Make More Rain : compensation, technology

My Attorneys Won't Enter Their Own Time

Admin — Fri, 01 Jun 2007 17:09:26 GMT

I have overheard “My attorneys don’t or won’t enter their own time!” more than a few times as administrators talked shop. Some attorneys believe they should not waste billable time on “administrative” duties. The problem, of course, is that the attorney is the only person who can accurately answer the question “What work was been done and how much of the attorney’s valuable time was spent doing it?"

After-the-fact remembering of what billable work was done is one of the reasons for the widespread belief that law firms pad their hours. According to Inside Counsel, 42 percent of your corporate clients think law firms pad their bills. It is even worse in the U.K.

Most of the resistance to “entering their own time” comes from baby boomers that bristled at the earlier trend of the back office to push accounting duties to the legal professional. New systems provide more flexibility. Attorneys have the option of using their BlackBerry® or computer to just enter or capture the essence of the work done. Collaborative features let their assistant or secretary add coding and “pretty up” the narrative.

Don’t get me wrong. If attorneys are comfortable with today’s easy-to-use lookup features, grammar, and spell check, having the attorney enter their time in a manner that does not require multiple hands to touch the entry has powerful advantages. The billing process is shorter and simpler and that speeds up collections—money gets in the bank sooner. But if an all-or-nothing approach means that some or all of your attorneys won’t enter their own time, take a look at some of the new systems with collaborative features.

TimeKM is one of the new time tracking alternatives attracting a lot of attention among law firms equipping their professional team with PDA devices like the BlackBerry. Attorneys can handle e-mail, take and make phone calls, and track their time with a single device—one that also includes their contact files, access to the Internet and extends other law firm systems to the attorney, regardless of location or time of the day. And it fits in your pocket or purse!

If you are interested in improving the time tracking tools for your legal professionals, ask your Practice Management or Time & Billing vendor if they support TimeKM™ or an equivalent alternative. I can tell you that TimeKM technology is built into MyJuris, the attorney desktop for the Juris Law Practice Management Suite of software.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income contact Juris National Sales Center: 877/377-3740, e-mail info@juris.com or go to www.Juris.com.

Law Firm Partner Compensation; The Case for Limited Origination Credit

Admin — Fri, 06 Apr 2007 17:26:00 GMT

People who sell are usually at the top of the food chain in every organization. Why? Because nothing happens until you have a customer or client. They are the force. They are the only source of revenue. They are the only thing that gives an organization the opportunity to succeed. Everything else is cost!

If it all begins with sales, it makes sense that origination credit, the equivalent of sales commissions in the business world, would be an important component in the compensation system of law firms. Having said that, there are good compensation plans and there are bad ones. Bad origination credit arrangements impede business development and get in the way of cross-selling, and team selling.

Think of the law firm as a triangular vessel that accumulates revenue-producing clients and matters.

The problem in most midrange law firms is that work doesn’t get delegated. Partners tend to hoard work. As their capacity is used up doing the work, new business development diminishes. It is a process that limits the firm’s performance and growth. What is the fix? The reward for “bringing in business” needs to be temporary. The politics need to be driven out of the system. You should get credit for making the sale if you make it, regardless of who will supervise or do the work. You should not get credit for the sale if you didn’t make the sale. Thus, new business occurring naturally from established relationships, referrals, and branded sales should not result in origination credit. The most important change needed to continually drive new business is that origination credit should expire with the case or matter, or for a continuing portfolio sale, it should expire after 12 or 24 months. Origination credit should be viewed more as a “bonus” than a way to build a compensation annuity. The emphasis should be on “what have you done lately?" Providing a handsome bonus for bringing in new business, say 20 percent off the top, requires that not all revenue be burdened with an origination cost.

Law firm partners are revenue producers, but if their individual production is all they contribute, the firm’s capacity is fixed and limited. One can break through that capacity barrier only if partners recruit, mentor, delegate and supervise. The role of a midrange law firm partner is to bring in business and get as much of the work done by others as practical. Thus, a sound compensation plan will not only have a “commission” component designed to reward for current “sales” (rainmaking) success, it should also compensate for supervision of the cases and matters regardless of who does the actual work. In midrange firms, this is typically the billing attorney role.

When it comes to individual production, the plan should not reward partners for neglecting rainmaking and delegation. One way to do that is to provide the partner with a billable target for personal production, one that leaves room for business development and the duties associated with delegation and supervision duties. Those hours are job requirements, and for that target the partner would receive a base compensation. The variability in compensation should come from three sources:

1. Collections for matters and cases under the partner’s supervision regardless of who did the work. That will include collections related to the attorney’s personal production as well as that attributed to others.

