Solution Manual for Fundamentals of Law Office Management, 5th Edition

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’s Manualto AccompanyFundamentals ofLaw Office Management:Systems, Procedures,and EthicsFIFTHEDITIONPamela Everett NollkamperSOLUTIONSGUIDE

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iiContentsChapter 1The Legal Marketplace ..........................................................................................1Chapter 2The Legal Team ...................................................................................................10Chapter 3Personnel Relations..............................................................................................18Chapter 4The Attorney-Client Relationship........................................................................32Chapter 5Paralegal Ethics and Client Relations ..................................................................47Chapter 6Legal Fees ............................................................................................................61Chapter 7Timekeeping ........................................................................................................81Chapter 8Billing and Financial Management......................................................................90Chapter 9Managing the Client Funds Trust Account..........................................................98Chapter 10Technology in the Law Office ...........................................................................103Chapter 11Law Office Systems...........................................................................................121Chapter 12Docket Control Systems ....................................................................................129Chapter 13File and Records Management...........................................................................149Chapter 14Law Library Organization and Management.....................................................164Test BankQuestions ..........................................................................................171Test BankAnswer Key ......................................................................................241

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1CHAPTER 1THE LEGAL MARKETPLACEChapter 1 begins the student’s journey into the fascinating legal marketplace. It sets thefoundation for the rest of the text by describing the characteristics inherent in all types of legaloffices, as well as the differences between various types of law offices. These characteristicsfamiliarize the student with how the legal business differs from other businesses.Two primary goals of this chapter are:1. To give the student an understanding of the structure, organization, and managementstyles of various types of law offices in which paralegals work and2. To give students an understanding of the many opportunities for employment a paralegaleducation offers.Consistent with the first goal, this chapter illustrates as closely as possible the various types oflaw offices and their differences in management styles. Many variables compose a law office’senvironment, and this chapter identifies the factors that contribute to a law office’s atmosphereand culture. To give the student a “real-life” feel for the subject matter, the chapter containsexamples of typical law offices.Consistent with the second goal, this chapter discusses career opportunities outside a traditionallaw firm. This will expand the student’s perspective of the paralegal profession and illustrate themany employment options in the legal marketplace.This chapter focuses on the legal marketplace as seen through the eyes of a lawyer rather thanthrough the eyes of a paralegal. Viewing the business of law from a lawyer’s perspective willgive readers an understanding of the reasons management decisions are made. Since paralegalsare an integral part of a legal office, understanding these reasons can only enhance theparalegal’s understanding of the business of law in general.OBJECTIVESAfter completion of this chapter, the student should be able to do the following:• Describe the structure and organization of small, medium, and large firms.• Explain the autocratic, democratic, managing partner, committee, and combinationmanagement styles.• Discuss the differences between a sole proprietorship, partnership, professionalcorporation, and limited liability company.• Define a boutique firm, an office-sharing association, a legal clinic, and a virtual law office.• Discuss the differences between corporate legal departments, private companies, andgovernment agencies.• Identify the changes that have affected the legal marketplace.

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2’s ManualCHAPTER OUTLINE AND SLIDE GUIDEI. IntroductionSlide 1.1 is the opening slide.II. Structure and OrganizationSlide 1.2 describes the structure and organization of a law office.A. SizeSlide 1.3 describes the variation in size of firms according to the geographical area.1.Small Firm2.Medium Firm3.Large FirmSlide 1.4 lists the four types of large firms.4.Mega-FirmB. SpecialtiesSlide 1.5 lists attorney specialties. This is a good time to discuss the difference betweengeneral specialists and certified specialists.C. Management StylesSlide 1.6 lists different types of management styles.Slide 1.7 describes law firm culture. The intangible areas that make up an office’sculture are reviewed here. This is an important discussion. Everyone is exposed to theculture of a business, whether at work, home, or community activities. Is theenvironment tense? Creative? Comfortable? What things make up an office’senvironment that produce these feelings? When your discussion of law firm culture iscompleted, you can move on your discussion of management styles and how it affectslaw firm culture.1.AutocraticSlide 1.8 is an autocratic organizational chart. This slide illustrates how an autocraticmanagement style functions.2.DemocraticSlide 1.9 is a democratic organizational chart so the students can visualize how thismanagement style functions.3.Managing PartnerSlide 1.10 is an organizational chart of a medium firm with a managing partner styleof management. To illustrate the difference in structure between a medium and largefirm, a large firm organizational chart is displayed on the next slide.Slide 1.11 is an organizational chart for a large firm managed by a managingpartner. This will illustrate the difference in a managing partner style ofmanagement in the two sizes of firms.

