Make More Rain : productivity, blog

Cash Flow An Important Metric For Law Firms

Admin — Thu, 10 Apr 2008 07:00:03 GMT

No matter how much you work, until you convert it to cash it is worthless. The average days in the law firm cash flow cycle (from worked to collected) is 169 (source: 2007 Law Firm Economic Survey from LexisNexis). Shortening your cash flow cycle has a positive impact to liquidity and thus your cash flow cycle should be measured.

There are two metrics that need to be measured: days to bill and days to collect. Determining these numbers on a timekeeper level identifies those timekeepers who are efficient and those who aren't. The opportunity then is to set a standard and work towards compliance by all timekeepers.

What is this standard? It depends on the area of practice. Many insurance companies just won't pay under 60 days of accepted electronic invoice and will only accept these invoices quarterly. In this case, 150 days isn't so bad. Some areas of law (many domestic relations situations come to mind) should, by default, be prepaid. Any work in process should be billed immediately and applied against the prepayments. In these cases a cash flow cycle of 60 days should be cause for concern.

Tools such as Juris from LexisNexis' Active Information can help you track this key performance indicator so that you can improve your liquidity.

We have begun taking submissions for the 2008 Law Firm Economic Survey. If your firm is interested in participating, please contact Brian by clicking here.

Management ABCs: The Hawthorne Effect

Admin — Tue, 18 Mar 2008 07:00:10 GMT

A method of increasing performance is based on the Hawthorne Effect. Although several of the experiments have been downplayed by social psychologists, the effect that attention has to performance is as true today as it was when recorded at the Hawthorne Plant in the 1920's.

Basically, when attention is given to the performance of an employee, the employee's performance increases. Simply put, measurement improves performance. If you set goals for your timekeepers and don't measure them against the goals, the incentive to succeed is left to trusting individuals to meet their goals.

How well suited is your firm for a loss of a client such as Bear Stearns (or, perhaps, Lehman Brothers)? Gerry Riskin wrote in January to make your firm recession-proof. Some of the factors listed in recession-proofing the firm:

Ramp up frequency of financial reporting (monitor the firm's key finanacial metrics);
Make hard decisions humanely and fast (monitor under-performing timekeepers);
Manage internal expectations (monitor expectations to keep staff motivated and avoid "business as usual");

Each of the above requires attention. Trust alone that the individual timekeepers will respond to economic crises is a recipe for disaster. A better management model is the Hawthorne Effect. Everyone needs to be accountable for results. Let the effect of attention to performance help the firm during difficult times.

The effect of measuring performance brings other benefits. Beyond improving results, keeping attention on profit drivers has the added benefit of opening opportunities - even in bad economic times. As Riskin notes, [w]hile strategy may be more challenging during recessions, if you grasp the nettle, opportunities will arise to enhance your client mix and your talent base.

We have begun taking submissions towards the 2008 Law Firm Economic Survey. If your firm is interested in participating or if you would like more information, please contact Brian by clicking here.

For Long Term Increases To Income, Partners Must Delegate Work

Admin — Mon, 17 Mar 2008 07:00:09 GMT

I spoke Friday at the ABA Techshow on profitability and the key drivers of partner income. At the end, I posed some questions to the audience to facilitate discussion on the findings of the 2007 Law Firm Economic Survey. One of the questions I asked was "why would firms have low associate utilization?" A partner in the audience responded, "Partners don't trust them to do the work."

That is a common answer I hear from partners. However, without fully utilized associates, firms can't leverage. Leverage affects the growth of the firm and there was a strong correlation between leverage and income by respondents of the 2007 Survey. The challenge for small to mid-size law firms is finding ways to increase associate utilization so that the firm positions itself to leverage. If trust is an issue, then confront it. Mentor associates so that you can trust them to do the work as you would.

An article written by Allison Wolf in her Lawyer Coach Blog titled The Fine Art Of Delegating was the basis of a post by Tom Collins in August, 2007 called Spinning Increases Law Firm Income. Both Wolf and Collins stress that partners who aren't "spinning" work to associates need to face the reasons that prevent them from delegating - don't let the reasons be an obstacle.

Wolf writes:

Delegation is one of the lawyer behaviors that need to be rewarded by compensation committees. For a law firm to be most profitable partners are required to spin work down to juniors. Savvy compensation committees look at the combination of billable hours and spin earnings when allocating partner income.

