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Will Bankruptcy Lawyers Be Forced to Declare Bankruptcy With the Recent Drop in Filings? Todd Zywicki's post at Volokh Conspiracy on the large drop in bankruptcy filings for 2006 is generating plenty of comment. Zywicki writes: As the year closes out, it looks like the final tally for consumer bankruptcy filings for 2006 (the first full post-BAPCPA year) will be about 600,000 or so. Last year the figure was 2 million (in large part because of the pre-BAPCPA spike) and in 2004 it was about 1.5 million. So there has been a drop of roughly 60% from the prior levels. Zywicki offers three hypotheses for the drop: 1. BAPCPA [Bankruptcy Abuse Prevention & Consumer Protection Act] Hangover: One theory is that the system is still suffering from a BAPCPA hangover, and that everyone who was thinking of filing filed last October before the law went into affect. But this is hard to square with the observation that filing levels stabilized in the spring and have not subsequently bounced back to anything like their preexisting levels ... 2. Increased Cost and Complexity: Another theory is that increased cost and complexity of the system is simply making it more difficult for needy filers to get access to bankruptcy even though they need it. But if this is the case, then one would expect to see a spike in "informal bankruptcies," i.e., defaults by struggling consumers who need to file bankruptcy but are unable to do so for some reason. Yet looking at the Federal Reserve's data on delinquency rates and charge offs on consumer loans, there appears to be no increase in delinquencies on consumerloans, as one would expect were struggling consumers unable to get access to bankruptcy, and a drop in charge offs. 3. A third hypothesis is that despite some hiccups, BAPCPA has been working largely as Congress intended so far in diverting various categories of debtors out of bankruptcy while preserving relief for those who need it. Most commenters tend to agree with the first two of Zywicki's hypothesis. Another explanation is that the economy has improved, thus reducing the need for bankruptcy filings. Of course, if bankruptcy filings continue to drop at the current rate, there's bound to be a rebound affect, as bankruptcy lawyers start declaring bankruptcy! Posted by Carolyn Elefant on December 21, 2006 at 03:33 PM | Permalink | Comments (0) Why Firms Should Want Their Own Lawyers to Have a Portable Practice Dan Hull of What About Clients? offers law firms a new standard for evaluating associates: the "dude, if you can't steal our clients, you're fired" standard. As Hull elaborates: Every day, the client service by associate and paralegals should be good enough to permit those employees to actually steal any client, and take them to another law firm (use "transport" for the foregoing, if you need the PC professional services term), if they were to leave your shop tomorrow morning. Period. Of course, in Hull's paradigm, the law firm must reciprocate associate service to clients with its own service to associates. Because it's only by providing a "fun, lucrative and engaging" work environment that law firms can hang on to client-generating and client-serving associates.  Michelle Golden at Golden Practices opines that it takes trust to make Hull's system work: trust that partners and team members will do the right thing, trust that associates will learn what they need to know and trust that when you place trust in others, it will return to you. If Golden is right that trust is the lynch pin of a firm that really offers client service, I don't think we'll be seeing this model any time soon. Posted by Carolyn Elefant on December 21, 2006 at 03:30 PM | Permalink | Comments (0) Blogging Policies for Companies and Law Firms This week brings discussion among bloggers about blogging policies -- for companies and law firms. Justin Patten at Human Law links to a bunch of sample corporate-blogging policies. Some policies discuss whether there's a need to suspend blogging during the SEC-mandated "quiet period," before an IPO, while others merely consist of a list of sensible guidlines. As for law firms, the real policy issue related to blogs is whether bloggers should get bonuses, an issue discussed by Peter Lattman in this WSJ Law blog post. Actually, the original discussion topic behind the post is whether law firm bonuses should reward associates for hours billed or rainmaking. In this context, Lattman notes that according to Kevin O'Keefe, efforts by bloggers like Dennis Crouch of Patently O or Christine Mingie of Forestry Law blog have brought clients to their firms. O'Keefe suggests: Let's incent associates who may not be as comfortable doing other forms of marketing to blog as away to enhance their and the firm's reputation as well as to bring in new work. What kinds of incentives does your firm give to associate bloggers or any kind of associate rainmaker? Posted by Carolyn Elefant on December 21, 2006 at 03:27 PM | Permalink | Comments (0) Second Acts in Law As Bruce MacEwen writes in this post, Back to Business Law, law firms in conjunction with the American Bar Association are developing programs to help female attorneys who left the law to raise families keep their skills fresh if they choose to return. As MacEwen describes, the programs cover cutting-edge issues in corporate law, like professional responsibility for corporate lawyers, Sarbanes-Oxley and changing regulation for securities issuances, and they're taught by first-rate experts.  Don't think law firms are necessarily growing more enlightened about work-life balance in sponsoring these programs. In many instances, economics drive the creation of these programs. As MacEwen writes: The economic tragedy is one we also know too well: As expressed by Arthur Field, retired corporate partner from Shearman & Sterling: ''Firms have a big investment in this group because they have trained them,'' he said, ''while the individual lawyers have an enormous investment in their education. Those who want to come back will work harder. If it's just a dollars and cents decision -- which it shouldn't be -- why wouldn't you hire more highly motivated people who have left and want to come back?'' And indeed, the law firms have found the right target audience. Consider this comment from MacEwen's post comments: You have heard, as have I, the female friend now 25 years out of a top-three law school, whose practice, in the ascendancy at an AmLaw 5 firm, ended 18 years ago, for keeps, when the first of her two children was born: And I quote, "I wasted my education, and my career!"  What firm wouldn't want to hire a lawyer (male or female) who overlooks the absolute blessing of children to bemoan the loss of a career and who apparently lacks the creativity to figure out a way to keep a place in the law without a job at Biglaw?    Posted by Carolyn Elefant on December 21, 2006 at 03:24 PM | Permalink | Comments (0)

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