Legal Tech, but for lawyers who miss the camaraderie of docket calls

Last week, I had to go to the Davidson County Courthouse to file some garnishment pleadings. With the adoption of e-filing and suspension of in-person court proceedings, filing garnishments is really the only reason I set foot in the building.

Once upon a time–well, about a year ago–I’d spend nearly every Friday morning there, on the fourth floor, checking in on all of the Chancery Court dockets.

Some days, I’d have a case in every courtroom, carefully timing my arrivals so that I could cover all four. On other days, I might just have one case, but I’d linger and roam the halls to see who was there and what cases they had. It was a great way to catch up with other lawyers, talk about our cases, watch interesting hearings, observe how the judges handled issues, and, really, just stay connected to what was going on (i.e. gossip).

But, last week, it was so strange, to be back in that building and it all be so quiet.

In fact, after I filed my pleadings in Chancery Court, I roamed the building, hoping to find a familiar face. Maybe somebody had an emergency injunction hearing. Or a custody battle. It would have been nice, honestly, to see another lawyer and simply say “This is really weird, isn’t it? How is your office handling all this?”

So, yes, please invent a geography-based App that tracks other lawyers and lets me know when they’re in the courthouse arguing interesting cases. Maybe include features that tell me how far away they are, what courtroom they’re in, and what legal issue they are arguing.

I miss the courthouse and seeing all my friends.

That’s one of the most common things I’ve heard from other lawyers during all of this. Back in July, a local bankruptcy lawyer said to me on the phone “I miss seeing everybody on Tuesdays.”

It’s even doubly strange to not see co-workers. Before I left Bone McAllester, the legal assistant outside my office asked me “Where will everybody go to ask their legal questions?” During my time there, my office tended to be the place where lost lawyers came looking for answers to their strangest and most obscure legal questions.

I didn’t always have the answers, but it was always fun talking through the issues and coming up with a strategy–something–to get their case moving forward.

Along with all the terrible other aspects, COVID has been isolating, especially in a profession that values civility, interaction, and communication. And, in a profession that, on its worst day, weaponizes incivility, hostility, and paranoia–both inside a firm and in the bar–the value of face-to-face interaction can’t be overstated.

So, when I say I miss seeing lawyers, I’m not just talking about the bar association happy hours or the networking mixers.

I’m not just talking about the spontaneity of running into that lawyer you haven’t seen in 3 years, or gossiping about how Lawyer X was taking her practice group to Law Firm Y, or just cornering a lawyer in court to run a weird legal issue past them.

I’m also talking about the value of sitting down in court next to your opposing counsel, who maybe sends you those e-mails with a tone that’s a bit too sharp, and seeing that he’s not that bad and maybe he just hits “send” before re-reading his e-mails.

So, yes, sign me up for Tinder for Lawyers.

341 Stories: Lawyer Compensation Week, the modern business obituaries

Welcome to January 21, 2021, the first full day of the Joe Biden administration. It’s also an interesting time for law firms…

Most law firms announce compensation plans this week. The first week of the year is generally spent winding down last year’s financials. The following week is spent distributing bonuses.

This third week, though, may be the most important. It’s when the new year’s salaries are announced. Associates and partners alike sharpen their advocacy skills, to explain away last year’s billables and to demonstrate how this coming year will be the biggest one yet. And, of course, that they deserve a big raise.

If you’re a lawyer in a “discretionary” system (i.e. you advocate to a “compensation committee” for a higher salary), you have limited arguments available. In fact, the presentations generally focus on two metrics: (1) I promise to bill more hours; and/or (2) I am raising my billable rate.

Neither of these are particularly good outcomes for clients.

Unless there was some external factor that limited hours (illness, leave of absence, COVID), where can a lawyer find 100-200 more billable hours in 2021? Is the lawyer simply going to work harder? Maybe. In other cases, the lawyer will just pad their time and that letter that took a “0.3” in 2020 now becomes a “0.5” letter.

