|
Strict privity of contract used to be the rule in estate planning cases. In other words, only the client could claim that the estate planning attorney had been negligent in planning their estate. Obviously, this severely limited malpractice actions against estate planning attorneys.
Over the years, the number of states adhering to the doctrine of strict privity of contract has been on the decline. Now, an ever-shrinking minority of states, allows estate planning attorneys to be insulated from malpractice claims brought by their clients’ Personal Representatives and beneficiaries after the client’s death.
In a recent case, Schneider v. Finmann, the New York Court of Appeals, the state’s highest court, held that strict privity of contract is no longer required in malpractice claims in estate planning cases in that state.
In Schneider, the New York court found that the Personal Representative stands in the shoes of the client and has privity of contract. The court specifically did not repeal the requirement of privity altogether. Thus, beneficiaries continue to be barred by the doctrine.
In Schneider, the Personal Representative alleged that the attorney was negligent in not recommending that the decedent’s life insurance policy be transferred to an Irrevocable Life Insurance Trust (“ILIT”). The lawsuit alleges that this negligence resulted in the decedent’s estate incurring estate taxes that would not otherwise have been incurred. ILITs, GRATs, FLPs, SCINs, and QPRTs are common ways attorneys practicing in estate planning reduce their clients’ estate tax liabilities.
The court found that it would be unfair for a decedent’s right to pursue a malpractice action to die with the decedent. Thus, it found that the Personal Representative was no longer barred by the privity doctrine. The court did not look at the underlying merits of the particular malpractice action.
The ever-shrinking doctrine of privity is yet another reason that attorneys should not dabble in estate planning.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com
Towards the end of my active litigation career I can remember a woman coming into my office that wanted to sue the law firm she had worked at for wrongful termination. Long story short: she worked for a named litigation partner at a local firm for 15 years. Feeling a bit unappreciated, she put her word out to the grapevine that she was hoping for greener pasture. Apparently, at the same time, a partner at another firm lost his legal secretary with little notice. He was desperate for a replacement and put his word out to the grapevine and therein they met. A few days later they met for lunch. She is a pleasant woman and obviously knew what she was doing given her work history. So he hired her on the spot.
Then the “problems” began. Apparently she wasn’t as quick as his previous legal secretary. Within 3 months she was let go for her non-productivity. That’s when she walked into my office.
So here was a woman over 40, raising some kids on her own, steady job for 15 years, promises of green pasture and then out on the streets 3 months later without so much as a “sorry.” How would you feel if that was you… or your sister? How do think 12 jurors might feel about law firms who treat people this way?
The “old” Don would have loved to mess with this firm. They weren’t especially nice to me on a case I had litigated against them a few years prior. If I could have somehow squeezed past all the motions to dismiss, etc. and taken it to a jury it would be game over. However, this being the kinder and gentler me, and someone who has learned that litigation is a poor substitute for the taking of personal responsibility and moving on, I asked a different set of questions. Such as, “What was your responsibility in all of this?” “Were you crystal clear about what it took to be a success in this position or did you simply have your fingers crossed?” (As Mary Kay so famously stated, “Most folks spend more time planning their vacations than their careers.”)
What does a litigation secretary do 80% of the day? Type. Did the firm or partner have a typing test requirement? Of course not. So what do you think their typing standard was for that job to be a success in it? The client was astute enough to say, “My guess is the speed met by the previous legal secretary.” And what was that? Who knew? When I asked what her typing speed was she said approximately 80 words per minute in a test she took herself some years ago. (Just an OK typing speed for a high end legal secretary—I never hired less than 100 wpm.) When I tracked down the previous legal secretary she said at least 100 WPM. So there you have it. This legal secretary was a failure the first day on the job and NOBODY KNEW ABOUT IT!
How many employees, not just legal secretaries, are failures on their first day of hire? Fact is, there is no substitute for testing on all aspects of employee performance. For example, you can do an online typing test of your existing secretaries to generate a hiring benchmark and to see who may need some additional training. Here’s an example of one such test. http://www.previsor.com/pdf/FactSheets/Fact_Sheet_Typing.PDF. While you are at it, have the attorneys and legal secretaries create a substantive knowledge test too. If it’s a litigation secretary test their procedural knowledge. If it is a secretary to an estate planning attorney you can test for the relevant knowledge there too. I bet half of all applicants and half of all employees will do better than the other half.