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Chapter 1: The Legal Marketplace34.CommitteeSlide 1.12 illustrates how the committee style of management functions.5.CombinationSlide 1.13 displays an organization chart for a combination style of management.D. Forms of ManagementSlide 1.14 illustrates the difference between centralized and decentralized forms ofmanagement.III. Private Law FirmsSlide 1.15 lists the types of private law firms.A. Sole ProprietorshipsSlide 1.16.B. PartnershipsSlide 1.17 is an example of full partner and junior partner percentages. This is whereyou can discuss equity and nonequity partnership positions.C. Professional CorporationsSlide 1.18 is an organizational chart illustrating how a professional corporation isstructured. Discuss the definition of shareholders and the role of the board of directors.Discuss the functions of the officers and how officers relate to the board and shareholders.D. Limited Liability CompanySlide 1.19 describes the three differences between a partnership and LLC. Mention thatan LLC is not an option for a professional practice in some states.E.Boutique FirmsSlide 1.20 describes the characteristics of the boutique firms.F.Office-Sharing AssociationsSlide 1.21 describes the two types of office sharing associations.1.Suite Concept2.Firm Concept3.A Typical Office-Sharing AssociationG. Legal ClinicsSlide 1.22 is a list of entities that establish legal clinics. Discuss the differences in theseclinics, if any.H. Virtual Law FirmSlide 1.23.IV. Private IndustrySlide 1.24.A. Corporate Legal DepartmentsSlide 1.25 is an organizational chart of corporate legal departments.Slide 1.26 illustrates how a corporate legal department is structured around its product.

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4’s ManualB. Private IndustrySlide 1.27 is a list of positions paralegals have held in private companies other than alaw firm. Ask if a student has had experience in one of these positions and discuss howa paralegal education would be beneficial in the position.1.Self-Employed ParalegalsSlide 1.28. You will present the two types of paralegal services separately.2.Freelance Paralegal Services3.Independent Paralegal ServicesC. Attorney Service and Nonprofit CompaniesV. Government AgenciesSlide 1.29 begins the section on paralegals in governmental offices and lists the four mainareas of government offices in which paralegals work.A. Federal AgenciesSlide 1.30 lists the four types of governmental agencies that employ paralegals.Slide 1.31 lists the federal agencies that employ paralegals.B. State AgenciesC. County AgenciesD. City AgenciesVI. The Changing MarketplaceA. Multidisciplinary PracticeB. Nonlawyer Ownership of Law FirmsC. GlobalizationD. Nonlegal SubsidiariesE.Legal Insurance PlansSlide 1.32 is the closing slide.KEY WORDS1.Autocratic:Relating to government by one person with unlimited power.2.Autonomous:Being self-governing, independent, and subject to its own methods ofmanagement.3.Boutique:A law firm that offers services in one area of law only.4.Contract attorney:An attorney who works for a law firm on an assignment basis or as anindependent contractor.5.Contract basis:Working as an independent contractor on a per case or assignment basis.The person is not an employee of the firm.

