Make More Rain : subscriber content, hr

If Not Mandatory Retirement for Law Firm Partners, Then What?

Admin — Tue, 21 Aug 2007 17:33:56 GMT

On August 15, the American Bar Association’s House of Delegates voted to encourage law firms to abandon mandatory retirement policies. The resolution traveled under two flags, the anti- age discrimination flag and the “graying of the bar” flag.

With regard to the discrimination issue, Law.Com noted that “The issue of mandatory retirement has received particular attention because of a lawsuit pending against Sidley Austin. Law firms are anticipating a decision from the U.S. District Court for the Northern District of Illinois in Chicago in an action filed by the Equal Employment Opportunity Commission on behalf of about 30 former partners against Sidley Austin over whether its alleged retirement policy violated age discrimination laws.”

My guess is that this issue’s place on the agenda is due to the increased number of delegates and partners in general that are nearing mandatory retirement age.

From the standpoint of midrange size law firms, the big issue is continuity. For midrange law firms to have a life beyond that of their current partners, there must be an orderly hand-off from one generation to the other. Mandatory retirement is one method of forcing that hand-off. It isn’t necessarily the best, but those in power are often reluctant to give it up.

In an earlier post titled Continuity or How Law Firms Acquire a Life of Their Own, I suggested alternative strategies assuring the hand-off between generations. Without an orderly handoff a law firm fades away or just survives for at least one more generation through an ugly or quiet revolution. We old guys leave one way or another. It needs to be through a win/win arrangement. Continuity planning is most important to the entrenched partners. Without planning for the handoff to the next generation, it is the entrenched partners and their heirs who lose the value of the legal service business they built (or improved) during their tenure.

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.

Keeping the Law Firm on Track

Admin — Mon, 16 Jan 2006 19:48:00 GMT

The 2005 survey of Law Firm Managing Partners conducted by Juris, Inc. and the Managing Partner Forum identified the absence of formal planning as one of the key challenges to growth faced by law firms. 84% of surveyed firms do not have a written strategic plan. That does not mean, however, that firms do not have a collective sense of purpose, including its goals and objectives. Nevertheless, if the firm is headed in one direction and key partners think it should be going in another, it is a sure sign that trouble is ahead unless those differences are discussed and resolved.

Even if the firm does not develop a classic structured strategic plan, it should periodically test the consensus among its partners and discuss and resolve differences of opinion about the firm’s direction, practices and procedures.

One useful tool is a simple partner questionnaire. The answers can then be scheduled for review by all partners without necessarily identifying who said what. The questionnaire should be followed by a partners meeting, or retreat, to review areas of agreement and to resolve or reach an agreement on areas of apparent disagreement.

What would such a questionnaire include? The example below while simple covers the high spots. Use it as is or as a starting point for a questionnaire that fits your needs.Click here for a Word version of the questionnaire that you can download.

SAMPLE PARTNER QUESTIONNAIRE FROM MOREPARTNERINCOME.COM

The law firm is a vehicle for achieving the goals and objectives of its partners. From time to time, we need to test our collective sense of where we are going and the progress we are making. This questionnaire is one of the tools for doing so.

This questionnaire is to be completed independently by each of us as partners. It is important that each person complete this form separately and without consultation or collaboration. By doing so, we can test our consensus and identify areas where more discussion about our future is needed.

1. What is the firm’s strategic thrust as you understand it?

2. What are the firm’s goals and objectives for:

a. Next 12 months

b. Next 3 years

c. Next 5 years

3. List the firm's 3 top strengths.

4. List the firm's 3 top weaknesses.

5. What are the main threats (risks) facing the firm?

6.What are the main opportunities available to the firm?

7.What do you see as the current and future trends that are or will be affecting the firm?

8.How do you rate the firm in terms of: Good / Average / Bad

a. Client relationships

b. Marketing (business development)

c. Personnel policies and procedures

d. Financial performance

e. Admin. and management practices

f. Professional development

9. What improvements would you like to see in each of these same areas?

a. Client relations, satisfaction and retention

b. Marketing activities and new business development

c. Personnel policies and procedures

d. Financial performance

e. Administration and management practices

f. Professional development

Closed for the Holidays and About Law Firm Branding

Admin — Sat, 24 Dec 2005 20:56:00 GMT

Season’s Greetings--and be sure to read the PS.

