Over the last few weeks, Lawyers Mutual has received multiple reports of North Carolina attorneys who were targeted by scammers attempting to divert seller closing proceeds following real estate transactions.  Unfortunately, several of these attacks were successful and hundreds of thousands of dollars were stolen and are very unlikely to be recovered.

I’ve asked our claims attorney, Troy Crawford, to talk with me about what went wrong and how to prevent it.

Troy: While the details of the recent scams are emerging, it appears hackers first became aware of the closing by compromising email accounts of differing parties.  Sometimes the attorney account was compromised, sometimes the Seller’s account was compromised but the most common scenario was the Realtor’s account was being monitored by international criminal organizations.

Camille: Sounds scary. How does this scam work?

Troy: The foreign-based hackers would observe the account, likely for several weeks, and only actively intervene once an understanding of the business practices were obtained and a significant wire was to be produced.  In the interim, the unsuspecting Realtor would continue to use the account unaware his or her client and the closing attorney were being set up to be robbed.

Camille: What can lawyers do to avoid falling victim to the latest series of scams?

Troy: EVERY wire request should be verified and the more personal the verification, the better. The best way to verify wiring instructions is to have the Seller sign the wiring instructions at the closing ceremony in the presence of the attorney.  We know of no wire fraud which has taken place when this has occurred, and even if it did, the closing attorney would likely be insulated from liability by the doctrine of contributory negligence.

If the Seller is unable to attend the ceremony, we recommend the wiring instructions be included in the same package in which the deed is delivered.  In these situations, have the Seller sign wiring instructions and have the signature notarized, if possible.  Even then, we recommend the Seller verify the closing instructions over the telephone via a call initiated by the law office, using contact information from very early in the file prior to any discussion of proceeds and wires.

Confirming a telephone call verification via email is a good practice and a great way to document the file.  However, an email verification alone is inadequate.

If at all possible, do not accept changes to wiring instructions.

Camille: Many professionals are still using free email services such as gmail, yahoo, aol.com, and nc.rr.com. What are your thoughts about the risk with these free services?

Troy: If wiring instructions are attached to an email from a free email service (gmail, yahoo, aol.com, nc.rr.com, etc.) they should be assumed to be fraudulent and extra diligence should be taken in verifying their authenticity. Sometimes hackers will set up an alias account with a very similar name (frequently dropping or swapping letters) to send modified instructions so the authentic user is not aware of their presence.  Examining the account name in detail is a good idea; however, as the hacker already has access to the original account, he or she may be not take this step and will use the same account that all other correspondence used.

Attorneys should be using secure email. Secure email essentially means that an email travels from sender to recipient without interruption, alteration, or interception. It allows the recipient to be sure of the sender’s identify and the validity of any attachments to the email. Most free email services do not offer these protections that you pay for with secure email providers.  In addition, free email services are likely non-complaint with the ALTA Best Practices because of these major security concerns and the emails are likely being mined for data by their providers in violation of Rule 1.6 of the Rules of Professional Conduct.

If you are currently using a free service, immediate action should be taken to find a more secure and professional alternative.  In the interim, it is possible to see when and from where the free account was recently accessed.  Here is a link explaining how to do it for gmail accounts:  http://www.groovypost.com/howto/check-gmail-login-activity/ Other services should have similar abilities.  If you see suspicious activity, please immediately change account passwords and contact your professional liability carrier along with your cyber or crime carrier.

Camille: What are some other red flags?

Troy: Be very suspicious of wires going to any account that is not in the name of the Seller.  Also, be suspicious of any account with a geographic location different than the Seller.  Why is a North Carolina Seller relocating to New York sending a wire to Wisconsin? There are some reasons for the different names and odd locations, but these are red flags which should be explored in detail (and not via email).

Do NOT send wires overseas.  Once money leaves the United States, it is likely gone forever.

Finally, regularly change your passwords.

While these policies appear harsh, hacking crimes can be devastating to a law firm’s finances and reputation.  Explaining the policy up front to your clients is a good way to limit negative actions. Also, be sure to share this information with your support staff. Many paralegals are on the front line of communications concerning closing instructions.

Below is sample language Lawyers Mutual recommends to be included in your Seller engagement letter:

Funds Availability Policy.
It is our goal to make real estate commission checks and funds available as soon as practical following closing.  However, NC State Bar Rules expressly prohibit disbursing any closing funds prior to recording.  Should you request funds be wired, our office can accommodate the request for a fee of $___.00.   In order to prevent fraud and protect your proceeds, all wiring instructions must be will be verified and you will be required to sign the instructions at the closing ceremony.  THIS OFFICE WILL NOT ACCEPT CHANGES TO WIRING INSTRUCTIONS.

Camille Stell is the Vice President of Client Services and Troy Crawford is a claims lawyer for Lawyers Mutual. Continue this conversation by contacting Camille at camille@lawyersmutualnc.com or Troy at troy@lawyersmutualnc.com or 800.662.8843 for an in-house presentation on Cyber Security. Contact Adam Pierce, AAI, Director of P&C Operations with Lawyers Insurance for information on cyber insurance policies at adam@lawyersmutualnc.com.

