1. finance
2. bank
3. checks

--
--
How
- -
to Establish a 'Percentage Fee
Program
MichaelJ. Davis
Cincinnati Bar Association LRS
Ste 800
35 E. 7th Street
Cincinnati, OR 45202-2411
513/381-8359
FAX: 513/381-5118
E-mail:
Carolyn M. Stachura
Erie County Bar Association LRlS
1450 Statler Towers
Buffalo, NY 14202-2922
716/852-3100
FAX: 716/852-7641
E-mail: cstachura@eriebar.org
2001
ABA standing
National
Lawyer Referral
Workshop
San Francisco,
CA
Committee
on Lawyer Referral
and Information
53
Service
How to Establish a
Percentage Fee Program
Supplied by Michael J. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midavis@cincvbar.or9, telephone: 513.381.8213'
direct 513.699.1394' fax 513.381.2920
Page 1 of 10
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to Establish a Percentage
Fee Program.doc
55
Percentage Fee Program
Objective
The following information will help you to lay the groundwork for a percentage fee program,
and hopefully provide some guidelines on how to set up a program, follow up on cases and confront
some of the snags you might run into while maintaining this system.
What is a Percentage Fee Program?
A percentage fee program is a revenue-generating avenue in which your referral service
panelist pays a percentage of his or her total "services rendered" from a client referred by your
service. This revenue is normally "over and above" LRS membership dues or consultation fees.
How does a Percentage Fee Program Work?
Percentage fee programs differ from state to state, but basically they all work the same. Your
panelists remit back to the LRS a designated percentage of what they collect for their services
rendered. The percentage levels can be a straight amount, graduated levels based upon total
collected and thresholds. For example, your panelist may be responsible for remitting 15% of any
fees collected of $200 or more. So, a case that generated $200 of revenue to your panelist also
provided your service with $30 in non-due revenue. You need to set the ground rules for percentage
fee remittance, so your panelist knows this is not a "deductible" (unless your guidelines specify
this).
Some LRS provide a tiered percentage fee schedule. This normally starts with a threshold.
For example, level one would be for fees of$200 - $5,000 @ 15%, the second level would be from
$5,001 - $30,000 @ 10%, and third, anything above $30,001 would be 5%. Most referral services
use a single percentage fee.
Pro's and Con's
Pros
Percentage fees are an excellent way of producing additional non-dues revenue for the LRS.
This additional revenue could be used to support more efforts in advertising and community service
programs.
Cons
Percentage fee programs involve more "policing" the disposition of open cases, paperwork,
and staff time. Unfortunately, those LRS, which have a percentage fee program in place, have
become very knowledgeable in "collection" efforts, and case tracking. Along with the collection
efforts, you will find those individuals who will alter their rates. Make sure you have stipulations in
your Rules & Regulations addressing these types of issues. In your fiscal budgeting process, you
need to make allowances for increases in postage, stationery, staff time, and software updates if you
do not have the capability to use a percentage fee program. (Lists of software programs are listed
later on.)
Supplied by Michael J. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midavis@cincvbar.orq, telephone: 513.381.8213.
.
direct 513.699.1394.
Page 2 of 10
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56
fax 513.381.2920
Where to Start
There are a lot of things to consider when implementing a percentage fee program. Do you have the
time to update records and do foot work to follow up on issues? The first step is to draft up a
business plan or budget. Determining how much to budget for commissions income is a wild shot!
Start low until you have at least a year under your belt, and then adjust accordingly. Commission
fees are solely based upon how your panelist performs, and the validity ofthe cases. Second, you
will need to modify your LRS Rules & Regulations to reflect issues concerning this new facet of
your service. (See Section labeled "Sample Rules & Regulations.") Third, if a board advisory
committee or board level committee governs you, this issue needs to be brought before them for vote
and initiation. This is going to be a big sell. Fourth and foremost, is getting your panelist to accept
the new policy. You most probably will lose some panelists, but again, maybe not. It's all in the
approach. Please keep in mind: you're requiring them to send you more money, which they are
accustomed to holding on to.
Providing Statistics
Statistics are most probably the most important factor you will have to present to your board and
panelists. Listed are some numbers you can "crunch" to present.