Collins adds:

[A] firm’s compensation plan is often the reason Why Partners Hoard Work. That, in turn, leads to poor leverage, underutilization of associates and high turnover.

On the issue of trust, Wolf writes:

Successful people surround themselves with talent. Your challenge is to help develop the juniors so that they do the work as well if not better than you do.

Formal mentoring programs are still rare in small and mid-size firms, yet the need is apparent based on the findings of the 2007 Survey and from what I hear from partners. In a year where inflation may very well end up over 4% (over 1% higher than the annual average the past 10 years), firms can't rely on rate increases alone to maintain income. Develop programs to help associates manage more caseload. Give partners an incentive to delegate and mentor. Those who do will create the circumstances necessary to leverage and grow the firm, ultimately leading to sustainable increases to income.

Generation Y Attorneys - Is It Lack Of Motivation, Or A Difference In Focus?

Admin — Fri, 14 Mar 2008 07:00:13 GMT

While sitting on a plane on the way to the ABA Techshow, I was reading the February 2008 issue of the Harvard Business Review. An article titled, Task, Not Time: Profile of a Gen Y Job, caught my eye. I often hear managing attorneys lament the lack of motivation of associates. The article in the HBR may provide a reason for the disconnect - it isn't that young associates are not motivated, but that they may respond differently than their elders to the conventions of work. Where many look to the hours you spend at the office as a measure of productivity, the HBR article suggests that the younger generation looks more to results, or task-based productivity.

Many younger employees find they can complete tasks faster than older workers,perhaps partly because of technological proficiency but even more . . . because they work differently. They spend less time scheduling and are comfortable coordinating electronically. They resent being asked to log hours and stay in the office after their tasks are done, and the idea of face time really annoys them. [Generation] Ys love to work asynchronously - anytime, anywhere. One said during out research, "What is it with you people and 8:30am?"

Does this explanation fit with your experience?

The article suggests ways to devise a better model of how to define work:

Articulate the results you expect - and tie accountability to getting the job done;
Make physical attendance in the office, including at meetings, optional;
Gauge performance on the quality of work performed;
Help managers and employees learn to measure dedication in ways other than face time;
Use today's networking capabilities to allow employees to work from anywhere;
Support the changes by creating drop-in centers

The above also appears to support what Chuck Newton has termed the 3rd wave law firm.

Planning Helps Law Firms Weather A Bad Economy

Admin — Tue, 04 Mar 2008 08:00:00 GMT

Although the housing market has grabbed headlines recently as the credit issues continue to unravel, the indicators have been present for several years. The businesses who planned for this are now in a better position to adjust and prosper while other businesses close their doors.

Law firms aren't insulated to market downturns. The New York firm Thacher Proffitt & Wood "informed around 50 associates that their futures at the firm were uncertain because of the collapse of the market for mortgage-backed securities, an area where the firm had had a leading practice." New York Lawyer, 11/28/2007. CitiBank and Hildebrandt released a Client Advisory predicting the "perfect storm" of indicators hurting the legal industry.

It doesn't have to be this way. The firm can retain talent even when the marketplace shifts by planning not just for economic good times but for bad times as well. How?

Retain Earnings
Rather than distribute every dollar of profit, project into the future and if indicators suggest that there may be a drop in business in a particular practice area, allocate additional funds to maintain your marketing budget and talent retention.

Prepare for the upswing
Have associates hit the road with partners to build and maintain relationships in the industry. If your client survives the poor economy it will come back stronger. Cement those relationships while mentoring associates so that when the market comes back, your firm has already done the legwork to expand the business.

Transfer Knowledge
Forms are gold, especially in document-driven industries making up transactional practices. Have associates review all firm forms against available case law and take the opportunity to build a solid foundation of accurate and up-to-date forms. Offer an incentive to create "products" representing reproducible work.

Help with the overflow
Just because one industry is hurting that doesn’t mean other areas of the firm aren’t thriving. Give associates an opportunity to absorb work from the more active areas of law. In fact, a firm recently did this when Dechert, LLP, initially layed off 13 associates, then changed its mind and re-assigned them to other practice areas.

Some associates won't have the sufficient motivation to change. That is fine. Keep the ones who do.

Morepartnerincome.com is sponsored by Juris®. 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.

When An Attorney Doesn't Fit The Firm

Admin — Thu, 28 Feb 2008 08:00:00 GMT

A recent article in the New York Lawyer entitled "Getting Fired" (requires free registration to view content) addresses a task that all managers would prefer not to have as part of their responsibilities: that of releasing employees.

