Book Reviews
Billing Innovations: New Win-Win Ways to
End Hourly Billing
By Richard C. Reed (Chicago, IL: ABA Law Practice Management
Section, 1996). 276 pgs. $144.95. To order, call (800)
285-2221.
Reviewed by Robb E. Arent
The legal profession has grudgingly, yet rapidly, changed with
technology; however, the practice of hourly billing has remained a
monument to the past.
Richard C. Reed drives this point home in Billing Innovations:
New Win-Win Ways to End Hourly Billing. The book is the third
installment of a trilogy that began with Beyond the Billable Hour:
An Anthology of Alternative Billing Methods (1989) and was followed
by Win-Win Billing Methods: Alternatives That Satisfy Your Clients
and You (1992).
In Billing Innovations, Reed first chronicles the legal
profession's progression and use of alternative billing methods since
the ABA's Task Force on Alternative Billing Methods was formed in the
late 1980s. Unfortunately for Reed, charting this progress is slow
going.
Reed makes salient arguments to change a historical practice in favor
of alternative billing methods. He notes that straight hourly billing
discourages attorneys from being efficient, from reaching early
conclusions and from providing cost-effective services (client value).
He then takes the extreme position that hourly billing will vanish from
the legal landscape in the future.
Reed's arguments are based almost entirely on common sense. This
leaves one to wonder why he required 250 pages to update these
previously discussed arguments other than to justify a $144.95 price
tag.
Granted, the arguments and methods employed are highlighted with
actual examples, but many of these apply to only very specific
situations. Other examples were the result of firms adapting billing
methods to meet a client's specific needs. To these points the book
seems overkill.
The book presents a brief synopsis of the 14 most common billing
methods including contingency, fixed fee, blended hourly and percentage
discounts, and gives examples of various-sized firms and the progressive
alternative billing methods they employ. The examples include interviews
with attorneys and the text of the firm's fee agreements. It is
disappointing that a book designed to promote these alternative billing
methods does not make these sample documents available on computer
disk.
Part One concludes with a chapter that emphasizes alternatives that
have worked for litigators and how other litigators can employ these
billing methods in their practice.
The second half of the book deals with the task of implementing a
chosen billing alternative. Reed emphasizes the need to generate client
trust before any alternative billing method will be successful. An
important aspect of the client-attorney relationship is communication.
There must be an understanding between clients and attorneys to know
what each is expected to contribute, to understand the economic
pressures each faces, and finally how to price the legal services so
clients believe they are getting value for the billings.
The book concludes with chapters on the future of alternative
billings and its relationship to pricing including strategic planning,
adapting attorney compensation to match alternative billing methods,
marketing the billing plans and the role technology should play in
efficiency.
Billing Innovations provides a broader palette of
alternatives than do most articles on alternative billing methods.
Beyond being a basic reference, the book falls short because Reed
provides mostly a common sense look at understanding your clients and
fulfilling their economic needs.
Robb Arent, Marquette 1996, is a Milwaukee
sole practitioner working with individuals and small businesses in
estate planning and taxation.
Competition Regulation in the Pacific
Rim
Edited by Carl J. Green and Douglas E. Rosenthal (New York, NY:
Oceana Publications Inc., 1996). 652 pgs. Hardcover. $95.
Reviewed by Prof. Ramon A. Klitzke
Competition is very high on the international agenda of most
countries. The World Trade Organization has a working group on
competition and pushes for stronger competition laws and enforcement
mechanisms in bilateral negotiations with various countries. Reasoned
regulation of competition will determine the future of economic health
in the new century.
On Nov. 25, 1996, the foreign ministers of 18 Pacific Rim governments
endorsed sweeping tariff reductions by the year 2000 in the $1 trillion
"information technology" industry. The ministers, meeting at the fourth
summit of the Asia-Pacific Economic Cooperation forum (APEC), also
agreed to voluntarily liberalize many other trade and investment
opportunities. Duties on computers and telecommunications equipment will
be completely eliminated and economic and technical cooperation will be
deepened. These were the first concrete steps toward a Pacific free
trade and investment area by 2020.
APEC members account for 50 percent of the global economy, more than
40 percent of international trade and 80 percent of the global trade in
information technology.
Global trade will continue to expand rapidly but healthy competition
will advance only if domestic laws do not unduly impair the ability of
local firms to compete in international markets and, conversely, foreign
firms have full opportunity to compete in domestic markets. APEC takes a
new and more consensual approach to the contentious trade disputes that
have obstructed healthy competition. Laws and policies on investment,
capital markets, intellectual property and regulation of the environment
and labor are all subject to intense APEC scrutiny and subsequent
agreement.