. If you collect $35,000 your first year in commissions, you have produced
around $233,000 in revenue for your panelist (based upon 15% commission
rate). Divide this number by your total panel, and this gives a rough estimate
of the per-panelist average.
The national average for referred cases, which actually produce a fee to your
panelists, is 3-7%. So, if you make 18,000referrals per year, you can estimate
900 (5%) will produce some type of revenue. If you estimate those at $200
per case, this comes up to $180,000 in attorney revenue. If you take 15%, you
could feasibly produce $27,000 in commissions.
If your software has the capabilities of producing statistics, you may want to
capture the total number of referrals made in the "high revenue" areas, such as
workers compensation, personal injury, medical malpractice and wrongful
death, and present this to your committee or board. These categories are
where your "ship" will come in. You can do the math!
.
.
Implementation
Now that your board has approved this program, you need to present it to your panelist. A letter
from either your LRS Director, LRS Board Advisory Chairperson or Bar Executive Director
outlining the program will help with the transition. Provide your panelist will all information
needed. This will include Rules & Regulations, Membership Agreement or Membership
Application, a copy of a Remittance Statement, explanation of how to calculate percentages, and
frequently asked questions.
Supplied by Michael j. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midaviS@cincYbar.orQ,
telephone: 513.381.8213.
direct 513.699.1394. fax 513.381.2920
Page 3 of 10
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57
Rules and Regulations
Enclosed you will find a copy of the Cincinnati Bar Associations Lawyer Referral Services Rules &
Regulations. The boxed areas pertain to the percentage fees, and remittance mailings. (See
attachment "A".)
Membership A2reement
You may find that having your panelist sign a "membership agreement" will further define the
responsibilities between the panelist and your service. The agreement should outline important
points you wish to make to your panelist.
Remittance Forms
If you are operating on an "automated" system, you most probably send out some type of remittance
form or cases status follow-up. When you implement a percentage fee structure, you will be asking
your panelist to also disclose any fees collected on referred cases. At this point, you will begin your
tracking of fees collected and percentage fees due your service. If your system has a feature in
which it will calculate percentage fees based upon information you post, it will produce the dollar
amount due the LRS on the next generated statement. This gives the panelist the amount they need
to pay.
Cases Status Posting
Once you have sent your remittance mailing to your panelist, it is their responsibility to report the
disposition of each case. Along with this reporting, you will be looking for information concerning
fee collected. The attached remittance forms (attachments"B" & "C") reflect responses from the
referred individual, updated information generated once cases status has been updated. It is very
important to keep correct records of payments made. You will find your service will also serve as a
"bookkeeping" department. It's good to have accurate records.
Follow up - Case Monitoring
Percentage fee programs opens up a whole new can of worms. You, unfortunately, will have those
individuals who elect not to supply you with accurate information, resulting in no remittance fees
due the LRS. There are avenues to check the accuracy of remittance information. Some avenues
include:
Client follow-up forms which ask the client how much the referred individual
actually charged for their services
County Court Index Press or Court Newspaper. Peruse the cases, look for
your panelist, and if something looks familiar, check your database for the
client name.
Once a year, send your panelist a list of all open and closed cases for their review. Sometimes the
client will wait beyond several weeks to contact the referred individual, and they report the case as
"no contact." This gives the opportunity for your panelist to double-check.
.
.
Supplied by MichaelJ. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midavis@cincvbar.ora, telephone: 513.381.8213 . direct 513.699.1394 . fax 513.381.2920
Page 4 of 10
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58
Collection Efforts and Issues
It will become necessary to call on your panelist for commissions due your service. Your Rules &
Regulations should state that if the panelist has outstanding issues with the LRS, and they are not
resolved within a reasonable amount of time, they will be "suspended" or "removed" from LRS
rotation until resolved. Another avenue would be payment arrangements or credit card payment.
Software Suggestions
There are quite a fewsoftwarepackageswhichoffera LawyerReferralServicemodule. If you're
lookingfor a "stand-alone"package,I canrecommendseveral:
.
.
