Month: July 2023

Smaller Law: Money Can Be a Bad Reason to Change Law Firms

As promised, some unsolicited career advice.

I became a lawyer for the money.

Others may talk about the prestige, a “love of the law,” and changing the world (all things I also care about). But, it’s the money that helps me slog through the piles of paperwork, arguing with other lawyers, and the nights I wake up at 2am and worry myself back to sleep.

If I won the billion dollar Powerball, I’d live a life free of interrogatories and argumentative lawyers. As a billionaire, I’d only employ lawyers who tell me “yes.”

On the topic of money, the Nashville legal job market is going through a golden age, with lawyers jumping from firm to firm like never seen before. In their rush to build a presence in Nashville, some of these law firms are offering quick cash to associates, partners, and, for a really big bag, entire law firms.

If you’re considering a move, I’ll offer some counter-intuitive advice: Never base your decision on money alone.

Some industries don’t have mathematical ways to measure the impact of superstar talent. If Bruce Willis wants $5M an episode for Moonlighting, then who’s to say that’s not what he’s worth?

The legal industry is different. Most law firms–big, medium, small, and tiny–follow the same general business model: billable hours. A lawyer’s salary usually comes down to: (1) How many hours are you billing? and (2) How much are you charging for that hour?

There’s a little bit of discretion this way or that way, but, in the end, a lawyer’s salary is a matter of math.

When a new firm offers a raise, a lawyer will probably be expected to “earn it back” (by multiples) by billing more hours and charging higher rates. Law firms don’t give money away.

I don’t trust legal recruiters for career advice, but BCG Attorney Search has an ok article, There are Only Three Reasons an Attorney Should Ever Switch Law Firms. They are: (1) You haven’t cultivated the right office relationships; (2) You aren’t getting enough work; and (3) You can upgrade to a better firm.

It’s not a terrible list. The “big picture” concepts are fine, but there are about 5 items of specific advice that make me cringe.

My own list would add: (4) Are you growing as an attorney, either via general learning (Are they mentoring you?) or developing a niche practice (Are they exposing you to a practice area or client base that you can grow into and develop?) (5) Do you like the people there and their working style (i.e. the vibe)? (6) Does your law firm value your contributions to the firm? (7) What are the future prospects for growth (i.e is the firm managed by old white guys on their way out, without any transition plan) and how could you fit into that future (i.e. is the leadership team inclusive, a small clique, or, worse, located 2-3 states away)? (8) What level of autonomy do (or would) they allow for you to grow your practice?

As you consider all of these questions, always ask yourself: Ignoring the potential raise, would things be better if I just stayed put?

Before I left my old law firm in 2020, I had spent about 2 years seriously listening to recruiters’ and law firms’ offers, and I realized that every law firm was basically the same. A little bit more money, but more hours and my rate would increase to a level that would chase off most of my clients. I’d be a stranger, though, who didn’t know how the document management system worked or where the snacks were hidden. The money wasn’t worth the hassle and couldn’t overcome my other concerns.

I declined all offers, mainly because I cherished my “F You Capital,” hard earned after nearly 13 years of high performance at the same firm. Even though I didn’t agree with the firm on many administrative things, my past success and client base had earned me a level of autonomy that was valuable to me. I had very little interest in being the “new lawyer.”

I understand that some lawyers are drastically underpaid, and many people don’t have the luxury of turning down a raise. What I’m recommending, though, is that money shouldn’t serve as a wildcard, to solve the red flag answers to the other questions.

You’ll have lots of jobs and will make good money as a lawyer, but you only have one career. Be deliberate when making the jump.

Tennessee’s Post-Judgment Interest Rate Hits Record High

Effective July 1, 2023, the statutory rate of post-judgment interest in Tennessee is 10.25%, the highest that it’s been in my 20 plus years of practice.

Long-time readers know that, in 2012, the Tennessee Legislature amended the Tennessee post-judgment interest statute, Tenn. Code Ann. § 47-14-121.

At the time, Tennessee creditor rights attorneys complained both about the decrease in the interest rate (at the time, it dropped from 10% to 5.25%) and also the confusion related to tracking a variable rate (it changes every 6 months). Back then, none of us envisioned a world where the rate would exceed Tennessee’s old rate.

Well, welcome to the future.

What’s next? A review of the historical list of Tenn. Code Ann. § 47-14-121 interest rates shows that rates have been steadily climbing since 2016, with the greatest spike in the past year.

When the Legislature made these changes during the Great Recession, it was designed to provide relief to judgment debtors. That the rate has reached an all-time high is good for creditors, of course, but also indicative that interest rates are pushing the economy toward a tipping point.

Tennessee Legislature Unites Both Tenant and Landlord Lawyers with Imprudent Changes to Tenn. Code Ann. § 27-5-108 (d)

In an apparent rush to be as unfriendly to tenants as possible, the Tennessee Legislature has upset lawyers for both tenants and landlords.

I’m talking about the new Tenn. Code Ann. § 27-5-108 (d), which became effective July 1, 2023.

The prior version said:

(d) If no appeal is taken within the time provided, then execution may issue.

The new version says:

(d)(1) Except as provided in subdivision (d)(2), if no appeal is taken within the time provided, then execution may issue.

(2) For a writ of possession, if no appeal is taken within the time provided, then execution shall issue by operation of law.

Do you see the difference? Under the new (d)(2), a writ of restitution “shall” automatically issue after an eviction judgment.

