Practical Law Office Management 4e Cynthia Traina Donnes - Test Bank

Practical Law Office Management 4e Cynthia Traina Donnes – Test Bank

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Chapter 1: The Legal Team, Law Practices, and Law Firm Governance 7
© 2017 Cengage Learning ®
. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
c. Many firms have a geographic service area strategy, which may include being
local, statewide, regional/multistate, national, international, or industry
specific.
III. Law Practice Organization Structures
A. Legal Forms of Private Law Firms
1. Sole Proprietorship—In a sole proprietorship, the proprietor—in this case, an
attorney—runs the business, personally receives all profits, and is personally
responsible for all losses and liabilities of the law office. A sole proprietorship is
a legal structure and should not be confused with a sole practitioner. A sole
practitioner, for instance, does not have to use the sole proprietorship form of
legal structure.
2. Partnership—The partnership legal structure allows two or more attorneys to
associate themselves together and to share in the profits or losses of the business.
All the partners are jointly and severally liable for the actions of the firm and for
the debts of the partnership.
3. Professional Corporation—The professional corporation legal structure allows a
single shareholder or group of shareholders from the same profession, such as
attorneys, to share in the outcomes of a business. Unlike a partnership, in which
partners are liable for the debts of the partnership, shareholders are not personally
liable for the debts of the corporation.
4. Limited Liability Company—The limited liability company is a legal structure
recognized by 30 states that allows for limited personal liability of company debts
for owners, but is treated like a partnership for tax purposes.
B. Private Law Firm Management Structures
1. The Powerful Managing Partner—The powerful managing partner management
structure is one in which a single partner is responsible for managing the firm.
The managing partner is responsible for the day-to-day operations of the
partnership, and partners vote on major firm decisions. The powerful managing
partner structure is autocratic, in that power rests with one person.
2. Rule by All Partners/Shareholders—Rule by all partners/shareholders is a
management structure in which all partners/shareholders are included in decisions
that affect the firm. This is a democratic structure.
3. Rule by Management Committee/Board—The rule by management
committee/board management structure uses a committee structure to make
management decisions for the firm. Common committees include the library
committee, automation committee, finance committee, and personnel committee.
C. Corporate, Government, and Legal Aid Organization Structures
1. Corporate law departments are either centralized, meaning the office is located in
the corporate headquarters and provides services to the whole company, or are
decentralized, with separate attorneys located throughout the organization.

8 Chapter 1: The Legal Team, Law Practices, and Law Firm Governance
© 2017 Cengage Learning ®
. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
2. Many government practices are decentralized, with each agency having its own
legal department.
3. Legal aid practices, because they are usually nonprofit corporations, are overseen
by a board of directors. The board of directors hires an executive director to
operate the organization.
TEACHING SUGGESTIONS
For students who are new to law offices and the legal industry, this is a particularly important
chapter because it introduces them to all of the players in the legal team. If possible, you may
want to include personal examples of your interaction with others on the legal team and explain
their functions in real, practical ways. This chapter also touches on important topics such as the
roles and responsibilities of the paralegal and the different types of law practices and structures.
Many students will be unfamiliar with corporate, government, and legal services/aid practices, so
you might want to provide examples of some of these within your area that you have had
experience with.
1. Use the opening example at the beginning of the chapter to discuss the fierce competition
that law firms of all sizes are currently faced with, and the need of firms to focus on law
office management and client satisfaction. The example also shows that good management
is necessary for the survival of any legal organization, and that even when there are
problems, there are management solutions available to solve them.
2. Discuss the “legal team” concept, and how important each member of the legal team is for
providing quality legal services to clients and how no one individual or person is greater
than the team.
3. Discuss the concept of administrators, and how they differ from office managers. Provide
examples of the millions of dollars that law offices spend on marketing efforts, management
consultants, technology, human resources, and training and development to better manage
and promote their firms. Administrators have had a substantial impact on the legal
profession and have made the management side of a law office almost as important as the
substantive side of practicing law.
4. Students will be interested in your paralegal background, including what your roles and
responsibilities have been as a legal professional and how you generally view the paralegal
profession, so let them know about yourself with personal insight and stories.
5. Some students will inquire about the difference between legal secretaries and paralegals. It
might be helpful to point out the “team concept” here and to stress that both have their own
roles and responsibilities, and are different from each other. Explain that there is friction
between legal secretaries and paralegals from time to time.
6. Point out the differences, from your own unique view, between private practice, corporate
practice, government, and legal aid/clinic practices as a paralegal or utilizing paralegals. An
alternative would be to invite a corporate, government, or legal aid/clinic paralegal to talk to
your class and discuss how his or her office operates, and how it is different from a private
law office. Another alternative would be to require that each student interview a corporate
paralegal, government paralegal, or paralegal/legal assistant in a different specialty. You
could also have students interview an attorney regarding how his or her law office uses
paralegals, and what type of management structure is used.

