Industry Focus: Attorneys

Article originally published in Nevada Business Magazine

The legal profession is unique in that it touches nearly every other industry at some point. As a result, businesses have a range of opinions regarding those that practice law. For attorneys in Nevada, reputation, professionalism and client expectations are all vital issues for the industry moving forward. Recently, legal executives met at the Las Vegas office of City National Bank to discuss their industry.

Connie Brennan, publisher and CEO of Nevada Business Magazine, served as moderator for the event. The magazine’s monthly roundtables bring together leaders to discuss issues relevant to their industries.

How big of an issue is reputation and professionalism within this industry?

John Steffen: What concerns me most, and a challenge that we all face, is the reputation of lawyers in general. We have lost, perhaps, our most valuable asset as problem solvers. We’re referred to as counselors of law but we do too little counseling, too little problem solving and often jump in a hurried way into protracted, needless and costly litigation, which is often a disservice for a client. That’s probably my biggest concern.

William Urga: I think we’ve lost a lot of the ability to pick up a phone and talk to each other and try to resolve issues. You see more antagonistic-type comments being made. Even in court, while you’re there arguing, instead of arguing to the judge and talking about the law, the issues or the facts, you somehow are turning on the attorney a lot. That is troublesome because we are more than used car salesmen; we’re a profession and we should act like professionals. That’s something we need to be pushing everyday. That’s a big deal for me. I think being a professional is very important. Your word is your bond, and you stick with it.

Michael Feder: I agree with you and I’ll tie that into one of the things I think we’re not doing as well as we used to, and it’s tied into professionalism. One of the things we’re having a harder time doing, and I’m seeing a lack of in younger attorneys, is that lack of professionalism because they’re not being trained. They’re not being trained how to act with other attorneys, interact with other attorneys or even clients. It’s something we need to start focusing again on, taking the time with younger attorneys so they understand what it means to be an attorney and be a professional.

Barbara Buckley: I do think professionalism is a big issue. I had a younger attorney go to court this week, and the older, more mature, attorney engaged in some trash talking of her and her abilities. The flip side of that is, I think lawyers like us, when we argue against a younger lawyer, need to, at the end of it, stick our hand out and say, “Congratulations, what a good job you did.” That is how you [create] the type of lawyers we want to see.

Glen Truitt: There’s a civility issue that’s been creeping up in Nevada. I’m not sure if it belongs to the young lawyers or the older lawyers, but there is a civility problem. I think it does start with senior lawyers to cut it out and not carry grudges. I’ve got people that it’s easy to be mad at, but it does go to us to try and lead the way, even if in the face of our own colleagues being spirited or uncivil, to try to respond in a civil way, to not propagate. Young lawyers will see that and they just think that’s the way to win. We have to stop because we’re getting a reputation.

Joshua Reisman: I don’t perceive a lack of civility in the Nevada bar and perhaps [it’s] because I practiced in New York before I came to Nevada. In all honesty, I’ve litigated against most of you, you’ve all been collegial toward me and I believe I’ve been collegial towards you. I’ve never had a problem getting an extension if necessary. I very rarely had people that have lied to me or misrepresented something. I don’t sense it and yes, we have to confirm things in writing, but I think that’s just the nature of a larger bar. There truly was a time where everybody really knew each other—not just as colleagues but as friends—and you could do things on a handshake. But, the fact that you can no longer do things on a handshake, that you don’t necessarily know each other and have a built up level of trust, that doesn’t mean you’re not civil towards one another.

Do judges play a role in professionalism?

Buckley: I help manage, mentor and guide 55 attorneys, and the majority of them practice in family court. I do reserve a little of my criticism for the judges because, in federal [or] civil court, they would not put up with the type of things you see everyday in family court. It is a shame for litigants to have to go into courtrooms that are less than professional. I blame lawyers, of course, for their conduct but I also lay some blame at the judiciary. Having an elected judiciary, sometimes they don’t wanna come down on folks. But, we’ve seen great examples of elected judges who, in a very kind way, ensure that civility reigns in our courtrooms. That’s what every person has the right to expect in a court they attend.

Urga: I’ve harped on the judges in the past. If they’d start sanctioning people for doing that kind of thing, I think it would stop or slow down.

