THE OFFICIAL PUBLICATION OF THE VIRGINIA BAR ASSOCIATION

VOL. XLIII, No. 2 • Fall 2016

UMANA-BARRERA’S IMPACT ON THE BAR

TRUE MEANING OF ‘BEST EFFORTS’ CLAUSES

THE UNIFORM POA ACT

The YOUNG LAWYERS DIVISION‘The Next Generation’ reviews and evaluates the YLD.

FALL 2016 • 9

LAW PRACTICE MUSINGS

Financial Literacy

BY R. BRAXTON HILL IV

Can your associate attorneys interpret a client’s balance sheet? Do the future leaders of your firm know what information belongs on an income statement? Does every attorney in your firm have a

clear understanding of how to handle deposits to and disburse-ments from your firm’s operating and trust accounts? Each of these questions relates in some way to financial literacy, i.e., comprehension of the manner in which money is made, handled, and reported by individuals and businesses. Because the practice of law is both a profession serving clients and a business endeavor seeking profit (or at least sustainability), managers of law firms and legal departments must be mind-ful of the importance of financial literacy to the grooming of the next generation of institutional leaders, as well as to the depth and quality of professional advice provided to clients.

For most practice areas, an understanding of fundamental financial concepts and reporting conventions will enhance the legal advice provided to clients. As explained by business development coach Elizabeth Munnell to the American Bar Association’s Legal Career Central web journal:

In simplest terms, almost every client who engages you or your firm needs your help with a pending, existing, or deteriorating business agreement. You’ll be asked to research, negotiate, and draft it; to explain, interpret,

and amend it; or to dispute, litigate, or settle it. Or you may be hired to sort out and resolve a regulatory dilemma impairing the client’s business, the validity of its contracts, or its profits and prospects.1

CHRISTIAN & BARTON, L.L.P.

challenges and opportunities for law practice managers

PLEASE INDICATE HOW IMPORTANT THE

FOLLOWING KNOWLEGE BASES/SKILLS ARE

FOR YOUR ASSOCIATES.

1 2 3 4 5Not at all Somewhat ExtremelyUseful Useful Useful

Accounting/Financial Statement Analysis

Legal Services Industry

Teamwork

Financial Markets/Products

Negotiations

Business Strategy/Industry Analysis

Statistical/Quantitative Analysis

4.30

4.28

4.00

3.85

3.68

2.96

2.85

Graphic reprinted with permission from the Journal of Legal Education

© 2015 Association of American Law Schools.

10 • VBA JOURNAL

SAVE THE DATE

SEPTEMBER

29 VBA Legislative DayVirginia State Capitol, Richmond

29-Oct 1 46th Annual Conference on Labor Relations and Employment Law Omni Richmond Hotel, Richmond

30-Oct 1 Boyd-Graves Conference (invitation only), University of Virginia Inn at Darden, Charlottesville

OCTOBER

7-9 Young Lawyers Division Fall MeetingThe Graduate Hotel, Charlottesville

21 18th Annual Corporate Counsel Fall ForumThe Jefferson Hotel, Richmond

21-22 VBA Board of Governors Fall MeetingThe Martha Washington Inn & Spa, Abingdon

27 12th Annual Virginia Health Care Practitioners’ RoundtableTroutman Sanders, Richmond

28 27th Annual Tax Practitioners’ RoundtableFarmington Country Club, Charlottesville

The Virginia Bar Association

The Virginia Bar Association

@VABarAssn

VirginiaBarAssoc

NOVEMBER

10 22nd Annual Administrative Law ConferenceVirginia State Capitol, Richmond

17-18 24th Annual Capital Defense WorkshopOmni Richmond Hotel, Richmond

JANUARY 2017

19-21 127th Annual MeetingWilliamsburg Lodge, Williamsburg

Similarly, a recent Harvard Law School study found that 83 percent of practicing attorneys interviewed believe students should take “Accounting and Financial Reporting” classes.2

Moreover, attorneys do not practice law in a vacuum — they do so within the context of either a for-profit business, a not-for-profit organization ac-countable to funding sources, or a department within a larger organization constrained by its own budget-ary considerations. To prepare the next generation of attorneys to evolve from doing the work in these practice environments to managing the work done by others, practice leaders must instill an understanding of how each of these practice modalities accounts to its respective stakeholders for expenditures of time and money.

How can this be done? For the newest of lawyers — current and incoming law students — practice managers can actively participate in and support the VBA’s JDPlus program, which aims to enhance the pace at which recent law graduates become produc-tive, profitable, and “practice ready” lawyers by adding practical coursework to the curriculum of participating law schools. For those of us already at the bar, practice managers can identify and publicize supplemental educational opportunities, including topical CLE offerings as well as non-legal, free courses, such as the Wharton School’s online classes for financial ac-counting3 and corporate finance.4 And simply taking a junior colleague to lunch and walking him or her through your organization’s annual budget or monthly P&Ls will always be time well spent.

1. Elizabeth Munnell, Financial Literacy: Don’t Leave School Without It, American Bar Association Legal Career Central, http://www.abalcc.org/2015/10/09/financial-literacy-dont-leave-school-without-it/ (last visited May 23, 2016).

2. John C. Cotes IV, Jesse M. Fried, and Kathryn E. Spier, What Courses Should Law Students Take? Lessons from Harvard’s BigLaw Survey, Journal of Legal Education, Volume 64, Number 3 at 443 (February 2015).

3. http://www.coursera.org/learn/wharton-accounting 4. http://www.coursera.org/learn/wharton-finance

R. Braxton Hill IV is a partner and a member of the executive committee at Christian & Barton, L.L.P., where he focuses his litigation practice on complex business disputes, intellectual property rights, and catastrophic injury cases. A member of the VBA since 1998, he is Vice Chair of the LPMD and a former Chair of the Young Lawyers Division.

Endnotes