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Admin — Sat, 09 Feb 2008 08:00:12 GMT

Click here to download attachments posted after February 24, 2008.

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 Economic Outlook for 2008

Admin — Tue, 18 Sep 2007 17:20:10 GMT

Larry Bodine has joined the chorus warning of a coming recession with a post titled Get Ready for the Recession—Part 2. In his post Doom and Gloom for the legal profession—it’s coming, Gerry Riskin provides detailed warning signs that there is trouble ahead.

2007 is going to go in the books as another good year for most law firms. However, the bust in the sub-prime market and resulting credit collapse brought the good times to an end for others. The dot com experience and the current sub-prime bust are proof again that law firms heavily dependent on a few clients or single industry are at risk. It is important to consider the susceptibility of firm practice areas and major clients to the particular kinds of risks we face today.

2008 appears to be problematic. We know what goes up comes down--recessions happen. 2008 could be the year. They say “What doesn’t kill you makes you stronger”. That saying has a ring of truth to it for those who go through a recession successfully. Recessions can be a time of opportunity and increased market share, if one is prepared and plays it right.

In times of uncertainty, you should avoid overextending the firm in terms of debt, merger activity, or overreaching in terms of talent additions. Use the time to consolidate your gains, strengthen your law firm financial health and improve operational performance. You should emphasize improved planning, workflow efficiency, and tweaking the firm’s performance metrics. Focus on improved effective rates, better scheduling and delegation. Speed up your billing and tighten collection efforts. Get rid of people you should have already let go—those who are not making a positive contribution to the firm’s goals and objectives. Use this period to replace any remaining legacy systems. You don’t want to depend on systems that lose support during a recession or are operationally unsoundly. Nor do you want to have the competitive disadvantage of being behind your peers. Convince you partners that they can win by being conservative with partner distributions in order for the group to hold back some rainy day funds for the uncertain period on the horizon.

Most of your competitors will cut back on firm travel, advertising and capital expenditures. That early reaction to a down turn is usually followed by a cut back in hiring, then a reduction in support staff and finally a cut back in legal talent.

The smart people go into a recession with dry powder and they increase expenditures on advertising and other business development activities. They have positioned the firm to take advantage of opportunities created by the disadvantage of others. They make moves that strengthen and grow their firm while others are eating their own flesh, cutting back and shrinking.

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 Game Plan for the Coming Year

Admin — Mon, 17 Sep 2007 17:18:00 GMT

October is almost here, so it is time to lay out the Game Plan for 2008.

As the saying goes, it all starts with a sale; everything else is an expense. Clients (customers) are the only thing that give a law firm the opportunity to succeed. Since it all starts with the top line, “revenue”, that is the best place to begin putting your game plan together. Marketing and revenue-generating activities set the pace. The firm’s legal talent and operational areas must then develop plans in support of and is response to revenue-generating activities.

Here is my checklist for laying out the marketing game plan for a new year:

Branding and Image Considerations
Positioning Considerations
Key Strategies the Firm Will Rely On To Win New Clients
Key Strategies the Firm will Rely On To Retain and Develop Existing clients
Pricing Plans
Media Advertising Plan
News Releases
Newsletters
Direct Mail Plan
Directories-Printed and On line
Printed Material
Key Word Purchases-internet and Internet Ads
Conferences/Organizations/Speaking/Writing
Other Events
Blogs
Web site
Technology
Individual Attorney Plans and Goals

An annual game plan is not a substitute for strategic planning nor is it the budget. Your game plan for the coming years represents operational decisions you are making in order to implement longer term strategies. However, one or two new ideas always come up in the operational planning phase that will reshape strategic thinking. That is the way it should be. When it comes to strategic planning, the plan should always be to change the plan! Strategic planning (thinking) goes on 365 days of the year. Your strategic plan shapes how decisions are made but decisions also shape and reshape the plan. As for the budget, you can’t have one until you have laid out your game plan. Budgets come last. They are financial estimates and targets in support of the game 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.

Unbilled Law Firm Fees (Work-in-Process)

Admin — Thu, 13 Sep 2007 17:27:50 GMT

Maister’s Law Practice Business model is an essential tool for forecasting and estimating per-partner income. It is a tool for expressing the firm’s financial targets and measuring progress against them. It is the standard by which one firm can be compared financially to another.

As important as Maister’s model is, however, it doesn’t tell the whole story. For example, while not used in Maister’s model, unbilled fees (work-in-process) and billed but uncollected fees (accounts receivable) have a controlling influence on partner distributions and should be consistently tracked. Reduce either and per-partner distributable income goes up. Yet, because most law firms use the cash method of accounting, both work-in-process and accounts receivable are off balance sheet. Like the old saying implies, both are often “out of sight, out of mind." As a result, both categories of uncollected work value receive too little management attention.

This post will deal with unbilled fees, aka work-in-process, WIP or inventory. The typical law firm has 60 to 80 days of unbilled fees in its inventory, making it one of the largest assets of the firm. It is earning nothing. It is a wasting asset! Unbilled fees become less valuable with every passing day. We know from our own experience and from the experience of other businesses that the likelihood of collection decreases with time.

The striking thing about this valuable asset left to waste on law firm’s shelves is that there is little reason for it; nor is anyone happy about it. There is no reason a law firm cannot bill timely for work performed where work is provided on an hourly basis. Likewise, except for pure contingency work, there is no reason a law firm cannot bill progress payments for work performed on a flat fee or other alternative arrangement. On the client side, no one is happy about getting a bill for work performed months prior. Tardy billing frustrates the corporate client. Rather than celebrate the free loan from their law firm, they scoff and joke at the lackadaisical and un-businesslike billing practices.