What kind of expectations does the digital age place on this industry?

Jeff Silvestri: They know you’ve got a cell phone, email and now text. My clients [contact me on my] work phone, then my cell phone, then I get a text, then I get an email. They want to hear back from you and it’s hard to keep up with those demands when you’re trying to service your other clients and run a practice. What they’re asking for is a lot more than just, “I’ve got a problem [so] I’m calling you now.” They want you to come to them and say, “You’ve got a problem,” or, “I see something that you might do differently.” So you’re [going to need] more of the counseling that they’re looking for and if you can’t provide all of it, they’re gonna go find another lawyer.

Joel Henriod: I think the biggest challenge right now, both in the law and then administrating business of a legal practice, is maintaining a sense of balance and perspective. [Maintaining] balance between the needs of clients, the market and the inventory of services that the firm provides so that you maximize efficiency. [You must have] balance between putting in enough resources to maintain excellence in what you already do, but investing enough in the future and the capacities of the future. [You must maintain] perspective between true growth opportunities and those things that are really a shiny new tool of the day.

Has the way attorneys bill clients changed in recent years?

Silvestri: Clients want their jobs done fast, cheap, quick, good and professional and lawyers are compensated by the hour. Our incentives aren’t always in line with our clients’ incentives and that creates a big problem. You see a lot of clients bringing work in-house where they can manage their costs and manage their work a lot more efficiently because I don’t think lawyers are necessarily responding as fast as we should to what our clients are asking for.

Ron Thompson: The flat fee billing system, billed hours, relatively speaking, in our industry [is] a new concept. We all hear about the flat fee billing concept and how it’s gonna take the industry back or the old system of retainers that were not refundable. But, you’ve got to wonder if the answer is a return to the past because the billed hour does create a perverse conflict of interests that we can’t resolve.

Mandy Shavinsky: We just hired a pricing manager at my firm, because lawyers are not great business people, as we all know. These folks take a look at different flat fee models and different things we’ve done in the past, with input from us, to try to predict what the correct flat fee should be. The interesting thing is, in ninety percent of the cases where people ask for a flat fee, you put an enormous amount of work into different structures, and the client comes back and says, “Well, how about you just give me a 10 percent discount?”

Henriod: We found that it may work to flat fee particular services in a case even if you can’t flat fee the entire case itself. For instance, you can flat fee consultation but not all of the motion work that may need to be done, not knowing what’s gonna happen in the case. But, I can flat fee what it’s going to cost to call me at any time you need to. Generally, that works out over time. Most clients don’t exploit it but what that does is, at least, caps their cost foregoing the expense of giving you a call.

Truitt: There’s the chance that a transaction or compliance matter will explode into something four or five times [as large, but it] is pretty limited, so we try to create modules. Our least common denominator, our least popular approach is hourly billing. If we go on long enough, we’ll try to be creative. You want to create that rapport, you want to try to be a problem solver. First you have to understand what the problem is in their business. There is a big investment but if you say, “Look, we’re gonna go for 90 days, or 60 days, to figure out what you need and if we can work out an alternative fee arrangement, we’ll try to get there.” There’s a two-way trust. Them paying up front for the initial work is important. If they won’t pay, then they just want a discount.

Feder: It’s very difficult, in litigation, to forecast everything that’s going to happen. The judge or your opposing counsel can change so many different things. I’ve seen where I’ve tried to flat fee and, you always overestimate, and the moment the client realizes, “Oh, I’m paying more in a flat fee than what really happened.” Clients will come back after a flat fee and say, “Let’s go back to hourly.” A lot of times our clients don’t want to do the flat fees because [of] some of the uncertainties as well.

Are the pro bono needs of the community being met?

Buckley: The short answer is no. The state bar and supreme court Access to Justice Commission just did a legal needs assessment. While we have a large number of lawyers serving the business community and high-income folks, the situation on the lower end of the spectrum is much different. In the study, it quantified the legal need and showed that 3 out of 4 people in legal need are getting turned away to go to court themselves. While, in some sense, I feel legal aid and the infrastructure has improved a lot in the thirty years I’ve been with legal services, the number of people who are at or below 200 percent of poverty is just a staggering number. There’s probably 150 clients right now on our waiting list. These are people who are screened both financially and for merit, so the legal needs are pretty staggering.