The article is geared to the attorney as releasee, helping them not miss the subtle ways they are "shown the horizon".

If a conversation starts: “You seem to be distracted lately, and we are concerned that maybe this isn’t the right fit for you anymore.” - you might be getting fired.

If a conversation starts: “We think maybe you would be happier somewhere else. Let’s reassess where you are in six months. Hopefully, by then you will have found the right opportunity.” - you might be getting fired.

Suggestions when hearing words like the above? Start job hunting. In the second example, the firm is clearly giving the attorney a 6 month notice to find other employment. It isn't likely that the firm is going to reassess the attorney's performance in 6 months. More likely they will have had a replacement for 2 months and will be ready for the performance-challenged attorney to go.

Although geared to those near the door, it is also a reminder to managers of their responsibility to the firm. No one likes to fire someone, but without that part of the employment cycle, those who drag down the margin won't change. This helps neither the firm nor the employee. Not fitting into your firm culture doesn't mean the attorney is not a quality attorney. It means the attorney is not a good fit for your firm.

As the article noted, "[t]here is another . . .firm out there just waiting to snap you up! They love laterals!"

Morepartnerincome.com is sponsored by Juris®. 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.

How Law Firms Can Increase Income By $100k Per Partner In 1 Year

Admin — Mon, 25 Feb 2008 08:00:13 GMT

Measurement improves performance. If you measure the following 5 key performance indicators, your profits per equity partner will increase. These drivers are:

Leverage
Rate
Realization
Productivity
Margin

Leverage in the above model is based on head count leverage. Head count leverage is the ratio of equity partners to non-equity fee earners.

Rate in the above model is based on the effective billable rate for all fee earners. You get this by adding all fee earner rates and dividing the sum by the number of fee earners.

Realization in the above model is based on the amount of fees billed against what was worked. You get this from dividing the sum of all fee earner hours billed by the sum of all fee earner hours worked.

Productivity in the above model is the sum of all fee earner billable hours divided by the total number of fee earners.

Margin is net income divided by total fee revenue.

Here is the scenario. Your firm has 29 fee earners. Eleven equity partners, eleven associates/non-equity partners/of counsel, and seven paralegals. You have a total of 50 employees including equity partners. Your effective billing rate is $275, your average fee earner productivity is 1,690 per year, your firm writes down or discounts an average of 10% of work performed (90% realization) and your cost per head is $140,903.

Based on the above, profits per equity partner would be $462,255.

Now, let's play with the numbers. First, we'll look at rate. If we increase rate by 6.5% (which was the average rate increase predicted by respondents of the 2007 Law Firm Economic Survey by LexisNexis), factor in cost inflation (currently around 4.25%), total PEPP increases to $486,314, an change of $24,059.

Factoring inflation, the increase in income is not substantial. However, it underlies the importance of increasing rates annually to avoid devaluing your rate due to inflation. The secret to beating inflation, though, isn't rate; It is productivity. High productivity creates the gap (margin) between cost (which includes inflation) and revenue. The higher your margin, the less inflation hurts you. The lower your margin, the more inflation works against you.

So let's consider productivity. If you increase billable production by 100 hours per fee earner per year (a meager 24 minutes per day based on a 50 week year), PEPP increases to $527,505, a change of $65,250 per partner!

This is one way to make a substantial increase in income with very little change in your workload. In fact, you can likely make up the 24 minutes per day by just entering your time as you are doing the work. Tools such as MyJuris Mobility take advantage of mobile devices such as Blackberry devices to recover nearly an hour per day of productive time.

Finally, we'll consider leverage. If you add two non-equity fee earners (assuming you have the business to necessitate such growth), PEPP increases to $512,686; a change of $50,431 per partner.

Best performing firms, however, do well in several indicators. If you were to combine the above, the results would be striking. If you increased rate 6.5%, added 24 minutes a day to each fee earner's billable goal, and added two associates, you would increase income from $462,255 to $609,677, a change of $147,422 per partner. The effect of compounding factors works to increase the effect of each indicator on income more than you would by increasing any of the indicators alone.

Even if you only increased rate and productivity, you would increase PEPP by $90,733. Click here to download a sample spreadsheet (you must be registered to this site to access the downloads page) and work the numbers yourself. Use it to forecast your increases and measure your performance to reach your financial goals.

