Texas law firm tax
The Texas Tax Reform Commission has announced plans to levy taxes on partnerships, such as law firms. The official recommendation will be handed down tomorrow in a move that is expected to reduce school property taxes by approximately $5.8 billion.
The new measure would tax about 4.5% of net law firm income. A possible loophole would allow for firms to deduct the first $300,000 of compensation paid to each employee. Texas firms had previously been exempt from such taxation and had been designated "flow-through" entities, where partners distribute profit based on internal agreements.
Some of Texas' biggest law firms, those that stand to lose the most revenue if taxed, are lobbying to minimize the potential damage. They have formed a Law Firm Legislative Coalition, comprised of 18 of the State's biggest firms.
Proskauer Rose and Fried Frank reveal strong profits
and Fried Frank Harris Shriver & Jacobson, both major firms with influence throughout the U.S., have announced strong revenue increases for the year 2005.
Proskauer posted a 15% increase in fee income, which reached $454 million, while profits per partner rose 7% to $1.22 million. Fried Frank's revenue increased 9% to $390 million, while profits per partner hit a reported $1.24 million, an 8% increase.
In 2005, both firms made several high-profile lateral hires and increased their international presence by expanding foreign practices.
Online law schools on the rise
With current education costs higher than ever and a rising law school entry rate, an increasing number of prospective law students are turning to online law schools.
For most graduates and post-graduates, attending a traditional law school means sacrificing family life and quitting their jobs. Internet law school offers opportunities for people bound by family or work commitments, for older students and also for people living in remote areas. While degrees from accredited law schools can cost more than $90,000, an online degree costs anywhere from $12,000-$32,000.
California is currently the only state that offers online law degrees for students considering the bar examination. Some online schools have reported a 50% passage rate for grads taking the bar exam
for the first time, which is a little more than the overall 48.8% for first-timers in general.
Critics claim online law schools are not nearly as reliable as their traditional counterparts. Internet classes lack the Socratic Method of teaching, a cornerstone of legal education
, which encourages reciprocal discussions among students and professors. Some legal analysts, however, predict that as the success of online law schools grow, the ABA will be forced to reconsider them.
Professional malpractice insurance
According to a recent survey by The State Bar of New Mexico's Professional Liability Committee, most attorneys carry professional malpractice insurance. Of the 3,700 attorneys surveyed by the Committee, about 2,900 reported that they are insured for professional malpractice. Of these, more than 60% claimed the maximum coverage in the range of $1 million-$2 million.
Currently, Oregon is the only state which requires malpractice insurance for lawyers. Other states, however, have proposed it. The issue of mandatory malpractice insurance is a controversial one. Opponents claim that requiring such insurance would only fuel lawsuits from litigious clients.
Lawyer Joke of the day
We've received complaints that our lawyer jokes are sexist. We thought we might get complaints from humorless fellow attorneys irked that we had damaged their reputation, but we never thought of these old jokes as sexist. So, for the purpose of this joke, the attorney is a prominent female litigator and law firm partner who has managed to consistently bill more hours than the men at her firm.
A doctor and a lawyer were talking to each other at a cocktail party. A man walked up and interrupted their conversation.
"Doc," exclaimed the man, "I think I got an ulcer. What can I do?"
"Well," began the doctor, "I would recommend you get a full physical exam."
"Yeah, I know," said the man, "but what can I do about it right now?"
The doctor thought about it for a moment.
"First, put that drink down," advised the doctor. "Alcohol can aggravate an ulcer. Try to lay off fatty foods and avoid late night meals."
"Thanks, Doc," said the man before departing.
Resuming his conversation with the attorney, the doctor leaned in and whispered.
"I hate when that happens. I never know how to handle those situations where I'm asked for medical advice in social situations."
"It's a common complaint," said the attorney.
"Is it acceptable to send a bill for such advice?" asked the doctor.
"It depends," began the attorney. "For such a minor question, I'd advise you to just let it go. It's an occupational hazard, but I wouldn't worry about it."
The next day, the doctor checked his mail and found a bill from the attorney: "$50 for legal advice."
I have been hired with a prominent firm and I found the ad through Law Crossing. Thank you for your service!
LawCrossing Fact #220: Our free newsletter ensures that you get essential news relevant to your job market every week.