The Associate * INTUS Technologies Inc., 603 E. Washington St., Suite 700,
Indianapolis, IN 46204-2634 Attention: Richard McGee,
rmgee@intustechnologies.com
Refer * Richard Seidel, seidel@mindspring.com
Conclusion
Once your percentage fee program is up and running, you will find some of the issues listed above
weren't as horrid as they sounded. You will have battles, but in the long run, it's a great program to
help supply your service first with a non-dues source of revenue. With the addition of these funds
you will have to opportunity to support public service efforts as well as increase advertisement
efforts.
Supplied by MichaelJ. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midavis@cincvbar.oro, telephone:513.381.8213
. direct513.699.1394 . fax513.381.2920
Page 5 of 10
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59
Rules & Procedures for the Operation
of the Lawyer Referral Service
1.
3. Toabide by all the rules of the LRS, and in no eyent to hold. or
claim to hold. the LRS or any of its officers, members or
employees liable for the operation of, or use of the ,nformation
contained in the member's application for the activities of the
LRS.
PURPOSE
The purpose of tI'e Lawyer Referral Serv,ce (LRS) is to provide a source
4. To annually certify that the panel member has not been
suspended from the practice of law or found 10 be in viol~tinn of
the Code of Professional Responsibility.
through which a person may be referrecJto a lawyer who is able to render
and interested in rendering legal services or to aid callers in finding other
appropnate sources of legal assistance when necessal)'.
2.
The Lawyer Referral Service Committee is charged with the operation of
the LRS. It will be composed of members of the Cincinnati Bar Association
who are appo,nted by the Pres,dent of the Cincinnati Bar Association. The
Committee shall adopt rules and procedures for the operation of the
Service.
3.
5. Tosubmit a new applicationand proof of liability insurance to
the LRS if the panelist's plaoe of employment, business
address. or law firm aSSociation change. (Amended 11/5/96)
THE COMMITTEE
5.
FAILURE TO COMPLYWITHTHE LAS RULES
"".~
w...~_.~.
A.
FORMATIONOF THE PARTICIPANTMEMBER PANEL
A. To qualify for listing on the lRS panel, a lawyer must:
;t or participant denied registration or suspended
under rule 5{A)(1) may apply to the lRS administrator for
registration or reinstatement after proof that he/she has
complied.
1. Maintain an office separate and distinct frcm any other
business. If a lawyer's office is mairrtamed m a residence.
the office area must be separate and distinct from the living
areas.
2. Be actively engaged
B. 1. An LRS applicant or participant may be denied registration or
suspended from the panel by the LRS Committee if:
in the private practice of law:
3. Cany. and continue to carl)', professional iiability insurance in
amcunts equal or greater than $100,000 foreachclaim, with
a. He/she has signed any application or other certification or
report to the LRS whichhas been found to be untrue in any
$300.000 aggregate, as endorsed by the Cincinnati Bar
Association. In the event that an attorney has not receiyed a
declaraticns page frcm his/her insurance carner by the
expiration date of the policy, a self certification form. provided
by the Cincinnati Bar Association. may be used.
(Amended ~213/96)
matenal respect: or
b. The LRSCommittee receives notice or InformatIOn giving it
reasonable grounds to believe that a participant member
does not meet the reasonable standards of responsibility,
capability. character or integnty.
2. Before finding any violation Of5(B)(1). the LRS Committce must
prOVide an appl,cant or participant an opportunity to be heard.
including provld,ng reasonable notice and a hearing. At the
hearing, a majority vote of the LRS Committee members
present will be necessal)' to deny reg,stration or suspend an
applicant or participant fo' violationof Rule 5(B)(~).
3. An applicant or participant denied registratIOn or suspended
under rule S(B)(~) may apply to the LRS Committee for
registration or reinstatement on the panel. Reinstatement shall
be permitted upon the approval of the majoritY of the members
of the LRS Committee present at the next scheduled meeting.
4. Carl)' on any relationship with clients in a professional and
businesslike manner in all respects: ancJ
5. Abide by the rules and procedures of the LRS.
B. Because each panel member's relationship with a referred
client reflects upon the lRS and on the Cincinnati Bar
Association. a panel member to whom any client has been
referred shall manifest this professionalism
in eveI)' contact
with the client, including, but not limited to, the answering or
prompt returning of telephone calls bythe panel member or
the member's office staff. office location, and the writing of all
correspondence to the client.
