Fee Changes
Background Material
The Current LRS Picture
•
Challenges
–
Revenue is down, and is coming in more slowly
–
Revenue owed goes unreported/unpaid
–
No real opportunities to cut expenses – actually need
to increase marketing/public outreach and staffing
levels
–
Staff and marketing/public outreach increases are
dependent on sustainable revenue
•
Successes & Opportunities
–
Call/internet volume picking up
–
New website is a great marketing platform
Factors Underlying Our Challenges
1. The Recession
2. Increasing Lag Time: Referral to Revenue
3. Lopsided Percentage Fee Model
4. Revenue Owed Goes Unreported/Unpaid
Increasing Lag Time:
Referral To Revenue
Lag Time: Referral to Receipt of % Fees Payment
Matters Generating $15,000 or more to LRS in Last 11 Years
March 2015 5 2.43 2.66 2.65 3.01 3.08 3.16 3.37 3.48 3.47 3.53 3.82 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 FY 04-05 FY 05-06 FY 06-07 FY 07-08 FY 08-09 FY 09-10 FY 10-11 FY 11-12 FY 12-13 FY 13-14 FY 14-15 (to date)
Ye
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s S
inc
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New York City Bar LRS
7
Annual Listing Fees
Base Listing Fee $200
Percentage Fees
Applies to attorneys' fees where the aggregate fee is $600 or more
Each Major Panel Category (area of law)
Add $60
Referrals made on or after 9/22/08: 6% of the first $10,000
12% of the next $40,000, plus 18% of the amount over $50,000 Association Membership Discount
Subtract
New York City Bar Association
New York County Lawyers’ Association
National Employee’s Lawyers’ Association
American Immigration Lawyers’ Association
($50)
Referrals made before 9/22/08, and dental and medical malpractice matters: 5% of the first $10,000
10% of the next $40,000, plus 15% of the amount over $50,000 New to Practice Discount
(admitted to practice less than 8 years)
Subtract ($50)
Cases that generate $50,000 or more in Attorneys' Fees
3%
Cases that generate under $10,000 in Attorneys’ Fees79%
Volume of Cases
(under current rules)
$10,000, next $40,000, over
$50,000
Cases that generate $50,000 or more in Attorneys' Fees54%
Cases that generate under $10,000 in Attorneys' Fees18%
% Fees Revenue
(under current rules)
$10,000, next $40,000, over
History of Changes - Percentage Fee Model
March 2015 9
•
1985:
–
5%
–
All One Tier
•
1991:
% Change
–
5%
of the first $10,000
0%
–
10%
of the next $40,000
100%
–
15%
of all over $50,000
200%
•
2008:
% Change
–
6%
of the first $10,000
20%
–
12%
of the next $40,000
20%
–
18%
of all over $50,000
20%
Percentage Fees:
Percentage Fee Revenue Models
March 2015
Program
Percentage Fee Revenue Model
Philadelphia
$0 to $10,000 -- 10% of entire fee
$10,001 to $20,000 -- 15% of entire fee
$20,001 to $35,000 -- 20% of entire fee
over $35,000 -- 33.33% of entire fee
Columbus
15% on everything less than $100,000
25% on $100,000 and over
Nevada
20%
San Diego; Los Angeles; Austin; Massachusetts
15%
Brooklyn
10%
New York City Bar
6% of the first $10,000
12% of the next $40,000, plus
18% of the amount over $50,000
Comparison of Fees Generated
Program
Fee paid on
$2,500 case
$7,500 case
Fee Paid on
$10,000 case
Fee Paid on
$15,000 case
Fee Paid on
$75,000 case
Fee Paid on
Philadelphia
$250
$750
$1,500
$2,250
$25,000
Columbus
$375
$1,125
$1,500
$2,250
$11,250
Nevada
$500
$1,500
$2,000
$3,000
$15,000
San Diego; Los
Angeles; Austin;
Massachusetts
$375
$1,125
$1,500
$2,250
$11,250
Brooklyn
$250
$750
$1,000
$1,500
$7,500
New York City Bar
$150
$450
$600
$1,200
$9,900
Revenue Owed Goes Unreported
and Unpaid – Attorney Portal
Revenue Owed: Unreported & Unpaid
•
Change from paper mailings to current PDF reporting is --
–
A good start; helps cut down on postage, printing and
administrative costs
–
Still a slow process for LRS staff and panel members
–
Still relies on panel members
’
and clients’ memories…if no one
remembers LRS referral when client retains panel member, no
hope of collecting percentage fees revenue
•
Attorney Portal: Online reporting is –
–
Fast, easy, lowers or eliminates postage
–
Less administrative/nonbillable time to panel members – simple
questions, easy review of payment history for each client, etc.