Competition Regulation in the Pacific Rim is an excellent
collection of 14 papers presented by distinguished scholars and public
figures from government, academia and the private sector in 14 APEC
countries. The papers were presented at a meeting hosted by the Program
in Asian Law and Policy Studies (ALPS) of the Georgetown University Law
Center in May 1995. This is the second volume in the ALPS project on
"Harmonization of Law in the Asia Pacific Region."
These papers on antitrust and economic developments in Asia and North
America are exceptionally timely and important. Each author addresses
the relation, in that author's country, between competition law and
policy on the one hand, and investment policy, economic development
("industrial") policy, trade policy, government regulation and exemption
of particular economic sectors, and intellectual property law and
policy. Of particular interest is the extent to which each country's
competition officials consult meaningfully on the competition aspects of
regulation of each of these five economic areas. Most countries are
concerned about enterprises having significant local power, how to
achieve fair deregulation and how to stop anticompet-itive market
practices. They need clear and predictable standards for local business
communities, many of which are inexperienced in the norms of open
markets.
The depth of the 14 papers testifies to the considerable effort the
authors devoted to explaining their national competition regimes. The
papers fill large gaps in information available about competition law
and policy in developing Pacific Rim countries. They describe many
recent dramatic changes.
The countries represented in the 14 papers are Australia, Canada,
China, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand,
Philippines, Singapore, Taiwan, Thailand and the United States. Each
paper is replete with references to sources of law and descriptions of
economic conditions affecting competition policy. Much of the
information is not readily available in other books.
This book will be of great value to businesses competing in the
Pacific Rim, the attorney advising those businesses and scholars
studying the strengths and weaknesses of the different approaches to
competition policy in APEC countries.
Ramon A. Klitzke is Professor Emeritus,
Marquette University Law School. He taught antitrust law, intellectual
property and administrative law.
Diversification, Refocusing
and Economic Performance
By Constantinos C. Markides (Cambridge, MA: The MIT Press, 1996).
$37.50. To order, call (800) 356-0343.
Reviewed by James J. Casey Jr.
The common political and cultural wisdom in 1996 about the U.S.
business climate in the 1980s is generally characterized by greed,
corporate takeovers and the increasing concentration of wealth with the
rich. Constantinos C. Markide's Diversification, Refocusing and
Economic Performance convincingly challenges current wisdom about
that decade.
He argues that while the 1980s had its share of high-profile
takeovers, the evidence shows that a significant portion (250) of the
U.S. Fortune 500 firms engaged in "refocusing" or de-diversifying their
operations, and in most cases sold unrelated business operations to
concentrate on their core traditional operations. Drawing upon a data
set of these 250 firms, Markides, an associate professor of strategic
and international management at the London Business School, measures the
extent of refocusing among these firms, proposes reasons for its current
popularity, delineates the characteristics of firms that are refocusing,
and discusses the effects of refocusing upon company market value,
profitability and organizational structure.
Using data independently collected and in the body of existing
literature, the author uses a series of regression equations to test the
extent of refocusing among the sample firms and to test the propositions
posited at the book's beginning. The statistical results are, for the
most part, statistically significant, meaning that the statistics tend
to support his propositions to varying degrees. As with all statistical
findings, however, the main question that arises is whether the findings
can be extrapolated to the entire U.S. economy. Given the sample size,
comprising most large U.S. corporations, he raises this issue near the
end in discussing the potential limitations of his findings.
The findings of his research indicate that: 1) more firms refocused
in the 1980s than in the 1960s; 2) although many firms refocused, many
firms continued to diversify; 3) firms refocused primarily by divesting
unrelated businesses and acquiring related ones; 4) firms that refocused
were characterized by high diversification and poor performance relative
to their industry counterparts, while firms that diversified were
characterized by low diversification and solid performance relative to
their industry counterparts; 5) refocusing announcements created
positive abnormal returns, that is, an immediate increase in market
value in the capital markets; 6) refocusing resulted in profitability
improvements within the following three to five years; 7) every firm has
a limit to how much it can diversify (the "optimal limit") before
diseconomies of scale and reduced profits set in; and 8) refocusing is
not a panacea for poor corporate performance, but must be linked to an
appropriate organizational structure if refocusing's full benefits are
to be realized.
The book insufficiently covers the reasons why corporations refocused
in the 1980s after the diversification binges of the 1960s and 1970s.
The author covers the accepted reasons in the current academic
literature. The premise of the author's argument and research is the
corporation's refocus to shed unprofitable divisions, and while that may
be true, other reasons also are collectively applicable. In short, the
phenomenon of refocusing is far more complex than the work contained in
this book. The reviewer joins the author in arguing that further
academic research is needed into the reasons for refocusing.
The author raises a point in the summary that is far more important
than the space given to it; namely, that the corporate takeovers of the
1980s would not have occurred at such a rate if firms were not then so
overdiversified. Based upon the proposition that corporate takeovers
occur because the individual parts of a conglomerate are worth more than
the whole, the author should have dedicated more space to this important
linkage between diversification and corporate takeovers, and the
profound impact the latter has had upon American society and how we
currently perceive the "excesses" of the 1980s.