4.
C. ~. An lRS participant may be suspended from the LRSpanel by
REQUIREMENTSOF THE PARTICIPANTMEMBER PANEL
the Chair of the LRS Committee Ifthe participant:
A. Each prospective panel member shall submit an application
a. Fails to abide by the Code of Professional Responsibility; or
and abide by the rules set forth herein and those listed on the
registration form.
B. The applicant shall list those fields of legal work in which the
applicant desires to accept referrals.
C. In accepting the registration form from any applicant, the lRS
may require such information and certification as it deems
necessal)'.
b. Is arrested or indicted for any offense. notwithstanding
lawyer's ability to practice law.
the
c. Has been investigatcd by a certified grievance committee or
the Office of Discipltnal)' Counsel of the Ohio Supreme Court
and a probable cause panel of the Board of Commissioners
on Grievancesand Disciplineof the Supreme Court of Ohio
has found that probable cause exists for the filing of a formal
complaint against the LRS participant, or a gnevance matter
has reached a substantiallysimilar point of investigatIOn in
another jurisdiction.
D. The Committee may at any time conduct further investigations
and require further information bearing upon the responsibilitY.capabilitY,character and integrity of any applicant or
participant member. The Committee may also require such
information as it deems necessary in accepting or continuing
the registration of any applicant or participant member.
E. The Committee may refuse membership in the panel to an
applicant ifthe Committee finds the applicant to be unsuitable
for panel membership
in the lRS.
F. Each panel member agrees:
2. A participant denied registration or suspended
under rule5(C)(~)
may apply to the lRS Committee for registration or reinstatement to the panel. Reinstatement shall be permitted upon the
approval of the majority of the members of the LRS Committee
present at the next scheduled meeting.
D. All matters arising out of Rules5(A)(B) and (C) above conceming panel members will be held confidential and will be
referred to the Bar Counsel of the Cincinnati Bar Association
where appropriate.
1. To permit any dispute conceming fees arising from a referral to
be submitted to bindingarbitration by the Fee Arbitration
Committee of the Cincinnati Bar Association.
2. To grant all clients referred by the LRS an appointment as soon
as practical after tne potential client's request is made.
Supplied by Michael J. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midavis@cincvbar.orq, telephone: 513.381.8213
. direct 513.699.1394.
Page 6 of 10
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60
fax 513.381.2920
6.
OPERATION
OF THE PANEL
A. Referrals shall be made to listed attorne)-'Sin the order in
which their names appear in the rotational system estab.
lished.
B. Panel members willaccept any referral for initialinterview
except for those matters which the member has indicated in
their application that they are unwillingto handle. However,
should any referral give rise to a conflict of interest a panel
member willadvise the client to contact the LRSfor a new
referral. Nothing herein willbe construed to obligate a panel
member to accept employment beyond the initial
consultation.
C. The panel member should not make the first contact with the
client (Amended 8/6/96)
D. Each panel member agrees to interview the client and. except
in extraordinarysituations,not to refer a prospectiveclientto
another attorney. Ifthe situation is deemed extraordinary. the
panel member agrees to first contact the LRSbefore referring
the client to another attorney.
E.
10. PUBUCITY
A. The tRS shall develop and maintain an active puOlicity
program using communications media best designed to
informthe generalpublicinthe GreaterCincinnatiarea ofthe
existence, purpose and advantages of the LRSand the kinds
of information and services available. Whenever possible, the
pUblicshould be informed as to when to seek legal advice.
B. The form and content of all puOlicityregarding the LRSshall be
dignified and consistent with recogniZed principles of legal
ethics within Ohio and shall not be false, deceptive. or
misleading.
11.
MAXIMUM FEE TO BE CHARGED TO CUENT
. Every participant member shall establish his/her fees in
accordance with the spirit and the letter of the provisions of
Disciplinary Rule 2.106 of the Ohio Code of Professional
ResponsibilitY.
F. A panel member rejecting initial referrals for any reason willbe
moved to the bottom of rotation.
