Category Archives: Law Practice Management

You know those New Medicare Reporting Requirements You Always Hear About? They Have Been Bumped Back to 2012

It’s crazy. Two posts in a row talking about new 2012 requirements that scare the heck out of attorneys. (See the last one here).

This time it’s the big, scary, “new Medicare reporting requirements” that have defense lawyers in a tizzy. As you may recall, as of 2011, liability insurers were supposed to start reporting certain settlements to Medicare – known as TPOC (total payment obligation to claimant) settlements. These reporting requirements have been postponed until 2012. Good!

(Howard Zimmerle is a personal injury, medical malpractice and workers compensation lawyer with offices in Rock Island, Illinois and Davenport, Iowa. You can reach him at 309-794-1660 or hzimmerle [at] mjwlaw.com)

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How Small Law Firms Can Avoid the New 1099 Requirement in 2012

I’m sure you’ve heard about the new 1099 requirement that will take effect in 2012.

You haven’t?

Well here is the gist of it: until now (and until 2012) businesses have to issue 1099 forms for amounts paid to individuals over $600. This typically affects our firm the most in the area of expert witnesses/consultants – we use a lot of them, so we send a lot of 1099 forms. The new law, which is part of the health care reform bill, would expand the requirement to include corporations. In other words, in 2012 if you spend more than $600 in office supplies at Staples or WalMart over the course of the year, you would have to provide them with a 1099. If you stay in a hotel for business enough to rack up $600 at that hotel, you have to provide a 1099.

Here’s a good rundown of the new law.

As of now there is one little loophole that will help small businesses, including law firms, avoid these new requirements – use a credit card or debit card. Those transactions are exempt!

So if nothing changes by 2012, that’s the workaround – use your credit card. But make no mistake, something will probably change for two reasons. First, businesses hate this new requirement, and businesses (small and large) have a huge influence on the government. Second, think of all the additional work the new law would require for the IRS – many more forms, lots more time and money spent to enforce the requirements. Does the IRS want to do that? Of course not. Can we afford more federal workers right now? Of course not. That’s why I don’t think it’ll happen as currently proposed.

The US Treasury seems to have dropped a hint about that recently in this New York Times blog interview – (sixth question down) - “it is important to look at whether this burden is too great for businesses to manage. Treasury and IRS are sensitive to these concerns and will look for opportunities to minimize burden… we won’t hesitate to consider alternative approaches.”

So my guess is that it’s like the 2012 doomsday myth – a lot of people will fret and hide in the basement for nothing.

(Howard Zimmerle is a personal injury lawyer in the Quad Cities. He’s not a tax expert, so don’t come to him for tax advice. He can refer you to a good tax business for that. Otherwise, if you have questions or comments, contact him at 309-794-1660 or hzimmerel [at] mjwlaw.com)

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New Iowa “Scope of Liability”/ Proximate Cause Jury Instructions!

As most practicing Iowa lawyers should know, the Iowa Supreme Court did away with the old doctrine of Proximate Cause last year (with some clarification in the Royal Indemnity case earlier this month) and replacing it with “Scope of Liability.”

The big headache for judges and trial lawyers is what the new jury instructions will look like.

Well, you’re in luck. I’m on the Iowa Jury Instructions Committee, and we approved two new jury instructions to replace the old proximate cause instruction – one on “factual cause” (ie did defendant’s conduct cause plaintiff’s damages) and another one on “scope of liability” (to be used only in rare cases – this is usually a question for the court)

Both instructions, after the jump.

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4 ways Pawn Stars is like Personal Injury Law

Haven’t seen the show Pawn Stars yet? Time to jump on that bandwagon. It’s on the History Channel, and if you’re like me, you’re not so inclined to watch the higher channels on the cable lineup unless Flavor Flav is involved.

Watch the show

You’re missing out.

For those who haven’t seen the show, here are the basics. It follows the day to day operations of a Las Vegas pawn shop and the family who owns it (Old Man, Rick and Corey, along with Corey’s delightfully walrus-like sidekick, Chumlee). People bring in objects to pawn or sell, there is some discussion of the object and its value, and the pawn shop makes a deal (or not). Naturally the objects brought into the pawn shop are more exciting and historically significant than what I’d imagine pawn shops usually deal with (offbrand guitars, xboxes, old CDs, DVD players, etc). The real fun comes with the discussion about the historical background of the objects themselves, as well as the negotiation.

So it dawned on me. I like Pawn Stars because it reminds me of taking in personal injury cases. How? Let me count the ways:

1. To take a case or buy an item – similar calculations.

On Pawn Stars, when someone tries to sell an item, the Pawn Stars have to decide whether they will make any money from it. Seems easy, right? It’s not that simple. They have to analyze what the chances of resale are, how long an item would sit on the shelf, how much money would be put into restoration, etc to get it ready to sell (particularly true with antiques, cars and guns) and how much profit they would make. Based on this calculus (done in a split second) they decide whether to buy or sell an item.

As personal injury attorneys, we share the same considerations in deciding whether or not to take a case. Will I win? How long will it take? How much is the case worth? How much risk is there? How much will we have to invest in costs (experts, exhibits) before the case can be settled or taken to trial? We also make this internal calculation based on a phone call or two and an in-person meeting with a potential client. Sometimes we make good decisions, sometimes not.