Duane Frizell: For me [the biggest challenge is] being able to keep up with the demand for legal services, and I think that’s especially true for those that are not proficient or not fully proficient in the English language, and even more especially true for pro bono clients. A large part of my clientele are Chinese speakers and the legal needs they have go beyond my practice areas. Being able to find competent legal counsel to represent them, and to advise them, in their language can be very difficult. I also speak limited Spanish and recently, through legal aid, I had an appeal of a Spanish-speaking client in rural Nevada, and before the Nevada Supreme Court, we were successful. Between my limited Spanish and some translators, I was able to effectively represent this client. However, the case has been remanded back to district court. Unfortunately, we’re having a very difficult time locating Spanish-speaking council that will take this case pro bono in rural Nevada.

How has the legal industry changed in recent years?

Thompson: I think one of the things that’s interesting is the advent of the cannabis industry. I know everybody here is aware of the problems it’s creating for the banking industry, being able to handle the cash involved. It’s not just for the owners of the cannabis businesses, but it’s also their landlords, their lenders. I suspect some of us have runners running all around the city with large volumes of cash. It’s just a matter of time before some sort of crime happens that affects our industry. Congress has been sitting on a bill for a long time, but I think it’s a hole right now that is going to be a problem at some point in the future.

Truitt: My practice was 100 percent healthcare until two years ago, and then a cannabis transaction walked in the door. It has been transformative, not only for the city but for the profession. There was some concern when the bar said, “Hey, are you sure you can do this? Can you bank this money?” We’ve worked our way through that. There’s a tremendous opportunity to lead. In Nevada, we are one of just a handful of recreational use jurisdictions. People look to us to lead. We’ve had a tremendous amount of success. We’ve had the best first year of any jurisdiction that legalized. We beat our tax target by a double-digit percentage, $74 million last month. We need to serve that business community, they need it. It’s highly regulated, just like healthcare. It’s transformed the way we practice law, because it’s a very unique market and I’m grateful for it because it’s brought jobs, it’s brought a ton of work, a ton of transactions. It’s been a real boon to the professional economy here and we’re in the lead, nationally. There are Nevada lawyers speaking nationally at cannabis conventions.

Has the commoditization of legal service been an issue?

Shavinsky: The economy is much better today than it was two years ago. Notwithstanding that fact, I still think one of the biggest challenges facing the legal industry is the increasing commoditization of legal services. Work that used to be done by associates, paralegals or even young partners is now being done by document review companies overseas or packaged up and done by companies that don’t necessarily specialize in core legal services. It’s something that we have to learn to deal with. It really emphasizes the fact that, if you’re like everybody else, you’re gonna fall further and further behind. You have to build really strong relationships with your clients and maintain those relationships. You have to be accessible, more responsive and your clients have to see the value that you add to them, to their practice and their lives. If they don’t, you’re going to look just like everybody else and it’s that much easier to go to somebody else who’s charging less.

Silvestri: My concern and issues are similar, dealing with shifting customer and client demands. For the firms that are all in this room, we deal mostly with businesses and they have different ways they want to do business now than they had three, four, five or ten years ago. If you can’t differentiate yourself, create value and help them in a different way, they’re gonna find somebody else. Lawyers aren’t necessarily good marketers or business development people. We’re not likely to necessarily get out, go have meetings and develop those relationships. That’s a huge problem, especially as companies take more work in-house or send it overseas. The work that used to come to us on a regular basis might not be there so you’ve got to find ways to provide different kinds of value to clients.

馬馬虎虎 (“Horse, Horse, Tiger, Tiger”) Avoiding Mediocrity with Your Chinese Clients

The Chinese say, “horse, horse, tiger, tiger.” Neither one nor the other. Mediocre. An understanding of pertinent issues helps U.S. businesses avoid mediocrity in the important Chinese market. Between 2000 and 2015, Nevada’s Asian population doubled.2 In the U.S. as a whole, from 2007-2015, the number of employees at Chinese-owned businesses increased 30 fold.3 From April 2017 to March 2018, Chinese nationals purchased $30.4 billion in residential property, the most of any nationality.4

Many know that, in China, the number 8 is good (prosperity), and the number 4 is bad (death). But business people need to know more than that. It would be an oversimplification to say that all Chinese have the same level of U.S. business acumen; however, I have observed certain trends, especially for those from the People’s Republic of China (PRC).

