ORGANISATION OF LAW FIRMS
A legal
practitioner who wishes to establish a law firm must decide on a type of law
firm. In Nigeria, there are four (4) types of law firms, and any one of these
may be chosen to carry out legal practice. They are sole Practitionership, sole
proprietorship, associateship, and partnership.
TYPES OF LAW FIRMS
SOLE PROPRIETORSHIP
In this unit of
practice, a legal practitioner establishes a firm and employs other legal
practitioners to work in the firm. The relationship between the
practitioner/owner and other practitioner is that of employer/employee. The
proprietor manages the firm, takes all the profit and bears all the losses
alone. The difference between the sole proprietor and practitioner lies in the
composition of lawyers. In the popular case of Salomon v. Salomon & Co. Ltd
(1897) AC 22, Mr. Salomon was the sole owner of a leather and boot
manufacturing business. He employed workers, including members of his family
(his sons) in the business. Later, he registered the business and converted it
into an incorporated company. The English House of Lords held that, before
registration, Mr. Salomon’s business was a sole proprietorship but, after
complying with all requirements of the Companies Act 1862, the business was
converted to a company. The process of incorporation transformed the business
into a juristic person and Mr. Salomon ceased to be owner of the business. The
business became owned by the new shareholders who, incidentally, were Mr.
Salomon and six members of his family.
ADVANTAGES
1.
A sole proprietor has
unfettered power in managing the firm
2.
He takes the whole of
the profits
3.
He can specialize in
certain areas of law and do in-depth coverage of the work.
DISADVANTAGES
1.
He bears all the loss
of the firm.
2.
The firm does not
survive beyond the lifetime of the sole proprietor.
SOLE PRACTITIONERSHIP
This is a unit
of practice when the legal practitioner practices alone but employs support
staff to assist him. He provides all the capital, manages the firm and does all
the legal work.
ADVANTAGES
1. He
has an unfettered power to manage the firm.
2. He
takes full credit for the success of the firm.
DISADVANTAGES
1.
He bears the risk of
failure and losses alone.
2.
He is professionally
isolated because there are no other legal practitioners in the firm with whom
he or she can discuss legal and management issues.
3.
He is more vulnerable
to failure.
4.
He cannot take long
vacations (holidays) because there is no other practitioner in the firm.
5.
He is unable to
specialize in a field of law because to sustain the practice, he or she will
have to be a generalist.
ASSOCIATESHIP
In this unit of
practice, two or more legal practitioners contribute capital to provide
facilities required in the firm and to run the firm. They carry on independent
practice although they may have an arrangement for work-sharing. Each is on his
own although they use the same office and facilities. Rule 53 of RPC states that “a
lawyer shall not share the fees of his legal services except with another
lawyer based upon the division of service or responsibility”. However,
whether or not there is a work-sharing arrangement amongst the practitioners,
the fact that each is in associateship with other practitioners in the firm
means that he is not a sole practitioner. The parties to this agreement should
enter into an associateship agreement containing the terms governing their
relationship, particularly the proportion of the costs of running the firm that
would be borne by each party.
ADVANTAGES
1. He
has associate colleagues who can offer guidance.
2. He
shares all the profit.
3. He
is not isolated.
DISADVANTAGES
1.
He bears any loss
arising from the practice
2.
The practice will not
survive beyond the lifetime of the associate.
PARTNERSHIP
Two or more legal practitioners may
contribute capital to provide facilities and run the firm as partners. They are
also liable jointly and severally for any loss sustained and severally for any
loss sustained by the firm – Yesufu & Anor. v. Kupper International
NV (1996) 5 NWLR (Pt. 446) 17. Under Rule 5(1) of RPC, a lawyer
shall not form a partnership with a non-lawyer or with a lawyer who is not
admitted to practice law in Nigeria, if any of the activities of the
partnership consists of the practice of law. The partners are all owners of
the firm; the relationship between them is that of joint owners. The profits of
the firm will be divided according to their capital contribution or any other
agreed formula. They owe a fiduciary duty to one another and are prohibited
from making secret profits.
ADVANTAGES
1.
Sharing of financial responsibility
2.
Sharing of profits and losses
3.
Room for specialisation
4.
More heads to take decisions
5.
Easier to get clients because of professional
competence of more people involved
6.
More time for relaxation
7.
Easier to raise capital to set up.
DISADVANTAGES
1. In
law, each partner is an agent of the other partners.
2. Each
partner is liable for the act of another done within the partnership business.
FORMATION OF A PARTNERSHIP
A partnership
can be formed orally or in writing. However, it is advisable to have a
partnership agreement in writing in order to prevent disagreements and
problems. The issues which a partnership agreement should deal with include the
following:
1)
Nature
and object of the partnership business;
2)
Firm
name;
3)
Location
of firm;
4)
Capital
contributions;
5)
Decision
of profits and losses;
6)
Maintenance
of individual income accounts;
7)
Management;
8)
Devotion
of full time to the firm;
9)
Expulsion
from the firm;
10)
Admission
of new partners;
11)
Retirement,
expulsion or death of a partner;
12)
Withdrawal
of partner due to incapacitation;
13)
Annual
and maternity leave;
14)
Ownership
of assets;
15)
Restraint
of trade;
16)
Resolution
of disputes; and
17)
Termination.