I will be celebrating Christmas at home this year with family and friends, including my wife Martha and the six grandchildren. Then Martha and I will head for the sun in Naples, Florida, to welcome the New Year. So I’m going to take a few days off. MorePartnerIncome.Com will close, as far as new posts, for the holidays from December 24 through January 6, 2006. I will be back in business on January 7 with new ideas and thoughts for increasing the income and wealth of law firm owners.

If my daily postings have made a difference in your law firm, send me an e-mail, morepartnerincome@juris.com, and let me know. I welcome your suggestions for issues you would like addressed in the future.

I wish you and yours happy holidays. May your new year be a prosperous one and may you have a Merry Christmas and Happy Hanukkah.

PS: Here is a gift for you before I turn the computer off for the holidays. Take some time over the holidays to think about the law firm's brand.

I have in my hands Paula Black’s The Little Black Book on Law Firm Branding and Positioning. An associate who received a complimentary copy passed it on to me. It is simple and effective—113 pages with each page little more than a sentence or two providing insightful suggestions for branding the law firm.Page 113 concludes with the following message: “Your brand is the essence of your firm’s personality. The synthesis of clients’ perceptions about your firm. Your implicit promise to your clients. The power behind all your marketing efforts. Establish a clear, consistent, unmistakable brand image for your firm—and deliver on the promise it implies.”

Paula reminds us that excellence is not enough. This little book is beautifully done. It belongs on your bookshelf or desk for the insight that it imparts. Go to http://www.paulablack.com for more information about Paula Black & Associates and to inquire about the availability of Paula’s Little Black Book.

Tracking Law Firm Key Performance Indicators

Admin — Wed, 07 Dec 2005 19:39:00 GMT

Key Performance Indicator tracking pulls the macro pieces of business intelligence together for the manager/leader. Managers who successfully lead their organization to targeted performance follow a road map. They don’t reach targets by accident. They understand that six to ten key items drive performance and determine the outcome. They don’t spend their time digging through reports to answer the question, “How are we doing?” They know the answer and know it continuously. They understand better than others how one area versus another will affect performance. They concentrate on the main things that determine the outcome.

Usually their road map is a simplified model of the organization. The image below (click on image to download) illustrates use of an Excel spreadsheet to pull the key performance information together into a simplified picture of where the firm is on its road map at any given time. The Variance from plan and Impact columns show how each area is likely to effect results for the year if the firm remains on its present course.

Keep in mind that any model is a simplification. Through simplification, the critical factors that determine income become clearer. While the result is an approximation, simplified models usually produce more accurate estimates than detailed budgets and forecasts. Why? Because the simplified models focus on what is important. Simplified models focus on the key indicators that determine the outcome.

The KPI tracker is using monthly results and, in some cases, annualized results based on year-to-date information to estimate per-partner income. The Variance and Impact columns illustrate the impact that missed targets are having on the outcome. You can use the attached spreadsheet to implement Key Performance Tracking (KPI) in your firm.

Earlier post included downloadable spreadsheets for computing the Key Performance Indicators summarized in the above KPI tracker. Consider having your accounting staff use the attached downloadable KPI tracker spreadsheet in conjunction with the earlier post for Work-in-Process Days, AR Days Outstanding, Utilization and Rate, Realization, and Margin to give you the situational awareness needed to manage the firm to on-target performance.

Measuring Law Firm Collection Realization

Admin — Tue, 06 Dec 2005 20:39:00 GMT

Effective managers keep their pulse on the numbers. Not all numbers. They watch six to ten Key Performance Indicators that provide them with the situational awareness essential to guiding the firm toward on-target performance.

Key Performance Indicators (KPI) to be tracked include Utilization (billable hours), Blended Rate, Realization, Margin plus Billed but Uncollected Receivables and Unbilled Fees and Expenses. This post includes an example of a common method for tracking realization and includes an attachment you can use to track realization in your firm.

Example (click to download):

The above schedule reflects the most common method used by firms to provide an estimate of the % of fees billed that actually get collected. Unfortunately, it is not the best practice for measuring collection realization or overall realization. The numbers are unmatched. It compares billing for one given set of hours to the collections related to an earlier set of hours.

The better practice would be to compare the collected fees to the amount originally billed for those fees. For overall realization, the best method would be to compare the value of collected fees to their value at standard value for the worked hours related to the collections, i.e., standard rates.

Not all law firm billing systems track the information required to compute realization using the best practice. Juris®, for one, does and you can view realization in a number of reports. The Combined Analysis is probably the most preferred and reflects realization in a number of ways including standard value, negotiated value and billed value. For firms without the Juris system, the attached spreadsheet will provide a less accurate, but useful, alternative for tracking realization in you firm.