Tort Reform Continues – but is it a “Job Creator”?

 

In a recent blog I wrote about Tennessee Governor Bill Haslam’s initial efforts to place limits on civil damage awards.  In a recently published article in the Nashville Business Journal, Governor Haslam ties “…tort reform to his job creation and economic development agenda.”

 

“The legislation will provide certainty and predictability for businesses and ensure that we are competitive with our neighboring states,” Gov. Haslam said.

 

One argument posited in the article by the president of a local contractor in Nashville states that if the courts were less risky, business would be more stable and able to pour money back into expansion and job creation.

 

While this may sound like a solid idea in theory, I look at the possibility of tort reform creating jobs much like I view “trickle down” economics, which posits (partially) that if you don’t tax people as much, they will use the excess funds to invest in business, thereby providing jobs and thereby benefiting everyone.  Numerous experiments with this type of economic policy have failed in creating good jobs, and I would argue that job creation stemming from tort reform is the same type of pipe dream.

 

Paul B. Myers

Chief Credit Officer

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Summer Interns . . . What to Do with Generation Y’s?

 

Every law firm has them every summer – interns and/or summer law students.  Struggling with how to manage them effectively?

 

Gen Y, roughly defined as anyone born between 1978 and 1990, has been “coached and tutored and guided and over-parented at every step of the way” in their short lives so far, according to many experts, so they may strike you as much more high-maintenance than you or your peers ever were.   Have I got a book for you!  Bruce Tulgan, head of a consulting firm called Rainmaker Thinking, has made a career out of counseling hundreds of companies on how to attract, motivate, and keep young employees. 

 

Not Everyone Gets a Trophy is chock full of mini-case studies from the companies where Tulgan has helped managers get great results from Gen Y employees – while keeping them happy so they don’t leave

 

Here are 5 quick tips:

 

  1. Set clear ground rules at the outset.  Many managers advise that Gen Yers fail to meet a lot of unspoken expectations about behavior in the workplace.  State expectations in no uncertain terms.

 

  1. Establish a regular time and place for one-on-one meetings.  Remember that Gen Yers have grown up hyperscheduled. “They thrive on that kind of structure, and they thrive on one-on-one, personalized attention.”

 

  1. Focus on solutions, not problems.  They want to improve. If you talk about continuous improvement, they are all ears.

 

  1. Keep track of their performance.  It may be tempting to skip evaluation for “temporary employees” but if you want great results from these young people, skipping the evaluation process would be a mistake.

 

  1. Teach them how to get what they need from you. Managers often complain that Gen Yers make a lot of requests and demands.  Per Tulgan, “’They’re doing you a favor by asking for things. Once you know what they want from you, you have the key to getting what you want from them.’ “

 

Good luck with your upcoming summer staff!

 

 

Donna A. Jones

Vice President, Operations

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Fred Thompson Informs and Entertains at TAJ Luncheon

 

Donna Jones (our Vice President of Operations) and I just returned from the luncheon at the Tennessee Association for Justice mid-winter conference at the Doubletree Hotel here in Nashville, TN.  As the keynote speaker, Senator Fred Thompson gave a great talk and showed why the TAJ has brought him onto their team to fight against the tort reform bills are that are being considered by the Tennessee Legislature this session. 

 

With just the right combination of humor and gravity, Senator Thompson gave a preview of how well he is expected to lobby in defense of the attacks that are being waged upon the rights of the citizens of our State.  Stay tuned for further updates in the months to come as we monitor the process.  

 

At our table during lunch, TAJ Legislative Counsel, Lauren Brinkley, told me that there are as many as 10 different tort reform bills presently being reviewed and discussed.   She and the rest of the team at TAJ are working long hours to make sure that the citizens of Tennessee have a voice in the legislative process.  We appreciate the TAJ and are glad to be able to join them as a financial supporter.

 

 

Michael J. Swanson

President and Chief Executive Officer

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Even Law Firms Can Be Victims of Internet Scams

 

FBI Warns of Such Schemes.