2. Origination credit earned only on new business where the partner actually closed the business. The credit is limited to the case, or for new portfolio business, it is limited to the revenue produced only for a temporary period such as 12 to 24 months.

3. A subjective element based on performance that considers assigned individual goals, teamwork, and support of firm strategies and policies.

Of course, it is always easier said than done. Fitting the pieces together is never easy. What is important is to understand that a compensation plan that is weighted heavily toward individual productivity limits partner income and firm capacity. Without rainmaking, delegation, and supervision, the triangle that represents the firm’s capacity is significantly smaller.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Sixty Web Sites for the Lawyer

Admin — Thu, 05 Apr 2007 17:06:47 GMT

Unfortunately, recovery from surgery kept me from attending the 2007 ABA TechShow. It is the first I’ve missed in a long time, and the reports are that the sessions were exceptionally strong this year. The session titled “60 Sites in 60 Minutes” included www.morepartnerincome.com among its short “Hall of Fame” List. Here is the Hall of Fame list for 2007 as it appears on the ABA TechShow web site:

www.lawmemo.com/SCT/: Covering all U.S. Supreme Court cases, this new feature compiles information and commentary into a resource that houses virtually everything you might want to know about a case. The front page lists all cases on the court's docket. Each case is linked to its own omnibus page. The page includes a plain-English summary of the case, the questions presented and links to blog commentary, the lower-court opinions, the oral argument transcript, all briefs, the decision when issued, counsel for each party and outside resources.
thomas.loc.gov/: This is an oldie but goodie, and it just keeps getting better. I've always used this site to watch Congress and the progress of legislation, but the site now carries links to the Constitution, access to Committee reports, treaties, the U.S. Code, government legal resources, and even webcasts from the Library of Congress.
www.morepartnerincome.com: A fantastic website/blog updated every day with a variety of information related to increasing law firm partner income and business intelligence tools.
blogs.adobe.com/acrolaw/:An entire blog devoted to using Adobe Acrobat in a legal environment. Rick Borestein's blog is becoming THE go-to place for questions law firms have about their digital documents
www.72hours.org/index.html: San Francisco has done a bang-up job of compiling a simple guide to common disasters and the questions they give rise to. Is your family prepared for floods, terrorist attacks, or long-term power outages? An excellent starting point.

For the complete list of 60 sites plus some additional bonus sites, go to the ABA TechShow web site and select the menu item 60 sites 60.

Morepartnerincome finished March 2007 with a viewing volume for the month of 153,503 by 27,825 distinct hosts. If this blog site has proved itself of value for your law firm, I would like to hear from you. Send your email to morepartnerincome@juris.com. I also welcome topic suggestions for future posts. If you have issues you are wrestling with or have achieved a recent management breakthrough, let me know about it. Give me your mailing address and I will send you a Morepartnerincome hat for that next partner retreat or golf outing. If you are a cyclist and would prefer a Morepartnerincome jersey, be sure to read the post Wanted: Lawyers Who Cycle.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Endurance, Not Age, Is the Issue for Law Firm Partners

Admin — Wed, 04 Apr 2007 17:01:57 GMT

Authors Mortimer Feinberg and Aaron Levenstein, when noting that talent and ability are not enough, quoted the famed actress Helen Hays: “Nothing is any good without endurance.” Their article Building Endurance appeared in the Wall Street Journal in the 1980s. Nothing has changed. Endurance is still the essential element that makes for an effective law firm partner or an effective leader.

With the aging of the baby boomer generation, the retirement issue has become increasingly important, especially as many key rainmakers and law firm leaders brush against retirement age. Age isn’t the issue. Endurance is. Unfortunately, endurance declines as we approach that all-too-unwelcome age marker—65. Granted, some people do not experience a decline in endurance until later. On the other hand, it can come sooner. As we enter our 50s, the chances of disability and energy-robbing illnesses become more likely

There are things that each of us can do to maintain and build endurance. Feinberg and Levenstein set out four:

1.     Know how you recharge your batteries. For some, this may be music, golf, or a long leisurely walk. For others, it may be extreme physical activity—cycling, running, the gym. Know what yours is and take advantage of it to avoid burnout.

2.     Keep a sense of humor, including the ability to laugh at yourself. It relieves stress not only for you but for those around you.

3.     Multiply you own resources of stamina by recruiting the strength of others. In short, delegate and ask others to do for you.

4.     Recognize your failings (weaknesses) as well as your strengths and virtues. Don’t waste energy on weaknesses; put your energy behind your strengths.