There you have it. A simple formula: test for it if it’s important to you. The failure to do so will guarantee failed employees.
Don Phin is the president and founder of HRThatWorks.com, a former litigator, Don is now a nationally recognized speaker and author on HR and Leadership.
Academy Guest Blogger
American Academy of Estate Planning Attorneys, Inc.
6050 Santo Road, Suite 240
San Diego, CA 92124
www.aaepa.com
Regardless of your estate planning talent and skill… without rapport, people in general don’t feel like they “know” you. Trust is nearly impossible without rapport. Even if building rapport is not your strength, there are a few specific efforts you can fine tune and practice on everyone from the dry cleaning lady to the guy next to you in line at the airport.
- Eye Contact: It’s old news, but guess what, you just can’t trust someone with shifty eyes. Pay attention to your own eye contact and start noticing how “shifty” others tend to be. Hold your chin up a little, square your face off with someone else and just be comfortable waiting for them to speak. If they’re speaking, how engaged are you with your eyes as you listen?
- Listening skills: Asking questions that get others to talk about themselves a little, being interested in what someone does or in an experience they had is important. People like you when you let them talk about themselves. Be interested and listen actively. Nod, comment and repeat important portions of what they’ve said. Don’t edit your laughter if something they said is funny and don’t rush them. Be a patient and generous listener.
- Go back: If you’re in a meeting and you sense that the prospective client has shifted “out of rapport” with you… maybe he/she isn’t listening or really participating any more, maybe they’re fidgeting or appear doubtful or on guard in some way. Stop the conversation, say something about what you’re sensing has just happened and go BACK to building the rapport before you continue.
Rapport killing practices include things like:
- Not looking at the person as you’re filling out a client intake form, being impersonal about the entire process.
- Being disrespectful of someone’s time, wasting time with aimless banter. It’s easy to allow rapport building conversation to turn to chatter.
- Being rushed can make someone feel like you don’t care.
- Not listening actively has people feel that their concerns aren’t understood or taken seriously.
- Allowing interruptions communicates that you think other things are more important than they are.
- Being late speaks to your ability to do what you say and communicates that you can’t do the easiest part of a meeting right.
- Lacking warmth, being unapproachable, abrupt or rude when people are in your office revealing the most intimate family fears—certainly won’t win you a Miss (or Mr.) Congeniality prize!
Estate planning attorneys are in the family business. Treat people like family and they will love you… the added benefit is that it makes life more meaningful for you, too!
Jennifer Price
Director, Member Services
American Academy of Estate Planning Attorneys
(858) 453-2128
www.aaepa.com
Gary Coleman’s dead? “What’choo talkin’ ’bout, Willis?!”
Gary Coleman played “Arnold,” the little brother on TV’s “Diff’rent Strokes,” for eight years beginning in 1978. Coleman appeared in dozens of television films and series over the years. Coleman is perhaps the stereotype of a childhood star with a troubled life.
Coleman had a variety of legal and financial problems over the years. In 1993, a court awarded him over $1.2 million in his lawsuit against his parents and former advisors for misappropriation of his earnings that had been placed into a trust for his benefit. In 1999 he filed for bankruptcy.
Coleman married Shannon Price in August 2007 and they divorced a year later. Coleman continued to have a relationship with Price. In fact, Price was Coleman’s agent under his final Health Care documents.
Unfortunately, problems and controversy still swirl around Coleman, even in death. A dispute has arisen regarding Coleman’s estate. Coleman left a Will in 1999 which did not leave anything to Price. A new 2005 Will surfaced which also did not leave anything to Price. However, Price purports to have a 2007 Codicil in which Coleman leaves everything to her.
However, their 2008 divorce would operate to void the bequests to his ex-wife. Thus, the 2007 Codicil would not operate to leave his assets to his ex-wife, even if it is valid.
The waters are muddied further. Coleman lived with Price in Utah up until his death. Utah recognizes “common law marriage” in which the parties can be married even though they have no formal marriage license. Under Utah law, they must have lived together and must have held themselves out as being married. Here’s a link to the relevant Utah statute: http://le.utah.gov/~code/TITLE30/htm/30_01_000405.htm. Under the Utah statute, they must have had the “uniform and general reputation as being husband and wife.” Presumably, the Utah probate court will determine if that was the case.