THE PURPOSE FOR DEVELOPING CHRONOLOGY OF A STORY DURING A
CLIENTS INTERVIEW AND THE PRINCIPLE OF COUNSELLING
This is to
enable the legal practitioner to gather information from the clients about the
facts of the matter.
It is also to
enable the legal practitioner conducting the interview to ascertain whether
there is any conflict of interest with existing clients.
It also aids
the legal practitioner to know if the client’s matter involves illegality,
crime, fraud, or other impropriety.
The principle
of counseling is that the legal practitioner must be frank in dealing with
clients. If a potential client’s matter is an area of law where the
practitioner lacks knowledge, he should say so and decline to handle the
matter.
To advice the
potential client on available courses of action, the practitioner must possess
analytical skill, and the ability to articulate clearly the advice being
offered.
The legal
practitioner is to counsel the client on the practical and legal effects of the
matter. The client is also advised of the solutions or alternative solutions
and their consequences and suggests a plan of action.
CRITERIA FOR AN EFFECTIVE CLIENT INTERVIEWING AND
COUNSELLING
1.
Establishing
an effective professional relationship: The legal
practitioner should establish the beginning of an effective professional
relationship and working atmosphere. At an appropriate point, the legal
practitioner should orient the client to the special nature of the relationship
(confidentiality, fees, mutual obligations and rights, duration, and plan of
interview, methods of contract, etc) in a courteous, sensitive and professional
manner.
2.
Obtaining
information: The legal practitioner should elicit
relevant information about the problem from the client. Relevant information
may include matters that affect the client considerably but are not legally
relevant. They should develop a reasonably complete and reliable description of
the problem and reflect this understanding to the client.
3.
Learning
the client’s goals, expectations and needs: The legal
practitioner should learn the client’s goals and initial expectations and,
after, input from the client, modify or restate them as necessary, giving
attention in doing so to the emotional aspects of the problems.
4.
Problems
and analysis: The legal practitioner should
analyse the client’s problem with creativity and from both legal and non-legal
perspectives and should convey a clear and useful formulation of the problem to
the client.
5.
Legal
analysis and giving advice: Legal analysis and the
consequent legal advice given should be both accurate and appropriate to the
situation and its context. If appropriate, the legal practitioner should give
pertinent and relevant non-legal advice.
6.
Developing
reasoned courses of action (options): The legal
practitioner, consistently with the analysis of the client’s problem(s) should
develop a set of potentially effective and feasible options, both legal and
non-legal.
7.
Assisting
the client make an informed choice: The legal
practitioner should develop an appropriate balance in dealing with the legal
and emotional needs of the client. The legal practitioner should assist the
client in his or her understanding of problems and solutions and in making an
informed choice, taking potential legal, economic, social, and physical
consequences into account.
8.
Ethical
and moral issues: The legal practitioner should
recognize, clarify and respond to any moral or ethical issues which may arise,
without being prejudicial in judgments.
9.
Effectively
concluding the interview: The legal
practitioner should conclude the interview skillfully and leave the client with
a feeling of reasonable confidence and understanding; appropriate reassurance;
and a clear sense of specific expectations and mutual obligations to follow.
DRAFTING VISION/MISSION STATEMENTS
Before plans
can be made, the owners must have a vision for the firm, that is, their future expectations
for the firm. But where the firm is solely owned, then the vision of the firm
shall be that of the sole owner. However, where it is owned by more than one
persons, their several visions will be merged as a collective and reasonable
vision for the firm.
The vision of
the firm should be written into a mission statement which informs everyone in
the firm about the goals of the firm and thus creates commitment to it.
The mission
statement must be drafted by the owners of the firm. It must state concisely
the firm’s long-term goals and should not be written in more than fifty (50)
words.
GOALS
The goals of the
firm must meet the criteria in order to provide a yardstick against which
achievements can be measured. These criteria are complimentary; specific;
measurable; related to time; and attainable.
1.
Complimentary
– The goals must be complementary in
order for them to be achievable because if they are conflicting, achievement
will be difficult. They are said to be complementary because the achievement of
one brings to the achievement of others. For example, a good service rendered
to a customer will make the customer to tell others about it.
2.
Specific
– It must state precisely what it is expected to achieve so
that plans can be formulated for their achievement. For example, a firm should
state the actual percentage it intends to achieve annually.
3.
Measurable
– They must be formulated in such a way that it is possible
to present evidence of their achievement or otherwise. For example, from
evidence available, a firm should be able to tell if what it intends to achieve
has actually been met or not.
4.
Related
to time – They must not be open-ended goals. As
such, a realistic deadline should be set for the achievement of such goals. For
example, a firm should fix a period within which it is to achieve its goals.
5.
Attainable
– The goals should be one that is realistic and attainable
with the firm’s resources.
An example of a mission/vision statement is:
To
be a quality firm providing a range of legal services to commercial and property clients profitably and to the
highest standard with partners and staff, happy and committed to this ideal and
inspiring to continual development in the firm’s quality standards.
An example of a goal of a firm is:
To
meet clients needs with full satisfaction.
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