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Chapter 1: The Legal Marketplace56.Culture:The working environment of a law firm, consisting of intangible elements such asthe social environment, employee relationships, and attitudes.7.Cybercrimes:Crimes committed on the Internet, including hacking and fraud.8.Cybertorts:Actions or damages resulting from libelous material posted on the Internet.Also included is posting material that is protected by copyright or trademark, such asmagazines and photos.9.Dividend: A payment according to the profitability of a firm and the number of shares ofstock owned by an attorney.10.Executive committee:A committee comprising the heads of the various committees in alaw firm.11.Freelance paralegal: Contracts his or her services out to law offices and works under thesupervision of an attorney.12.General counsel: An attorney in charge of a corporate legal department; often an officer ofthe corporation.13.General practitioner: An attorney who does not specialize but accepts cases in all areas oflaw.14.Globalization:In the field of law, refers to law firms that establish offices in othercountries to service international clients.15.Independent paralegal: A person who does law-related work for the general publicwithout the supervision of an attorney.16.Indigent:Poor or needy.17.In-house counsel: An attorney who is an employee of a corporation and works in thecorporation’s legal department.18.Legal administrator: Experienced manager who is hired to manage a law firm and has theauthority of a managing partner.19.Legal clinic:Legal offices formed for the purpose of providing low-income people withfree, or low-cost, legal services.20.Limited liability company: A company formed to shield its owners and their assets fromliability arising from the misconduct of other owners or employees.21.Mega-firm: A firm that employs more than 1,000 attorneys and has branch officesthroughout the world.22.Multidisciplinary practice: A lawyer and a member of another profession practice togetherto provide both legal and nonlegal services to a client.23.Nonlegal subsidiary: A company that is owned by a law firm but provides nonlegalservices.24.Office manager: A person hired to assist a managing partner or legal administrator withmanagement functions of a firm.25.Outside counsel: A private law firm retained to do legal work for a corporation.

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6’s Manual26.P.C.:Professional Corporation.27.Sole practitioner: An attorney who practices law alone. A sole practitioner does notemploy other attorneys.28.Sole proprietorship: A business that has one individual owner who operates the firm. Asole proprietor may employ other attorneys.29.Virtual law firm:A professional law practice that is located online through a secure portaland is accessible to both the client and the attorney through the Internet.TEACHING TIPS AND SUGGESTIONSCommunicating the broad topic of the legal marketplace is challenging because each law officeis different. However, law offices have common elements. Concentrating on these commonelements will give students an understanding of factors inherent in most offices, which willprepare them for their paralegal employment experience.Nontraditional Paralegal Positions:Nontraditional paralegal positions should be discussed.Review the list of nontraditional paralegal positions on pages 24 and 25. Ask the class to identifyother positions not listed.Legal Specialties:Invite an attorney or paralegal that specializes in an uncommon specialty tospeak to the class about the specialty.Cybercrimes:Have the students search the newspaper or magazines for an article concerningcybertorts or cybercrimes. Have them discuss hackers and the penalty imposed for hacking orcybertorts. Discuss identity theft over the Internet.Virtual Law Office:Have the students discuss their experience, or the experience of someonethey know, with a virtual law office such as Legal Zoom or Rocket Lawyer. What are the prosand cons?Group Projects1. Break the class into five groups. Each group will demonstrate the five management styles:autocratic, democratic, managing partner, committee, and combination. Each group willrole-play the style. For example, the autocratic group demonstrates positive autocraticcharacteristics such as requesting input from subordinates and delegating responsibility.Negative autocratic characteristics are also displayed, such as authoritarian demands and notrequesting input from subordinates. The committee group demonstrates a committeemaking a management decision such as purchasing new computer equipment.2. Another method of role-playing the various management styles is to develop a problem anddemonstrate how each management style resolves the problem. For example, a valuedparalegal refuses to work on an accounting project. Each time the paralegal is reminded ofthe project, the paralegal states that the project will be completed on a certain date, but itnever is. The supervising attorney is frustrated and asks management for assistance.