If Price and Coleman were married at the time of his death, then she would be entitled to one-third of his augmented estate even if he had not left anything to her in his Will. Here’s a link the relevant Utah statute: http://le.utah.gov/~code/TITLE75/htm/75_02_020200.htm
How will the Utah court rule? Which Will or Codicil will they admit to probate? Will the Court find that Coleman and Price were common law spouses? Stay tuned for future developments…!
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com
Lawyers tend to have a hard time asking their clients what they can do to improve, assuming that if they don’t hear any complaints, everything must be fine. But unfortunately, this is not always the case. When it comes to legal services, as in many other service-oriented industries, clients who are unhappy rarely take their complaints to their lawyer or law firm. Instead, they complain – often repeatedly – to their friends and family. This can hurt your reputation and cost you business in the long run.
Wouldn’t it be great if you could catch problems early and correct them, giving you an opportunity improve your reputation and build your business?
You can… with a little feedback from your clients.
And there are a number of ways to gather that feedback. Some firms hire a consultant to sit down with their clients in person (or on the phone) to glean details about what the firm does well and what improvements need to be made. Others ask each client to fill out a short questionnaire at the conclusion of a matter.
The method you employ is not as important as what you ask. You should cover at least these basics:
- Did the attorney understand the client’s objectives and expectations for the case?
- How would the client rate the attorney’s professional competence
- How would the client rate the efficiency with which the matter was handled?
- Was the client satisfied with the level of communication? Was the attorney/firm responsive to the client’s needs?
- Were the costs associated with the matter predictable? How does the client feel about the fee?
- How would the client rate the results delivered by the attorney/firm?
- Would the client use the firm again or recommend it to their friends and family?
If you routinely have your clients answer these questions, you’ll catch problems early, and you’ll know what adjustments you need to make in order to improve the services you provide to your clients.
At the Academy we provide our Members with a survey form to be mailed out after every engagement to get immediate feedback on the quality of the client’s experience with the firm.
Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
Phone: (858) 453-2128
www.aaepa.com
FOR IMMEDIATE RELEASE
Robert Armstrong and Sanford M. Fisch Co-Author the E-Myth Attorney
SAN DIEGO, June 18, 2010–Attorneys nationwide have long looked to Robert Armstrong and Sanford M. Fisch as pioneers in law firm practice management. Now, with the publication of The E-Myth Attorney: Why Most Legal Practices Don’t Work and What to Do About It (ISBN 0470503653, Wiley, http://www.amazon.com/E-Myth-Attorney-Legal-Practices-About/dp/0470503653), Armstrong and Fisch are showing attorneys everywhere exactly how to build a successful legal practice while enjoying a balanced life.
Armstrong and Fisch, co-founders of the American Academy of Estate Planning Attorneys, Inc. (AAEPA, www.aaepa.com), co-authored The E-Myth Attorney with small business expert Michael Gerber, author of The E-Myth: Why Most Businesses Don’t Work and What to Do About It. Though the authors are estate planning attorneys, the principles they lay out in The E-Myth Attorney can be used to build a thriving legal business regardless of practice type or law firm size.
“This is a NOW read for attorneys. Gerber, Armstrong, and Fisch hit the mark by applying E-Myth principles to the legal profession,” stated Larry V. Parman of Parman & Easterday. “The attorney’s unspoken fear is, ‘What happens if I’m not here’ [The E-Myth Attorney] is a roadmap for creating systems that make a business out of a practice, one that works for you, not you for it… Live and apply these principles and watch what happens to your practice… and your life.”
While most attorneys have a solid understanding of the technical aspects of a legal practice, far fewer have the training or experience needed to run a successful business. The E-Myth Attorney combines Gerber’s business development expertise with Armstrong and Fisch’s experience in implementing legal practice management systems to bridge the gap between attorney and entrepreneur.
The E-Myth Attorney serves as a blueprint for building a practice that attracts qualified clients and produces exceptional work, while allowing time for family and a fulfilling life outside of work. Equally valuable for start-ups and existing practices, the book details the systems and processes Armstrong and Fisch developed in their own successful California law firm. In fact, the American Academy, a national membership organization for attorneys, was built on the foundation of these very same principles. Those systems give attorneys the tools they need to balance successful estate planning practices with quality of life.
