Make More Rain : productivity, operations

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.

The War For Young Attorney Talent At Law Firms

Admin — Fri, 08 Feb 2008 08:00:58 GMT

Bruce MacEwen writes in his post The Ten Years War something that I have heard from many managing partners: talent combined with work ethic from those in the "millennial generation" (those born after 1980) is difficult to find. MacEwen quotes an article from The McKinsey Quarterly titled Making talent a strategic priority:

"People in this group see their professional careers as a series of two- to three-year chapters and will readily switch jobs, so companies face the risk of high attrition if their expectations aren’t met. The Gen Y cohort, already representing 12 percent of the US workforce, is therefore perceived as substantially harder to manage than its predecessors. As one North American HR director explained, 'The millennial generation doesn’t want to work 100 hours a week. These kids want a different deal; they have seen their parents work all their life for the same company and then get fired. They are not interested in killing themselves for work.'"

Though the above sounds a bit overstated to me (is the threshold to being productive really 100 hours a week?), it hits on the point that many in mid-sized firms experience: the unmotivated young attorney. MacEwen cites the article's suggestions for battling this "ten year war" for talent:

Target talent on all levels - not just on lateral partner hires - look for talent at all levels. People tend to change in the environment they are in - if you have talent at all levels, this will encourage the right attitude.
Communicate your firm's value propositions - it's what motivates behavior, says MacEwen.
Bolster HR - MacEwen takes exception to this recommendation, arguing that "in many firms [HR's] reputation—certainly as a strategic asset—is tarnished beyond salvation". Instead, he argues, have office managers and practice group leaders be the champions of recruiting.

For several years now, the ABA has made a focus on work/life balance, especially considering some firms where partners can work in excess of 2200 billable hours per year. If you agree that work/life balance is important, how do you get young associates to buy-in to the work part?

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.

LegalTech 2008 Wrap Up

Admin — Thu, 07 Feb 2008 22:11:54 GMT

Wrapping up the first major law-related technology show of the year (and my first live blogging event), I have taken some good and bad things with me.

The good:

It's always good to stay in touch with the trends each vendor is promoting. Based on the sessions, I think vendors may have been more reactive than trailblazing - or it could have been that the vendors that were more relevant to the topics in the sessions were prominent. Either way, I think the tone is set for a year of vendors promoting themselves as having the best E-Discovery solution.
If you are an attorney who wants to knock out CLE credits as well as get your head spinning around the hundreds of technology solutions available to meet nearly any need your firm could require, this ain't a bad place to be.
Live blogging is possible in a large tech show with the right amount of focus and determination and hopefully gives readers some value for the toil.
This show is a great place to network if you are any way affiliated with the legal profession.

The bad:

Live blogging without consistent internet connectivity is difficult. I spent my time in sessions sitting with my laptop writing the blog entries in Windows Live Writer (my current experimental desktop blogging tool), then doing a mass post when I got back to the suite where I had reliable wireless access. This is a challenge I can't believe will be remedied without more demand for live blogging and will be dictated by the luck of whether there is good wireless access at the location of the show.
There was precious little focus on financial management in the show (qualification - I am biased). One session on firm profitability (hosted by Thomson West) but that was it. On the other hand, there were 6 sessions with the word E-Discovery in the title alone! I think some wanted to make sure we understood the theme of the show - the beast in the jungle was no ordinary gorilla - it was the many faces of e-discovery.

I hope my fractured writing wasn't too much of an irritant. Please feel free to give me feedback on what you liked, disliked, or would like to see me focus more on in the future.

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.

LegalTech 2008 Day Three - Traffic Eases

Admin — Thu, 07 Feb 2008 18:56:10 GMT

Traffic is much lower this morning. Mostly consultants and other vendors running around the exhibit hall.

I asked some of those walking through about the e-discovery choices they are seeing - it seems that different vendors tackle different things under the banner of "E-Discovery". For some it is as limited as getting headers from a Lotus Notes email so you can track the origination of the email thread.

It is apparent that vendors are trying to find the right formula for selling e-discovery tools to lawyers. And at LegalTech, you will have lots from which to choose.