G. A panel member can only receive referrals at a location where
the member maintains a law practice. Each panel member
may select only one location at which the member may
receive referrals.
H. The internal operation of the LRSwillbe under the direction of
the LRSAdministrator and the Executive Directorof the
Cincinnati Bar Association.
12.
AREA OF PRACTICE
A classification of legal services will be published, from which a participant
member can delineate the services for which the member will be available.
Attorneys must practice actively in the areas of law designated on their
application. Any changes in the areas of law must be made in writing.
13. PANELS FOR SPECIAL GROUPS
Rules for the Attorneys for the Marginally Indigent (AMI).or any other
programs or groups recognized by the LRS Committee are publiShed
separately. and are Incorporated here by reference. Such rules may be
implemented. enforced. changed or terminated by resolution of the LRS
Committee or the Executive Committee of the Cincinnati Bar Association.
LRS
LAWYERREFERRALSERVICE
rule obligates an attorney to pay a referral fee to the
when a client returns to the attorney on a different and unrelated matter
following the conclusion of the matter for which the client received the
initial referral. (Amended 12/3/96)
Revised and approved: March 1997
Please direcr all inquiries conceming these Rules and Procedures ro rhe
Lawyer Referral Service Director or Staff.
,
CBA "00
LRSP.EGISOO
I
i
I
Supplied
by Michael
J. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midavis@cincvbar.or9,telephone: 513.381.8213. direct 513.699.1394. fax 513.381.2920
Page 7 of 10
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Fee Program.doc
61
ATTACHMENT"A"
ATTACHMENT "B"
Lawyer
LRS
1.,~iII¥t!'IlItffMAf,
Referral
Listing of AJI Opcn and Un-responded Cases
Service
3 5 East Seventh Street
Suite 800
Cinti OH 452022492
iWI"!I;t
Phone: (513) 381-8359
Fax (513) 381-2920
To enSIlTeproper update, please remit by date
Ji.~tedat end ofthi.~ report
Member No:
1,3406
MR. MICHAEL.J.
DAVIS
CINCINNATI
BAR ASSOCIATION
SUiTESOO
35 EA.". SEVEN"Of STREET
CINTI OR 45202
'FROM:
c, ,#
La""-yer Referral
q~U~~q:~wyer
Refe~~r>'ice
Statu... ~rt
200109240013
Referral 02"':
(~Type:
Service Coonlinator
91241200
Current Status
1
(i'OBEDETERMJNEDJ"
t:.nery & ADI\IINISTRATIVE
Clita. lIIfo:
A_,~
Mouse., Mickey
""'-
"
m..
Ca.« 'taM typo hos not
yet boen d<t=ninod.
C~-~;;.;;~~~~-]
~
..CI'aI,~~il1 ~taI;"".~~e.:'.':,,".9"=t:I<:~~>'...
. (:Io«d
r-
r:_tigeII.Fee
(:locoed lloarl)'
0.-.1.
Fee Paid ia Filii
o..rer
Sy,"'m i, reporring tho,." h"" boen do roe,
collected at thi, point in time.
Olli~'
CO.Ollgen' Fee
.'«
AR.ici,"'Rd
Fee AmangenKII'
Peudill/i:
Ra. Fee
Ref"rred individual has indicated paymont and the current ,taM orthi, caso ~..
,/--U_rly
1'«
.J, 3r;;t) CO
No COn.a..
Plume
Please ,>erify this report
and remrD with an)'feesdue to LRS by October
Ill' LJ;1i/:S
()DI~
I, 200.1
Date
Signature
Commenu:
Menlbcr No;
13406
Mr. Mki»lel
l)1If.eof Report: 9/24/200 I
J. D/lvis
Supplied by Michaelj. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midavis@cincvbar.orQ, telephone: 513.381.8213 . direct 513.699.1394 . fax 513.381.2920
Page 8 of 10
C:\TEMP\Howto Establish a Percentage Fee Program.doc
62
Lawyer Referral
LRS
3 5 East Seventh
Listing of All Open and Un-responded Cases
Service
Street
Suite 800
Cinti OH 452022492
I.."''Y!IInml1!'.\! 'WI"'t!