Deal Closing: One issue is getting the deal “inked.” Given their country’s non-independent, nascent legal system, PRC nationals often view professionals, such as attorneys, accountants and real estate agents, as unnecessary. Instead, they tend to rely on their relationships (關係). With this focus, they may disregard legal formalities or opt for simple write-ups of general terms. Businesses have been sold with nothing more than scribbled terms on the back of scratch paper. Misunderstanding the importance of U.S. contract clauses, Chinese manufacturers have fallen prey to unfavorable terms in multi-million dollar deals.

Another issue is getting the cash—Chinese nationals’ preferred method of payment. Limitations are imposed as part of the PRC’s “Anti-Corruption Campaign” (反腐运动), which some say targets those disfavored by the regime.5 This campaign frightens off Chinese investors who do not want to run against the political winds or get branded as “corrupt” for simply investing in the U.S. The campaign also limits capital flow. Chinese nationals may only transfer a total of $50,000 out of China per year and may only withdraw $15,000 from Chinese banks when they are overseas.6 Getting money out of China can be extremely complex, especially if the amounts exceed general limits.

Business Formation: PRC nationals often prefer corporations because of their lack of familiarity with LLCs and other business entities. They may hear of the favorable tax treatment of S-Corporations, but non-resident aliens may not be S-Corp. shareholders.7 For Nevada state business licenses, the annual fee for a corporation is $500; the fee for other business types is only $200.8

Real Estate: Under the Foreign Investment in Real Property Tax Act (“FIRPTA”), a buyer of real estate may be liable for taxes realized by the seller, if the seller is a non-resident foreign national and if 15 percent of the sales price is not withheld.9 The foreign seller also faces difficulties in getting the withholding reduced or refunded. FIRPTA problems are legion when sales are closed informally, without escrow. Even closing through an escrow company does not guarantee FIRPTA compliance. Many U.S. real estate professionals do not fully comprehend FIRPTA’s landmines.

Immigration: Many Chinese nationals hope to get a green card by investing money in the U.S. through the EB-5 visa program. However, EB-5 requirements are rigid, including a minimum investment of $1 million ($500,000 if in a targeted employment area), and the investment must create at least 10 full-time positions for qualifying employees.10 Chinese investors need to plan ahead before sinking their money into any business venture.

Understanding issues like these helps companies provide services that are customized to Chinese business (and legal) needs.

Article originally published in Nevada Business Magazine

1 – In addition to his J.D. degree, Mr. Frizell has a B.A. in Chinese and an M.A. in Asian Studies. He is bilingual in English and Mandarin Chinese.
2 – Las Vegas Sun (May 29, 2015).
3 – Pew Research Center (Dec. 14, 2017).
4 – National Association of Realtors (2018).
5 – The Economist (Dec. 13, 2014).
6 – PRC State Administration of Foreign Exchange (Dec. 30, 2017).
7 – 26 U.S.C. § 1361(b)(1)(C).
8 – NRS 76.130.
9 – 26 U.S.C. § 1445(a).
10 – 8 C.F.R. § 204.6.

Anatomy of a Lawsuit

This is a brief outline of a lawsuit. Bear in mind: Each case is different; the possible procedural issues are infinite; there are numerous court rules and statutes that give rise to numerous, different procedural possibilities; and it is impossible to predict all of the procedural issues that may arise in a given case.

In general, however, there are three stages to litigation: (1) the pleading stage; (2) the discovery stage; and (3) the trial stage. In addition, there may be settlement negotiations and an appeal. Each of these items is discussed in more detail below.