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.

Rick Borstein (Adobe Systems) Podcast

Admin — Thu, 07 Feb 2008 00:48:39 GMT

Rick Borstein is a Business Development Manager specializing in the Legal Market for Adobe Systems Incorporated. Rick is a veteran of 20 years in the software business, the last fourteen with Adobe. During his tenure at Adobe, Rick has had broad exposure to all of Adobe's products including intelligent documents, digital imaging, publishing and digital video.

Rick is an Adobe Certified Expert in Acrobat and a member of the American Bar Association and International Legal Technology Association. Over the years, Rick has presented hundreds of talks targeted to the legal industry.

He has been a featured speaker at the American Bar Association’s annual Techshow, LegalTech East, LegalTech West, the National Solo and Small Firm Conference, International Legal Technology Association Conference and a variety of state and local bar conferences including the California Bar Association Conference, Missouri State Bar Solo and Small Firm Conference and many others.

Rick’s AcroLaw Blog is a popular destination for those interested in the legal application of Adobe Acrobat. The blog may be found at http://blogs.adobe.com/acrolaw and contains more than sixty illustrated how-to articles. Rick has contributed articles to Legal Technology News and various legal-focused websites.

Headquartered in San Jose, California, Adobe Systems Incorporated is a $3B, Fortune 500 company with over 6000 employees. The company's popular Adobe Reader software is installed on over half a billion PCs around the world.

To listen to the podcast, click on the player or download link below.

Law Firm Management ABC's: Manage Your Associates

Admin — Wed, 16 Jan 2008 08:00:20 GMT

Management is achieving objectives through others. It's a continuing process of receiving input, processing input, taking action, receiving feedback, and repeating the process. It requires KASH in a real-time environment. It is a cycle of planning, organizing, actuating and controlling.

Prior to 1828, the path to becoming an attorney required not only to obtain a degree, but to serve several years as an apprentice before being able to practice law. President Andrew Jackson changed these requirements to break up the elitist methods of choosing attorneys (only attorneys could choose who the apprentice would be, much like real estate appraisers of today). By the end of the 1800's, apprenticeship programs for attorneys were well in decline and after the introduction of the American Bar Association in 1878, a more standardized formal process to becoming an attorney was introduced (Source: Bar Examination: Further Readings). An unintended consequence of this action was to lessen the importance of mentorship to young attorneys-in-waiting.

Today, the only qualifications (not to lessen their importance) to becoming a lawyer is a good dose of book smarts, focus and an ability to not crack under stress. Law school does much to help you think like a lawyer, but does nothing to help you act like a lawyer. Mentorship helps associates to learn from seasoned attorneys how to act as well as how to best service clients.

Management ensures that the value of mentoring is set as habit, achieving professional objectives not only for the individual, but for the firm. Unfortunately for some firms, management is treated much like strategic plans: either you spend time developing a plan but don't stick to it or you don't do it at all.

Good management starts by receiving input. Actively solicit feedback from your associates. Karen Asner wrote an article for Law.Com (Law Firm Partners Find Out What Associates Really Think of Them) regarding establishing an "upward review process":

Upward reviews give associates the opportunity to evaluate and provide input on the management and leadership performance of partners with whom they regularly work on deals, cases, committees or pro bono matters.

Law firms aiming to create an outstanding working environment for their associates and attract prospective recruits should seriously consider implementing an upward review process.

It's a good bet that associates, if put in a non-threatening environment to speak frankly, would have some pointed views on their plight. Some may be warranted; some may not, but if you want to consistently increase partner income, knowing what associates are thinking can be invaluable, especially if you are considering them as future partners. You don't want to find out after the attorney leaves how disaffected he/she was towards the shareholders. Plus, in an ideal environment, the associates are bearing the brunt of most of the work - you want to make sure they are well incented to be proper representatives of the firm, inside and outside of the office.

Implementing an upward review process is only the start: next, you have to process the input. The management committee or equivalent must review the results and develop a plan of action that will address concerns and further the firm's objectives. Accountability must be delegated to every member of the firm. Clear and concise roles and goals need to be communicated.