Speeding up the billing process serves everyone’s interest and puts more income in the pockets of the partners. Doing so takes management attention and that translates into planning, setting goals, measuring performance and holding people accountable. The first step is measuring the firm’s current level of performance.

There are two approaches to measuring the firm’s inventory of unbilled fees:

For internal management purposes, the best tool is an aging report—for example, what percent of unbilled items are less than 30 days old, 60 days old, 90 days old and more than 90 days old? The managing partner will want that answer on a firm-wide basis with the ability to drill down to the same information by location, practice class, billing attorney, client and matter.

Externally, surveys and benchmarking services tack the metric Unbilled Days as an indication of a law firm’s billing efficiency. Since most midrange law firms report fee revenue on a cash basis, the metric normally uses fee collections for a twelve month period divided by 365 to arrive at the value of one day's billings. That divided into the dollar value of unbilled fees (WIP) yields the number of unbilled fee days.

Your law firm’s business system should be able to track both unbilled days and the aging of unbilled items for you. To keep billing efficiency in the eyes of the firm’s managers, including practice area leaders and billing attorneys, both unbilled days and aging metrics can be included in dashboards custom designed for each law firm leader. Dashboard technology, like that available from Juris, provides continuous “situational awareness” over each individual’s area of responsibility. When top level area measurements indicate a problem, the responsible individual can quickly drill down to identify the problem point and take corrective action.

The Excel® spreadsheet below illustrates the computation of Unbilled Days. A copy of the spreadsheet is attached for your use if your accounting system lacks the capability to measure and keep the metrics front and center on a continuous basis.

Shortening the billing cycle has a significant positive impact on distributable income to the owner/partners. While every law firm is different, the average firm has 72 days of unbilled work. Reducing the bill time in half would free up cash for distribution equal to more than a month of fees! With faster billing, adjustments will also decline since client appreciation for work is highest at the point the work is performed. That appreciation declines with the passage of time. Fewer adjustments increases margin and that means a permanent year-after-year increase in per-partner income Steps to speed up billing often result in other indirect financial benefits, including increased productivity (utilization) from better time tracking methods, lower overhead due to increased accuracy and improved administrative practices, greater client satisfaction with the firm’s billing and communication process, etc.

I have attached an Excel template should you wish to use Excel to track unbilled days for your law 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.

Economic Outlook for Law Firms

Admin — Fri, 27 Apr 2007 17:10:00 GMT

Bruce MacEwen, an economist at heart, reminded law firm leaders that sooner or later, they are going to face another recession. His post on Adam Smith, Esq. noted that the Hildebrandt/Citigroup 2007 Client Advisory anticipates that the 2007 bottom line for U. S. law firms will be squeezed by increasing cost with little, if any, revenue growth over 2006.

Morepartnerincome’s outlook for midrange law firms is more optimistic. Nevertheless, as Bruce reminds us “….we all know one lies in store sooner or later.” The important question posed by MacEwen is, “Will you be ready?”

Prepared organizations not only survive the periodic downturns of a cyclical economy, they prosper in relation to peers. They come out of recessions stronger with increased market shares. Bruce MacEwen’s post includes some examples from the commercial world. Morepartnerincome offered the following 2007 advice in the earlier post Law Firm View of the Economic Outlook for 2007:

While the outlook is for a good year, it may be one best suited to consolidating your gains and strengthening your law firm financial health and operation performance—emphasizing improved planning, workflow efficiency, and the firm’s overall performance metrics. Concentrate on improved effective rates, better scheduling and delegation to the firm’s associates and paralegals as well as on faster billing and collection. Use this period to replace any remaining legacy systems. You don’t want to get caught in recession or downturn with systems that are no longer supported or that become operationally unsound. Nor do you want to have the competitive disadvantage of being behind your peers.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income contact Juris National Sales Center at 877/377-374, e-mail info@juris.com or go to www.Juris.com.

Key Performance Indicator (KPI) Tracking for the Law Firm

Admin — Mon, 23 Apr 2007 17:03:00 GMT

The one consistent message of morepartnerincome.com is that measurement improves performance and that law firms that plan, set goals, and hold people accountable are the firms that consistently outperform the rest of the field. Partners in those firms benefit through higher income. It isn’t all about the numbers. The numbers measure how well the people within the firms are doing the right things and doing them the right way. When that happens, everyone benefits—clients, associates, administrative team, vendors, Uncle Sam, and partners!

The sample Excel® worksheet, shown below, pulls together in one place the macro pieces of business intelligence 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.

The image below illustrates use of an Excel spreadsheet (click on image to download) to pull 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 metric is likely to affect results for the year if the firm remains on its present course.

The KPI tracker shown above uses 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. It is a simplified model for the law firm. Through that simplification, the critical factors that determine income become clearer. The results reflected by the model are, of course, an approximation. Nevertheless, simplified models like the above usually produce more accurate estimates than detailed budgets and forecasts because they focus on what is important.

You can use the attached spreadsheet to implement Key Performance Indicator Tracking (KPI) in your firm. For help in computing the metrics used in the tracker read the following previous posts:

Realization is the most problematic of law firm metrics when it comes to measurement. To better understand this important but elusive key performance indicator, read the post titled Rolling Realization Computation for Law Firms. However, for the purpose of the Key Performance Tracker illustrated above, a simplified computation of “Collection Realization” can be used. You can use the Excel spreadsheet shown below for that purpose.

Click the image above to dowload the Excel template for the above Collection Realization computation should you wish to use this approach for your law firm. This approach to measuring this important metric is discussed in more detail in the prior post titled Measuring Law Firm Collection Realization.