A limited number of attorneys will receive The E-Myth Attorney free for participating in the Academy’s August 10, 2010 teleseminar, “7 Deadly Law Firm Mistakes That Can Kill Your Estate Planning Practice.” Though Armstrong and Fisch have co-authored estate planning books for consumers, The E-Myth Attorney is the authors’ first book for attorneys. The authors’ blog, blog.aaepa.com, gives attorneys additional insight into systems and how they serve as the foundation of a thriving practice. Learn more about The E-Myth Attorney and the AAEPA at www.aaepa.com.
For further information please contact:
Erin Laverty
Event and Publicity Coordinator
(858) 453-2128
erin@aaepa.com
Jennifer Price
Director, Member Services
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com
Welcome to your final installment on this series of Computer Tips for your Estate Planning Law Practice!
Hard Drives (HD)
A hard drive is a metal case within which one or more discs (platters) spin, while a mechanical head moves over them to retrieve information from the microscopic pits embedded on their surface.
Think of it as the tool case whence you retrieve what you will then lay on the blank plane of memory.
Older hard drives ran at 4200 or 5400rpm, but nowadays the norm is 7200rpm for desktops, and the whole gamut for laptops, according to the substance of your investment.
The correlation between HD and RAM is important, as, by default, when your system runs out of memory it will recur to the so-called virtual memory; that is, it will utilize available hard disk space to store what it can no longer cram in the already-full memory. That wouldn’t be bad, except the mechanical hard drive is considerably slower than the electronic memory. That is why when you open many programs on systems with insufficient RAM your HD starts chugging away and any operation takes that much longer.
Much like a teenaged son’s room, or many bosses’ desks, information is strewn all over a hard drive, with the OS keeping mental track of where everything is. The fuller a hard drive, the more scattered about the data is, the longer it will take to retrieve it. This phenomenon is called fragmentation, and can be obviated with regular maintenance of your HD, specifically running a process of defragmentation. When you defragment the hard drive, the data is moved to contiguous area so that the HD head no longer needs to run all over the place to put it together.
Well-maintained and comparatively emptier drives run faster.
HDs also have some electronic memory, the so called cache. Much like with RAM, the cache is filled to its capacity with needed information, so that the mechanical, and slower, components of the drive become less involved. The cache is usually a few MB large.
You may have noticed hard drives never sport quite the capacity they advertise; where does all that claimed space go? Nowhere, really. It all comes down to the definition of Gigabytes, which HD marketers measure in multiples of 1000, rather than 1024. Thus a 500GB HD will in reality only be 500/1.024=488GB.
On the same, yet unrelated, theme of marketing, your internet connection is measured in Megabits (Mb), rather than Megabytes (MB), yielding to more impressing numbers, since you remember that 1 bit is in actuality only 1/8th of 1 byte.
My suggestion for hard drives is to buy the largest your budget allows, running at no less than 7200rpm and with the largest cache.
Naturally, all the options described must be considered in concert: 24GB of RAM on a 32-bit system would not do much, as a superfast CPU coupled to 256MB of memory would yield only frustration.
Thanks for hanging in there for this conversation about Operating Systems (click here), CPUs (click here), RAM (click here) and now finally Hard Drives!
Medeis Nadir
Graphic Designer and Internal Technical Support Manager
American Academy of Estate Planning Attorneys
(858) 453-2128
www.aaepa.com
We spend a lot of time with members looking at the results of the marketing that has filled up a law firm calendar. What we find is no surprise—during the hustle and bustle of getting a marketing effort pulled together and having a successful offer that attracts a potential client—often the energy and focus is to fill the seats of a presentation or to make the calendar full with another type of offer to a solution.
The attorney in charge frequently has countless responsibilities on his or her plate, hiring, training, production of the work, decisions on upcoming marketing efforts, legal decisions to solve specific client problems, staffing challenges and the list goes on. If the quality of the consultation isn’t a focus, it doesn’t really matter how fantastic your marketing was. One of the numerous areas that law school didn’t cover is training on effective consultations that lead clients to make decisions that are in their own best interest. Once you’ve spent the time and the money attracting prospective clients—why would you spend little or no time studying and learning the best ways to handle those meetings most effectively and productively?