Chapter 1: The Legal Team, Law Practices, and Law Firm Governance 9
© 2017 Cengage Learning ®
. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
7. Discuss the internal and cultural differences between how small firms, medium-size firms,
and large law firms operate, from your own experience. You may also want to distinguish
between the different types of internal management structures, regarding how decisions are
made between them. You may also want to discuss the difference between plaintiff- and
defense-oriented firms, and explain how mergers are relatively common in the legal
industry.
8. Discuss how private law offices have drastically changed over the last 20 years, going from
being local in nature to having to define their geographic service area and strategy—
including either being local, statewide, regional/multistate, nationwide, international, or
industry specific. Describe how the Internet, technology, and national/international firms
have changed this.
9. It may be interesting for students to read about how the legal profession has changed since
the early 1970s. There are several magazines and Web sites, such as the American Bar
Association’s Web site, that provide articles on this topic. An article in the July/August 2004
issue of Law Practice provided some interesting comparisons between the number of
lawyers, the consumer views of lawyers, the practice as a whole, and the inclusion of other
professions and technology. A few noteworthy points from the article along with current
updates from ABA statistics on lawyer population and U.S. Census Bureau are listed in the
accompanying table.
LEGAL PROFESSION IN THE UNITED S TATES , 1970 S V. 1990 S V. 2000 S–2015
1970s 1990s 2000s–2015
Fewer than 500,000 lawyers Between 750,000 and
1 million lawyers
1 million to over 1.3 million
lawyers
One lawyer for every 430
people based on average
population of 215 million
Average of 1 lawyer for every
300, people based on average
population of 265 million
One lawyer for every 262
people, based on average
population of 301 million
Lawyer-to-secretary ratio of
1:1
Lawyer-to-secretary ratio of
3:1
Lawyer-to-secretary ratio of as
much as 4:1
Lawyer-to-paralegal ratio—
paralegals seldom used
Lawyers-to-paralegal ratio of
4:1 to 5:1 when utilized
Lawyer-to-paralegal ratio can
range from 4:1 to 9:1,
depending on firm size
© 2017 Cengage Learning ®
.
10. The following are some interesting trends in the legal industry related to this chapter:
• Mergers and consolidations continue to occur regularly.
• Globalization is a major factor in the U.S. legal industry. It was reported that 36 of the
top 250 law firms in the country now have offices in China.

10 Chapter 1: The Legal Team, Law Practices, and Law Firm Governance
© 2017 Cengage Learning ®
. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
11. The Sushi Memo—The New York Times published an article in October 2003 about a three-
page memo that was written by a New York City paralegal to her attorney, a partner,
regarding the quality of sushi restaurants in New York City. The law firm has nearly 500
attorneys, and the partner wanted to know what options were available because he received a
mediocre order at a sushi restaurant. The memo was controversial in the paralegal
community, because it was argued that the attorney was misusing the paralegal’s time; the
memo stated in part:
As requested, please find below selected alternatives for ordering sushi in mid-
town New York City. The alternatives have been categorized into two distinct
groups: (i) those available on Seamless Web Professional Solutions (“Seamless
Web”) and (ii) other sushi restaurants from which delivery to PWRW&G LLP’s
office is available.
Most restaurants in the area claim to receive fish deliveries daily. However, I
have learned that Mondays should be avoided, as fresh fish is generally delivered
on Tuesdays. While a few of the restaurants included on Seamless Web offer what
might be called “quality” sushi, their quality is clearly not comparable to the
sushi available from some of the top-notch restaurants in New York City. . . .
The question is whether this is a regular type of abuse of paralegals or a simple aberration.
You may be able to use this as a teaching tool to discuss which kinds of assignments are
proper, and what paralegals can or should do about improper assignments.
ANSWERS TO TEST YOUR KNOWLEDGE
1. A partner/shareholder is an owner of the law firm, whereas an associate is an employee of
the firm and does not share in its profits or losses.
2. Equity
3. Manage or run the operation of the law firm
4. An associate attorney
5. Ten
6. Nonequity
7. Contract attorney
8. Counsel
9. Medium, large
10. General management, finance and accounting, human resources, marketing, and computer
systems
11. True
12. Paralegals
13. Freelance/contract paralegals
14. True
15. False