Phone: (513) 381-8359
Fax (513) 381-2920
To ensure proper update. please remit by date
listed at end of this n:port
Member No: 13406
MR. MICHAEL J. DAVIS
CINCINNATI BAR ASSOCIATION
SUITE 800
35 EAST SEVENTH STREET
CINTI OH 45202
FROM:
Lawyer Referral
/
Service Coordinator
~~.~~<:!~-~~~~ef~!~rviee
ea.,.,,,
Note the clispooition or
the case is reflective or
the CWTent status
Statas~rt
m
200109Z40013
Referral Date:
9/2412001
c~ Type: t:"ery & ADML"'L'ITRATlVt:
~&;;t~.
..
-
m_"
mmm./_- -- ; Change in Status (Please Check One)
.-r-m
-- m{:Iosed
m
__m_-
-m-_m-m______----
CIasctI Coaljge81 fer
""": Oosed
IloMrly
Closed..
- 'C
Fee !'aid
ia filii
rerncc 08iy
C08d_t
Fer
f~ A8tieipalt'd
fer AtTaagrJIoeaI Paodisg
Sysrem has recorded payment and is indicating to rerem:d
individuallhcre
is a percentage due the LRS
-FbtF~
.... . IIo8r1y fer
m__....
No CGtataet
PhoDe
Please verify this report aad return
-- -
,
with aay fees dae to LRS by Oetober
()III~'
I. 2001
--'--_..-
Date
Signature
Commeat.'f:
Member No;
13406
Mr. Michael J. Davis
Date of Report: 9124.12001
I
Supplied by Michael J. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midavis@cincvbar.orQ, telephone: 513.381.8213 . direct 513.699.1394 . fax 513.381.2920
Page 9 of
10
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63
ATTACHMENT "C"
Supplied by MichaelJ. Davis, LRSDirector, Cincinnati Bar Association, 35 East Seventh Street, Suite 800, Cincinnati OH
45202
midavis@cincvbar.oro, telephone: 513.381.8213 . direct 513.699.1394 . fax 513.381.2920
Page 10 of 10
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Fee Program.doc
64
---
-
"Howto Establisha SuccessfulPercentageFeeProgram"
by CarolynM. Stachura,LRISAdministrator,BarAssociationof ErieCounty
I believeit is safeto saythat,eventhoughtherewillprobablyalwaysbesomeconflictoverwhetherthe
purposeof a LRISprogramis to benefitthepublicor to benefitpanelmembers,theviewof th~ABAis
consistentin thatthe primarypurposeof LRISis oneof publicservice.
So, howdoesthe LRISAdministratorhandlethis delicatebalanceso thattherearebothhappypanel
membersanda happyBoard?Theseconcerns,alongwithothers,will be addressedduringthe break-out
sessionbut,inthe meantime,I wantto giveyousomeideaof whatto expectshouldyoudecideto consider
implementinga percentagefee arrangement.SomeLRISprogramsarefundedby an annualregistration
fee and/orsomesortof a consultationfee remittance.Nearlyhalfof LRIS'saroundthecountryhavea
percentagefee recoverysystemin placeandmanyothersareeitherconsideringit or are in the processof
implementingone. An increasein revenueusuallytakesplacewithinthreeyearsof implementingthe
percentageprocedure,whichinturn resultsin the LRISbecomingmorefinanciallyself-sufficientthereby
allowingthe LRISto providebetterqualityserviceto the publicandto its members.
Follow-upproceduresandthestaffto implementthemare necessaryforthesuccessof a percentagefee
program. Theyare alsoan essentialqualitycontrolmeasure. It is recommended
thatfollow-upreports
includeall referredcase,whetheror nottheyhavealreadybeenreportedto LRISandthattheybe
continuedon the reportfor at leastsix months.Thiscreatesawarenessor previousreferralsamongnot
only yourpanelmembersbutalsotheirstaff. Eventhougha referralmayhavebeenpreviouslyreportedon
and closed,if theclientdecidesto retaintheattorneyin thefuture,yourpanelmemberwill still have
updatedinformationwhichreflectsthattheclientcameas a referralfromtheService.Oneadditionalitem
that hasbeenfoundto be anextremelyusefulreminderto LRISmembersis the useof brightlylabeled
LRIS stickers. ManyLRISprogramshavenotedthatpanelmembersaremoreefficientwhenreturning
remittancefeesand alsowhenrespondingto statusupdateswhentheirfileshaveLRISstickerson the.