One very common death trap for attorneys is that they have an inclination to go into presentation mode in consultations to subconsciously increase their credibility or prove that they know how to solve the problems the prospective client has – as though it’s a closing statement in court, because that is what law school prepared them for! However, listening and rapport building skills need to be sharpened more than talking points. The best, most effective meetings are when the client does the talking. The attorney of course guides the meeting with the right questions—but most of the things coming out of the attorney’s mouth should end in a question mark, not a period. The client likely already assumes that the attorney knows the law or they wouldn’t be sitting in that consultation – they just need to decide whether that attorney is the person they trust to ensure theirs and their family’s future. What better way for the attorney to show the client that he or she can solve their problems than to ask the right questions that delve deeper into their goals, fears, and future – causing the client to feel understood and listened to.
Next time you’re in a meeting – don’t change anything, just listen to yourself. Are you talking or asking?
A great book we have recommended for a long time is called, “You Can’t Teach a Kid to Ride a Bike at a Seminar,” by David Sandler. A fabulous integrity-based approach to consultations.
Jennifer Price
Director, Member Services
American Academy of Estate Planning Attorneys, Inc.
Phone: (858) 453-2128
www.aaepa.com
Attorneys routinely get themselves in trouble by dabbling in practice areas about which they know little. Estate Planning and Elder Law are complicated areas with much to stay on top of. 2010 is a great example of that. The rules have changed completely and there is much uncertainty. There is no estate tax. But, the basis “step-up,” long a mainstay of Estate Planning, has been replaced, temporarily, by a carryover basis regime. It’s enough to make even dedicated estate planners heads’ spin!
Let’s look at a couple with $2 million in zero basis assets, all owned by the wife. She is on her death bed and will die in 2010. What would you advise them to do? A “dabbler” might either tell her to 1) put all her assets in a bypass trust (because there is no estate tax in 2010), or 2) send all the assets to her husband. The first strategy could be problematic from an income tax basis perspective. The wife’s executor could only allocate $1.3 million of basis increase to the bypass trust. Thus, the bypass trust would have $2 million in assets and a $1.3 million income tax basis. The second strategy could be problematic from an estate tax perspective. Assuming the surviving husband will live into 2011, the current estate tax law provides for only a $1 million applicable exclusion. Thus, at the survivor’s later death, their heirs would face a tax of $435,000 on the balance of the $2 million inheritance.
Perhaps the best result would be a third option. Leave $1.3 million of assets to the bypass trust to which the executor could allocate $1.3 million of basis increase. Leave the remaining $700,000 to the surviving spouse. The surviving spouse qualifies for an additional basis increase of up to $3 million. So, with this third option, the surviving spouse ends up with $700,000 with a fair market value basis and does not have a taxable estate.
What would you do?
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys
(858) 453-2128
www.aaepa.com
You’ve made it to the 4th segment of the Computer Tips blog topic! You can review the previous 3 segments, Introduction, Operating Systems, or the entry on the CPU.
RAM
Memory is akin to a plane upon which lay your information and the tools to analyze it. The larger the surface, the more tools and information you have available at once, the faster and more satisfactory the results. RAM is also volatile, meaning that if for any reason your computer is switched (or logged) off, the surface is wiped clean, and you have to start anew.
I view the amount of system memory as the most influential factor on a computer’s performance. For simplicity, I will only discuss the amount of RAM, rather than its type or speed, as the most directly correlating to performance gains.
A unit of binary information is called a bit. Binary means a bit is either a 0 or a 1, off or on. Eight bits make a byte. 1000 bytes, or more specifically, 1024, comprise a Megabyte (MB), and if you multiply again by 1000, you have a Giga Byte (GB).
A modern operating system requires at least 1GB to operate (Vista hogs more, XP less), and every program you launch will also reside in memory. So you obviously need more than 1GB. The more programs open at the same time, the more memory is required.
If you have a 32-bit system, then you should employ all the 3GB it allows you to install. On a 64-bit system, 4GB is usually the sweet spot. At any rate, the vast majority of users will seldom if ever need more than 6GB.
A few ulterior considerations on memory: RAM is comparatively cheaper than other performance-boosting options, and dollar by dollar will return the best results. As with processors, particular care should be employed in case of upgrade. Motherboards have different amount and format of available memory slots; they may require dual memory, in which case memory sticks would have to be installed in pairs, or even triple memory on the newest boards (if you follow PC advertising you will notice the latest trends offer 6, 9 or 12GB; those are all multiple of triple memory sticks).
|