The Wake Forest Law Review has named its annual banquet after Brooks Pierce partner Dan McGinn. The surprise announcement was made at the Law Review’s 2016 event, which was held April 15.

 Suzanne Reynolds, dean of the Wake Forest University School of Law, praised McGinn, recounting tales of his scholarship as a student and his success as a lawyer.

 “Our law school is incredibly proud of Dan McGinn, as I know his partners are,” Reynolds said. “He is an example of what we hope every student of the law will strive to be.”

dan mcginn

 McGinn, a labor and employment lawyer, received his bachelor’s degree from Wake Forest University in 1964 and his juris doctorate from Wake Forest University School of Law in 1967. He continues to give back to his alma mater, chairing the Wake Forest University School of Law Alumni Council from 1996-1997 and serving several terms as a member of the Wake Forest University School of Law Board of Visitors.

 “I was surprised and humbled to have received this recognition,” said McGinn. “Wake Forest University School of Law played such a significant role in shaping who I am as an attorney. It has been my privilege to give back to the school and its students, and I feel honored that the school would acknowledge me in this way.”

Brooks Pierce partner Ed Winslow was recently honored by the Greensboro Chamber of Commerce with its Denise E. Maleska Leadership Service Award. The award, which was presented at the annual Leadership Greensboro graduation dinner on May 18, recognizes an individual who has shown lifelong dedication to leadership and community service.

 “I am so pleased to be recognized in this way,” Winslow said. “It’s a genuine honor to be associated with Greensboro’s vibrant tradition of community engagement and its many, many servants and leaders. I am a member of a great law firm and I live in a great city. Trying to make a contribution is what you do when you have that.”

ed winslow

Since moving from Tarboro to Greensboro in 1974, Winslow has contributed to a number of local and regional community initiatives, boards and organizations. He has held leadership roles with Hospice of Greensboro, the United Arts Council, the Canterbury School, the Carolina Theatre Commission and the Greensboro Economic Development Partnership, among other organizations. He is currently the chairman of the Guilford College Board of Trustees, a role he was elected to in 2014 after joining the board in 2005.

 An attorney with more than 40 years of experience, primarily in banking law, Winslow served as managing partner of Brooks Pierce from 2000 to 2015. During his tenure, the firm grew in both size and reputation as the go-to firm for complex business litigation, constitutional controversies and sophisticated business governance, regulation, planning and transactions.

 “I could not think of anyone more deserving for this award,” said Reid Phillips, managing partner of Brooks Pierce. “Through his dedication and service to so many organizations, Ed helped to create a culture of community service at Brooks Pierce that has been embraced by so many of our attorneys. Ed has made a lasting impact on many community organizations, including our libraries, our arts programs, our professional associations, and our educational institutions. He is an outstanding example of the type of community leadership to which we should all aspire.”

By Camille Stell and Ginny Allen

North Carolina attorneys are getting a glimpse of what the future holds due to recent events happening right here in our state.  Avvo is offering limited legal services to consumers online.  Legal Zoom filed a 10.5-million-dollar antitrust lawsuit against the North Carolina State Bar which was settled last year.  Part of the consent order that resulted from that lawsuit requires both parties to “mutually support and use best efforts” to pass House Bill 436.  HB436 will further define the “practice of law.”

Companies like Legal Zoom and Avvo have increased their market share through the use of technology to meet the needs of consumers in a different way.  Technology and the internet are empowering consumers with access to information and a new selection of options.  Lawyers are losing out on clients who are opting to “do it themselves.”  Technology has improved the delivery of products and services to consumers who are growing more and more accustomed to personalization and convenience.

Technology is the main driver in the changes and challenges facing lawyers and law firms today.  To address these challenges, a recent Harvard Business Review article suggests incumbent firms continue to invest in sustaining innovations (those which use technology to make the good services better in the eyes of existing customers) while also creating new divisions focused on growth opportunities arising from disruptive technology.

In their book, The Future of the Professions, Richard and Daniel Susskind discuss technologies as falling under one of two categories – automation and innovation.  Many lawyers and firms are beginning to focus on automation within their practices.  They have identified inefficiencies in the back office and are implementing technology to streamline processes.

Innovation, on the other hand, “enables ways of making practical expertise available that simply were not possible without the [technological] systems in question.”   The authors go on to state that automation is the “comfort zone of technological change” for most professionals.  So is automation enough, or will innovation be required?

What Does this Mean for Lawyers and their Firms?

The rapid advancement of technological change is overwhelming.  But now is not the time to employ the “head in the sand” approach.  Along with the change and challenges, there are real opportunities for creative lawyers to embrace technology to create profitable practices and build a following of loyal clients.

But where should you start? 

Focus Your Practice

You can’t be all things to all people on the internet.  While it may seem counterintuitive, a successful practice will continue to require attorneys to focus their services on only one traditional practice area, and in some cases, a subsection of the practice area.