–
Searchable database means more reporting and payment of
referral fees – search on new client name and know
immediately if client was an LRS referral
•
The Association is investing in the Attorney
Portal – LRS is not paying for version 1.0
•
LRS will be responsible for enhancements
(version 2.0, etc.) and maintenance
•
Project Planning is underway
•
Timeline = 18 mos. (estimate)
March 2015 15
•
New Website
•
New Phone System
•
Attorney Portal
•
Full Time Executive Director & Deputy Director
•
Paid Interns for Marketing/Public Outreach
•
Open to Increasing Staff if Sustainable Revenue
March 2015
Association Investment in LRS
Changes to Legal Referral Service
Rules for Panel Membership Rule 14
- Payment of Case Fees from
New York City Bar LRS
19
Annual Listing Fees
Base Listing Fee $200
Percentage Fees
Applies to attorneys' fees where the aggregate fee is $600 or more
Each Major Panel Category (area of law)
Add $60
Referrals made on or after 9/22/08: 6% of the first $10,000
12% of the next $40,000, plus 18% of the amount over $50,000 Association Membership Discount
Subtract
New York City Bar Association
New York County Lawyers’ Association
National Employee’s Lawyers’ Association
American Immigration Lawyers’ Association
($50)
Referrals made before 9/22/08, and dental and medical malpractice matters: 5% of the first $10,000
10% of the next $40,000, plus 15% of the amount over $50,000 New to Practice Discount
(admitted to practice less than 8 years)
Subtract ($50)
New York City Bar LRS
Percentage Fee Changes
Now Effective 5/1/15
Applies to attorneys' fees where the
aggregate fee is $600 or more Applies to attorneys' fees where the aggregate fee is $600 or more Referrals made on or after 9/22/08: Referrals made on or after 05/01/15: 6% of the first $10,000 10% of the first $5,000
12% of the next $40,000, plus 15% of the next $35,000, plus 18% of the amount over $50,000 20% of the amount over $40,000 Referrals made before 9/22/08, and dental
and medical malpractice matters: Referrals made between 09/22/08 and 05/01/15: 5% of the first $10,000 6% of the first $10,000
10% of the next $40,000, plus 12% of the next $40,000, plus 15% of the amount over $50,000 18% of the amount over $50,000
Referrals made before 9/22/08, and dental and medical malpractice matters referred by the Service between 02/01/91 and 05/01/15:
March 2015 21
Rebalancing Percentage Fee Model
Cases that generate $40,000 or more in Attorneys' Fees
41%
$5,000 through $40,00047%
Cases that generate under $5,000 in Attorneys' Fees12%
% Fees Revenue Year 5 (est.)
(under 5/1/15 rules)
Longer Lag Time Cases that generate $40,000 or more in Attorneys' Fees47%
$5,000 through $40,00043%
Cases that generate under $5,000 in Attorneys' Fees10%
% Fees Revenue
(under current rules)
Longer Lag Time
Less reliance on cases which generate over $40,000 in fees and have
the longest lag times from referral to receipt of % fees payment.
More reliance on cases under $40,000 with shorter lag times.
Changes to Legal Referral Service
Rules for Panel Membership Rule 3 –
Membership/Annual Listing Fees
New York City Bar LRS
23
Annual Listing Fees
Base Listing Fee $200
Percentage Fees
Applies to attorneys' fees where the aggregate fee is $600 or more
Each Major Panel Category (area of law)
Add $60
Referrals made on or after 9/22/08: 6% of the first $10,000
12% of the next $40,000, plus 18% of the amount over $50,000 Association Membership Discount
Subtract
New York City Bar Association
New York County Lawyers’ Association
National Employee’s Lawyers’ Association
American Immigration Lawyers’ Association
($50)
Referrals made before 9/22/08, and dental and medical malpractice matters: 5% of the first $10,000
10% of the next $40,000, plus 15% of the amount over $50,000 New to Practice Discount
(admitted to practice less than 8 years)
Subtract ($50)
Annual Listing Fee Comparisons
Program Annual Listing Fees for Members
+ (bar membership fees, if required) Additional Panel Annual Listing Fees for Non-bar Members
Philadelphia 385/year + (experience tiers $92 to $383) Bar membership required Columbus LRS 300/year for new lawyers with 3 or less years experience 400/year for lawyers with more than 3 years experience Same – no bar membership required Nevada 50/year + (200/year, if less than 5 years experience) 50/year + (350/year, if 5 years or more experience) Bar membership required San Diego 125/year + (experience tiers $0 to $230) 350/year
Los Angeles 300/year + (no public pricing) 50 550/year
Austin 200/year 3+ years experience + ($180 to $250) 175/year 1-3 years experience + ($180 to $220) 150/year under 1 year experience + ($180 to $220)
50 discount for new bar members
Massachusetts 100/year 1-4 years experience + ($75 to $175) 150/year 5+ years experience + ($300 to $410) Bar Membership Required Brooklyn 400/year + ($100 to $185) 900/year
March 2015 25
