Legal Practice Advice

Remote Work – Post-Pandemic Update of an Old Post

Below is a post I wrote about remote work in the “before days” of 2014. (I called it “Virtual Law Offices,” which was a more common term then than “remote work.”) It’s interesting to read it now with the hindsight provided by having gone through the pandemic and seeing attitudes to remote work change overnight. The points I made below, such as how it’s possible to be more efficient by eliminating a commute, were not widely shared by my colleagues back then. One thing that’s changed for me since then is that the door-to-door commute is now a bit shorter because the Long Island Railroad introduced routes directly to Grand Central Terminal, near my office. But I still don’t go in most days, since a shorter commute is still longer than no commute at all.

I live in the quaint seaside town of Port Washington, Long Island (at least, it’s as quaint as is possible 20 miles from Manhattan).  Local residents have, in the past year or so, been much more likely to see me around town running errands during normal business hours than in the past.  This is because my law firm is gradually morphing towards becoming a so-called virtual law firm.  When I started the firm in 2010, I set up my office on 5th Avenue and 46th Street, and dutifully commuted in every day (75 minutes door-to-door each way, at best, notwithstanding the puffery of the real estate agents who will tell you only how long it takes for the train to get to Penn Station, which never happens on time anyway).

As my firm’s workload and breadth of practice has increased, I’ve been bringing in attorneys and other law firms on a contract basis to help.  I don’t have the space at 5th Avenue to physically house these people, and my primary go-to contract attorney spends most of the year in Andalucía, Spain (now that would be a commute).  So these attorneys do their work from wherever they want to work.  The fact that they are not physically present has almost no practical effect on how we work together, which is done primarily via email and phone.

Observing the ease of these virtual relationships, I started to question why I was trudging into the city myself.  Of course, I’m the face of my firm and therefore need to meet with clients from time to time.  Nevertheless, 95% of what I do is email, phone calls and review of Word documents, which can be done anywhere with an Internet connection.  Accordingly, I’ve been working mostly from home lately, though I often come in for meetings, in one of the conference rooms at 5th Avenue or elsewhere, as needed.  This required a couple of technological adjustments – using cloud computing for my documents and email and call forwarding for calls that come into Manhattan – which has been seamless.  All the time I save on commuting gives me that much more time to devote to my work and has made me much more productive overall.

It will be interesting to see whether my arrangement becomes the norm for how law is practiced in the future, particularly for areas of the law, like corporate, that are less likely to require physical presence somewhere at a particular time.  It clearly works well for firms like mine – experienced lawyers working with a network of other experienced lawyers.  Time will tell whether it could potentially work for the big firm setup, where young attorneys are being trained by mentors.

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Ensuring that Clients Understand the Agreements they are Signing

We all know that most users of web-based products (which is to say everybody) do not read the lengthy terms of service that they are asked to accept with a click before proceeding. These users make a probably reasonable calculation that the stakes are pretty low given the nature of the transaction and that by clicking “accept,” they are not agreeing to bequeath their estate to Apple or Microsoft. But what about agreements that are more significant to the signer, like an agreement to sell one’s business to a buyer? Does the seller need to read every word and understand them before signing? Their lawyers will usually say yes, because after all, the seller is the one signing the agreement and giving up the business, not the lawyer. But like all experts, lawyers can sometimes forget how utterly foreign contractual language is to lay people and need to take steps to ensure actual comprehension beyond a mere CYA admonition to read every word. Of course, some clients have had long business experience and have seen many agreements of a particular type, so the need to hand-hold needs to be tailored depending on the client.

When people think of legalese, they primarily are concerned with arcane words such as “heretofore” or whatever. But a more significant factor in client incomprehension, I think, is that they don’t have the background knowledge with these agreements to know the purpose of various provisions and how they all interact. For example, in a typical agreement for acquisition of a business, there are provisions relating to the seller’s potential liability to buyer after the closing, including various defined terms such as Fundamental Representations, Cap, Basket and Survival Period. These concepts are, needless to say, not experienced by the average person in their lifetime, even if it’s a well-educated lifetime. But the idea behind all of it is not terribly complex and is very important to the parties in an M&A deal: The buyer should be compensated for damage that occurs after closing if the seller misrepresents facts about the business being purchased when the agreement is signed, but assuming this misrepresentation is not intentional/fraudulent, there should be reasonable limits placed on the amount of compensation and the length of time after closing during which the buyer can bring this up. So, while it’s unrealistic to expect clients to start using all of the contractual lingo in ordinary conversation, it is important for the lawyer to impress upon the client the importance of, to take the above example, ensuring that representations in the agreement are correct to avoid post-closing liability.

So, my message to fellow lawyers is to try to remember how clueless you were as a law student and junior associate and, accordingly, guide your clients with the goal of ensuring true comprehension of important concepts.

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A Few Etiquette Tips for Corporate Attorneys in Dealing with Other Attorneys

This is an update of an earlier post.