For most partners, declining endurance doesn’t come from burnout. It comes from an actual decline in physical stamina due to age and age-related illnesses. The best advice here is two-fold:

· It is never too late to adopt a disciplined exercise program to maintain and improve physical strength.

· With increasing age and experience, shift your emphasis from “doing it yourself” to “doing it through others.”

No matter what measures we may take to maintain our individual endurance, it will eventually lower our ability to contribute on an equal footing with younger members of the firm. Regardless of when it happens, it will happen. For the benefit of both firm and its senior members, the transition out of the partner role needs to be planned and carried out in an orderly fashion.

By the late 50s, there should be an understanding between a partner and the firm as to the path toward retirement. Usually this involves a change in the partner’s role from working attorney to manager, mentor, statesman, goodwill ambassador, community mover and shaker, etc. As long as we have the desire and the capacity, there are many ways other than long hours and high-energy lawyering to continue as a valuable contributing member of the firm. There are successful partners continuing to make important contributions well up into their 70s and 80s. They may represent the firm’s brand. They know who is who. They are respected in the community. They can give important clients top-level attention to cultivate the firm’s relationship with those key clients and, while at it, cross-sell services. They can publish, speak on behalf of the firm, and fulfill the firm’s obligations for community and charitable duties. Along with a changing role, the firm may need to refine compensation for partners in the transitioning process by moving to a compensation plan that places the emphasis on management, rainmaking, and handing off business and origination to the younger partners.

Plans can change quickly. Even for the mature partner with no plans to retire there should be an annual conversation concerning retirement plans. That conversation will eventually have to turn to the firm-driven need to prepare for the partner's inability to continue in his or her former capacity.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Media and Communication Training Increases Law Firm Income

Admin — Tue, 03 Apr 2007 16:51:25 GMT

I’ve mentioned the Pincus Group in a previous post titled Communications and Presentation Skills for the Attorney. They are a communications and media training company. I’m sure there are others out there as well. However, I have worked with the Pincus Group and seen their results. You need to know about them and organizations like theirs. Why? Because, effective communication is the essential ingredient for individual and organizational success. Why would you wing something so important to success when there is an alternative—professional media and communication training?

Most of us think of public speaking when the topic of communication skills comes up. Public speaking is important, and doing so can pay off for the attorney and the law firm, but only if you’re good at it. You can be with training. But public speaking is just a side issue. We spend our day communicating. Yet, developing your message and staying on message aren’t natural skills. Communication is the key to persuasion and relationship development. We develop new business through communications. We recruit new talent through communication. We develop our relationship with clients through communications. We win victories and settle disputes around conference tables and in court through our communication skills.

You can’t get elected for office unless your craft the right message and then stay on message. That skill is no less important for the law firm leader or working attorney. Without training, there is a vicious pitfall just waiting for you—the reporter. Without professional training, you will not be a happy camper later when reading the reporter’s story.

Providing the law firm’s players with professional media and communication training is an income-enhancing move for the law firm. It will improve rainmaking and client satisfaction. It will improve the results you achieve as a lawyer. It will kick the law firm’s reputation up another notch!

The Pincus Group is located in D.C., but they will do group training for your law firm anywhere that's convenient for you. Sessions are customized for individual needs but all involve interactive practice with Pincus’ seasoned coaches. Your team learns by doing, enhancing skills with videotaped exercises specifically designed for them. Training sessions can be tailored for half-day, full-day or two-day sessions.

In addition to training for your own law firm, consider your firm’s clients. As their trusted advisor, you may have business executives among your clients for whom media training would make an important difference to the success of the business or the venture being pursued with your assistance. Such training is especially important for businesses seeking investment funds or considering a public offering.

For more information, visit thePincus web site or call Aileen Pincus at 301/938-690 or reach her by e-mail at apincus@thepincusgroup.com.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

$30 Million Law Firm Embezzlement; How Can That Happen?

Admin — Mon, 02 Apr 2007 17:07:11 GMT

“Hardworking” attorney embezzles thirty million dollars! My brother J. Steven Collins, the Knoxville attorney and one of the founding partners of Burroughs Collins & Jabaley, PLC, forwarded the story to me and asked, “How can that happen?”

Unfortunately, law firm embezzlement is hardly an infrequent event. The amounts change and the embezzlers can be a billing attorney, administrator, office manager, accountant, or bookkeeper, but many similarities are present in reported cases.

Back to my brother’s question, how can this happen? There are several factors making law firms more susceptible to misappropriation of funds—part-time executive management, absent or weak financial management, inadequate internal controls, high volume of pass-through disbursements, decentralized approval and signing authority, plus a tradition of deadline or crisis-driven transactions. Many law firms have to add to the list the power of unchecked individual attorneys to create their own rules when it comes to “their” clients.

