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Sifting Through the Ashes of Law Firm Dissolutions

I finally had some time by the pool this summer to read the June 2010 issue of Law Practice Today. The theme of the issue is Sifting Through the Ashes of Law Firm Dissolutions, which turns out to be a very revealing look back over the past few years of economic turmoil within our profession.

While I recommend reading all three articles on the topic of why firms dissolve, I found the thesis of one article far more insightful and compelling than the others.

The first article, by venerable management guru, Ed Poll, focuses on the need for firms to aggressively manage cash in harsh economic times. Paying attention to cash flow, promptly collecting receivables, and reducing overhead are his keys to avoid failure.

J. Mark Santiago, makes a strong case in the last article that the lack of three traits--leadership, strategic focus, and financial discipline—has brought down some once-mighty firms.

But the article by San Francisco lawyer Will Nathan contains the most compelling and often overlooked reason behind law firm failure: The move from true partnerships to limited liability companies. Nathan writes that LLCs have made it easier for rainmaking partners to flee their firms at the first sign of trouble because their personal assets are not at risk. He contrasts this to true partnerships where lawyers risk losing their personal assets; partners tend to stick together longer to work though financial problems in order to avoid losing personal assets to creditors. To support his thesis, Nathan points out a number of San Francisco firms that converted to LLCs and have gone bankrupt in the past few years, namely Brobeck, Heller, Graham, and Thelen.

Without the responsibilities of a true partnership, Nathan writes, rainmakers flee to other firms on more solid ground, leaving remaining LLC members and creditors to stave off bankruptcy or dissolve.

I seems to me that leadership, cash flow and focus are important, but without the integrity and accountability of a true partnership, a firm will remain subject to the whims of a few.

With the U.S. and world economies still not in the clear, if I were a “partner” in a big firm LLC today, I would definitely be checking my firm financial reports on a regular basis, and check out any rumor of a big rainmaker leaving the firm.

 

OMG--My First Apple Rant

For those who know me, sit down before you read this. I’m afraid you might faint. 

For those readers who don’t know my deep affection (read: slave loyalty) for Apple products, you can read some of my prior iPhone posts or just know that since my first Macbook Pro 6 years ago I have been totally sold on Apple products, service, and culture. I am on my second Macbook Pro (purchased December 2009) and my third iPhone, having purchased the iPhone 2.0 and 3Gs. From the sales experience, to the coolness factor, to the outstanding heads-above-the-crowd customer service, I am a huge Apple fanatic.

 Until June 24, 2010—the day the iPhone hit the streets and I purchased mine.

In less than 2 weeks Apple went from an 11 on a 10-point scale to a 5—one small step above their PC competitors.  Loyalty, once unquestioned, is proving to be fickle.

Yes, it has everything to do with the new antennae and reception problems, but it goes beyond the technical problems and to the heart of why I love(d) Apple—they treated me with respect and stood behind their products just like I stood behind the company.

Until last week. Apple has screwed up and is lying about it. Now I am one angry customer!

I guess I should have had a clue when the Apple store associate brought me my new phone along with a new rubber bumper case he said I would want to “protect” it. It seemed a friendly gesture at the time, but I had not yet heard of the reception problem. I realize now the Apple associate was trying to warn me. (It was my teenage son who told me of the reception problem about 2 nanoseconds after I got back from the Apple store.)

Then Apple releases a disingenuous letter blaming some software glitch causing the reception bars to show better reception than actual. Right.

It’s the antenna, stupid.  It’s not AT&T. It’s not my hand. It’s Apple.  I take the same route home from work everyday. Down Constitution Avenue, past the White House, across the Theodore Roosevelt Bridge, through Arlington, and out to Fairfax County. Before the iPhone 4, I had 2 drop zones—crossing the bridge from DC to Virginia and in a dip in the road near my house. Now, I have calls drop all along the route. Totally frustrating!

Maybe if some of their beta testers had actually HELD the case rather than hiding it in a fake 3Gs case Apple would not be in this predicament.

Furthermore, security settings pop up at random times, and my email is far slower to load than will my old 3Gs. Yes, the screen clarity is amazing and the folders are great, but I need a smart phone to work!

Consumer Reports jumped to the defense of consumers this week and stated they could not recommend the phone. That may have been the tipping point.

True, Apple has a 30 day return policy—and I am seriously considering this. But Apple has to do more. They have to do the right thing. They have to resolve this problem without me (and millions of others) having to return our phones for the old 3Gs. They have to be Apple once again.