Then you must take action. Talking about management and goals is a waste of time otherwise. Taking action means mentoring associates - not only as to how to practice law, but how to act. Mentoring is a way to reclaim the lost art of apprenticeship. Not only will it allow the partners to dictate how the associate acts, but it also creates a bond of acceptance within the firm that the associate is part of the team. That can only help in fostering trust, a central component in management.

Measurement improves results. Always measure the effectiveness of your plan by again receiving feedback. Keep the upward review process going - quarterly, semi-annually, annually, whatever time frame will maximize the effectiveness of the campaign (understanding the resource drain on the review process - you don't want to lose productivity as a result of processes established to improve productivity). My suggestion is semi-annual.

Measure and adjust, then repeat the process. Nothing is gained by doing something only once. Consistency is the name of the game if you want to affect the habits of others. Don't let up, don't get down, never give up. Over the long run, your efforts will be rewarded with a smooth running operation that will scale with your profits.

Reward Attorneys for the Commoditization of Reproducible Work

Admin — Tue, 15 Jan 2008 08:04:35 GMT

A friend of mine practices in firm that specializes primarily in transactional work. Much of the work is billed flat fee but they still track their time so the firm can determine profitability. Recorded time is set against an attorney's budgeted hours for the year so that they are credited for their flat fee work. My friend lamented associates padding their worked hours for flat fee work so they make their budget numbers. In this case, padding hours doesn't affect clients since the fee is pre-set but it does affect reporting of profitability.

Aric Press, Editor-In-Chief of The American Lawyer, wrote in the December, 2007, In-House article that 2008 may well be the year when clients start to demand alternative fee arrangements:

One of the unintended consequences of electronic billing is that clients can now easily compute and compare the cost of tasks. Soon there may be other technological threats based on knowledge management that can convert once complex acts of lawyering into rather commoditized routines.

I have been pretty adamant in my defense of the billable hour. That doesn't mean that I am against alternative fee arrangements when the use of them will improve the efficiency of the firm and thus increase profits. Recording time, regardless of fee arrangement, is still a good idea. However, sometimes it just makes more sense to bill using fixed fees for certain tasks.

Why not take advantage of this and place an internal value on the task as well? You can do this by determining the time it takes to perform the task, then mark it up to the market price (perhaps based on the hourly rate times the time it should take to perform it). When a task is routine, standardization gives firms opportunities that can revolutionize a firm's business model. Not only will attorneys have a value based on their billable hour, but certain repetitive and reproducible tasks can be valued as well. Your firm will diversify its product offerings to clients, giving them more options for services and giving you more options to strengthen the client relationship. You could ostensibly set a price list for legal products - in effect competing with the emerging online forms market.

In the example of my friend's firm, creating a standard task that is reproducible and given a proper value reduces the inaccuracies in reporting due to "padding time" by associates trying to make their numbers. In the example of the firm whose client has already placed billing guidelines on a firm, this has the equal benefit of both providing cost certainty to the client and saving the attorney from repetitive time entry.

There is also the benefit to the general practice firm. The firm can market package transaction services at a set rate, and tack on billable hours beyond the scope of the repetitive (and priced) task. Sound a bit like value-billing?

How would this work? For transactional work, it would be as simple as setting a value upon a routine task, such as creating a will. For a simple will, attorneys will determine what the variables are, determine what it has cost in the past, agree upon an acceptable price based on market acceptance and variables, then price it.

In a litigation matter, it is no different. Many firms are already required to provide budgets based on tasks for the benefit of client cost allocation. Each task that the firm performs can be priced. Litigators can anticipate the course of the suit and determine a cost for the entire matter. There should be a value placed upon every legal task, whether it be writing a status letter, reviewing a file, etc. The price can take into consideration variance in time it takes for different attorneys to perform the task. That is up to the firm to decide.

By standardizing the value of certain tasks, it also opens another opportunity for building firm expertise: giving royalties to attorneys who create reproducible work product. Firms spend years building up forms. Forms are rarely created again - they are typically modified. Yet no one gets credit for creating the forms.