Chapter 1: The Legal Team, Law Practices, and Law Firm Governance 11
© 2017 Cengage Learning ®
. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
16. True
17. Nonexempt
18. The Unites States Supreme Court recognized that paralegals could bill for their time at the
prevailing market rate.
19. Smaller
20. Private, government, legal services/aid, corporate
21. General counsel
22. Legal services/aid office
23. Private
24. Boutique
25. Professional corporate, partnership, limited liability company
26. Managing partner or powerful managing partner
27. Managing partner, rule by all partners/shareholders, rule by management committee
ANSWERS TO PRACTICAL APPLICATIONS
1. In Joerger v. Gordon Food Services, Inc., 224 Mich. App. 167, 568 N.W.2d 365 (Mich.
App., Jun 13, 1997), the court was interpreting a specific state statute regarding what types
of legal fees were recoverable. The court found that neither the statute nor court rule
specifically allowed for the recovery of paralegal fees (even though there was recovery for
attorney fees), so the court did not allow recovery. It is an interesting case, and even though
the court found against recovery, the court does a nice job of stating both sides of the
argument and recognizing that many other courts and states allow for recovery of paralegal
time.
2. The paralegal may want to approach Pat privately, and at a time when Pat is not swamped
with other work (if possible). The paralegal may explain that his or her supervising attorney
has specifically instructed him or her that he or she is not to do administrative/clerical work,
and that these tasks are to be given to her. The paralegal should try to negotiate a mutually
convenient time for the work to be finished, as well. In addition, the paralegal should tell Pat
that he or she wants to be a team player, and that if Pat has something that she needs help
with from time to time, and as long as it does not interfere with a major deadline, he or she
will be happy to assist Pat.
3. This is a personal decision that each paralegal has to make.
4. This assignment should be graded on how well the student followed the directions and the
quality of the writing.
ANSWERS TO “ON THE WEB” EXERCISES
1. Paralegal Compensation—The point of this exercise is for the students to use the Internet to
find paralegal compensation data. Salary.com is a great Web site that is easy to use and has
good salary-related information. As long as the site is operational, it currently provides one

12 Chapter 1: The Legal Team, Law Practices, and Law Firm Governance
© 2017 Cengage Learning ®
. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
of the best free resources for compensation data on the Internet. The exercise lists a number
of other possible sources to research. The second-best source is the National Association of
Legal Assistants (NALA) National Utilization and Compensation Survey Report. This is
updated roughly every couple of years. This report contains regional data and data based on
years of experience. The other sources listed in the exercise only provide national data.
2. Law Firm Web Sites—This is a good general exercise to allow the students to see and
experience different law firm Web sites, and learn about the great diversity among law firms
regarding size, practice area, strategy, and so forth.
3. Legal Service/Aid Offices—The exercise is designed to show students that there are
different types of practices, including legal service offices, and that they provide a needed
service to communities.
ANSWERS TO PROJECTS
1. Compare and Contrast Paralegal Definitions—There is no “right” answer regarding this
project; it mostly comes down to how well the student researched, analyzed, and wrote the
assignment. All of the definitions generally recognize that paralegals are qualified through
education, training/knowledge, and experience to perform certain legal work. What is
interesting is that the American Bar Association (ABA) and National Association of Legal
Assistants (NALA) specifically state that either a lawyer is responsible for the paralegal’s
work or the paralegal works under the supervision of an attorney. Neither the National
Federation of Paralegal Associations’ (NFPA) nor the American Association for Paralegal
Education’s (AAfPE) definition includes this.
2. Paralegals and L:egal Assistants—Exempt or Nonexempt under the Fair Labor Standards
Act. Following are succinct answers to the questions listed in the project.
a. What is the FLSA? The FLSA is a federal law originally passed in 1938, during the
Depression. It sets forth basic principles on how employees are to be paid. At the time,
some employers were taking advantage of workers and subjecting them to extremely bad
working conditions, long hours of overtime, and minimal wages. The FLSA, among
other things, defines the 40-hour workweek, sets federal minimum wages, sets out how
overtime will be paid, and places restrictions on child labor. All workers not exempted
under the FLSA must be paid at one-and-one-half times their normal hourly pay for all
hours worked over 40 hours in a workweek.
b. What is the difference between an exempt and nonexempt employee? An exempt
employee does not receive overtime pay, but a nonexempt employee does receive it.
c. What are the so-called “white-collar” exemptions to the FLSA?
i. Executive Exemption—Primarily manages the enterprise, agency, department, or
subjective area. Usually requires that 50% or more of the employee’s time is spent
managing and supervising at least two or more full-time employees, including
hiring, firing, evaluating, and so forth.
ii. Administrative Exemption—Primarily performs office work related to management
or general business operations of the business (usually 50% or more of the time).
Requires actual discretion and judgment.