You canpurchase500FeestickersthroughtheABAfor only$10by calling(312)988-5786.
-Inorderto ensurethattheLRISreceivesallfeesduefrompanelmembers,it is recommendedthat LRIS
utilize clientquestionnaireswhichsolicitfeedbackabouttheclient'ssatisfactionwiththe serviceandthe
attorney,as well as informationaboutthefeeswhichhavebeenpaid. Such
questionnairesare a veryimportantsourceof informationbothabouttheoperationof the serviceandfees
paid by LRISclientsto panelattorneys.Panelmembersshouldbe informedregularlythat informationis
gatheredfromthe clients. Anyquestionnaireswhichreportthatthecasehasbeenopenedshouldbe
closelymonitored.If theattorneyfailsto reportthatthe casehasbeenopened,actionof the inconsistency
should betaken. Forexample,a standardlettercouldbe sendaskingthepanelmemberto accountfor the
discrepancy.Any saiddiscrepanciesshouldthenbe investigatedpromptly.Questionnairesshouldalso
serve thepurposeof reportingto panelmembersanypraisefor theirservices.Copiesof thecomments
should becirculatedamongthe LRISstaffandthe panelattorneywithwhomthecommentwasmade
about. Theyalsoserviceas a publicrelationstoolto the clients,demonstratingtheServicecaresabout
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whathashappenedwiththeclient'sinquiry. It mayalsogiveclientswho maynothavefollowedup on the
initialreferralor who havelostthe lawyer'snumber,an opportunityto act. Questionnairesare very
inexpensiveto produceandshouldbe limitedto a few simplequestionssuchas:thesatisfactionof the
LRISandthe attorneyor thetotalof legalfeeschargedfor anyservicesrendered.ManyLRISprograms
havepostagepaidenvelopesin whichthe Serviceis onlychargedfor thesurveysthatare returnedto
them. It is suggestedthat surveysfor personalinjuryreferralsshouldbefollowedup on 100%,whether
verballyor by mail. Matrimonialmatters,on theotherhand,shouldbe limitedregardinganyfollow-up
becauseof thenatureof thecircumstances.
Beforeyoudecideto reviewthistopicwithyourbarleadership,it is essentialto be ableto ask andanswer
the followingquestionswith regardto percentagefee implementation:
1. Haveyoueithersurveyedor researched(i.e.Profile2000- Characteristicsof LawyerReferral&
InformationServices)thevarietyof differentthresholdsandfeesplittingarrangementsthatother
programsuse?Whatwill ultimatelyworkbestfor yourprogram?
2. Haveyouhada recentPARvisit?If so, doesthe reportsuggestimplementinga percentagefee
procedure?This informationis a valuablemarketingtoolwhenit comesto educatingpanelmembers
duringtheimplementationprocess. Ifyouhavenothada PARvisit,call theABAtodayto schedule
one!
3. Doesyourstate haveanethicsopinionregardinga percentagefee system?TheABAethicsopinion
291definessuch a systemas beingethical,as havemoststateethicscommitteesthat havereviewed
the issue.Gatheranyopinionsso thatyouarepreparedwhenyour boardand/orpanelmembers
inquireasto whethera feesplittingarrangementis ethicalor not in yourstate.
4. Doyouhavestatisticsthat havebeencompiledfromthe pastfew yearsin orderto estimatehowmuch
revenuecouldhavebeenmadebasedon a percentagefeeprogram? It is alwayshelpfulto compare
differentthresholdsto determinewhatis morefittingin orderto operateyour particularLRISas a selfsufficientrevenuemaker.(graduatedversusflat feesystem)
5. Howdoyoumakea presentation
totheBoard?It isnotasbadasyoumaythink.Bottomline:be
armedwithinformation.Youmayneedto sellyourboardon this ideaso do just that - sell it! Providea
reportthatincludesthecurrentoperation,
theprojected
operation,
andtheshortandlong-term
goalsof
LRIS.Youmayalsowanttoconsiderfurnishing
yourboardwithstatisticalandbudgetary
information
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fromotherprogramsthathavesuccessfullyimplementeda percentagefee systemwithinthe lastfive
years.