One study by a major CPA firm reported that the average incident goes on for 18 months before detection. More than half of the time the defalcation is exposed only through a tip or by accident. External audits are not the answer. Less than 11 percent of embezzlers are caught as a result of external audits. Fraudulent checks, credit cards, payroll, petty cash, and outside vendor accomplices are all favorite tools of the law firm embezzler.

According to the ABAJoural EReport story, Lawyer Stole Millions, Indictment Says, by Stephanie Francis Ward, this New Orleans partner sent clients fictitious billing statements with enclosed self-addressed envelopes, directed to the attorney’s attention. Funds received were deposited to the firm’s trust account for the client. The partner would then ask the firm’s accounting department to write checks from the trust account to businesses he set up and controlled. Those businesses were disguised as transaction participants. The partner allegedly created phony paperwork, such as closing documents, to make the transactions appear legitimate. The attorney was described as hardworking and was one of those who insisted that any billing questions related to “his” clients be referred to him for resolution. He was discovered because a temporary worker, who didn’t know about his hands-off rules, received a call from a client asking about a bill.

Perhaps the most common characteristics of the embezzler are the following:

Completely trusted and never checked
Several years service with firm
Rarely takes vacation/holidays
Secretive and rarely delegates to others

While they apparently did not apply in the $30 million case, four other characteristics are often present:

Personal/family health or financial problems
Lifestyle inconsistent with income
Rumors of affair or drug/alcohol abuse
Unusually close relationship with vendor

What should you do to protect your firm? First, select business software with built-in audit trails and controls. Do not allow chiefdoms within the law firm. It is a business, and no attorney should be allowed to create their own rules, bypassing internal and business controls, for the handling of “their” clients.

Remain alert to the reality that it can happen in your firm. Keep your eyes and ears open. Obtain professional assistance to implement appropriate internal controls, including segregation of duties. Insist that employees and attorneys take vacations as consecutive days under an arrangement where others assume their duties. Send trust and accounts receivable statements showing all transactions independent of the individuals responsible for billing. Do not let a crisis take over and circumvent normal controls and procedures. Budgeting, comparative financial results, and detailed review and questioning of monthly financial statements are an essential function of law firm management and play a vital role in protecting and preserving the assets of the firm.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Wanted: Lawyers Who Cycle

Admin — Fri, 30 Mar 2007 16:54:24 GMT

There are many partners involved in law firm management who are also cyclists. Some race competitively. For others, cycling is just the new golf. Regardless, I would like to know who you are and if you would be interested in a cycling camp that combines sessions on increasing law firm performance with cycling.

Send me an e-mail at morepartnerincome@juris.com. Let me know how morepartnerincome.com is making a difference for you and whether or not you would be interested in attending a morepartnerincome cycling camp. E-mail me within the next few days and I will send you a free morepartnerincome.com jersey (large or extra large) making you an honorary member of the morepartnerincome / Juris team.

My son Stephen Collins, President and CEO of Juris, Inc., rides competitively. I’m more in the recreational zone, and unfortunately, right now I’m grounded recovering from surgery. But with spring here, I’m ready to ride as soon as the doctors give the okay.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

The One-Person Planner Approach for the Law Firm

Admin — Thu, 29 Mar 2007 17:08:42 GMT

Survey after survey discloses that only about 20 percent of midsized law firms engage in a formal planning process. Yet, the evidence is clear that those that do have a process outperform those that don’t. If your firm is one of the 80 percent without a formal planning process, you still need to plan—to think about the business of the law firm and into what and how do you want the law firm to change.

I previously posted a step-by-step quide for structured strategic planning as a team, but in this post, let’s take a simpler approach—a “one-person planner” approach. How do you proceed as one individual when thinking about the business of the law firm? Start by taking an inventory—what is the nature of the business today and then proceed to what you want it to be and what is required to get there:

What do our clients have in common (who are they)?
What do our clients think of us?
Who are our Partners- professional strengths, people and team skills, business strengths, marketing strengths, aspirations, traits, ages, satisfaction with income level, satisfaction with status quo, retirement goals?
What do our other lawyers have in common (who are they); are they the right people; do we have the right number; are we fully utilzing them; are we training and developing them as we should?
How do we stack up financially—per-partner income, rates, leverage, realization, margin?
How are we growing our business; where does our new business come from?
What is good and not good about our facilities?
What is good and not good about our administrative team?
What is good and not good about our systems and equipment?
Who are our competitors, if any, that really matter?
What are we really good at?
What do clients ask of us that we are not good at?
What are our biggest threats, if any, that really matter?
What are our best opportunities?
What is the firm’s value proposition—what elevator response would we give to someone who asks, “Tell me about your firm”?
Are you satisfied with who and what your firm is? If not, what do you want it to be?
If you are not satisfied, what do you want your value proposition to be—what elevator response would you like to give?
What is keeping you from being what you want to be?
Make a list—what has to change to get where you want to go?
Go back over your list and reshape it into a big picture.
The vision: This is who we are and want to remain or this is who we want to be.
What are the three to five main things that will determine the success of that vision?
What strategies are we going to rely on to achieve those main things?
- What tactics or programs will we implement to support the strategies and who is going to be responsible for what?
- How are we going to measure and report progress?
- How are those responsible going to be held accountable for their delegated role?

Now here is the caveat. Now you have to sell your plan. A one-person planning team can only take the progress so far. You need a consensus for a plan to work. Everyone doesn’t have to agree with every aspect, but they must agree to the destination and the road, the key strategies, for getting there.

I call that consensus “getting on I65 North”. The message I65 North conveys is that we are going north and we are going on this specified road. You can travel at your own speed as long as you are not endangering other travelers or impeding their progress. But you can’t go South, East, or West. If you want to go somewhere else, there are exits along the way.

The truth be told, the easy way to sell your plan is to move to the next level and repeat the process as a team. You’ve gone through the process and, having done so, you are in a position to facilitate the planning process. New light bulbs may go off during the process, but the team is likely to wind up with a plan very similar to the one you scoped out initially. Only this time, they have ownership.

When you plan as a team, you may want to use the strategic planning guide from a prior post or you may feel more comfortable initially by sticking to a modified version of the above one-person planner approach for now.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

A Formal Client Service Standard for the Law Firm

Admin — Wed, 28 Mar 2007 17:07:00 GMT

We often take for granted that everyone is on the same page when it comes to how clients and prospective clients are to be treated. Unfortunately, life just isn’t that simple. The leadership of the law firm has to communicate service standards—the firm’s expectations about how every member of the firm will treat clients and prospects. Law firms are in a constant state of change. People come and go. For services standards to become institutionalized, to become a integral part of the firm’s culture, the standards must be formalized, communicated frequently, and the leadership must hold people accountable for honoring those standards—they must be job requirements!

Janet Ellen Raasch has penned an excellent paper dealing with implementing a formal client service standard in the law firm. Her paper,Set Your Law Firm Apart with a Formal Client Service Standard Policy, appears on CBA PracticeLink, and the site also includes an online or downloadable presentation on the subject. The Canadian Bar Association puts out a wealth of top quality practice management material on their web site. Add it to your favorites list as a source of ideas for continuous improvement.

In her paper, Raasch includes the following sample list of client service standards which she complied from a variety of Canadian and U. S. sources:

We will put clients first – on our premises

We will be welcoming – the client will be greeted by name first by a professional receptionist and later by attorneys and staff.
We will be punctual – so the client will not have to wait.
We will make an unavoidable wait pleasant – offering a beverage, a comfortable waiting area, entertainment (television or print materials), directions to the restroom or coat closet, and access to the phone and Internet. We will apologize for any delay.
We will not make negative comments or discuss any client’s business in a public place (hallway, elevator, or snack room) where it might be overheard by a visiting client.
We will keep the files of other clients out of the view of visiting clients.
We will give a visiting client our undivided attention – putting other calls and distractions on hold until after the meeting.
We will introduce the visiting client to other attorneys and staff – especially those on the client team.
When we see an unfamiliar person in a hallway, we will ask “Can I help you?” and then stay with the visitor until the visitor’s need is met.
When a client sees our office space or our print and electronic materials, the design will convey the message that we place clients first.

We will put clients first – by being accessible

We will provide clients with our office, cell, and home phone numbers as well as e-mail addresses.
When out of the office, we will carry BlackBerries, cell phones, and laptop computers with remote access to firm resources.
We will provide clients with extranet sites where they can access information about their matter 24/7.
We will answer our own phones. When this is not possible, the client will have a choice of phone mail or talking to a real person.
We will train all attorneys and staff (especially switchboard personnel) in professional communication protocols.