2. We both have to watch out for red flags.

One episode showed a guy trying to sell 5 or 6 identical, mint condition Pete Rose cards. This set off red flags for the PS crew – why did he have so many? Why were they all in identical condition? Why were all of them in perfect condition? Why did he want to sell them? After a closer inspection, the cards turned out to be forgeries. We don’t know if the would-be-seller was the forger or a victim of someone else’s forgery, but it was a good catch that saved Rick some money.

In my field, I believe the vast majority of people I talk to are good people who need help. There are always a few who want to fudge the truth to get what they want. If someone’s story doesn’t make sense, or if their story is completely different each time you talk to them, beware of the counterfeit case. I’ve taken cases in, ordered the medical records, and then found out my client’s story is completely different than what actually happened. We get rid of those clients – but we have to keep a look out for them.

3. People often have an exaggerated idea what their stuff (or their case) is worth.

One feature of Pawn Stars has a quick interview snippet with a prospective seller where they say what they want to get for an object – usually something like “I have no idea what this antique coin is worth, but I’m looking to get between $2,000 and $3,000 for it today.” If you have no idea what it’s worth, where did you come up with your numbers? Is that just the amount you needed to get out of debt/pay your mortgage/buy what you really wanted? Likewise, people on the show typically overlook flaws in their items and see them with rose colored glasses.

Once again, this is no different in the law. Clients tend to overlook flaws in their cases (yet plaintiff’s attorneys should be mindful in how they discuss the flaws with their clients – focus on them too much or too strongly and the client may think you don’t believe in their case, ignore them too much and you gloss over some needed truth). Clients also have some idea what their case is worth, and sometimes it’s way, way off. The key is explaining how you get your range as to the value of the case.

4. In over your head? Call in an expert!

Several times an episode, Rick will call “a buddy of his” to evaluate an interesting piece – sometimes for authenticity, sometimes for value.

We do this all the time. We have expert witnesses in cases because we can’t possibly know everything. We use them in medical malpractice because we’re not doctors or nurses and don’t pretend to be. We use them in other cases where particular expertise is needed. We talk to other lawyers about technique, settlement value, etc. Other lawyers come to us with specific or general questions. The process is collaborative, and a lawyer who goes along totally on his or her own may get in trouble.

So there you go. Watch Pawn Stars and become a better lawyer – but remember you heard it from me first.

(Howard Zimmerle is a personal injury and accident lawyer with offices in Rock Island, Illinois and Davenport, Iowa.)

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Practice tip – find out insurance policy limits before negotiating

STOP!!!! Before you order medical records, hire experts, draft a demand letter, etc!!

Find out the limits of the defendant’s auto insurance policy first. Why spend a bunch of money if the medical bills are at or above the policy limits? Find out what you’re dealing with first – here’s how:

215 ILCS 5/143.24b provides that an automobile liability carrier must disclose the dollar amount of liability coverage upon receipt of a certified letter from a claimant’s attorney with a brief description of the nature and extent of the injuries, a statement of the amount of medical bills claimed, and copies of the medical records.

In practice, insurance companies often disclose these limits without having to do all of this, but it is important to know that this section exists.

I’ll save the rant about how $20,000 insurance minimums are ridiculously low for another post.

(Howard Zimmerle is a car accident attorney in Moline and Rock Island, Illinois).

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Important Ethics Opinion for Illinois Attorneys and Personal Injury Settlements

Here’s a common situation in the personal injury context: Plaintiff’s attorney negotiates settlement with the defendant’s insurance company. The parties strike a deal, but only on the condition that the plaintiff’s attorney guarantee to pay all liens and subrogation interests out of the settlement proceeds. No problem, especially since the attorney would pay the liens and subrogation interests anyway, right?

Wrong.

 An Ethics Opinion that was issued in July 2006 says that Illinois attorneys may NOT guarantee that liens/subros will be paid back out of settlement proceeds.

 So what do you do instead? Typically I will tell insurance adjusters that I can’t personally guarantee payment, but that my policy always has been and always will be to pay liens and subrogation interests out of settlement proceeds. So far, I haven’t had a problem… but I know I’ll have one of those cases someday where the insurance company ends up sending a bunch of checks for each lienholder – which is a pain.

How do other attorneys deal with this? Comments would be appreciated.

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Specialization – good or bad?

As I tell people all of the time, I’m a personal injury and workers compensation attorney in Rock Island, Illinois. Our firm does personal injury, workers compensation, and medical malpractice. That’s it. No wills, no divorces, no criminal law, etc.

Some people believe that specialization is bad. I guess this is the old-time view of the country lawyer who was a one-stop shop. One example of someone who disagrees with me is Susan Cartier-Liebel. She believes that having too few practice areas makes you look like the people in this pretty funny video.

I, on the other hand, believe that being too much of a generalist makes you look like this:

Virginia injury lawyer Doug Wessel would agree with me… one of his tips for getting good settlement results in personal injury cases is “don’t dabble.” I don’t agree with all of his tips, but I think the “don’t dabble” logic applies to other areas of the law.

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