6. Howdo youdeterminewhatis an adequatebudget?Howwillyour revenuebe allocated?Are you
preparedto answerquestionssuchas: howdo youplanon spendingyourprofit?Do youhavean
advertisingproposalin mindand,if so,whatis it? Radio,cable,internet?Willyou needto expandyour
staff and/orcomputercapabilities?Are youableto projectthesecosts?
7. Do you needto modifythe languagein yourLRISapplication?Doyouneedto add languagethatwill
specificallytargetproblemssuchas non-reportingissuesor over-chargingclients? Yes! It is of utmost
importancethat yourrulesandregulationsreflectthefee splittingarrangements,delinquency/panel
removal/suspension
procedures,acknowledgement
and reportingof referralissues.
8. Do you havesoftwareissues?Doesyoucurrentprogramallowyouto properlytrackpendingcases
and providestatisticalreports? If not,is it withinyourbudgetto expandyourexistingprogramto fit
your needs?
9. Howdo you keeptrackof thecasesandtheirstatus? Trackingis oneof the mostessential
componentsto anyefficientlyoperatedLRISprogram.Youwill needto considerhowoftenbilling
statementsshouldbeforwardedto panelmembers(monthly/quarterly/yearly).
Willyouallocatethis
responsibilityto oneparticularstaffmemberor willit be a groupeffort?
10. Are thereanyadministrativeissues?Doyouhaveenoughstaffto properlytrackLRIScasesandfee
remittances?Is therea needfor newcomputerequipmentor a newworkstation?Is it timeto revamp
the LRISformsto meetyourpercentagefee needs?
11. Howdo youeducateyourpanelmembers?Doyouhavea newsletterin whichyoucanadvertiseany
newchangesalongwithotheritemsof discussionsuchas delinquencyand/orreportingissues?Thisis
such a greatpublicrelationstoolin whichyoucanalsoexpresspositivestatisticsandclientfeedback.
It is certainlyunderstandablethatthis maybe onelessthingthatyoureallywantto worryaboutright
nowso keepit simple. Youcanadda onepageinsertwhenforwardingreportsor billingstatements.
Or, if youfax yourreports,addoneor two paragraphsto yourprogramwhichallowsyouto
convenientlyupdateyourpanelmembers.
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12. Howdo you handledelinquencyissues?Doyousendtwo or threenoticesbeforea decisionis madeto
removea panelmemberfromreceivingfuturereferrals.If thereis an issuesuchas refusalto make
payment,arethere measuresin placethatwilladdresssucha situation?Be not afraidas there is no
needto re-inventthewheel.Requestcopiesof otherLRISapplicationsand"fine-tune"their language
to fit yourparticularneeds.
13. Doyou reallyneedclientsatisfactionsurveys? DoesyourServiceutilizeclientsatisfactionsurveys?
Howdo youdecidewhetheror notto providea postage-paidenvelope?Dootherprogramssend
surveysandwhat is theirreturnrate? Exactlywhatdo youdowiththe statisticalinformationthat is
received?Howdo you handlenegativeresponses?Whatdo youdo withthe positiveones?
Thesearejust a few examplesof itemsthatyoushouldbethinkingaboutwhenconsideringwhetheror not
to implementa percentagefeesystem. It is importantto keepin mindthatwhatmayworkwellfor one may
notbe rightfor you. You mayfindthatyoulikethethresholdsystemfromone LRIS,a billingsystemfrom
another,thefollow-upproceduresfromanotheranda clientsatisfactionsurveyfromyet another! The one
additionalsuggestionthat I willpassalongis to discussthe prosandconsof implementinga percentage
fee systemwithas manyLRISadministratorsasyoucan. It canbe a cumbersomeprocessto beginbut
the benefitsfar outweighthenegative.On a finalnote:theonestatementthat I will neverforgetwhen
sellingthis ideato my boardis that inorderto makeyour"business"expand,youneedto makean
investmentin it first. Goodluck!
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