ADDRESS OF JOSEPH M. PROSKAUER

(of the New York Bar)

MR. CHAIRMAN AND LADIES AND GENTLEMEN: I know of no subject upon which I am more ignorant than the subject of the evening, excepting one, and that is the first subject on which this committee asked me to orate and upon which I frankly confessed utter, complete, total and abysmal ignorance. I finally got the nerve to come here and talk about office system, and I was feeling pretty good until I looked over the audience and found in the second row a man who used to be my managing clerk and in the back row a man now in my office, both of whom are fully aware of my shortcomings. So, I am not a little disconcerted. My acquaintance with office system is limited to the knowledge I derive upon my return to the office after court late in the afternoon. What I have been able to see of it has led me to this conclusion: Office system is a splendid thing provided you don't have too much of it. We have tried a great many of the plans suggested by my colleagues and if they can make them work, they are a good deal better than any organization with which I have ever come in contact. Our whole endeavour in our own office has been to reduce the complication of the system to a minimum.

Now, so far as binding the sheets together, of course Mr. Stern has already harvested the crop. The bill has gone, although he didn't say anything about it having been paid. We are led to assume that the check has come in, but I am going a little back from the planting of the crop and talk about the special topic to which I have

been assigned-Filing System and Accounting System. A good many years ago, when I first came into the office where I now am, we had some great big books called "Office Registers." A girl used to sit and write in those big books, and sometimes when you wanted to know what had happened you could hunt through one of these great big books in the hope of finding it. Our papers were filed in the old system of great big binders, and we had a set of books-or, rather, the bookkeeper said we had a set of books. Well, I got interested in trying to run a law office like a business office, and, after trying a good many methods we finally cut it down to the system which I am going to try to explain to you very briefly, hoping that some fellow-sufferer will get some comfort from it-always remembering to take it in homeopathic doses.

We have found the loose-leaf system simple and efficient, enabling us to keep our records within easy reach as long as they are actively used and allowing us to cut out the useless stuff and send it to our dead files as soon as its practical utility has ceased. I don't think the system permits you to prove an alibi quite as successfully as Mr. Stern's system, but it has the merit of simplicity, although perhaps it is not as efficacious.

When a new case first comes into the office, it is marked in a bold and conspicuous hand "for the managing clerk," so that everyone in the office knows that at last the office has some new business. The filing clerk then makes an entry in a little folder which contains a record of all our cases. This folder corresponds to Mr. Stern's time sheets and to the old-fashioned office register. This little folder is, you see, very simple. These little blue sheets of paper have nothing on them but a line for the title of the matter and the words "Entry of," followed by a line on which the man making the entry puts his name. On these little blue sheets is entered whatever the lawyer has done on that particular matter on any par

ticular day, and the time he has spent on it. Of course, I will not guarantee that everybody religiously, even under the whip and spur of an intelligent stenographer, enters everything he does, but we find that our men do take the little blue sheets which are perforated and lie in batches on their desks, and enter at the end of every day roughly and in a perfectly illegible hand, with as much accuracy as you can expect in an ordinary law office, what has happened in that case. Now, the nicety of this system is that everything goes into the one folder. You don't have a managing clerk's docket and an office clerk's docket and a bookkeeper's docket. The whole history of the case is in that little folder, and it stays in there. These folders are filed in alphabetical order; that is, Jones against Smith would be filed under "J," and that is in contradistinction to the papers which we file numerically. This gives us a double index.

We have found by experience, both in our accounting system and in our record system, that we get along infinitely better if we don't try to keep all of a client's business under one head. We treat each matter as an account in our books and each matter has a different set of folders in our files whether it be litigated or non-litigated. Then, the matter goes merrily along more or less until it reaches this very cheerful hue: This pink slip represents the flowering of the plant. It is the same size as the blue slip, and it says at the top "Title of Matter" and right underneath that "Entry of" and the date. Below that is "Fee" and a blank, "Disbursements" and a blank, and "Bill Rendered To" and a blank. That is the warning signal that the bill has been rendered. The way we bill from the pink slip is very simple. It is very much like Mr. Stern's method. At periodic intervals the man who is charged with that duty goes through the records and temporarily removes from the files the matters which are ripe for harvest, and, with more or less success, endeavours to get the man who has the matter in charge

to send out his bill, and insert the cheerful pink slip. We are very partial to these pink slips in our office and we try to have a great many of them, just as many as we can get. That is a good system. It is subject to certain vicissitudes, however.

About a year ago one of my partners had put on his desk a big pile of these little folders from which to send his bills. He was not overly energetic that day, so before he left the office for the night he took them all up and put them in a waste-paper basket which basket he put on his desk. Our offices are well cleaned and well ventilated, so well cleaned that when he arrived at the office the next day, he found that the wastepaper basket with the original records in about one hundred and fifty matters had been emptied by the charwoman. We immediately set out to find them. We traced them from the charwoman to the janitor; the janitor had sold them to a junk man, and the junk man to a paper factory in New England. We immediately dispatched to New England one of our men to trace those records: he telegraphed back that he had that day bought a carload of waste paper in which our original records had been placed, and after a two-day search through that carload of waste paper we recovered our one hundred and fifty records. Even our system is not fool proof.

Now, that is all that there is to our record system, and I think that you will agree with me that it has the merit of simplicity, and, for lawyers, you must have something simple.

Our filing is done on the flat filing system. That is the only way to file papers in these modern times. We have a card index system with numbers. We file them under "Smith against Jones" and also cross-index them "Jones against Smith," so if we forget who our client is, we can always find the case by looking up the name of our adversary.

When the matter is closed it is taken out of the file, the

folder containing the pink and blue sheets is also taken out of its file, and placed with the papers so that the records of the matter-the papers and the records-are together. They are then taken and placed in dead storage and indexed as "dead" so that when we need to refer to an old record, we get the whole thing in a very simple and compact form. Now, that is our whole filing system, and, as I say, it seems to work very well.

The accounting system is necessarily a serious problem in any law office. Even in a small office a great deal of money is lost by failure to use proper books of account. Disbursements get away from you; charges are overlooked; and the whole thing gets mussed up. The system that we now have in our office is the result of a good many years of development with the aid of a firm of accountants, who have been changing it gradually from year to year, apparently every year providing some new improvement thereon as an aid to proper billing. In its present state of development, it stands about as follows: We have a loose-leaf disbursement book. The pages are numbered, however, so that you can keep some check on it in that way. It reads very simply. Here is the date and in large letters "Disbursements" and right next to it "Cash Paid Out." The page is divided into columns. Here is a column under "Day," then we say "Charge account of" and we leave a big blank there so that the name of the case or the matter may be plainly written in, and, as I say, we have an account for every case and every matter in the office. Then we have a column "Incurred for," and underneath is a warning "Give full details." This item is written in by the person who wants to spend the money. The man in the office who wants to get the money must fill out this form. He has to sign here and it must be approved by one of the persons in authority, and then the amount is entered under this column, and then here is a very simple column with the ledger reference which is inserted by the bookkeeper