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  • May 26, 2010 | Practice News
    Best Practice: Financial strategies for surviving in the present economy
    Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. We are a 12 attorney firm located in the midwest. We are concerned about the impact that the economy is having on our practice and the current business environment. Our business is down and we are unsure what we should be doing financially to evaluate and improve performance - and survive. A. Management of cash flow is critical. Here are our suggestions of how to examine where you are based upon receipts and your pipeline of future collections: Monthly Billings Are you budgeting your fee billings? Are your billing and collections on track? Are your individual attorneys and other producers meeting their revenue goals? Why not? Collections and Receipts Are your collections in alignment with your cash requirements for firm expenses, client advances, loan repayments and attorney draws? Remember - the total expenses listed on the income statement does not represent all of your cash requirements. Balance sheet accounts such as partner draws, client advances, purchase of assets (equipment), and payments on loans also involve uses of cash and must be taken into consideration. Typically, there is a lag of three months between the time you incur expenses and do work for a client and receive payment. Be aware of potential cash deficits. Costs How are your actual expenses/costs tracking against your budget? Are you within your budget? If not - why? Investigate reasons. If over budget, should you cut costs or is there a way to increase revenue? Sometimes you have to spend money in order to make money. Which costs should be cut - and which should not? Be careful cutting marketing/client development investments. Accounts Receivable Are they increasing or decreasing? What percent are they of your annual billings? Fifteen percent is high - five percent is within the range of acceptability. Uncollected accounts can sink the firm - stay on top of them with an effective management system. Deal with collection problems early - formulate a client acceptance/credit policy - get retainers up front - reject problem clients from the onset.
  • May 25, 2010 | Practice News
    Is your client really a nonresident for state income tax purposes?
    Let's say your high-income client moves to a no-income-tax state. But he still has a house in the Land of Lincoln. And a spouse in the house, just to up the ante. Is he a nonresident of Illinois for income tax purposes? Can anybody say "it depends"? David P. Dorner discusses the important factors to consider in the latest ISBA Tax Trends newsletter.
  • May 24, 2010 | Practice News
    Important changes to the POA Act await Quinn's signature
    Important changes are on the horizon for the Illinois Power of Attorney Act, a statute that touches the lives of many (most?) clients and their lawyers. The good news -- assuming the governor signs HB 6477, its effective date is July 1, 2011, giving lawyers, banks and others plenty of time to adjust. According to Mary Cascino in the latest ISBA Trusts and Estates newsletter, "Some of the revisions make the statutory forms more user-friendly, such as revising the Notice to the principal, while other revisions, such as the Notice to Agent in the Property Power of Attorney, are intended to visibly inform the agent about his or her duties under the Act." Read her brief, helpful summary.
  • May 24, 2010 | Practice News
    Quick take on today's modified Illinois Supreme Court opinion

    CRIMINAL

    People v. Givens

    By Kerry J. Bryson, Office of the State Appellate Defender Last month, the Supreme Court decided Givens, concluding that it was error for the appellate court to, sua sponte, decide an issue not argued or briefed by the parties in the appellate court. In so holding, the Court simply vacated the decision of the appellate court and affirmed the circuit court. Defendant sought rehearing, arguing that the Supreme Court should remand the case back to the appellate court for consideration of a chain-of-custody issue which the parties had briefed and argued, but the appellate court had not reached because the appellate court considered the "sua sponte issue" to be dispositive of the outcome on appeal. The Supreme Court modified the relief and remanded the case to the appellate court to consider the chain-of-custody issue. Case summary Supreme Court opinion 107322
  • May 24, 2010 | Practice News
    Cavanaugh appointed associate judge in 9th Judicial Circuit
    The Administrative Office of the Illinois Courts announced today that the Ninth Judicial Circuit judges voted to select Raymond A. Cavanaugh as an associate judge of the Ninth Judicial Circuit. Mr. Cavanaugh received his undergraduate degree in 1986 from Loras College, Dubuque, Iowa, and his Juris Doctor in 1990 from John Marshall Law, Chicago. Mr. Cavanaugh is currently affiliated with the Henderson County State’s Attorney’s Office in Oquawka.
  • May 20, 2010 | Practice News
    Quick takes on Thursday's Illinois Supreme Court opinions

    FAMILY

    Baumgartner v. Baumgartner

    By Celia G. Gamrath, Partner, Schiller DuCanto & Fleck LLP In Baumgartner v. Baumgartner, the Illinois Supreme Court ruled that the incarceration of a 20-year-old child is not a self-emancipating event that automatically terminates a parent's obligation to contribute to a child's postsecondary education expenses. Though Baumgartner decides only the question of incarceration, the Court's decision affects a broader range of cases in which a child marries or enters the armed forces. For parents, here's the rub: Self-emancipation for support purposes automatically occurs when a child reaches the age of majority; however, it does not necessarily occur if a child is convicted of a felony and incarcerated, gets married or joins the military. Under these scenarios, the Circuit Court must consider all relevant facts and decide whether the colossal event has the effect of emancipating the child and constitutes an abandonment of any pursuit of a higher education. A "lengthy incarceration is simply one of many situations in which a minor may be found to be emancipated." Case summary Supreme Court opinion 109047