And, sure, inflation or more experience can justify an increase in an hourly rate, but is the increase really based on that, or has the lawyer just figured out that a $15 increase multiplied by 1,800 hours equals $27,000 more in profit?

When a rate increase is based only on a new calendar year, it can lead to unjustified results.

Law firm leadership has no incentive to push back on these issues. More hours and higher rates mean more money to them too. In short, the fox is in charge of making sure the barn door is locked.

All I’m saying is, clients, watch your bills next month.

Despite the pandemic and overall concerns about the economy, legal rates are going up. In March, we all talked about how commercial real estate, transactions, and law firm profits were dead. But, locally, that hasn’t been the case.

In general, law firm hourly rates are rising. The pessimist would say that law firms are increasing hourly rates to offset the reduction in actual hours billed. The optimist would say that the commercial economy is as strong as it ever was and that rising rates reflect the market.

Get your insolvency news from McLemore Auctions. I love getting the weekly emails from McLemore Auctions that show all the cool stuff being auctioned, usually via a going-out-business liquidation. In fact, one of the biggest mistakes I made during the pandemic was to show my children the website, which has resulted in a few really strange family purchases.

A few weeks ago, I noted the concept of “funeral by auction” after seeing how frequently the fixtures and assets of many Nashville restaurants end up being sold on the McLemore site. In fact, based on my review of today’s Nashville Post, it seems like the McLemore website may be the earliest public notice that some local businesses have closed.

And, yes, it really stinks to be shopping for deals on gaming chairs, and you see the cafe where you proposed to your wife being sold off, piece by piece.

Remember to shop local. I cringe when I see a local restaurant on the McLemore website. It’s often because I hate to see a small business owner give up, and I feel a little guilty thinking about the last time I spent my money at that local business.

This restaurant closure really hurt. Yesterday, the Nashville Post reported that Woolworths on Fifth was closing. Woolworths was a beautiful restoration of the historic lunch counter where many brave African American students and leaders took a stand to demand equality in our city.

I frequently took guests there for lunches over the years, and I was always proud to share that history. I also worry what’s next and whether the future operators will respect the history of the site.

There’s no stay in judgment appeals (unless you ask for one)

There’s a bit of confusion about appellate bonds, particularly when it comes to money judgments from a court of record.

“Is what I’ve filed good enough to protect my client from an immediate garnishment?” That’s not a legal question that any attorney wants to learn after a client’s bank account gets hit.

In every appeal, the Appellate Court Clerk’s office charges certain filing fees for the Notice of Appeal. At the same time, the appellant must file an Appeal Bond for Costs, which is a bond (generally signed by the attorney) to cover the court costs in the appeal (generally, a nominal amount).

Judgment enforcement is automatically stayed for thirty days after entry pursuant to Tenn. R. Civ. P. 62.01. But, here’s the key: The filing of an appeal and posting that initial “cost bond” do not automatically stay enforcement of a creditor’s rights under a judgment.

You’ve got a valid appeal, but you don’t have any stay on enforcement.

In order to obtain a stay of collections after the appeal is filed, the appellant must file a motion with the trial court. Ultimately, this is done by filing a “stay bond,” but, until the trial court grants such a motion and approves the amount of the bond, there is no stay of judgment enforcement. See Tenn. R. Civ. P. 62.04. Tenn. R. Civ. P. 62.05 requires that the bond be in an amount sufficient to pay “the judgment in full, interest, damages for delay, and costs on appeal.”

In short, just filing an appeal and posting a cost bond does not stay the enforcement of a judgment. Bank levies, wage garnishments, all of that can still happen.

And, if you’re a litigant or attorney who doesn’t understand this issue, then there’s a good chance that you’re in for an unpleasant surprise during your appeal. Don’t be that lawyer.