By giving an attorney a royalty for a form, you encourage expertise to be passed on to the rest of the firm. You can position attorneys who have a talent for researching and integrating current law into forms as work product creators and attorneys who are better at managing relationships and matters representing clients. Both have value. Both can be compensated based on the work they perform. Form writers would receive a percentage of the cost of the task as a royalty for a certain time period whenever their form is used. Just as you should place a time limit on origination credit, you should only provide royalties on forms for a certain time.

How can this be advantageous to the firm? Several ways:

It encourages information sharing within the firm.
It compensates those who provide value to others in the firm.
It can further a strategy of increasing leverage by giving credit to partners while reducing their billable hours.
It transfers the wealth of knowledge gained at the firm's expense back to the firm.
It can aid the strategy of succession planning by providing a route to semi-retirement while ensuring that the firm maintain its areas of specialization.
It allows partners to spend more time on what they excel in most: rainmakers focused on marketing efforts and strategic planning and grinders developing work product.
It gives firms an opportunity to give associates responsibilities that will benefit the firm as well as the associate.

Of course, with any change in policy, there are uncertainties that have to be addressed. For example, what if another attorney within the firm finds a problematic provision in the form and proposes to change a few clauses? What if the attorney proposes an entirely new form? Although in theory it would be a good thing to have several different forms from which to choose, logistically it may make more sense for your firm to settle on a preferred form from which attorneys may receive a royalty. That along with determination of the royalty percentage is sure to provide lively discussion in the partner meeting.

Whatever direction your firm goes when applying new policies, it should conform with a universal requirement of periodic measurement and adjustment.

Law Firm Management ABC's: Training

Admin — Thu, 03 Jan 2008 14:00:00 GMT

Training is based on the KASH principle. The principle conveys that new Knowledge, plus the right Attitude provides new Skills that, with use, become Habit.

For example, if a firm hypothetically decides they want to improve profitability through the purchase of technology that can help measure performance, the first order of business is a dedication to learn the new skill.

Knowledge is achieved only through taking time to learn the new skill. Acquisition of such knowledge must be calculated in the price of the new skill. There is a price in out-of-pocket expense. There is a price in lost productivity. This must be calculated into the price of gaining knowledge.

Attitude determines the length of time that productivity is hampered. With a positive attitude, there is less resistance to change and loss of productivity is minimized. With a poor attitude, knowledge is shielded from those who might gain from it and loss of productivity is inceased. In cases where poor attitude prevails, staff may leave the firm, setting you back to step one.

Skills are acquired through repetition and time. Patience and attitude are key. Patience means not only that those who seek knowledge through attitude and repetition remain focused in the face of frustration. Patience also means directing attorneys that notice of an impending crisis to others seeking knowledge through attitude and repetition (ie support staff) may be better communicated the day before the situation metastasizes into crisis. Any crisis that reduces repetition of a new skill delays the formation of habit and delays return on investment, adding to the price of gaining knowledge.

Habit leads to higher performance by making the knowledge acquired through attitude and repetition applicable without further direction. It is the impetus for your return on investment.

The keystone that holds the entire process together is shareholder buy-in and commitment. This is the dedication to the skill that is fundamental to the successful implementation of new knowledge. Without commitment by the owners, KASH is hindered and the return on investment is at risk for delay or worse, abandonment.

New Years' Prediction Follow Up

Admin — Thu, 03 Jan 2008 10:28:00 GMT

It didn't take long for one of my predictions to come true (prediction #5). In an article today on Slate: The Scourge of the Billable Hour: Could Law-Firm Clients Finally Kill It Off?