Morepartnerincome.com is sponsored by Juris®. 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.

Georgia Proposes Flat Rates For Representing Indigents In Capital Cases

Admin — Fri, 22 Feb 2008 08:00:25 GMT

Legislation has been introduced in Georgia to provide more cost accountability to state-funded defense of capital cases. What has caused the uproar?

In March of 2005, Brian Nichols was awaiting trial for rape in Fulton County, Ga. While changing clothes to prepare for his court appearance, Nichols overpowered a deputy, walked into Judge Rowland Barne's courtroom through the judge's chambers and shot both Judge Barnes and a court reporter. During his escape, he injured several and killed two others. The manhunt that ensured culminated in an unlikely ending: Nichols in the apartment of a drug user who was soul-searching and through an 11 hour conversation softened Nichols enough to let her leave. She called 911 and Nichols eventually surrendered without further violence.

Since then, Georgia has seen one of the longest murder trials in state history take place. Since Nichols qualifies as an indigent under Georgia law, the taxpayers are footing the bill for his defense. The Atlanta Journal Constitution reported that the cost of the trial has exceeded $2 million in defense costs alone. That has outraged the Georgia Legislature enough to change the law regarding representation of indigents in capital cases. According to the AJC:

The bill . . . could reduce the financial burden on the Georgia Public Defender Standards Council, which oversees the statewide indigent defense system. Under the bill, the council would pay for the first $150,000 paid to private lawyers defending an indigent capital case and 75 percent of the next $100,000, with the county paying the other 25 percent. Beyond $250,000, the state and the county would split defense costs.

Here's the kicker: The measure recommends that the council set contracts with flat rates for attorneys' fees and expenses in death cases. Sound like a good idea?

Perhaps if defending capital cases were akin to filing Chapter 7 Bankruptcy. However, for private sector attorneys who represent indigents in capital cases, does it remove the incentive to take on these difficult matters? Would a criminal defense attorney zealously defend a suspect for a flat rate for both fees and expenses when you have Judges saying things such as"[e]veryone in the world knows he did it" (as the New York Times reported Judge Fuller said before having to recuse himself from the case)?

Is Georgia trying to limit the representation of indigents in capital cases? Or are they only limiting the financial incentive to defend them? If it is the latter, then ostensibly an attorney may lose the zeal to defend a client once the money runs out - unless they believe that the defendant is innocent. And that might be the point of the legislation. [poll=8]

Morepartnerincome.com is sponsored by Juris®. 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 Pricing Management

Admin — Thu, 21 Feb 2008 08:00:46 GMT

One of the more common questions I hear asked by attorneys is how to set their rates. Many attorneys raise their rates periodically but not as part of a strategy to maintain or increase margin. Pricing management is addressed in detail in an article in Managing Partner Magazine titled Pricing Management. Noting that most firms still use a "reactive" approach to pricing, the article suggests instituting a pricing management function within the firm closely tied to the finance and marketing functions. A systematic approach is recommended that positions pricing with your strategic goals.

According to the article, firms should prioritize consideration of the price it will charge for its services and to ensure that the firm’s value and pricing propositions are constantly reviewed and improved upon, and communicated to clients at all levels of the firm. Firms should manage the pricing function around three levels: industry, practice and engagement level.

Industry Level: invest in understanding how variables drive supply and demand for legal services in your particular industry of practice.
- Systemic drivers: focus on short and long term considerations in the industry affecting client demand.
- Service delivery: leverage your firm's technology and skills as value that sets your firm apart
- Client patterns: how often they are a source of new business, how well they pay, etc.
- Talent supply: look into alternatives in how services can be delivered to be more cost effective.
- Pricing Czar: A finance director or equity partner should be dedicated to reviewing these drivers and organizing a pricing strategy and structure that meets the financial needs of the firm.
Practice Level: understand the markets that your firm and its practices operate.
- Testing client perceptions: client interviews, surveys, etc to better understand client need and provide better value.
- Discriminating among clients: develop rates that fit the client and practice area, not one-size-fits-all.
- Objectively reviewing fee schedule: periodically check market position as well as reputation of key partners by conducting blind study of key clients.
- Central pricing function supporting practice-group leaders: remove discretion in pricing except at practice group level - discounting should be first approved by pricing czar.
Engagement Level: getting the best price for each matter
- Training: partners need to understand the effect even minor discounts have on the bottom line; develop skill in communicating value.
- Tools: having proper tools to measure performance so as to maximize profitability based on comparison of historically similar matters.
- Systems: develop processes to review efficiency and improve on it to better price similar matters in the future.