    CIVIL

    Founders Ins. Co v. Munoz

    By Michael T. Reagan, Herbolsheimer Lannon Henson Duncan and Reagan PC Founders Ins. Co v.
  • May 20, 2010 | Practice News
    Legal Tech: Practical steps to managing your metadata
    By Shamla Naidoo You’ve heard about the issues with metadata—lawyers can inadvertently share privileged information, even with opposing counsel. You may also have reviewed the ethics rules on how to react when opposing counsel accidentally sends us a document containing metadata. Wouldn’t it be better to avoid sending the metadata in the first place? Lawyers review the content of legal documents before sharing them. However, metadata is part of the content of the electronic document - but it is not obvious, not on the face of the document - and may be easily overlooked. Careful review of metadata reduces the ethics burden created for other lawyers; increases client confidence in how sensitive matters are handled; and demonstrates competence to operate in the electronic age. There are expensive tools and services to help you manage your metadata; however, you can simply use the available features of your existing word processing software to do this for free.  I use Office 2007 so the metadata management discussed here is limited to Word 2007 before converting them to PDF. First, you should clear any existing metadata from new documents since these may include default information. If you use templates or reuse documents, the name of the author of the template or source document may be embedded within your work product. To clear this information, click on the Office button (in the top-left corner of the Word window), select “Prepare”, select “Inspect Document”, and press the “Inspect” button. In the next screen, Word will display all locations where metadata was detected, including document properties, headers, footers, watermarks, etc.
  • May 19, 2010 | Practice News
    Best Practice: Types of partner compensation plans
    Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. We are a four partner law firm on the west coast. Currently we each have a 25% partnership interest and we cut up the pie in accordance with these interests. Recently, our contributions have changed and we are considering other approaches to compensation. What are some of the systems in use by other law firms? A. Compensation plans in use in law firms run the gambit. But here are the typical approaches: Subjective Plans which review the performance of each partner and subjectively determine a relative value for each partner. These plans require evaluation of the individual, comparing the evaluation against those of all other partners and relating the determinations to available funds. Some firms use a democratic process in which each partner participates in the process and others use a committee to perform the evaluation. Increasingly, partners are required to submit personal business plans each year which must be approved by the partnership, executive, or compensation committee. Formula – Objective Plans which use a formula to assign value to various criteria to determine compensation. Approaches can range from eat-what-you-kill plans that focus only on a partner’s individual production to plans that assign values to the full range of compensation criteria. Some eat-what-you-kill plans employ a profit center approach in which each partner is set up as a department in the accounting system and fee revenue is assigned based upon generation, and indirect and direct overhead is allocated based upon a predetermined usage formula.
  • May 18, 2010 | Practice News
    Illinois Supreme Court disbars 12, suspends 26

    The Illinois Supreme Court disbarred 12 lawyers, suspended 26, censured 4 and reprimanded 2 in its latest disciplinary filing. Sanctions were imposed because the lawyers engaged in professional misconduct by violating state ethics law.

  • May 18, 2010 | Practice News
    Gamrath appointed as a Circuit Judge of Cook County
    [caption id="attachment_11507" align="alignright" width="150" caption="Celia G. Gamrath"][/caption] The Illinois Supreme Court has appointed Celia G. Gamrath as a Circuit Judge of Cook County, Eighth Subcircuit, to fill the vacancy created by the retirement of the Hon. Thomas R. Chiola. This appointment is effective June 10, 2010, and terminates on December 3, 2012, Ms. Gamrath is a former judicial law clerk for the Honorable Thomas R. Rakowski of the First District Appellate Court of Illinois. She is a partner of Schiller DuCanto & Fleck LLP and concentrates in matrimonial law and appeals on behalf of individuals whose cases mainly involve the distribution of multi-million-dollar holdings and require sophisticated financial expertise. Ms. Gamrath has been recognized nationally as a top family law and appellate lawyer by Best Lawyers in America, Chicago Magazine’s Illinois Super Lawyers, the Leading Lawyers Network, and the Law Bulletin Publishing Company as one of “40 Illinois Attorneys Under Forty to Watch.” She is the recipient of several awards, including the Young Lawyer of the Year Award from the Illinois State Bar Association, the Alta May Hulett Award from the Chicago Bar Association, and The John Marshall Law School Distinguished Service Award. Ms. Gamrath graduated cum laude from The John Marshall Law School (J.D.) in 1994 and from Indiana University (B.S. in Business) in 1991. Ms.