Sarbanes/Oxley - How It Affects Global Competition And Privately Held Law Firms

Admin — Mon, 03 Dec 2007 14:00:00 GMT

Bruce MacEwen (Adam Smith, Esq.) in a recent post notes the negative effects of the Sarbanes/Oxley Act of 2002 (SOX) on the global competitiveness of America (specifically New York City). Some of the complaints regarding SOX:

It encourages highly risk-averse management, the antithesis of American entrepreneurialism and innovation.
Ironically enough—along with Regulation FD—it discourages corporate disclosure and communication with analysts and other commentators and observers since the statement not made cannot later be labeled misleading.
The requirements for independent directors operate to disqualify anyone with actual experience in the industry and, perhaps, judgment, perspective, or insight.
Worst of all, of course, the potential criminalization of accounting judgments—touching not just the corporation but senior executives—operates, as one managing partner put it to me, to make every publicly US-listed company long for the day when all they had to worry about were the quarterly earnings expectations of Wall Street: "Today, it's not the stock analysts you've got potentially looking over your shoulder, it's the US Attorney."
Finally, there is universal consensus that had SOX been in place before the parade of the Enron, Tyco, and Worldcom horribles, they still would have happened. Why? Because one cannot legislate common sense or integrity. More than one person pointedly observed that fraud and misrepresentation have always been illegal and we've always known quite well how to deal with them. Piling SOX on top had the same practical effect as "making it illegal to break the law" (that would be zero).

MacEwen argues that the above have created unintended consequences that may "help dislodge New York from its pre-eminent role as a center of global capital formation". There is little question that SOX has reduced the number of firms filing for an Initial Public Offering. The risks involved in going public are worry enough - with SOX, the added costs for compliance plus the potential criminalization of executives is a tipping point in favor of staying closely-held.

It isn't just MacEwen who questions the benefits Sarbanes/Oxley. The negative effects of SOX certainly merit consideration, and perhaps "knee-capping its provisions" might be in order. However, let's go in the other direction for a moment: Could SOX be expanded to include privately-held corporations and find its way into the management of law firms?

Currently, only two provisions apply to closely held corporations: whistleblower protections and prohibition against destroying, altering, or falsifying documents that could be used in a legal proceeding.

As law firms start to restructure and operate more like corporations (ie, hiring C level management, moving from partnerships to limited liability companies or professional corporations, etc) some argue that best practices dictate that companies begin to implement at least the basic mandates of SOX (particularly when revenues approach $50 million). An interesting discussion of this by Stephen Bainbridge (with an alternative view by Jennifer Johnson) can be read here on the Business Associations Blog.

As ridiculous as it sounds on its face, lawyers know that the expansion of Congressional Acts knows no boundaries. Congress has a habit of creating short-sighted Acts that have long-term unintended negative consequences; the application of RICO to abortion protesters - though short-lived - comes to mind. This could be a new area of law - defending law firm managing partners from causes of action brought by non-managing equity partners over the mismanagement of their books! Lawyers suing lawyers requiring lawyers to represent the lawyers sued. A self-sustaining marketplace!

All kidding aside, the purposes of SOX shouldn't be lost to law firm managers. A large purpose of SOX is to ensure fiduciaries are properly overseeing the management of their corporation's books. Managing partners (or their equivalent) are the fiduciaries of their firm and are responsible for the accounting of their firm's finances. Embezzlement is a real concern for law firms. The accounting of the law firm should not be without oversight.

That said, do you think SOX should be cut at the knees? Or, since the purpose overlaps existing law (relative to fraud and misrepresentation), is SOX just reactive bad law that should be repealed altogether? What would be a better way to address the purposes of SOX?

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 New Host for morepartnerincome.com

Admin — Fri, 30 Nov 2007 19:37:12 GMT

An Attorney, a prolific writer and an experienced advisor to law firms, Brian Ritchey was selected to succeed the retiring Tom Collins as the host and Chief Contributing Editor for morepartnerincome.com. He also takes over as the Editor in Chief of the Managing Partner Advocate, a bi-monthly publication focused on issues affecting law firm managers.

Brian Ritchey, previously a Regional Vice President for Juris, Inc., became part of the Practice Management Division of LexisNexis upon the purchase of Juris by LexisNexis in July 2007. He actively practiced law for 7 years in a firm in Birmingham Alabama. Brian was recruited away from his practice early in his career to join a leading case management company and spent a year working as a liaison between attorneys and software developers to provide customized case management solutions to clients. He went back to private practice in 2000, but was lured away again to join the Juris team in 2005 where Brian used his knowledge of law firm dynamics to help partners, directors, shareholders and legal administrators manage their firms’ practice through the utilization of technology, strategy and process.