Though some feel trapped in their pricing scheme, firms can and should plan how they price their services. With a well-conceived and implemented pricing plan, firms can be proactive and systematic in developing a pricing structure aligned with their strategic plan.

Morepartnerincome.com is sponsored by Juris®. 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.

A Warning For Law Firms (And Business Clients) Using Facebook

Admin — Wed, 20 Feb 2008 08:00:41 GMT

There has been some discussion in legal blogs regarding the use of social networking tools such as Facebook as a marketing tool. Kevin O'Keefe notes the potential of Facebook as a growing force for lawyers and businesspeople. Larry Bodine writes [w]hy lawyers can't ignore Facebook for networking.

The Birmingham Post (UK) writes of a reason why there should be caution in using Facebook. In an article titled Facebook May Blow Up In Your Face, several potential "minefields" are noted:

Facebook is for personal use only: In its terms and conditions, it states in the first sentence under User Conduct:

"You understand that except for advertising programs offered by us on the Site (e.g., Facebook Flyers, Facebook Marketplace), the Service and the Site are available for your personal, non-commercial use only."

In the terms and conditions, every user agrees not to register for more than one user account, not to register a user account on behalf of another, or register a user account on behalf of any group or entity.
You can be banned from Facebook for a violation of terms, subject to "final and binding arbitration" under Delaware law, likely in California.
Facebook has a license to do whatever it wants with content you provide. In theory, you could upload a photograph and Facebook could sell it without you receiving a penny. If you write lengthy notes about business related issues, these could be turned into a book by Facebook for its gain, not yours. Relevant wording from terms and conditions:

"By posting User Content to any part of the Site, you automatically grant, and you represent and warrant that you have the right to grant, to the Company an irrevocable, perpetual, non-exclusive, transferable, fully paid, worldwide license (with the right to sublicense) to use, copy, publicly perform, publicly display, reformat, translate, excerpt (in whole or in part) and distribute such User Content for any purpose, commercial, advertising, or otherwise, on or in connection with the Site or the promotion thereof, to prepare derivative works of, or incorporate into other works, such User Content, and to grant and authorize sublicenses of the foregoing."

Bodine cites Joshua Fruchter, in a more recent post, citing methods of using Facebook as a marketing tool. Particularly in regard to posting copyrighted content, this should be re-assessed.

Bodine and O'Keefe promote Facebook as a networking tool. Facebook does have a section for businesses called Facebook Pages that serves this purpose. However, there is no pre-screening process to ensure that the entity is in fact who it states it is (read: Wikipedia-ish). There is an additional terms and conditions (which incorporates the original terms) that doesn't negate any of the above concerns (apart from allowing commercial use). If you plan to utilize this tool, make sure you follow the guidelines of Facebook's terms and conditions. [poll=7]

Lawyer Professionalism Tied To Value Billing?

Admin — Tue, 19 Feb 2008 08:00:01 GMT

It's not that I am against value billing. I am just against the proposition that the hourly billing model is an inherent source of evil. When reading Ed Poll's post on Professionalism versus Competence, a sentence caught my eye that appears to be another slam against the billable hour.

The post is about a recent USA Today poll asking whether co-worker's rude or unprofessional behavior should be tolerated if they otherwise do a good job. Thankfully the answer was overwhelmingly no. No one wants to work with rude people.

Poll notes the new firm Patrick Lamb co-founded this year that focuses on value billing. There is much positive press when law firms move to this model so the marketing upside is a good thing. But then came this:

As more lawyers succeed in this business model, perhaps others will follow. Then, perhaps, will civility in the profession be achieved.

Am I to conclude that without this business model (value billing), civility can't be achieved in the legal profession? First, I don't want to mistake Poll's point: that providing value to clients and a team mentality within the firm adds civility to the profession. Agreed. However, how is this at odds with hourly billing? Is it because some (and unfortunately many) are sloppy in their billing process? Or worse, unfairly padding their hours?

Assuming this is a widespread problem, does value billing fix it? Maybe, but not by its presence alone. If you sell services at a fixed fee, you had better know the price of your services or you won't be in business long. Tom Kane explains in a recent post the importance of tracking time even if you bill at a fixed fee.