 

Most everyone has heard about the world famous Nigerian Scams that has been going on for more than a decade.  First it was by letter, than faxes and in more recent years as an email scam.  The scammer typically started out by saying they were a wealthy Nigerian who needs help moving millions of dollars from his homeland promised a hefty percentage of this fortune as a reward for assisting him.

 

Well, this version offers a new twist aimed at U.S. law firms and involves a counterfeit check scheme sent to lawyers by an individual seeking legal representation to collect delinquent payments from third parties in the U.S.A.

 

Take a look at the following Federal Bureau of Investigation website link so that your law firm never falls victim to this scam.   New Twist on Counterfeit Check Schemes Targeting U.S. Law Firms appears as the 10th topic/article titled.

 

Dan A. Taussig

Chairman

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Microsoft Excel – A Powerful Business Tool

As a business owner, you know how important it is to constantly improve processes to insure efficiency in your firm.  Excel, a spreadsheet application, is one of the most valuable software applications in the business world today.  Its functionality can be used in numerous areas of your law firm including record keeping, calculations, and converting data into charts and graphs.  Although Excel can accommodate the most advanced users, using it even in its simplest form can benefit your law firm.

 

I recently came across a great website that provides tips and suggestions regarding the use of Excel.  You can even sign up to have a daily Excel tip emailed to you.  If you are currently using Excel, you may want to check out this site the next time you have a question.  If you aren’t a current Excel user, spend some time learning about this effective business tool!

 

-Kelly O’Leary, CPA, MBA, Controller

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Tort Reform in Texas

 

Tort Reform is certainly on the minds of anyone who has spent significant time and resources pursuing justice on behalf of people who are injured.   With an overwhelming, Republican majority (101- 49) in Texas’ 82nd Legislature, Texans are especially concerned about Tort Reform and how new legislation might impact the practice of law in Texas.   

 

Texas Lawyer senior reporter, John Council talks with former Texas state democratic representative Allen Vaught of Barron and Budd, P.C. in his January 26th, 2011 edition Revised & Remanded video blog about the implications of Tort Reform in Texas.  In the video blog, Vaught talks candidly about the wide spread economic implications of Tort Reform for everyone, not just Plaintiffs’ Counsel. 

 

As a follow up to the video blog with Vaught, Council talks with pro Tort Reform, Matt Rinaldi, about what Texans can expect to see in terms of changes in legislation in his February 7th, edition video blog, Revised & Remanded.   Rinaldi believes that Texas legislators have chosen a pragmatic approach to Tort Reform and doesn’t anticipate seeing wide spread changes.  As a basic framework, according to Rinaldi’s comments, Texans are likely to see the following legislative changes:

 

1)     Loser Pays Provision as proposed by Governor, Rick Perry.

2)     A Fast Track in Discovery for cases ranging

  from $10,000.00 – $100,000.00.

3)     Limits to Judges’ ability to create new causes of action. 

 

Rinaldi says in his interview with Council, he doesn’t see any plans for the legislature to limit punitive damages and doesn’t see any limits on Contingency Fee contracts.

 

We will all be watching as Tort Reform in Texas unfolds. 

 

 

Lisa Wagner

Vice President, Client Services

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New Tennessee Governor Proposing Limits on Civil Damages

 

As Mike Swanson wrote in a recent ACI blog, the Tennessee Association for Justice (TAJ) has added former U.S. Republican Senator Fred Thompson to its legislative team. 

 

Based on information in a recent article in the local Nashville newspaper, The Tennessean, Mr. Thompson will have his work cut out for him.  New elected Governor Bill Haslam is proposing new limits on damages in civil suits in Tennessee.  He is proposing that non-economic damages in medical and personal injury cases be capped at $750,000 and that punitive damages be capped at either twice the compensatory damages or $500,000.