The book succeeds in presenting its limited research agenda, and is
necessary reading to obtain a more complete idea of American corporate
behavior in the 1980s.
James J. Casey Jr., Dayton 1988, works in
the Office of Research and Sponsored Programs, Office of the Vice
President for Research and Graduate Studies, at Northwestern
University.
Legal Ethics for Management and
Their Counsel
By Len Biernat and R. Hunter Manson (Charlottesville, VA: Michie,
A Division of Reed Elsevier Inc., 1996). To order, call (804)
972-7600.
Reviewed by Jeffrey N. Gingold
The subject of ethics has been a hot topic for attorneys in the
1990s. In Legal Ethics for Management and Their Counsel , the
authors analyze the ethical rules germane to management and its
corporate counsel. Accordingly, this book is more of a resource for
management to understand what it can expect from its counsel, rather
than an educational tool for attorneys. Since the ABA Model Rules are
used for the analysis, the discussion must be examined in light of each
state's ethical rules. This can become especially complex for counsel
who practice in multiple jurisdictions. Here, the book offers little
advice, except to read and understand each state's rules.
The bottom line warning is that an attorney's ethical restrictions
can outweigh management directives; thus, counsel cannot necessarily be
viewed as a "team player." Counsel's reporting obligations alone foster
a unique independence and responsibility which may adversely affect the
company.
The book provides significant analysis regarding the level of
diligence required from counsel in defining the scope of representation.
From the beginning, the attorney must continue to identify whether the
client is management or the company. The discussion outlines the key
issues and possible solutions that counsel may be required to
follow.
One of the more troublesome concepts for management to appreciate is
that its counsel's confidentiality is not absolute. While the usual
exceptions to confidentiality still apply, issues of joint
representation and intercorporate disputes may compel counsel to act for
the company even if doing so is against management's wishes. Here, the
authors provide useful illustrations for attorneys faced with such
questions of representation, complicated by the need to protect
confidentiality.
If this balancing act does not unbalance corporate counsel, other
conflict of interest issues certainly add to the tension. When corporate
counsel is asked to represent the company's client or employees or
becomes a member of the board of directors, counsel must not only be
aware of the numerous prohibitions against such representation but also
must properly tread the steps to terminate representation without
prejudicing either the company or client.
In one of the book's more interesting sections, the authors give
direction to management for avoiding a "noisy withdrawal" if counsel is
terminated or resigns. While the attorney must continue to maintain
confidentiality obligations, embarrassing "noise" can occur where the
attorney notifies third parties that the departure from the company is
due to "ethical reasons."
This book is a useful ethics guide for management and counsel, and
reminds both that an attorney's practice requirements may be beneficial
or detrimental to their relationship.
Jeffrey N. Gingold, Marquette 1988, is a
shareholder in the Brookfield law firm of Blumenfeld, Rose & DeJong
S.C. and is a member of the State Bar Professional Ethics
Committee.
The Run of His Life:
The People v. O.J. Simpson
By Jeffrey Toobin (New York, NY: Random House, 1996). $25. To
order, call (212) 572-2141.
Reviewed by Timothy R. Karaskiewicz
Events following the verdict in the criminal prosecution of O.J.
Simpson seem only to have deepened the public's fascination with the
murders of his ex-wife, Nicole Brown Simpson, and her friend Ronald
Goldman. Unless you followed the criminal trial, some of the case's
details and subtleties may have eluded you. You also may have been
surprised at the jury's verdict and curious how the prosecution could
lose what seemed to be (from the media reports of the physical evidence)
a certain conviction. As Jeffrey Toobin, the legal writer for The
New Yorker, explains in this book, the verdict was not
surprising.
The prosecution, it seems, was its own worst enemy. From the
beginning Marcia Clark displayed astonishing arrogance. After
recognizing that the Simpson case was unlike any she had ever tried, she
refused the services of a premier jury consultant. Polls had
demonstrated that black female jurors were most sympathetic to Simpson
and most antagonistic to Clark's persona. Still, she favored her
instinct that black female jurors were particularly susceptible to her
style of advocacy. The eight black female jurors did not influence
Clark's presentation.
The prosecution also seemed oblivious to the image they projected to
the jury: Clark infuriated the sequestered jurors by consistently
showing up late for court while Christopher Darden often was unprepared
and unable to control his temper in response to Johnnie Cochran's
taunts. Most importantly, despite their knowledge of the significant
role that race would play in the trial, the prosecution put Mark Fuhrman
on the stand. That decision is even more perplexing given the wealth of
physical evidence tying Simpson to the murders and because Clark was
aware of Fuhrman's racist history.