Etiquette for Attorneys When Dealing with Other Attorneys

Over my 25 years of practicing transactional law, I’ve often been mildly (or sometimes not so mildly) exasperated by common inconsiderate behaviors by opposing counsel on my deals.  Of course, our primary job as attorneys is to represent our clients and not befriend opposing counsel, but unnecessarily agitating other attorneys does not, in the long run, serve our clients’ interests.  The following are some frequently-occurring examples of bad corporate attorney etiquette to avoid:

Sending Uneditable Drafts. Often I will receive initial drafts of an agreement in PDF or read-only form.  In other words, I can’t easily get into the document to provide edits. Sometimes it’s possible to convert the PDF to Word, but the formatting is garbled. Of course, I can provide the comments in other ways besides directly editing the document, but the point is that you’ve made it harder for me to do my job. If the intent in doing this is to discourage commenting, at least with me it may have the opposite effect, by reducing my trust of the other side. The time to create PDF versions is when both sides are in agreement and ready to execute.

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Equity for Legal Fees (2021 Update)

Equity for Legal Fees | Andrew Abramowitz, PLLC | New York, NY

The payment of legal fees by issuing stock or other equity to the law firm in lieu of cash became popular in the late 1990s with Silicon Valley startups and has gone in and out of fashion since then.  The appeal of the structure, particularly with startups, is obvious.  Before these companies start generating revenue, cash may be hard to come by, so if both sides are willing, the payment of service providers like attorneys, at least initially, with equity, may be an attractive alternative.  It is also possible to have hybrid structures where, for example, the law firm is granted a small piece of equity issued in exchange for the firm’s agreement to discount cash fees and/or defer their payment for a period.

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Should Solo Lawyers Seek to Partner Up?

Use of Debt Financing by Law FirmsWriting in Above the Law, Jordan Rothman argues from personal experience that solo lawyers would be better off partnering in a law firm with one or more other attorneys. As someone who has operated partner-less for almost 10 years now, after Big Law partner experience (where one literally doesn’t know many of one’s partners because there are so many of them), I’ve seen different arrangements and have some thoughts on these issues. While there are some clear advantages to having partners, much of Rothman’s argument is based on an unduly restrictive assumption about how solo firms must operate.

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The Role of Personal Trust in Lawyer Selection

In some ways, my law firm, Andrew Abramowitz, PLLC, is at the forefront of recent changes in the delivery of legal services. For example, the firm operates virtually, with the staff attorneys toiling away at home (or wherever – they could be doing it while hang-gliding as long as they do the job well and promptly, as far as I’m concerned). The ability to get the work done without housing everyone in an expensive Manhattan leased space gives the firm flexibility to offer more competitive rates than traditional firms.

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The Challenges of Startup Legal Representation

When I am having initial discussions with potential startup clients, they often say they’re looking for a firm that understands the particular challenges of running a startup. Perhaps this can be a reference to the substantive transactional matters that startups deal with – like negotiating an agreement among founders or raising capital using methods particular to early-stage companies – that attorneys who’ve been trained by representing Fortune 500 companies may not understand. But often the subtext of the question is that startups are frequently short of cash and may not be in a position to pay legal bills on a regular basis. The challenge for the attorney is to secure these sorts of clients and still manage to make a living after doing so.

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Division of Labor Between Law Firms and Corporate Services Companies

Attorney Productivity | Andrew AbramowitzWhen I am estimating costs for a project for prospective clients, particularly those new to the formation of business entities and deal-doing, a common source of confusion is why there needs to be a fee paid to my law firm as well as to a corporate service company like CT Corporation or CSC. So, I thought it would be useful to briefly outline the different roles that each of us plays in the creation and maintenance of entities.

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Early Payment Discounts for Law Firms

So, the good news for the law firm of Andrew Abramowitz, PLLC is that business has increased steadily over the past few years. The bad news is that there has been somewhat of a greater tendency among clients to be slow in paying invoices. There is a hassle factor associated with this, as it requires frequent follow-up, but the real issue, as anyone who runs a small business will know, is that lumpy income creates financial challenges. My firm has regular expenses that can’t be contingent on the timing of my clients’ payments, and the owner of the firm (yours truly) has personal expenses that are equally not capable of being deferred while I wait for payment. (All of this sounds very self-pitying, but I’ll get to the point soon. I’ve been very fortunate in life and cannot complain.)

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Recognizing and Combatting Strategic Umbrage in Negotiations

Recognizing and Combatting Strategic Umbrage in NegotiationsIn a recent transaction that I worked on – obviously, I can’t give too much detail to protect client confidentiality – I noticed a weird dynamic. In a typical negotiation, when the lawyers from each side are speaking without the principals present, there is some degree of emotional detachment from the ultimate outcome, even though each attorney knows his or her role is to represent the client’s interest. Lawyers will say, for example, that it’s not worth continuing to argue about a particular bone of contention because it is a “business issue” that needs to be worked out by the principals. However, in this transaction, the other attorney, though he was unfailingly polite and even-keeled, would make fairly routine requests from our side seem thoroughly unreasonable, putting me on the defensive.

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