United States Supreme Court: Post-bankruptcy possession doesn’t violate automatic stay

It’s rare the the United States Supreme Court decides a legal issue that affects everyday consumer bankruptcies, but today was one of those days.

In City of Chicago, Illinois v. Fulton, the Supreme Court ruled unanimously that a creditor who repossesses property prior to a bankruptcy filing is not required to release that property after the bankruptcy filing. Per today’s opinion, “mere retention of property does not violate the [automatic stay in] § 362(a)(3).”

This case has real-world implications for creditors, mainly car loan creditors. In the past, if a lender repossessed a vehicle and the borrower filed a bankruptcy case, the debtor would then demand immediate release of the car.

The argument has been that the secured creditor would be in violation of the automatic stay, unless it immediately released the vehicle to the debtor. In our Nashville bankruptcy local practice, the creditor attorney would generally ask for “adequate protection,” meaning proof of insurance on the car and proof that the debtor was proposing a reorganization plan that would pay for the car.

But, in short, if the car creditor tried to keep the car after a bankruptcy was filed, the creditor was swimming in risky waters. That continuing exercise of possession, most of our bankruptcy judges would say, was an action to collect a debt and a stay violation.

Justice Alito’s opinion walks a fine line, noting that 11 U.S.C. Section 362(a)(3) “prohibits affirmative acts that would disturb the status quo of estate property.” The opinion says that simply holding property is not affirmative act; it’s just maintaining the status quo.

While it’s true that that Section 362(a)(3) prohibits “exercising control over estate property,” Alito wrote that this text “suggests that merely retaining possession of estate property does not violate the automatic stay.” The words used in §362(a)(3) “halts any affirmative act that would alter the status quo as of the time of the filing of a bankruptcy petition.” An automatic stay is not “an affirmative turnover obligation.”

In the end, the Supreme Court wrote that “We hold only that mere retention of estate property after the filing of a bankruptcy petition does not violate §362(a)(3) of the Bankruptcy Code.”

This case creates as much trouble as it resolves, honestly. In practical application, where the creditor has repossessed the car, when does the creditor turn it over? In its discretion? After negotiation of plan repayment terms? Never (i.e. the creditor keeps the car and files a motion for stay relief to take an affirmative action–a sale)?

Law Students: Law School Grades Will Not Define Your Career

Over the long New Years holiday, I found my law school’s “Lawyers of the Future” picture book in a box while cleaning out my basement.

This was a booklet all University of Tennessee College of Law students were given at the start of a school year, with pictures and biographies of all the law students.

My plan had been to throw all of this stuff away, but I just couldn’t. Instead, I strolled down memory lane, looking at all the faces of the people who I’d assumed would be part of my professional life forever, as opposing counsel, judges, and law partners.

Twenty years ago, though, I looked at those faces with less sentimentality. Back then, I looked at those people and their prestigious backgrounds, mainly, as competition. Competition for grades. For law review. Moot Court. Summer Jobs. Clerkships. Associate positions.

Lawyers, do you remember how much you agonized over your first semester 1L law school grades? I mean, it felt like everything in your life depended on Criminal Law, Contracts, Civil Procedure, Legal Writing, and Torts.

Law school grades just absolutely consumed our lives.

Based on what I’m seeing this week on Twitter, today’s law students are still freaking out.

What a stressful time. It definitely was for me.

I don’t have any lawyers in my family. I was the first generation in my family to go to college. My mother was a grocery store check-out clerk at my hometown Piggly Wiggly, and my dad was an assembly line worker at an elevator factory.

If our family ever had to deal with lawyers, well, that wasn’t something we would have talked about at the dinner table. If we had, it probably would have been very bad news.

Even though I got a full scholarship to college, my parents still didn’t understand why I would go to college, when I was smart and could have, otherwise, just gotten a job after high school. You can imagine their confusion when, in college, I studied English Literature (19th century American writers were my specialty).

When I graduated, I went to law school because, for me, college wasn’t just an education–it was a path to a profession. A master’s degree in literature wasn’t that path. I needed a path that ended with good pay.