Understanding that in all but a few routine transactions there are variations in the time it takes to provide a service depending on the variables surrounding the case, you will need to account for differences in the price of particular tasks. So while on the surface everyone may be paying the same for a service, some will be paying more for a task while others pay less. It depends on how difficult the task is and how efficient the attorney.

In fact, if anything, value billing helps budgeting for lawyers since you can set goals on how many tasks you sell clients. Crafty firms can then weed out the difficult cases through case assessment to maximize profit. Finally, marketing efforts can sway those who would buy into the "value" concept unaware of the higher price they are paying for a simple legal task.

Am I saying this is how firms who "value bill" operate? No. Can they operate this way? Yes. Is that a better value to clients? No. And to answer the presumptive rebuttal, "with value-billing, if the client doesn't like the fee, we will adjust it for them" I would answer, "and how is this different from hourly billing?" I've yet to meet a lawyer that is unfamiliar with post-bill adjustments. Some attorneys have a chronic habit of reducing their fees prior to billing as well. The biggest attraction to the value billing model isn't the savings to clients (marketing notwithstanding), it's the potential for higher revenues for well-managed law firms who price margin into the fee. The value of value billing to the client is nothing more than trading actual cost for pre-performance cost certainty - that apparently can still be negotiated after the service is provided (at least when firms open the door for negotiating fees after performance).

Once again, it comes down to trust. If there is a trusted relationship between attorney and client, then attorneys shouldn't overbill their clients and clients shouldn't question attorneys' fees (after-the-fact) - regardless of the method. As Poll states in an earlier post, "there is a very small percentage of 'bad apples' in the legal profession." The devil isn't in the billable hour. It's in those bad apples.

Morepartnerincome.com is sponsored by Juris®. 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.

Business-Continuity Planning for Law Firms

Admin — Mon, 18 Feb 2008 08:00:12 GMT

Planning is an oft-referenced theme on this blog. Plan for increasing wealth, plan for economic down cycles, plan for disasters. What about during interruptions such as the recent blackberry outage?

There are many things that can cause business interruptions. Planning for them will mitigate the consequences those interruptions have on your firm's operations. Not planning for them will cost you money.

What are some things you can do to prepare? There are companies that make a living selling plans to businesses, but basic guidelines include:

Business Impact Analysis: Determine the effect an outage would have on the firm's most crucial systems and processes. More or less identifying the important processes subject to interruption and how that interruption will affect business. In a law firm, this includes (but is not limited to) telephone systems, computers, staff, software systems.
Plan what you will do if business interruption takes place: This, of course, is the hard part. Planning means taking the time to think of ways around the interruption - and gain approval for the procedure. For example, if your office is unavailable, where are critical staff? They need to have a place to meet to put in effect the plan. Remote communication is easier now than it's ever been. Cell phones help but what about email? If your email servers go down, you will need a backup plan to send and receive communications. There are services such as Mimecast Unified Email Messaging that can provide a seamless transition that clients won't notice - making it appear as if there were no interruption at all - so long as you have access to high speed internet or have a data-enabled mobile device. In the case of an interruption of internet access, there needs to be a secondary plan to know where your people are.
Always have good, redundant, and off-site backups available: All the benefits of technology are in vain in a disaster situation if you have no backups. It has been reported that 25% to 30% of backups don't save properly. When was the last time your office checked to make sure the backups were working? Services such as LexisNexis Data Backup and Protection Services provide continuous automatic off-site storage of your data.
Run a drill or two to test the processes: It is paradoxical to interrupt the business day to test processes geared to mitigate interruptions in the business day. But it has to be done. Otherwise you may not find the flaws in the plan until you put the plan in action - not the time you want to find out that you left out an important facet.
Review the plan annually: Don't just dust off the Y2K disaster readiness plan and change the cover page. Times change, technologies change, and needs change. Make sure you are up to date on all your systems and their effect on your business.

A sample business continuity and disaster preparedness plan, courtesy of ready.gov, can be downloaded by clicking here.

Morepartnerincome.com is sponsored by Juris®. 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.

Marketing Advice for Lawyers During Economic Down Cycles

Admin — Fri, 15 Feb 2008 08:00:00 GMT

I had a chance to catch up with John Remsen, Jr. last week and asked him about the economic outlook for law firms in 2008. Like many, he believes we are in the midst of an economic down cycle that will affect how law firms perform in 2008.