 

Of course, the TAJ responded quickly to this news, stating, “Tennessee’s civil justice system works by promoting responsible behavior and holding wrongdoers accountable for the harm they cause others. Placing caps on non-economic and punitive damages increases profits for insurance companies and takes away the rights of Tennesseans.  Damage caps amount to more government, not less. Tennesseans are trusted in the ballot box and should continue to be trusted in the jury box.”

 

Gov. Haslam is also proposing a reduction in the maximum amount that litigants would be required to bond while they appeal damage awards from $75 million to $25 million, and that a rule be established to limit the bond to 125 percent of the judgment, excluding punitive damages.

 

Paul B. Myers

Chief Credit Officer

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Lawyers, Bankers & Judges…Oh My!

 

The mortgage foreclosure issues continue to proliferate in our justice system, with lawyers now getting more “attention” from judges hearing the cases.  Heretofore, the bankers involved with “robosigning” and otherwise using shoddy procedures (or no procedures at all) to initiate foreclosure actions have taken the brunt of the ridicule from the press and from judges.

 

That seems to be changing.  A recent article in the New York Times discusses the “scorching criticism” being thrown at the lawyers involved in the proceedings.  Lawyers are being accused of shoddy and fabricated paperwork when representing the banks.  Lawyers argue that they can only present what is given to them by their clients (i.e. the banks/lenders).

 

Courts are beginning to ask attorneys involved in foreclosure actions to vouch for the accuracy and authenticity of the documents they present to the court.  In New York state, for example, courts have devised a two-page affirmation to be signed by attorneys stating that they have reviewed the documents and had “confirmed the factual accuracy” of any allegations with their clients.

 

Lawyers, of course, argue that they should not be held responsible for their clients’ mistakes.

 

Given the likely continuation of a large volume of foreclosure actions, this issue is not likely to die down anytime soon.

 

Paul B. Myers

Chief Credit Officer

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Adding Value by Sharing Information

 

I’m really pleased with a new initiative that we recently launched here at ACI regarding the sharing of financial analysis with our clients during the annual renewal of their credit facilities.  If you are a client who has been renewed in the past month or so, you know what I’m talking about.

 

After years of just sending out a letter to clients each year letting them know that we had renewed their line, we recently decided to take a new approach.  In an attempt to be more helpful and transparent in our renewal process, we decided to “benchmark” each client at renewal time on several key credit indicators, such as credit score, law firm revenue vs. line size, etc.  We now share this information with our clients during an annual conference call and we use screen sharing technology to walk them through a series of graphs depicting how their law firm has been performing over time.  We also share with them how their firm compares to the average of all of our clients on those same indicators.

 

The response from our clients has been overwhelmingly positive.  They really appreciate knowing and understanding how our renewal decisions are made.  They also appreciate knowing how they stack up on those key variables compared to the rest of our client base.  If you are a client who has not been through this new process yet, you have something to look forward to.  If you are not yet a client of Advocate Capital, Inc., our benchmarking process is one more reason why you should consider joining our family of clients.  I’d like to give a “hat tip” to our Chief Credit Officer, Paul Myers, who developed our benchmarking data format.

 

We believe in what trial lawyers do and enjoy helping our client law firms maximize their financial health so that they can most effectively achieve justice on their clients’ behalf. 

 

Michael J. Swanson

President and Chief Executive Officer

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Repeal of 1099 Reporting Requirements

In October 2010, I blogged about the controversial changes to the 1099 reporting requirements imbedded in the Health Care Reform Act.  These changes would impose burdensome paperwork requirements on businesses across the country by requiring all cumulative annual payments greater than $600 to be reported on Form 1099, regardless of the recipient’s business formation.

The theory behind this change is that it would increase tax revenue to help fund the healthcare legislation by revealing previously unreported taxable income.

After much concern and controversy throughout the country, business owners are beginning to see some relief.  Last week, the Senate repealed the health care reform provision that mandates the increased 1099 reporting requirements.  Click here to read the article on Portfolio.com.

-Kelly O’Leary, CPA, MBA, Controller

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