Practice Tips

Management moment

Question: What is the hottest and most cost-effective method of legal marketing today? Answer: A legal e-newsletter.

An electronic newsletter (an email broadcast to many recipients) is sent directly to a recipient's inbox. It costs little more than your time to develop and it can be easily passed along to interested parties. In these days of tough markets and lawyers looking for ways to expand their client base, e-newsletters offer incredible potential. However, there are ethical and legal pitfalls in marketing via electronic newsletters. Here is a quick overview of the major considerations in launching an electronic newsletter:

Opt-in: One of the first law firms to send out a broadcast electronic newsletter ended up in ethical hot water for "spamming" the Internet - in other words, sending out its newsletter indiscriminately. Today, the acknowledged way to start an electronic newsletter is for recipients to opt in or subscribe to the service. How do you obtain email addresses for your list? For starters, ask your existing clients if they would like to receive a newsletter and have them provide you with their email addresses. Or give a presentation and ask the audience to sign a sheet if they wish to receive your newsletter. Have your latest newsletter on your website along with instructions on how interested parties can subscribe. You can also send a sample periodically to your clients and ask if they wish to receive further editions. Whatever you do, don't obtain commercial lists of email addresses and spam the list.

Format: (HTML or plain text?): Until very recently, it was recommended that most newsletters be in plain text format. However, the later versions of most email programs, including Outlook, Eudora and Netscape Communicator, are now able to handle HTML email, which allows for graphics and formatting to jazz up the newsletter. However, if someone is not able to receive HTML email, the newsletter ends up being almost unreadable and will probably be discarded. While plain text is universal, it is a harder medium to capture and keep a reader's interest.

Confidential: Newsletter email lists can grow to be substantial. There are dedicated newsletter email sites that will look after the maintenance of your lists and delivery to your email recipients. If you do use a commercial email service, you must make them aware of the confidential nature of the email list and have them agree to not divulge the names on it.

To start off your newsletter, MS Outlook is a good product as you probably already have it in your office. It allows you to keep information on each potential client in a database and then aggregate the clients into group email lists, such as Family_Law, Construction_Law and Business_Law. By building separate newsletter lists, you can develop different newsletters for different groups of potential clients. When you send out your newsletter to your group or groups, address it to a dummy email address in the firm (such as To: and have the group email list name in the Bcc (blind copy) area such as: Bcc: Business_Law. This allows you to keep your potential and current client email addresses and names confidential, since the individual email addresses will not appear with every copy of the newsletter. This is important as lawyers have an ethical obligation to not divulge information on their clients. The From: address should be directed to someone in the firm who can follow up on any replies to the newsletter for further info, requests to be removed from the list or bounced email addresses.

Schedule: Once you launch your newsletter, set a schedule for further editions and stick to it. You could send it out monthly, every two months or even every two weeks - whatever is comfortable for you. Recognize that clients will become accustomed to receiving the newsletter, and your reputation for following through on initiatives will be on the line.

Content: Your newsletter should be concise and to the point. Use headings and spaces between sections. The content should reflect your knowledge of current issues in your area of practice. It is not a bad idea to "tease" the audience into calling you to find out more. Keep in mind the requirements of Chapter 14 (Marketing) of the Professional Conduct Handbook when drafting your newsletter.

Credit: Give billable hours credit to the lawyer who is editing and managing the newsletter - after all, the editor is doing marketing for everyone in the firm! If you fail to give this credit, your editor will likely resign and it may prove difficult or impossible to find a replacement.

Contact: Always put three things in your newsletter: One, a paragraph that reminds readers that they are free to send the newsletter along to their friends. Two, information on how to unsubscribe. Three, information on how to subscribe. Remember, the purpose of the newsletter is to introduce yourself to strangers, create in their minds a positive impression and turn them into clients.

Subject: Use a good "Subject" line in the email, to avoid the newsletter looking like spam and being trashed without being read.

Research: Subscribe to other good email newsletters for ideas on how to improve yours.

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Q & As on accounting

Is it okay to endorse over a cheque received in trust?

Q: I am a lawyer who has received a cheque in trust. The cheque represents funds that are payable to another person. Can I endorse it over to the eventual payee or do I have to deposit it into my trust account? As the cheque is not certified, I don't wish to put it through my trust account if possible.

A: Rule 3-54, "Cheque endorsed over" reads as follows:

If a lawyer receives a cheque payable to the lawyer in trust and, in the ordinary course of business, pays the cheque to a client or to a third party on behalf of the client, in the form in which it was received, the lawyer must keep a written record of the transaction and retain a copy of the cheque.

It is strongly advised that the lawyer endorse the cheque with the words "without recourse" to avoid potential trust liability if the cheque should not be honoured.

Must I file a Form 47 for endorsed cheques?

Q: I don't maintain a trust account, but I have endorsed over trust cheques to third parties in the course of my practice over the last year. Do I have to file a Form 47 Accountant's Report with the Law Society?

A: A lawyer is exempted from filing a Form 47 Accountant's Report if he or she complies with the provisions of Rule 3-73:

(1) A lawyer is exempt from the filing of an accountant's report for a time period referred to in Rule 3-72(1), (2) or (3) during which the lawyer has

(a) not received any funds in trust,

(b) not withdrawn any funds held in trust, and

(c) complied with this Division.

Since you received trust funds (the cheques that you endorsed over were trust funds notwithstanding that you didn't deposit them to any trust account), you are not entitled to take advantage of the exemption in Rule 3-73 and accordingly should file a Form 47 Accountant's Report.

Where should I deposit GST and PST prior to remittance?

Q: I have been told by my accountant that I should be depositing the GST and PST billed on my invoices into my trust account until I make a remittance. Is this in accordance with general practice?

A: Both the federal and provincial governments deem GST and PST amounts to be trust funds under their respective legislation. For example, the Social Services Tax Act states:

Tax collected deemed to be held in trust for government

102 If a person collects an amount of tax under this Act or collects an amount as if it were tax under this Act,

(a) the person is deemed to hold the amount in trust for the government and for the payment of the amount to the government in the manner and at the time required under this Act and the regulations, and

(b) the amount collected is deemed to be held separate from and does not form a part of the person's money, assets or estate, whether or not the amount collected has in fact been kept separate and apart from either the person's own money or the assets of the estate of the person who collected the amount.

However, deeming the tax amounts to be trust funds and requiring them to be held in a lawyer's trust account are two different matters. According to the Chartered Accountants Institute of BC, Chartered Accountants need not require GST and PST on legal accounts to be deposited to a lawyer's trust account.

Where is legal assistant time reflected on bills?

Q: Our retainer agreement allows us to charge for legal support/assistant time in addition to lawyer time. Should that time be included in the "professional fee" portion of the invoice, or should it be shown as a disbursement?*

A: It should be included as part of the professional fee. It is no different from charging for the work of a student. If an outside legal assistant is used, and that person bills the lawyer, the charge would be shown as a disbursement.

* Thanks to Gordon Turriff for his assistance on this Q&A.