We will put clients first – by being responsive

We will check for phone and e-mail messages regularly and return them within a set period of time – no longer than 24 hours, and preferably much less.
If we can’t respond to a message personally, we will make sure someone else who is familiar with the client’s case or matter returns the call.
We will check for and acknowledge the receipt of all faxes.
We will let clients know when we will be out of reach and give them the contact information of the person who can answer their questions in our absence.
We will make sure that each client has multiple contacts at the firm, and that the client’s staff has contacts among parallel members of the law firm’s staff.
We will learn and use the names of a client’s staff; we will be courteous and respectful at all times.
We will respond to any complaints, fix them, and let the client know how the problem has been fixed.

We will put clients first – by understanding their needs

We will ask clients about their service preferences before, during, and after each engagement.
We will create a client service ombudsman – and encourage clients to contact this person if they are less than perfectly satisfied.
We will listen more than we talk. We will never give the impression that we are too busy to give a client our complete attention.
We will visit each client on their premises at least once a year – off the clock – to ask about client satisfaction. We will ask for a tour to learn more about their business.
We will take a hard look at our own interpersonal skills – and ask for professional development assistance if necessary.
We will keep current with developments in our client’s industry, reading industry publications and participating in industry organizations. We will keep track of and congratulate clients on their industry successes.
When appropriate, we will co-locate a lawyer on the client’s premises.
To respect the client’s financial needs, we will staff each matter in a way that provides the best value for the service provided.

We will put clients first – by continuously improving our procedures

We will manage client expectations through clear client intake procedures.
We will communicate clearly regarding fees, costs, team members, deadlines, risks and outcomes.
We will hold a team meeting with the client at the start of any engagement.
We will avoid surprises.
We will discuss a proposed action with a client before we incur any fees.
We will provide clients with copies of documents – in the format they prefer.
We will review documents carefully for typos, misspelled names, or missing pages.
We will meet or exceed our deadlines. If we cannot, we will let the client know well in advance.
We will handle client correspondence promptly upon receipt, using a routing system.
Our bills will be clear, correct, prompt, and in a format that meets the client’s needs.
We will review the first bill with the client and resolve any questions promptly.
We will provide a status update monthly, even if there are no billed hours.
We will accept responsibility for any mistakes, apologize, and provide a solution.
At the end of any engagement, we will send a thank you note. We will survey to find out how we could have provided better service. We will make changes to our procedures based on what we learn from our clients.

Sample Client Service Standards

Janet Ellen Raasch is a writer and ghostwriter who works closely with lawyers, law firms and other professional services providers – helping establish these clients as thought leaders within a targeted market through publication of articles and books for print and rich content for the Internet. She can be reached at (303) 399-5041 or jeraasch@msn.com.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Rolling Realization Computation for Law Firms

Admin — Tue, 27 Mar 2007 16:42:39 GMT

Across the board, most midrange law firms fail to collect a material portion of their work product due to work flow, poor billing practices, and weak collection management.

Losses begin with poor time recording practices. After-the-fact accounting for work performed remains a badge of courage for a portion of the baby boomer generation. Some firms simply have not considered it important enough to require its professional staff to use modern technology to track and report time as work is performed. Work product is lost to imperfect memory, unless contemporaneous time tracking is standard operating procedure.

Additional losses are attributed to what some have labeled invisible expenses. If you had to show write-downs on your financial statements, how would they stack up against other expenses of the firm? The industry mean for realization of billable effort worked is around 90 percent. You may be better than average or worse. But, if on average you collect $15,000,000 in fees annually, that amount is net of write-downs, adjustments and uncollectible amounts of almost $1,700,000.

The answer is management. First and foremost, you have to have the information you need to manage, and that should come from your law office business system. You want to know who is writing off billable time, whose work is being written off and why. You must hold people accountable to justify their actions. That justification will point you to the solutions.

True realization is difficult to measure because of timing differences between billings and collections. If you want an accurate picture of what has been happening, use the backward-looking rolling computation method. The rolling computation method mines your financial database, extracting only fully paid bills and then measures each layer of realization:

o        Pricing Realization: Lost revenue due to negotiated rates

o        Billing Realization: Lost revenue due to write downs before the bill gets out the door

o        Collection Realization: Lost revenue due to write offs, adjustments, and uncollected amounts after the client was billed

o        Overall realization: The overall lost revenue due to all the above

Your reports should measure realization by matter, client, working attorney, billing attorney, originating attorney, practice class, etc. Rolling realization reports aren’t usually a standard report option, but your software vendor should be able to work with you to develop a set of custom reports that fits your particular firm. While this backward-looking report lags months behind current firm activity, it is often an eye-opener that identifies previously unaddressed problem areas that are reducing the income of every partner in the firm.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Law Firm PEP (Profit Per Equity Partner) Under Fire

Admin — Mon, 26 Mar 2007 17:28:49 GMT

PEP as a measure of law firm financial performance has come under fire lately. See the Adam Smith, Esq. post Is PEP the Proper Measure of Success?. Profit per Partner is a perfectly legitimate measure of financial return to the owners of a law firm. There are, however, those shortsighted firm leaders who would maximize PEP at the expense of long-term law firm success just as in the corporate world you can find some less-than-stellar CEOs who focus on earnings per share while damaging the long-term value of the business.