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Chapter 1: The Legal Marketplace7Management has agreed to discuss the matter with the paralegal. The paralegal has notcompleted the project because she has dyslexia and cannot perform accounting functions.However, she is embarrassed about her problem and does not want anyone to know about it.Role-play management’s meeting with the paralegal and demonstrate how each style wouldresolve this problem. An autocratic style would resolve the problem alone; a democraticstyle would involve others; a committee style would discuss it among themselves. After theexercise is over, have the class discuss each style’s manner of solving the problem. Theseexercises demonstrate the various management styles and show how each style functionswith everyday problems. They also allow individuals in the group to express their creativity.Perhaps some members of the class have experience with the various management stylesand can communicate those experiences to the class through this exercise.Internet ProjectsThe Internet Resources section lists law firm websites, paralegal websites, and governmentwebsites. Assign a research project to review the sites and report their contents to the class. Whatare the differences between the websites of U.S. firms and foreign firms, if any? What are thesimilarities?Research the Freelance and Independent Paralegal websites found in the Internet Resourcessection. What are the qualifications of the paralegals? What are their specialties?Research how to apply for a federal job by visiting the Federal Jobs Internet Resources section.Access a legal blawg and list the subject matter of the topics discussed. What is the general“tone” of the blawg? What is each student’s general impression of the blawg?ANSWERS TO CHAPTER REVIEW QUESTIONS1. The four things that determine the structure and organization of a law office are size,specialty, management style, and form of office (p. 2).2. The growing complexity of the law and frequent changes in the law have forced attorneys tospecialize (p. 3).3. The five management styles used in most law firms are autocratic, democratic, managingpartner, committee, and combination (p. 6).4. The difference between centralized and decentralized management is that a centralized formof management exists when a firm is managed from one source as opposed to adecentralized form of management, which is managed in segments (p. 12).5. The most common management style found in law firms is managing partner (p. 8).6. The three classes of attorneys in a partnership are partners (owners), associates, andnontraditional attorneys (p. 14).7. A legal clinic is different from a private law firm because a legal clinic is formed for thepurpose of providing low-income people with free, or low-cost, legal services (p. 19).

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8’s Manual8. Outside counsel is a private law firm retained to do legal work for a corporation (p. 22).9. The head attorney in a corporate legal department is called General Counsel (p. 22).10. The management style of a corporate legal department must conform to the managementstyle of the whole corporation. A legal department is not autonomous in its managementdecisions. (p. 23).11. Two distinct managerial areas are addressed by any law firm: administrative (financial,office systems, and so forth) and governance (associates, client relations, personnel,marketing, and the like) (p. 6).12. The difference between a freelance paralegal and an independent paralegal is that afreelance paralegal works for attorneys and an independent paralegal does work for thegeneral public (p. 25).13. The federal government’s General Schedule is the government’s compensation schedule forfederal workers (p.28).14. A nonlegal subsidiary is a nonlegal business owned by a law firm (p. 33).15. A multidisciplinary practice is a firm that employs nonlegal professionals from otherdisciplines to offer its clients nonlegal services in addition to legal services (p. 31).EXAMPLES FOR DISCUSSION1. The Books Are in the SafeThis example illustrates the liability of all partners in a partnership situation. This examplealso illustrates the problems that can arise if sound management principles are not followed.In addition, it illustrates that some lawyers are reluctant to participate in management andwould rather delegate that responsibility to another. In this case, the two partners suffered asevere financial loss because of the fraud of the third partner and poor managementsystems.A. Many things went wrong with this partnership. David and James did not participate inmanagement and left all decisions to Edward. While this is often done in partnerships, itis important that all partners have knowledge of the actions and decisions of themanaging partner. All partners should have been familiar with the financial accountingsof the law firm.B. David and James had to pay the $3.1 million judgment because the partnership,including each partner, is liable for the debts and obligations of the partnership eventhough they did not personally participate in the fraud. Edward was ordered to payrestitution to the partnership but does not have to pay the judgment.C. The situation could have been avoided if all partners were familiar with the financialaccountings of the firm. If a system was in place where the partners reviewed thebillings before they were mailed, a problem could have been found in Dresser’s billings.D. This question will produce a discussion of review mechanisms. Many students mayanswer that they would require that the bills be reviewed. Questions to ask to promptadditional discussion would be:

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Chapter 1: The Legal Marketplace91.How much time should other partners spend on management functions if themanaging partner is delegated all management responsibility?2.Is there a duplication of efforts here that is not profitable for the firm?3.Would a review mechanism indicate a lack of trust of the managing partner?Tip:Have each student write out two or three things they would do to avoid this problem. Putthe suggestions on the board and discuss the pros and cons of each suggestion. After thisexercise, have the class choose the best solution.2. Management StylesThis question will allow students to contribute their personal experiences with the variousmanagement styles. If a student has not worked, ask him or her to identify people in his orher family or acquaintances to identify the various management styles. For example, couldthey apply a management style to their parents or other family members? This exercise willencourage students to identify the different styles in their daily lives.ANSWERS TO ASSIGNMENTS1. Individual student response.2. This assignment is designed to assist students in determining their ideal place to work. Todo this, students must identify their needs. Students are asked to list their needs and desiresfor an employment situation. This assignment is Part 1 of a two-part assignment. Thesecond part is Assignment Number 3.3. In this assignment, students are asked to apply chapter material to their employment needsand desires. They are to choose the type of office, management style, and culture that bestsuit their needs. Even though it is too early for many students to choose a specialty, theyshould indicate what area of law interests them the most. Students should keep thisassignment until they have finished their paralegal education to see if their ideal workenvironment has changed.4. Individual student response.5. Individual student response.6. Individual student response.7. A decentralized form of management would be effective for a firm that has large branchoffices located in other states. It would be ineffective for a firm that has one location, forexample, a firm whose departments are managed independently. A centralized form ofmanagement is effective for smaller firms with one location.8. Individual student response.9. A corporate legal department has only one client: the corporation. Therefore, it is notconcerned with client cultivation like a private law firm. A corporate legal department is notautonomous in its management decisions and could be more concerned with budgetconstraints than a private law firm. A corporate legal department’s budget is normally set bythe executives of the corporation instead of the General Counsel alone.

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10CHAPTER 2THE LEGAL TEAMNow that students have an overview of the structure and organization of a law office, adescriptionoflawofficepersonnelwillfamiliarizethemwitheachperson’sdutiesandresponsibilities. With knowledge of each employee’s duties and responsibilities, students willunderstand how the legal team functions and their participation on the legal team.OBJECTIVESAfter completion of this chapter, the student should be able to do the following:• Describe the titles, functions, and duties of each member of a legal team.• Describe the functions and differences of the different categories of attorneys in a lawfirm.• Describe the history, present position, and responsibilities of a law office administratorand a law office manager.• Explain the difference between an office administrator and an office manager.• Identify the various types of managers in a large firm.• Describe tiered paralegal programs.• Explain how different law office staff members contribute to a legal team.• Describe the types of outside services and consultants contracted by a law office and howthey contribute to the delivery of legal services.• List the many employment opportunities for a person with a paralegal education.CHAPTER OUTLINE AND SLIDE GUIDEI. IntroductionSlide 2.1 is the opening slide.II. Historical PerspectiveSlide 2.2 lists the elements that have contributed to the growth of the paralegal profession.III. Legal Team MembersA. AttorneySlide 2.3 introduces your discussion of the four categories of attorneys.1.Rainmakers2.Owners