My success in the English Department, though, didn’t fully prepare me for a legal education. When I arrived at the law school campus, other than knowing that speeding and murder were against the law, I didn’t know much–if anything else–about the law.

When they handed me that Lawyers of the Future during orientation, all I saw were the faces of the people who were going to do better than I was.

That first semester was harder for me than I expected. The transition from William James’ philosophical texts to federal civil procedure was a big jump. About a month in, I seriously considered quitting law school and taking the GRE for grad school. Not much in that first semester made sense to me.

So, when they posted those first year grades on the wall, I was a little surprised to see that my first year grades ended up being pretty much average. In fact, I was sort of relieved to have achieved “average.” Not bad enough to chase me away to the English department; good enough to keep on with law school.

But, in the hyper-competitive world of law school, “average” doesn’t get you any on-campus interviews. And none of my classmates seemed excited to get average grades.

The grades you make in your first semester feel like the only objective measure of you as a law student. They will be, if that’s all you have to offer. If you are interviewing at a big law firm and they don’t know anything else about you, then, yes, grades are the only thing that matter.

It’s your task to find other ways to show your potential. You can volunteer at legal clinics. You can get active in a law student organization. You can show sincere interest to an area of law far beyond making an “A” in the class. You can attend bar association CLE for free and meet lawyers who practice law in the areas you hope to work in.

As a lawyer with 20 years experience who is always looking for prospective hires and mentees, law school grades are part of the conversation, but I’m generally looking for more. I’m looking for hustle, drive, commitment, and fuerte.

Great grades are just one of the many ways to tell if a student is going to be a good lawyer. If your grades don’t show it, then you need to figure out how else to show it.

In the real world, your grades help get you in the door, but your success depends on everything else.

For me, my one shining grade was Criminal Law. I made an A in it. (Years of watching Law and Order paid off.)

For my summer clerkship, I networked and cajoled my way into a $4.25 an hour clerkship with the Shelby County District Attorney’s Office, where I worked my tail off. It led to a job offer a few years later, which I didn’t take (that’s a story for another day).

But that summer also showed me that I belonged. That I could do this. That I wasn’t average.

That I was going to be a very good lawyer.

In the end, I got a little lucky too.

I ended up getting the hang of law school that second semester. Some of the things that made no sense to me at first started to click.

Don’t get me wrong, I didn’t turn into Elena Kagan overnight (spoiler alert: She made a single B- and then overcame that by making all As). (Side note, geesh, New York Times, thanks for the encouragement.) But, I did make Dean’s List second semester. And every semester after that.

In the end, that first semester taught me that there’s so much more to my eventual success than grades. Grades were big, but they weren’t everything.

Doing good, real work in the legal profession mattered. Impressing practicing lawyers with my work and passion, that mattered just as much as my transcript.

A few years ago, a professional reference described a potential hire to me as “an adult.” Well, of course, the attorney is an adult, but what he was suggesting was that she was responsible, trust-worthy, mature. And that really spoke to me.

Because, no matter how good your grades are, you’ll be a terrible hire (for me) if you aren’t those other things.

If you are all those other things that go into “adult,” honestly, I may never ask you about your grades.

The hardest part about being disappointed with law school grades was the secrecy. Back then, they’d assign you a random number, and, when the grades were publicly posted on the wall, you’d find your grade in a class via your anonymous number.

Nobody knew anybody else’s grades, which, in a way, created its own paranoia and isolation. Nobody talked about the disappointment. I never told anybody that I was considering dropping out of law school. If other people were scared, they didn’t tell me.

So, if you’ve found this post by googling “first semester law school bad grades,” I hope something I’ve said helps. If I can offer advice or answer any questions, feel free to email me.

First year, first semester law school grades only matter if you let them define you.

Unreliable 2021 Predictions for the Nashville Legal World

2020 wasn’t a great year for predictions for me.