In spite of the downturn, Remsen says that certain practices like bankruptcy, litigation and employment will do quite well. Other areas won’t be so lucky. He explained that law firms that are heavily dependent on cyclical industries like real estate should be prepared to ride the waves of the economic cycle. For example, a firm that does lots of commercial real estate transaction work can position itself as “workout specialists” during the down cycle.

Some advice from Remsen during a slowing economy:

Partners need to push work down to associates so they free up time for marketing and business development. Most compensation systems tend to reward the opposite behavior.
With this time, they should go visit top clients to thank them for their business, and learn about their issues and concerns.
Invite clients into the firm to discuss industry trends and opportunities.
Resist the temptation to cut marketing expenses. Most of your competitors are cutting back so you have a chance to stand out and solidify your position as the economy improves.
Make sure that marketing and business development activities sustain themselves consistently, in both good times and bad.

At the end of the day it is about relationships, says Remsen. He advises firms to take advantage of the down cycle to invest in relationships. In so doing, you position your firm to take off as the economy improves….as it eventually will.

John Remsen, Jr. is the founder of The Remsen Group, which in partnership with LexisNexis and others host the Managing Partner Forum. John has recently co-authored a book, The Little Black Book on Law Firm Marketing that can be purchased by clicking here.

Morepartnerincome.com is sponsored by Juris®. 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.

Measuring Law Firm Profitability

Admin — Thu, 14 Feb 2008 08:00:00 GMT

One way to get an idea of your firm's financial health is to report on the firm's profitability. There are many ways to calculate profitability depending on what you are looking to track. In this example, we are taking into consideration the value of fee earners against their cost. The value of an attorney, for the purposes of this post, is the billed rate per hour.

You determine attorney cost per hour by taking the salary of the attorney, the cost of their dedicated resource(s), the cost of their work space, the cost of equipment used, and other incidental costs (not billable to the client) incurred by the fee earner. This can be sticky for some firms where principals may not be agreeable to apportionment of cost. In cases like this or where the firm is more evenly apportioned in staff and office use, a less accurate but easier calculation would be to add up all the general ledger cost accounts (excluding fee earners' payroll), divide by the number of fee earners, then add salary. It is better to do the work and determine actual cost.

Once arriving at a cost per fee earner, reduce to a cost per hour (by dividing cost per fee earner by worked hours billed per year) and then you can use this to subtract from the attorney's billed rate to get the profitability rate. This is excellent indicator of the value of your billable rates and by extension the attorneys charging these rates.

With profitability reports like the one above that is part of Juris' Active Information product, you can determine how much value (in terms of dollars) you are getting for every billable hour worked by the fee earner. You can set margin per fee earner and track the profitability rate against the target margin as well. Efficiency is an important key to higher profits. A report such as this in a historical context helps you track efficiency of the fee earner.

To take it one step further: you can use, for analysis purposes, the collected rate to compare to the cost per attorney. You shouldn't make this analysis until the invoice has been zeroed out (either by payment or adjustment), so this is not really a good indicator of current profitability. But it can be helpful in a profitability analysis of a given client or fee earner. Again, tools like Juris' Active Information can track collected rate and thus make calculating all the formulas above automatic.

Morepartnerincome.com is sponsored by Juris®. 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.

Work/Life Balance May Hinge on Others' Deadly Whims

Admin — Wed, 13 Feb 2008 08:00:06 GMT

I was talking with the driver on the way to the airport last week when the subject of his family came up. He showed pictures of his kids and how they were growing so fast. He then said to me, "don't ever take for granted what you have today - you may not be around tomorrow to enjoy it".

After hearing of the near disaster that could have occurred in Tempe, Arizona as Super Bowl revelers filed into the stadium unaware of the danger near them, I reflected on the fragility of life and the effects one person can have on so many others.

Although important, the purpose for improving revenue and financial performance should be to provide better for yourself and/or your family. Don't let the focus on the bottom line blur the real bottom line. The world is uncaring and unmoved by regret.

It's been said to live today as if it were your last. In college I loved to invoke "carpe diem" to encourage bad habits. The fact is, we can't afford to reflect much when the fate of others are at our feet. However, there is always a moment, however brief, in each day that can be used to ensure that when your time comes, there will be no regret. Time management applies not only to your professional life, but your personal life too.

You can't control when your last breath occurs. You can control what you do while still breathing. Don't ever take for granted what you have today.

Morepartnerincome.com is sponsored by Juris®. 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.