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Chapter 2: The Legal Team113.AssociatesSlide 2.4 lists the four classes of associates.Slide 2.5 is an illustration of how to calculate a leverage ratio.4.NontraditionalSlide 2.6 lists the types of nontraditional attorneys.B. Legal AdministratorSlide 2.7 discusses the three differences between a legal administrator and an officemanager.C. Law Office ManagerSlide 2.8 is an illustration of Exhibit 2.2 in the book showing the hierarchy of legaladministrators and office managers.1.Financial Manager2.Human Resource Manager3.Technology Manager4.Administrative Manager5.Facilities Manager6.Marketing Manager7.Paralegal ManagerSlide 2.9 lists the Legal Administrator’s areas of responsibility.D. ParalegalSlide 2.10 begins your discussion on paralegals and discusses the common elements of adefinition of a paralegal.1.EducationSlide 2.11 shows the paralegal educational statistics as reported by theParalegalToday 2011salary survey.2.SpecializationSlide 2.12 illustrates the areas in which most paralegals specialize, according to the2011 Paralegal Todaysalary survey.3.Paralegal ResponsibilitiesSlide 2.13 shows where paralegals work according to statistics compiled byParalegal Today 2011salary survey. This is a good time to discuss tiered paralegalprograms, which is the topic of the next slide.Slide 2.14 illustrates tiered paralegal programs. When you have completed yourdiscussion, click on the forward arrow. The next topic, Salary and Benefits, willdisplay.Slide 2.15 lists the ten tasks most commonly performed by a paralegal.4.Salary and Benefits

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12’s ManualE.Law ClerkSlide 2.16 lists other law office personnel and introduces the topic for discussion.F.Legal SecretaryG. ReceptionistH. Other Personnel1.Law Librarian2.Calendar Clerk3.Paralegal Assistant4.Legislative Analyst5.Investigator6.Messenger7.Process Server8.Case Coordinator9.Clerk10. File ClerkI.OutsourcingSlide 2.17 lists some types of services that law firms outsource.1.Attorney Service2.Paralegal Service3.Employment Agency4.Bonding Company5.Records Search Company6.ConsultantsSlide 2.18 is the closing slide.KEY WORDS1.CPA:Certified public accountant.2.Equity:An ownership position in a firm. The owner is entitled to a portion of the firm’sprofits and is responsible for a portion of the firm’s losses.3.Expert witness:A person who testifies at trial on the basis of professional expertise.4.Leverage:To make money from the work of others.5.Leverage ratio:A formula used to identify the number of income-producing employees perowner.6.Liaison:A person responsible for communication between groups; spokesperson.7.MBA:Masters of business administration degree.

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Chapter 2: The Legal Team138.Nonequity:Not entitled to a portion of the profits and is not responsible for a portion of thelosses of a firm.9.Of-counsel:Attorney affiliated with a firm on a part-time basis.10.Outsourcing:A firm’s use of outside services for support functions.11.Permanent associate:An employed attorney who is not eligible for a partnership in, orownership of, a firm.12.Rainmaker:An attorney responsible for client development for a firm.13.Service of process:The personal delivery of summonses, complaints, or other legaldocuments to a defendant or respondent.14.Staff attorney:An employee of a law firm who has no advancement opportunities.TEACHING TIPS AND SUGGESTIONSLaw Office Personnel:Demonstrating the functions and duties of law office personnel is aneffective method of communicating the chapter material. Ask an attorney, legal administrator,paralegal, legal secretary, law clerk, and/or other law firm personnel to come to class and explaintheir duties and responsibilities. Or, you may have groups of attorneys come in and explain thedifferences in their functions such as a rainmaker, associate, partner, and staff attorney. Studentsenjoy guest speakers, and the material comes to life for the student.Tiered Paralegal Programs:Tiered paralegal programs vary among legal offices. Contact somelaw offices in your area that offer a tiered paralegal program and invite them to come to the classto describe their program. Large law firms, corporate legal departments, and private industry arethe most likely to have tiered paralegal programs. This activity will give students an idea of thecareer ladders available to them in your area of the country.The Paralegal Profession:Appendix B contains a list of national law related organizations andstate paralegal organizations. Contact them for information regarding their profession. They arealso a good source of speakers.Group Projects1. Break the class up into five groups. One group will be a small firm administrator, one groupa medium firm administrator, another group a large firm administrator, another anadministrator of a corporate legal department, and the last group an administrator in agovernmental agency. Each person will research and interview an administrator in his or herparticular environment and answer one of the following questions.Each group will report its findings to the class.A. What is the administrator’s job title?B. What is the administrator’s status within the law office?C. To whom is that person responsible?

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