Remember when I boldly predicted that June 2021 would see an all-time spike for consumer bankruptcy filings in Nashville? (Note: That time period actually saw local bankruptcies hit a 10 year low.)

Remember when I joined an out-of-town law firm with the express goal of creating the “perfect law firm”? (Note: Satellite offices are not for me, so I started my own firm, Anthony Watson.)

Remember when I bought a boat? (Note: Yes, I was quoted in USA Today calling it all a big hassle.)

So, with that grain of salt, here are my predictions for 2021:

The Bankruptcies are coming. Maybe in February, but maybe not. All the local bankruptcy lawyers have been confused by the lack of new filings.

The reasoning behind my analysis was partly correct, though: The stay on evictions and in-person court proceedings (coupled with a general reluctance by banks to attract negative attention through aggressive collections) has kept direct pressure off many consumer debtors.

And, strangely, the discovery of the coronavirus vaccine will lead to more filings. But, in May, I was just more optimistic about the timing:

As strange as it sounds, it’s likely that bankruptcy filings will not spike until the economy starts to recover, when businesses start to reopen and people begin to go back to work. That’ll be when people can stop worrying about survival and start worrying about digging themselves out a financial hole.

I stand by this prediction. Even in a typical “economic boom” year, the filings were always steady (and higher than the national average) in Nashville; with what our economy went through in 2020, we would have reasonably expected double the filings.

The financial and other relief we saw in 2021 didn’t offer cures or solutions; instead, they only delayed the inevitable (which was still a good thing for borrowers). But, having said that, all of those cases will get filed at some point in 2021. I’m just done guessing “when.”

Note: This reasoning also applies to divorce filings, which are way down.

The Nashville real estate market will continue to grow. I’ll leave the stories about all the new companies and people moving into the city in record numbers for the Nashville Post.

Instead, for this post, I’ll tell you about how my foreclosures over the past 6 months compare to my sales during the Great Recession.

Back in 2009, I’d get zero calls on my pending foreclosure sales. Inevitably, nobody would show up at the sale, and my bank client would be the high-bidder, with a new problem to deal with in their REO department.

In the last six months, though, I’ve been deluged with calls. Then, I’ll have 6-7 people show up at the sales. And, in the last six months, a third party buyer has been the winning bidder at every single one of my foreclosures.

The number of people and companies looking to get rich in Nashville real estate remains high and, generally, undeterred by the pandemic. Instead, because investments in traditionally safe properties are so expensive in Nashville, many of those investors are focusing their attention (and capital) on opportunities in non-traditional locations and via non-traditional sales (like foreclosures, tax sales, sheriffs sales). There’s simply too much money and not enough land.

For 2021, there’s enough money in town to keep the highs-high and to keep the lows from falling anywhere near the bottom.

(As an aside, I hate this for our city and our most at-risk residents, and I write all this in a way that can acknowledge how big and grand the flames are, even though it’s my house burning down.)

Nashville Commercial Real Estate. As a lawyer who recently started his own firm and who has not signed a long-term (or any other sort of lease), I’ve been waiting patiently for the economic crisis to hit the CRE market.

It hasn’t.

Part of that is timing. Not many projects came online over the past 4-6 months and, of those, many were fully (or mostly) leased. The other part of that is the amount of new money surging into Nashville from all over the country (see above), and, for most existing businesses, a sincere reluctance to change how they work. In short, people still want big, shiny office space.

At worst, I think 2020 and early-2021 will be a blip on the CRE profit-loss statement, but it will not bring any fundamental or long-term impact on the Nashville market.

We’re seeing this in the commercial litigation realm. In March and April, we all predicted dozens of commercial landlord eviction and debt collection lawsuits, but, aside from a few noteworthy cases here and there, there just haven’t been that many COVID-related lawsuits filed.

All of this is a developing story, but these are my totally watered-down predictions as we start our first business day of 2021.