Chapter 1: The Legal Team, Law Practices, and Law Firm Governance 13
© 2017 Cengage Learning ®
. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
iii. Learned Professional—Primarily consists of performing work requiring advanced
knowledge that is predominantly intellectual in character and requires exercise of
discretion and judgment.
iv. There are also exemptions for creative professionals, professional programmers,
and outside sales.
d. What is the position of the U.S. Department of Labor regarding whether paralegals or
legal assistants are exempt or nonexempt under the law, and why? The Department of
Labor has recently stated that “paralegals and legal assistants generally do not qualify as
exempt learned professionals because an advanced specialized academic degree is not a
standard prerequisite for entry into the field. Although many paralegals possess general
four-year advanced degrees, most specialized paralegal programs are two-year associate
degree programs from a community college or equivalent institution.” In the past, the
U.S. Department of Labor has also stated that paralegals/legal assistants do not exercise
enough independence, discretion, and judgment to qualify as exempt, arguably because
they must work under the direct supervision of an attorney. In addition, the regulations
of the FLSA now state that paralegals or legal assistants are generally to be treated as
nonexempt.
e. What positions do the national paralegal/legal assistant associations take on the matter?
They generally state that (1) the determination of exempt or nonexempt is the
responsibility of the employer, and (2) whether a paralegal/legal assistant is or is not
exempt does not diminish the profession or the value of paralegal education or
professional certification.
f. What is your opinion regarding this matter, and why? This is the opinion of the student,
but it obviously should be well reasoned.
CASE REVIEW EXERCISES
In the Matter of a Member of the State Bar of Arizona, JEFFREY PHILLIPS, Attorney,
No. 13362, 244 P.3d 549 (2010)
This is a truly interesting case, and I highly recommend that you assign this case to your
students. The court spends a great deal of time discussing the management practices of the firm
and the ethical concerns that are raised because of them. Because this is a management book, I
felt it was important to tie together management practices (including marketing and how they
used support staff) and ethics. The law firm in the case was overzealous regarding the business
side of making money and squeezing each dollar of possible profit out of the law business. The
end result of this one-sided strategy was that the firm neglected its clients and failed to provide
them with competent, ethical legal services.
1. The court noted, under Section F, Appropriate Sanctions, that Phillips’s conduct and
disciplinary history warranted a more severe sanction than did Arentz’s because he had no
prior disciplinary history. Phillips’s disciplinary history also involved the same type of
supervisory shortcomings that occurred with this case.
2. The firm violated most of the practices of good management in favor of profits.

14 Chapter 1: The Legal Team, Law Practices, and Law Firm Governance
© 2017 Cengage Learning ®
. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
3. The firm could have corrected the strategy by being directly involved with the initial client
meetings instead of delegating the duty to the legal administrator. Phillips, who was no
longer handling cases, could have been more proactive in the law firm management and
supervision of Arentz and Teague. More control over case volume per attorney could have
been provide to ensure adequate client representation. Management personnel could have
been more selective in the types of cases they took (instead of taking them all), and by
focusing on the cases that were the most profitable.
4. The hearing officer found that legal administrators were paid bonuses based, in part, on the
number of clients retained, violating ER 5.3. Legal administrators also used “high-pressure
tactics” and intimidation practices to attempt to dissuade a client from terminating P&A’s
representation. Because legal administrator bonuses were tied directly to client retention, the
hearing officer found that the incentives motivated the misconduct, and therefore concluded
that both Phillips and Arentz violated ER 5.3(a).

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