Brian obtained his J.D. from Cumberland School of Law after attending the University of Alabama for his undergraduate degree in English. He was admitted to the Alabama Bar in 1997, is licensed and in good standing with the Alabama Bar, the U.S. District Courts of Alabama for the Northern, Middle and Southern Districts as well as the 11th Circuit Court of Appeals.

Brian will transition into his new role over the next six weeks. Readers can expect to continue to see posts of Tom Collins and other authors as well as those of its new host. The blog’s mission continues to be providing information to law firm leaders that will enhance partner income. That objective is achieved by doing the right things right. When you do everyone wins including clients and non-partner members of the firm.

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.

The Paralegal Opportunity for Law Firms

Admin — Thu, 29 Nov 2007 19:57:00 GMT

In a paper titled Managing for Superior Paralegal Profitability, James Wilber with Altman Weil wrote the following:

“Nearly two decades consulting to law firms about paralegals and paralegal programs has demonstrated to this author that, in those firms that really understand how to leverage work and profitability through paralegals, the following circumstances always exist:

In terms of experience, education, title, job classification and compensation, paralegals do not look like legal secretaries, nor do they perform clerical work (keying the first draft of one’s own documents is not considered clerical work, and of course, the high-volume, routine work performed by low-level paralegals in litigation matters might be considered to be an exception to this rule).
Paralegals are provided with secretaries and other staff support, just as lawyers are.
Paralegals are encouraged and allowed to participate in professional development and training activities, just as lawyers do.
Paralegals are considered to be key members of the legal services delivery team or practice group, and they have input into the group’s discussions, decisions and strategies.
Paralegals are treated like professionals.
The work assigned to paralegals is limited only by their abilities (and, of course, ethical considerations).”

The rise of the para-professional seems to be on the increase everywhere. Law firms now routinely report that they have paralegals on staff; however, for midrange law firms, those reported paralegals are often legal secretaries upgraded to billable status. Few midrange firms have made paralegals a strategic element with the objective of lowering cost to the client and providing a profitable alternative to the increasing expensive Juris Doctor. Doing so represents an opportunity for advantage.

The key to the paralegal profitability is the same as that for legal associates—utilization. It requires partners with delegation and supervision skills. It requires effective firm-wide scheduling of billable resources.

Unfortunately, delegation, supervision and scheduling are notable weaknesses among midrange firms. Yet, considering the financial metrics reported by law firms participating in the latest Law Firm Economic Survey from Lexis/Nexis, improving utilization appears to be the best current opportunity for midrange law firms to increase income per partner. Even the top performing firms have less than optimum use of their non-partner billable resources. Associate utilization is poor and firms score worse for billable use of their paralegals.

Increased use of paralegals can be an effective strategy, but it has to be preceded by improved scheduling and delegation. For many firms, that will require a major change in how partners are compensated, shifting emphasis away from personal production to accomplishing billable work through others.

The Law Firm Economic Survey has been provided to participating firms without charge and is available to others for $495.00. Additional copies for the same firm are available for $50.00 each. To order, contact the Juris National Sales Center at 877/377-3740.

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.

Irony, Incent and the Case for Contemporaneous Timekeeping by Attorneys

Admin — Wed, 28 Nov 2007 14:06:22 GMT

Speaking of irony, one of the most timeless of topics revolves around time. Time and expertise are all an attorney has to sell, whether it be in current expertise (litigating a matter) or in transferring it into a workable and reusable template (transactional forms). Valuation of that expertise is determined by the time it takes to perform a task. The fact that some attorneys consider timekeeping anathema further feeds fodder to irony.

You can’t accurately place a value on a task without recording the time it takes to do it. You can't accurately place a value of an hour's work without recording the time you spend working.

For law firms of any size, discussing the importance of recording billable work timely can quickly become circular. For example, some attorneys use the excuse that recording time costs them money since it takes time away from them doing billable work. Of course, not recording time leaves billable work unrecorded and thus unbillable, which costs them money.