Some quick background: A “detainer /eviction judgment” is the court order that says a landlord is entitled to possession of the property, usually due to lack of payment of rent or some other breach under a lease. A “writ of restitution” is the subsequent legal paperwork that directs the Sheriff to physically remove a person (and all their stuff) from the property.

To be clear, the entry of the former one does not necessarily require the issuance of the latter.

In most cases, no Writ is ever needed. Most tenants act fast in response to the mere threat of having the Sheriff show up, unannounced, with hired labor to physically remove them and move all their possessions to the street.

Most landlords reach out to the tenant and do everything in their power to accommodate a reasonable and peaceable move-out, to avoid the cost and mess of having the Sheriff throw out all of a tenant’s stuff.

And, sure, not all evictions are the same, and there will always be a few–the “worst of the worst”–where the Sheriff’s help is needed. But those are a rare exception.

As a landlord-tenant lawyer, of the 500 eviction judgments I’ve won, I’d guess that I’ve issued less than 10 writs of restitution.

Why on earth did the 2023 Tennessee Legislature decide that each and every eviction judgment needs this immediate and atomic action? This makes no sense, as a matter of policy or practical application.

Tenant lawyers hate it. Landlord lawyers hate it. I’m guessing the Sheriff’s Office hates it (or will hate it).

And, worse, there’s no way around the law. The Davidson County Circuit Court has already provided notice that this will happen on all eviction judgments.

Just today, I filed an eviction judgment with the Court and, as part of the filing process, I was forced to also to pay the $67.00 Writ of Restitution fee. Neither I nor my client want that process to issue.

The only people who think this is a good idea is the Tennessee Legislature.

Smaller Law 101: Advice on Growing your next Law Firm

Exactly three years ago, I was struggling with two decisions. One, whether to buy a boat. Two, whether to leave my long-time law firm.

As to the boat, the world is full of advice about that. Ask anybody you know, and you’ll instantly hear the joke about the “two best days of a boat-owner’s life.” There’s so much information online (generally negative) that a prospective boat buyer has to actively ignore it all.

As to the second (far more important) decision, I was surprised by how little information was out there. Bar associations tend to avoid the topic like the plague. Their business model is to keep big law firms happy, or, at the very least, to not encourage mutinies. Other lawyers aren’t much help either–you’ll rarely get an honest response. They’ll either embellish (for good or bad) or, worse, let slip to somebody that you’re thinking of leaving.

As a result, most lawyers keep quiet and rely on legal recruiters or their own ego, two very unreliable and heavily biased voices.

In this wild Nashville legal market where lawyers are constantly switching firms (and, in a surprise twist, switching back to the original firm), there’s value in real talk. Sometimes the billable hours aren’t greener at the other firm.

For me, I got the law firm decision right. Having said that, even though I’ve had three very successful years, it’s all been built on a foundation of small mistakes, miscalculations, and lessons learned the hard way.

I could write a book about all the things I’ve learned about entrepreneurship, law firm management, marketing, and psychology but, instead, I’ll write some blog posts here over the next few months as the 3 year firm-iversary approaches.

As for the boat? I totally screwed up that one, a mistake so notable that it was documented on the front page of USA Today.

If you’re considering leaving your existing firm, I hope that these blog posts over the coming weeks will be useful –or maybe just keep you out of the national news.

Plaintiff Beware: General Sessions Nonsuits aren’t “Decisions” that can be appealed

If a creditor client has a claim that is close to $25,000, I’ll reccomend that the lawsuit be filed in General Sessions Court. To do that, a creditor owed $33,000 must shave its claim to fit the $25,000 limit, as a trade off for the fast pace and reduced costs.

No matter the outcome, you can always appeal the decision for “de novo” review in Circuit Court. In fact, under Tenn. Code Ann. § 27-5-108(a)(1), “[a]ny party may appeal from a decision of the general sessions court…”

If you lose? Appeal. If you win, but thought you should have won more? You can also appeal. “Any party ” means any party.

This broad right has resulted in some plaintiffs not even bringing witnesses to court. In the event that a defendant shows up with exhibits and wants a trial, the plaintiff will voluntarily dismiss the case and, then, just appeal the order of dismissal.

A new Tennessee Court of Appeals case casts this strategy in serious doubt. The Court noted that a nonsuit is a voluntary dismissal by right, at the request of the plaintiff. Walker v. Shelby Cnty. Sheriff Dep’t, No. W202200466COAR3CV, 2023 WL 3000875, at *7 (Tenn. Ct. App. Apr. 19, 2023). As a result, the trial court exercises no discretion and the nonsuit order is not a “decision,” as used in Tenn. Code Ann. § 27-5-108(a)(1), and is not appealable. Id.

Lawyers who represent creditors in general sessions need to take note of this. If faced with this difficult situation, voluntary dismissal remains an option, but the plaintiff must refile a new action after that voluntary dismissal.

That may not be a good option, though, for a few reasons.

Under Tenn. R. Civ. P. 41(2) limits who many times a plaintiff can voluntarily dismiss claims before losing them. Also, a plaintiff may be dealing with potentially time-barred claims, meaning that the filing date of new case would not satisfy the Tennessee statute of limitations. Finally, as a practical matter, the plaintiff may be concerned that it will never get service of process on the defendant in a later case, and plaintiff may want to get the current action pending.

In any of those situations, the creditor’s lawyer has only once good choice under Tennessee law: Try the case and force the judge to issue a ruling on the merits, which can be appealed.