How should performance of a law firm be judged? What attributes should management use as its steering points for long-term success? For the answer, you don’t have to look far. Peter Drucker spelled out the eight areas in which organizations create value in the eyes of those to whom it is accountable. The eight key result areas are:

Customer Satisfaction
Productivity
Innovation
Resources
Management Development and Performance
Employee Attitude and Performance
Public Responsibility
Profitability

The point is no single metric tells the whole story. The successful organization must address each of the eight areas through its objectives and control systems. It must set goals, measure performance, and hold people accountable in all eight areas. Profit per Partner is just one measure. It isn’t an inappropriate one. Like any other single metric, it can be inappropriately pursued.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Successful Rainmakers Look Close to Home for Results

Admin — Fri, 23 Mar 2007 17:14:00 GMT

The Remsen Group’s Marketing Tip of the Month is a reprint of Seven Habits of Successful Rainmakers by Sara Holtz of ClientFocus.

As I see it, the most important point of Holtz’s article is that the most successful rainmakers “treat their current and former clients as well as, or better than they would treat a prospective client”.

It is our existing relationships that foster new ones. It is from those relationships, including our existing and former clients that referrals come. Yet, as Holtz observes, “some lawyers focus their marketing efforts on cultivating new relationships with people they have never done business with before. They ask these ‘strangers’ out to lunch, invite them to firm seminars, and call and e-mail them. Meanwhile, their most valuable assets—their existing clients—are being neglected“

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Improve Law Firm Performance by Understanding How You Perform Best

Admin — Thu, 22 Mar 2007 17:09:46 GMT

First, capitalize on your strengths! Why? Peter Drucker answered that question this way: “It takes far more energy to improve from incompetence to mediocrity than to improve from first-rate performance to excellence.”

As an individual, or for an organization, the greatest success will come from capitalizing on strengths rather than through efforts to overcome weaknesses. Likewise, success is greatest by pursuing opportunities rather than solving problems. Knowing oneself—understanding your strengths—is the first step toward career success, optimum income, and wealth accumulation.

In writing about Managing Oneself, Drucker places a great deal of importance on the need, particularly for knowledge works, to understand “how you perform” best.

Are you a reader or listener? Fail to understand which you are and then relying on the wrong one and you will not perform or achieve excellence. Drucker points to Dwight Eisenhower who learned by reading and excelled as Supreme Commander of Allied forces in Europe when supplied with written briefs. But when he stepped into a new roll as President and attempted to follow the oral briefing methods of Truman and Roosevelt, both listeners, he appeared ill-prepared and equipped in front of the Press. The opposite was true of Lyndon Johnson, a listener, who inherited his predecessor’s staff. Kennedy was a reader. Johnson never effectively absorbed written briefs.

Some of us (I’m one and you could also be) do not learn by either reading or listening. We learn by writing. As it was for Churchill and Beethoven; neither reading nor listening is enough. I must write about it to learn. I must write about it to develop the idea or craft the strategy, the solution, the transaction, the opportunity, etc. We are sometimes mislabeled as people who have to “sleep on it”. We make our best and most creative decisions after we have found a quiet corner and written about it.

Just as listening and reading are not enough for writers, there are those who learn by hearing themselves talk. They need people in the room listening to their ideas and explorations. Drucker, himself a talker, says that learning through talking is by no means unusual and notes that successful trial lawyers are often talk learners.

There is no right method. There is no wrong method. Which ever you are is your strength, not your weakness. Try to be what you are not, and you greatly reduce you effectiveness. Once you have your own answer, tell others. When those you work with understand how you “perform best,” the collaborative results are improved. That, of course, means that next you should determine how others around you “perform best”. Who are the readers and listeners? Who are the writers and talkers? Understanding each other improves team results.

You can download a copy of Peter Drucker’s 1999 article Managing Oneself from the web site of the National Legal Aid & Defender Association.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Law Firm Scheduling, Is Continuity Good or Bad?