The defense did not so much win the case as refrain from losing it.
Toobin credits Cochran with sufficient charisma and authority to turn a
domestic homicide into a referendum on race relations with the LAPD -
which the author persuasively characterizes as one of the worst big city
police departments in the country. Still, Toobin lists the many missteps
the defense smoothed over on the way to victory. In his opening
statement, for example, Cochran promised a defense and yet delivered
none. And, after Cochran took control of the trial team, Toobin
describes how Robert Shapiro and F. Lee Bailey tried to sabotage Cochran
and maintain their places in the spotlight, almost damaging their
client.
Another disturbing theme that develops throughout The Run of His
Life is the transcendence of celebrity: no matter what the
circumstances, Simpson's fading celebrity consistently engendered
fawning adulation and cooperation. On the several occasions that the
LAPD was summoned to the Simpson home on domestic violence calls, Toobin
describes how officers still remained deferential to O.J. So absorbed
with Simpson's celebrity was the LAPD that during his interview
following Nicole Simpson's death the investigators accepted Simpson's
vague generalities and interviewed their leading suspect only half an
hour.
Others in the case come under the spell of their own celebrity: Judge
Ito was so enthralled by media attention that he interrupted the trial
and granted an hour-long audience to Larry King and his daughter (during
which Ito divulged the contents of an evidentiary ruling he had yet to
share with the parties). Another judge, to whom the case was transferred
for a hearing on the Fuhrman tapes' admissibility, was so enchanted by
Simpson's appearance in his courtroom that he engaged him in a chummy
conversation about O.J.'s career at UCLA.
As a former prosecutor, Toobin gives insights into the legal
maneuvering, trial tactics and ethical lapses that occurred throughout
the trial. There also are scoops - Simpson knew the verdict the night
before and the dream team's fees are revealed. The Run of His
Life is essential reading for anyone trying to understand the
implications - legal, racial and institutional - we are still
experiencing from the prosecution of O.J. Simpson.
Timothy R. Karaskiewicz, John Marshall
1984, is a principal assistant corporation counsel at the Office of the
Milwaukee County Corporation Counsel.
Was That a Tax Lawyer Who Just Flew
Over?
By Arnold B. Kanter (North Haven, CT: Catbird Press, 1996). 224
pgs. $13.95. To order, call (203) 230-2391.
Reviewed by Robb E. Arent
At a dinner party I was seated next to the host's grandmother. She
eventually asked my profession and I proudly responded "attorney." Her
face soured, "But you seemed like such a nice young man!"
Such perceptions of attorneys are the subject of Arnold Kanter's
fourth book of legal humor, Was That a Tax Lawyer Who Just Flew
Over?
As in previous books, the stories revolve around the fictitious but
prestigious Chicago law firm of Fairweather, Winters & Sommers and
its founder Stanley J. Fairweather.
The vignettes begin with a senior partner-ish memo announcing that in
anticipation of the firm's fiftieth anniversary a book was being written
highlighting the impressions of those who regularly come in contact with
the firm's lawyers.
What follows is a perceptive and satirical look at the noble legal
profession. The witty, often dark, humor may at first spark defensive
contempt from attorneys. In retrospect, however, we can all find the
grain of truth once we realize we are mostly legal legends in our own
minds.
A funny insight comes from the mother of a young associate at the
Fairweather firm. The mother is dumbfounded as to why her daughter, who
could not possibly know anything right out of law school, makes $70,000
per year.
Attempting to help her daughter, she hands out her daughter's
business cards everywhere she goes, after placing an offer to reduce the
daughter's billing rate by $10 per hour on the reverse. Stanley
Fairweather soon adopts the idea.
The book's title comes from the story of a commercial real estate
agent who has given up bird watching to focus instead on the attorneys
she can spot in neighboring high-rise office buildings. She has learned
to recognize a lawyer's specialty by his dress and mannerisms. Her notes
conclude that the rumpled brown suit and wing-tips indicates a tax
attorney, while the crisp blue suit must be a litigator.
Other views of the Fairweather firm come from clients, accountants,
judges, shoeshiners, the deli guys on the first floor, psychiatrists and
the homeless.
Fairweather's clients form a social club to discuss the firm. While
patient with firm tactics such as inviting the client to golf and then
billing the client for the time, the clients often grumble about
extraordinarily long and meaningless meetings.
The final client masterpiece is an attorney-English dictionary,
including such terms and phrases as: Can I get back to you on
that means the attorney does not have the foggiest idea what to say
next, but may be able to come up with a response in a week or two.
The book is a wonderful addition to the library of any attorney who
has an inflated self-image. It is also a great read for us modest,
level-headed, legal experts - or anyone with a sense of humor about the
profession.
Robb Arent, Marquette 1996, is a Milwaukee
sole practitioner in estate planning and taxation.
Wisconsin Lawyer
