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Law Firms in the Cross-Hairs of Accounting Scrutiny?

In a recent The Economist piece, Matthew Valencia offered his predictions for the genesis of the next legal-financial scandal. After these last few years of LIBOR manipulation, Volkswagon, and investigation by the CFTC into precious metals manipulation, it can almost be said that the public is inured to these sorts of scandals.

A number of suspects were named, including China (referring to possible market troubles), unscrupulous elites trading art pieces, and of course -- law firms.

Do Lawyers Need Accounting Expertise to Keep Out of Jail?

Few other times in history has the subject of accounting been so captivating as it was in the criminal fraud scandal of executives at the collapsed law firm of Dewey & LeBooeuf. The trial revolved around the arguably gray-area practices of three executives in the law firm who were charged of just falling short of cooking the books in order to "inflate" income of the once venerated law firm.

Who would have believed that such a precise professional service could be so murky?

If you don't bill, you can't eat. But even if you're racking up 30 billable hours a day, that work will be meaningless if you can't get clients to pay.

Sure, you can put liens on delinquent clients or even take them to court, but often your firm's collections practices can be drastically improved by enhanced at your internal practices first. Here are 11 ways to improve.

The End of "Too Big to Fail" Bailouts? Can It Be? Nah, It Can't.

The Federal Reserve Board adopted a rule earlier this week that, in theory, precludes it from rescuing individual companies that claim status of "too big to fail." Has your cynicism kicked in yet?

The change was implemented following much controversy and teeth gnashing over the government's decision to shell out $85 billion to rescue AIG, making it one of the -- if not the --biggest government bailouts in modern history.

A Brief History of the Billable Hour

The billable hour. It's both a loved and vilified institutional mainstay of the legal profession. It has been, up until very recently, the undisputed measure for associate performance at the nation's best law firms for the better part of half a century. But does anyone really know the background of this traditional practice?

Here is a quick summary of the background of this polarizing billing practice.

SEC Approves Landmark Crowdfunding Rules. This One Is Big.

The SEC just approved changes to crowdfunding rules that will allow small companies looking to raise money to seek investment from small, non-accredited investors. Who are those non-accredited potential investors? Just to give you an idea, that's about 91 percent of American households.

The traditional model required complicated underwriting processes for equity investing. The new crowdfunding changes are some of the most sweeping made to the model of buying and selling securities to date.

When it comes to litigation, parties have got to pay their own way. It's just the way we do things here -- it's called the American Rule for a reason. But all rules come with exceptions. The American Rule can be broken and attorney's fees awarded, in order to protect the public interest, to punish parties who refuse to settle, or simply to increase a law's effectiveness.

Take the Patent Act. The Act's fee-shifting provisions allow an award of attorney's fees to the prevailing party in exceptional cases. Thanks to a Supreme Court ruling last year, "exceptional" has become a bit more common.

There aren't many lawyers who went into law because a career in theoretical mathematics would have been just too easy. In fact, many of us can probably get away with counting on our fingers much of the time -- except when it comes complex patent litigation. Or to client funds. Lawyers' ethical responsibility to maintain a client's funds in trust is one of the most common reasons lawyers face disciplinary action.

As a rule of thumb, you should strive to manage your client funds so that, should you die tonight, everything would remain in order. Of course, we don't always live up to that ideal. So, if you find an accounting mistake in an trust account, what sort of ethical issues might arise and what must you do about it?

People are cheap, they like free things, and paradoxically, this can be a great way to get into their pocketbooks. How can you turn a giveaway into a payday? For many lawyers, it's via the free consult, where attorneys meet with potential clients, answering basic questions and providing simple advice.

But, when your product is your legal expertise, does it make sense to give it away? Like so many things, the answer is "it depends."

Virtual Law Office 105: Processing Credit Card Payments

How complicated is getting paid by credit card?

In an ideal world, one would only need a credit card processor, such as the many ones we've talked about that handily operate via an attachment to your smartphone. If a food truck can take plastic, lawyers certainly should be able to do so too, right?

Except IOLTA accounts. Damn trust accounts. If you're taking payment in advance of services rendered, things get immensely complicated because most credit card processors take their cut out of what the consumer pays -- which creates an obvious ethics issue for unearned fees that are supposed to be sitting in your IOLTA account.