Admin — Wed, 21 Mar 2007 17:54:18 GMT

In responding to a question, David Maister wrote the following:

“Ultimately, clients care about quality, efficiency and service - continuity is just a short-hand rule-of-thumb to try to get to these things. If you can be more thoughtful about how you achieve these things, they will give you more leeway in pursuing your other goals and won't insist on always seeing the same faces. And, with more thoughtful staffing, you'll be able to improve leverage, profits, learning and morale.”

The work one gets determines the future of the individual attorney. Give them limited exposure, the same old stuff or the same clients year after year, and you will neglect the full opportunity to enhance the value and potential of the attorney. You are likely to lose them to someone who they think is more concerned about their professional development. It is over the professional development issue that most associates switch firms.

The problem appears to be a general lack of centralized schedule management in midrange law firms. Someone other than each individual partner needs to manage firm-wide scheduling. An alternative is needed to the frequently seen model where work is doled out by partners to “their associates” or “their favorite associates.” There has to be a counterweight to the easy and expedient “continuity” method that leaves associates stuck working with the same partner, same client, and/or on the same style matter.

For an enterprise whose factory floor is composed of talented people rather than machines, it is surprising that more technology is not available and used for managing the maintenance (professional development) and scheduling of the firm’s production resources (its professional talent). This is one of the areas of future product development that the Juris team has been considering. Technology is one thing; having a culture that makes scheduling a strategic issue must come first. How do you have the best people and the best future leaders without making their development a priority? How can you do that if scheduling is not a key tactic in that pursuit?

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.

Billable Hours vs. Head Count Leverage in Law Firms

Admin — Tue, 20 Mar 2007 17:02:23 GMT

The question of leverage is becoming more complicated given the increasing use of part-time lawyers and those working flexible schedules. Likewise, a pure head count approach where a firm underutilizes non-partner lawyers produces a misleading result.

William Johnston and Kristin Stark of Hildebrandt International address the leverage and underutilization issue in their paper titled Are We Approaching a Profitability Plateau?

“While partner/associate leverage is widely regarded as one of the drivers of economic performance (much like realization, productivity, etc.), leverage of billable hours is more important and should be given greater attention than leverage based on body count. Leverage is often stated as the ratio of non-equity lawyers to equity partners; economic leverage focuses on the total billable hours each group works. A surprising number of firms, including some of the largest firms in the country, have solid leverage based on body count, but only mediocre leverage when based on billable hours. These firms should reevaluate their use of leverage. Leverage is only positive when you can keep the timekeepers busy. After all, having a high associate-to-partner ratio is fairly meaningless if the associates are underutilized. Firms where 'body count' leverage far exceeds billable hour leverage typically have a large number of lawyers who neither work very hard as a working attorney nor generate significant business for the firm. Successful firms have the courage to take action when lawyers under perform, including counseling lawyers out of the firm.”

To see what the authors are talking about, compute your firm’s body count leverage and then compute the ratio of non-partner billable hours to partner hours. To illustrate, the related numbers for a composite of all survived firms as determined by the 2006 Juris Law Firm Economic Survey were as follows:

Partners: 12

Associates: 12

Leverage based on Body Count 1:1

Partner hours: 19,956

Associate hours: 17,724

Leverage based on hours: 0.89:1

While the body count leverage is 1 to 1, associates' hours were 89 percent of those produced by a partner, reaffirming the chronic underutilization of associates in midrange firms.

Morepartnerincome differs with the Hildebrandt team when it comes to corrective steps. Conditions on the ground may, in some cases, warrant thinning the law firm ranks of under-producing lawyers. However, spotty cases of attorneys who are inclined not to “work very hard” cannot account for across-the-board low body count leverage and even lower hourly leverage among 75 percent of midsized law firms. The blame rests not on lazy lawyers, but on law firm partners who hoard work at the expense of delegation and business development. Chopping heads is a short-term fix to stop the blood flow. The long-term solution is improved scheduling and delegation coupled with increased partner emphasis on business development, recruiting, and association development.

Back to the issue of measuring leverage, the issue of relying on body count leverage alone raised by the Hildebrandt authors illustrates why sound management requires a balanced approach in using law firm performance metrics. Leverage, utilization, price, realization, and margin must all be considered. Top performing law firms score highly in all metric categories. When it comes to measuring leverage, part-time and flex schedule attorneys add an additional complication. One simplifying technique is to use non-equity equivalents in computing traditional body count leverage. Two half-time associates equal one non-equity equivalent, for example. When using equivalents, the fractional measure should be based on compensation not on the billable hours that part-timers generate. If a flex hour attorney is costing you two-thirds of a comparable associate, they are two-thirds of a non-equity equivalent, even if they are producing at the annual level of 500 or 1500 hours.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income, go to www.Juris.com.