Stage 1—Pleadings

In its strictest sense, the term “pleadings” refers to a Plaintiff’s complaint and a Defendant’s response. In the pleading stage, the Plaintiff files a complaint and serves process (court papers) upon the Defendant. The Defendant then has three general options: ignore the complaint and file no response; file an answer; or file a motion to dismiss (or other motion). If the Defendant ignores the complaint, the Plaintiff could get a default and default judgment against them. From a financial perspective, that would be the cheapest way for a Plaintiff to dispose of the lawsuit. If, as in most cases, the Defendant simply files an answer, the pleading stage would be over and the case would move into the discovery stage. If, on the other hand, the Defendant files a motion to dismiss (or other motion), the Plaintiff would, at a minimum, have to file an opposition to the motion (along with a brief supporting its position) and perhaps appear for a hearing in court. If the court ultimately denied Defendant’s motion, they would have to file an answer, and the case would then move into the discovery stage. (Some courts require the case to go to discovery even if a motion is pending.) For the pleading stage, Defendants’ filing a motion to dismiss or other motion would be the most expensive scenario.

Stage 2—Discovery

“Discovery” refers to the time when attorneys collect evidence and identify witnesses. Attorneys request documents and information, they serve subpoenas on third parties, and they take depositions. The discovery stage begins soon after Defendant files their answer. At that time, the attorneys meet and discuss a potential discovery plan (i.e., dates, events, documents, witnesses, and deadlines for discovery). Usually, the parties agree on a plan and submit it to the court, which ultimately accepts or rejects it. Regardless, the court will ultimately issue a discovery order. The parties may then “discover” information, documents, and other items. Right off the bat, the parties must disclose relevant documents, witnesses, and other information to each other. They may also request additional documents and information from other parties in the form of written discovery requests, including interrogatories, requests for production, and requests for admission. They may take the depositions of other parties or even non-parties, such as fact witnesses. They may request documents from non-parties in the form of subpoenas. In the discovery stage, the parties disclose relevant experts—such as appraisers, accountants, economists, and the like—along with their experts’ reports. (Experts are not cheap.) In discovery, the parties may file all sorts of motions, such as motions to compel discovery responses from the other side, motions for protective order to keep them from having to disclose documents or information, motions for summary judgment to get rid of some or all of the opposing party’s claims or defenses, and so forth. Discovery is generally the longest and most expensive stage of litigation.

Stage 3—Trial

The trial stage begins after discovery closes. Most of the trial stage is spent preparing for trial, including culling all the file documents, identifying and marking exhibits, subpoenaing witnesses to appear at trial, reviewing deposition transcripts, outlining direct and cross-examinations of witnesses, preparing legal briefs, preparing questions for the jury panel, outlining opening statements and closing arguments, and so forth. There may be some motions filed in the trial stage, such as motions in limine to keep documents and information out of evidence (and away from the jury). Finally, there is the trial. Trials generally consist of the following: a hearing on pre-trial motions and other trial matters, jury selection, opening statements, Plaintiff’s presentation of evidence and witnesses, Defendant’s presentation of evidence and witnesses, closing arguments, and jury deliberations. Oral motions are made and ruled upon by the court throughout the trial. Trials require a lot of work in a short period of time. Thus, while the trial stage may not be as expensive as the discovery stage as a whole, it usually will result in very large monthly bills.

Settlement Negotiations

The overwhelming majority of civil cases settle. Throughout all three stages of litigation, settlement negotiations may (and usually do) occur. Parties can settle anytime, even after trial. Nevertheless, in order to settle, the parties must agree to settle, and they must agree to the terms of settlement. It is often said that “a bad settlement is better than a good trial.” One reason is the expense. Litigation is extremely expensive. Regardless of what stage a case is in, a settlement stops the case dead in its tracks. In this manner, parties can minimize their attorney fees and court costs. Settlement also allows the parties to control the result. No one can guarantee what a judge or jury will do. There is always a gamble in taking a case to trial. With a settlement, that uncertainty is eliminated.


After the final decision is rendered at trial, the aggrieved party (usually the party that lost) may file an appeal. The procedure for an appeal is completely different. An appeal is brought before an appellate court, while the three stages of litigation discussed above are brought before a trial court. An appeal usually does not involve as much time (or expense) as a case in the trial court. However, avoiding an appeal is another benefit of settlement.

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