give the fee agreement to the client at the first meeting but refuse to let the client sign it at that time.  Rather, the client is encouraged to think it over and to discuss the matter with their children.  The check is received at that meeting but the client is instructed that the check will not be deposited until the client signs and returns the fee agreement.  These clients liked the fact that they were not being pressured.

            Attorneys also pointed out that it was important to indicate that the fee as quoted was only good for a certain period of time, usually 60 to 90 days.  Several attendees had experienced problems with families who returned one year or more later when circumstances had changed or the attorney’s fees had increased.

            The fee agreement also needs to state what will happen if the client dies in the middle of representation.  Most agreed that the fee should be considered earned if all the documents have been prepared or if the application has been submitted.  Some agree to refund a portion of the fee.  Others offer to probate the estate at little or no extra cost, although it was noted that there is often little to probate in most Medicaid estates.

            Very few attendees accept credit cards.  At prior NAELA meetings it has been pointed out that, through the use of credit cards, receivables drop dramatically.  Others have told me that credit cards are a popular way for a client to build up their airline miles.  But this does not seem to have taken hold.  Attorneys with large Medicaid practices noted that, during a spenddown, cash is usually readily available to pay fees.

            There was a good anecdote for those attorneys who may be concerned that their fees are too high – think of the commission that the realtor will get if the client’s house is sold as part of a probate estate!  Still think your fee is too high?

Client contact.  I was surprised at the number of attorneys who do not send out questionnaires prior to the first meeting with the client.  I, as well as most of the attendees, send out a detailed questionnaire with a checklist of documents that I will need to review.  But a substantial number of attorneys prefer to have the first meeting be more of an information-gathering session.  Only after an attorney-client relationship has been established does the document exchange take place.

            A good idea is to include a cover letter explaining that the client is being asked to provide confidential information that the attorney needs to analyze.  The letter emphasizes that the information will be kept confidential.

            A growing number of attorneys are providing fee schedules with the initial documentation that is sent to the client.  This is intended to give the client a good grasp of what the fee will be.  Not surprisingly, others took issue with this approach since there is typically a wide range of fees and the client will not understand what they are paying for until meeting with the attorney.

            One nice touch that I learned of is to have the client come to the office and pick up the completed documents.  The attorney, staff and client then have a mini-celebration – “Isn’t this great.  We got everything done!”  This is much better than simply mailing the items to the client.

            Another useful tidbit was, upon completion of the work, to send a booklet containing elder law FAQs.  Attorneys using this method said this dramatically lessened the subsequent phone calls and questions that can take up substantial amounts of time.  It is also an effective CYA mechanism in that the client cannot later complain that they were never told certain things or that they were told something different.

            There is no question that it is important to get the little things right with a client.  As one attorney said: “You can make a mistake in the law that could cost a client thousands of dollars and he will never know it.  But spell his name wrong and you’re dead.”

Marketing.  Not much time was spent discussing marketing our practices.  I noticed a wide range in the amounts attorneys are spending.  One attorney spends $130,000 per year on radio advertising.  Others, who have built several-lawyer firms with large staffs, have not spent a dime.

            No one was too excited about the Yellow Pages.  The consensus was that those ads produce too many shoppers and other low quality clients.  However, my experience with a ¾ inch ad has been quite favorable.

            There was also wide agreement on the need for tracing the sources of your new clients.  I simply ask at the end of the first meeting.  Others provide for this in their questionnaires or other intake forms.  Not only does this tell you where your business is coming from, but it may also provide greater insight into the client’s motivations.  You also need to provide some sort of personalized thank you to the referral source.

            Public speaking is a great way to build a practice.  One attorney related how he had developed a standardized letter that he sent to each group that he wanted to present to.  What caught my attention about that letter was the need to list ten topics that you can speak on.  Your intended audience may not know that you could speak on these other topics.

Scheduling.  I was surprised by how fixed the calendars are for most attorneys.  Appointments never vary and are only scheduled for certain times and on certain days.  Many, if not most, of the attendees close their office to clients on Fridays.  A message is left on the firm’s answering machine indicating that the staff is in the office, that they will be checking messages throughout the day and that they will return any emergency calls.  Some attorneys have their staff devote a specific portion of each day to filing and other humdrum tasks that are easily put off. 

There is an increasing use of regularly scheduled staff meetings with the entire office.  These are usually done over lunch with the entire staff so that everyone knows what everyone else is doing.  It can be very important for everyone to have some familiarity with each case since this can greatly minimize disruptions if a staff member is ill or otherwise out of the office.

            A problem that frequently came up during discussions was limiting attorney contact with the client.  It appeared to me that many attorneys are not involving their staff at the first meeting with the client.  The attorneys who have solved this problem introduce the staff member at the first meeting.  The client is told to contact the staff member first and the client is told by the attorney how the staff member will be handling the case.

Hiring of staff and personnel issues.  An increasing number of firms hired staff through the Internet – some without even realizing they were doing it.  Apparently, most large newspapers will, at no additional charge, place their classified ads on their website that in turn are picked up by Internet headhunters.  Other firms hire through their local paralegal programs.  Some were happy finding that they are getting mature individuals who are embarking on a second or third career.  Others, however, felt they were hiring overqualified people from these programs. 

            Many believed it was best to avoid advertising altogether because this required too much time in interviewing.

            There was a great deal of discussion over the necessity of legal training for new hires.  The consensus was that as you increase the number of staff, the less importance that legal training will have.

            There was great emphasis placed on increasing the staff’s contact with the client.  The staff enjoys it and the client will often get a greater sense of personal attention.  But in such a setting it is critical that FYI memos from the staff to the attorney are routinely done. 

            There is also increasing use of dividing up staff by topic areas, such as guardianships, medicaid, estate planning, trust administration, etc.  This increases the staff member’s sense that it is now their case and their responsibility to get things done right.

            Creative ways of compensating staff were discussed.  Massages, manicures and gift certificates are fairly popular.  Other benefits included paying for occasional weekend trips or leasing a car.  There seemed to be an even split between those who pay their staff on an hourly basis as opposed to a salary.  It was thought that the best way to resolve this issue is to ask the staff member which they prefer.

            To no one’s surprise, issues with staff discord regularly came up.  The best advice I heard was that if it cannot be worked out, then someone has to go.  The problem cannot be allowed to linger.  But a serious attempt needs to be made to prevent it from coming to this.  A very useful suggestion was to have the two staff members go out to lunch, at the attorney’s expense, and tell them not to return until they have the matter resolved.

            Everyone I spoke to thought the Unprogram was very useful and worthwhile.  Many, if not most, had been to prior Unprograms.  There was a certain aspect of “misery loves company”.  I, like all the attendees, knew I had problems to address.  Yet time and again I drew some comfort from realizing that many of my colleagues were experiencing much more serious problems than I was.  I was by no means alone in feeling this.  But by attending, and continuing to attend, the Unprogram, let’s hope that the collective wisdom and encouragement so willingly dispersed at the Unprogram will make life easier for those who need it.