If you were experiencing back pain and needed to see a doctor, would you rather see a doctor who helped patients with back pain, delivered babies, and helped teens with acne, or would you go to the doctor who only saw patients with back trouble?  “Specialization” will only become more and more important for attorneys to remain competitive.

Understand your target client. 

As you focus your practice, you naturally focus on the specific clients you can help.  This is difficult for most attorneys who feel like they must cast a wide net so they don’t lose out on potential clients.

Developing a keen understanding of your ideal client, and the issues they face is growing in importance.  Effectively marketing your practice online requires clarity on who you want to reach, and the development of messaging around the specific problems you help them solve.

You have less than 3 seconds to make a first impression online.  As more prospective clients are researching potential attorneys online, you may be losing out on business you never even knew you were in contention for. 

Evolve into Emerging Practice Areas

One particular way for attorneys to evolve their practices is to focus on emerging areas.  The internet is creating the need for attorneys who are focused on issues around privacy, cyberbullying, net neutrality, and the accessibility of websites to those with disabilities, just to name a few.

One of the simplest ways to identify opportunities is to consider how technology is changing your current clients’ industries.  What are the new challenges they face?  If you don’t know, ask them.    

For example, in 2015, Seyfarth Shaw launched their Social Media Practice.  A Social Media Practice is an extension of several different traditional practice areas including employment law and intellectual property.

Create a “Product”

As a lawyer, you are in sales.  You are selling your knowledge and expertise as a service that helps your clients with a specific problem.  But what if you could package a part of the services you provide as a “product” that you could scale and sell over and over again?  You can and you should.

Even if you aren’t ready to launch an online consulting business, packaging a specific scope of services into a “product” is a good idea.  It provides new clients an opportunity to work with you on a clearly defined project, for a clearly defined price.  It meets potential clients’ growing demands for transparency in legal services.    

As an attorney, it allows you to begin relationships with new clients on a specific project that may very well expand into a larger relationship at a later date.  You can create a system for the delivery of the product you develop so that you can leverage other timekeepers and maximize your margin.

Update Your Hiring Criteria

Instead of looking at the law school a potential hire attended, or the GPA he or she achieved, perhaps take a peek at non-traditional experience or skills as you make hiring decisions.  For instance, has the attorney started his or her own business in the past?  An attorney with an entrepreneurial drive might serve your firm well in exploring different ways to deliver your services.  Does the attorney have a wealth of volunteer experience or a career between undergrad and law school?  She may have strong “people skills” that will help with development of a new client relations program within your firm.   

Be a Part of the Conversation

The most important first step for North Carolina lawyers is to start having more conversations around the challenges and opportunities the future holds for the profession.  It is critical that these conversations extend beyond firm management to include a diverse cross-section of associates, paralegals, legal assistants, and administrative staff.  If you have not yet had a discussion with your key clients on how their industries and businesses are changing, and how you can improve the delivery of your services to help them, now is the time.

Camille Stell is the Vice President of Client Services for Lawyers Mutual. Ginny Allen is a lawyer and the owner of Adept, a digital marketing firm focusing on lawyers. Continue this conversation by contacting Camille at camille@lawyersmutualnc.com or Ginny at ginny@adeptfirm.com for an in-house presentations on the Future of Law.

Is the Lack of Cross-Selling Your Fault?

By Tom Kane

(Reprinted from Tom’s LegalMarketingBlog.com dated February 25, 2016)

Are you to blame for your partners’ failure to cross-sell you to their client contacts?  Not necessarily, but you could be part of the problem. Clients select lawyers they know, like, and trust. Referral sources, including your partners, send you clients for the same reason. Since they know, like, and trust you, they transfer those qualities by recommending you.

Maybe your partner doesn’t know enough about you or your practice, especially in a large firm. And there may be selfish reasons he or she is protecting the client relationship.  In my 30 years in this business, I can assure you that a “bit” of that goes on.  So you must work to enhance the relationships with your partners and to make certain that he or she knows enough about your practice to be comfortable that you won’t displace or hurt the client relationship.

According to Mike O’Horo, in a recent article on Attorney at Work, “cross-selling problems are self-created.” He argues, among other things, that lawyers focus on the product they’re trying to sell, instead of whether the client has a need for such services. The important point is that any attempt to cross-sell should be client-centric (i.e., benefit the client), rather than product-centric (i.e., what service can benefit the lawyer and firm). The client must understand that it has a need for such services and agree that your firm, rather than another, is the best choice for those services.

Cross-selling often fails based upon a client’s unfavorable reaction to the idea.  They may prefer to spread work around, or they are not convinced that the lawyer being recommended is right for the job.  For cross-selling to work, the client must recognize the need for the services, and have faith that the lawyer making the recommendation of another lawyer within the firm  has confidence in the lawyer being recommended.

While it may not be entirely your fault that your partners don’t cross-sell your services, it is critical that you foster relationships with other lawyers within the firm so that you come to mind when cross-selling opportunities arise.