For those firms who have defied the gravitational pull of lazy timekeeping, the issue then becomes execution – how do you provide incentives for compliance? Do you implement punitive or rewarding incentives?

David Lat at Above The Law, in a post in August, posted a memo from a large firm who took the punitive route, punishing lawyers who don’t enter time daily. The relevant portion of the memo read:

Notification of non-compliance will be given to the Office of Attorney Development as well as to the leader of the delinquent timekeeper’s department or practice group. Failure to comply will impact the performance evaluation of a timekeeper and, in repeated cases, will result in a timekeeper no longer being eligible for direct deposit of his or her compensation.

One can envision an attorney first reading the above thinking back to the days in law school, all the promise, all the glory and excitement for being a champion of that which binds our civilization. Then, as he/she focuses on the memo again, the “self actualization” moment: I am a rat in a cage.

Punitive measures for non-compliance appear more like a tax in my opinion. You are taxing the timekeeper for not following your guidelines. If this method works and doesn’t affect the long-term retention of talent, then it is a good idea. However, in the above example, the firm is trading one administrative headache for another. Recording your work timely helps administration by having less to perform to get bills out - the time is in, now bill it. However, if the attorney doesn't record time within the allocated grace period, then not only does the administration get stuck with getting the attorney to record their billable work but they also get the hassle of manually processing the attorney's paycheck! The admin can't win!

There are other ways to encourage compliance. Rewarding contemporaneous timekeeping is like providing a tax cut – you give something back to timekeepers for doing what they should be doing anyway.

For example, a Juris client gives timekeepers cash if they get their time in before deadline. They spend tens of thousands of dollars a year compensating eager timekeepers yet their margins are higher than before the policy was implemented. They are making money by spending money targeted to achieve a positive result.

Another gives out candy – and reports that it works well. Some post numbers to a board or send out daily/weekly emails, ranking those timekeepers based on productivity (you don’t have to show numbers; the ranking alone is enough to expose the weak). If you don’t record your time, your number is lower regardless of how much work has been performed. Using this method, though, is based on an assumption of competitiveness. It isn’t uncommon for the chronic problem attorneys to show little care for their plight.

Any incentive must be accompanied by mentoring for those who struggle to make their numbers. Gimmics may be effective at improving the performance of those who are coachable, but the goal is to keep the cash flowing inward. You can either be punitive up front or on the back end but regardless you need to know when to show a timekeeper the door. A timekeeper that can't or won't help the firm stay profitable is a drain on resources and must be marginalized to lessen the affect it has on the producers. Otherwise you risk losing the talent that help make the firm profitable.

There are many ways to get attorneys to record time as work is performed. Set up benchmarks and measure against them to see if your methods are working. If not, change them. Management isn’t a one-time check of the pulse. It requires constant measurement and adjustment.

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

There is a World Outside of Big Law

Admin — Fri, 16 Nov 2007 19:31:00 GMT

Word is finally out. The story we have been fed by the national media targeting the legal community hasn’t been real. It was the Wall Street Journal that broke the story with their front page article, Hard Case: Job Market Wanes for US Lawyers. However, the real story isn’t about a waning job market, it is about the two different worlds in which law firms operate. In the real world (the world outside of AmLaw 100) associates don’t earn, and law firms don’t pay, $135,000 to $160,000 in starting salary. See morepartnerincome prior post, New Associates salaries in Midrange Law Firms.

What the Wall Street journal article disclosed is the distorted, Alice in Wonderland, picture one gets from a national media and from surveys fixated on Big Law. There is another world out there other than the world of Big Law. The largest 100 to 200 law firms play by a different set of rules and a different set of operational metrics.

The real story isn’t that the job market is waning. The story is that the market for $135,000 to $160,000 first year associates isn’t the real market at all. It is the Tiger Woods segment of the market. It is the market for the most talented willing to live in most expensive cities and work the longest hours.

Is it a waning job market or are people just surprised that you don’t walk out of law school and into a $150,000 job?

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.