Legal Ease Blog

Do Lawyers Really Need Practice Management Software?

Earlier this week on the JD Hacker blog, Will Geer posted "Do You Really Need Practice Management Software?" His answer was no, but I'm not so sure - I think his post missed some of the big reasons to have practice management software.

Geer opines that most lawyers purchase practice management software for document management, but that this is a 'ridiculous' reason for making this purchase. He sets out a system for storing documents in your operating system, which is the default method for most solos and small law firms (and even some mid-sized firms). He goes on to describe this system, complete with folders for each client and subfolders for individual document types, as well as his naming system for those folders.

While this system sounds logical and can work for a while, as a practical matter, it has a number of pitfalls which I have, unfortunately, witnessed first-hand both in the law firms I worked in as an associate and as a partner, but also in the law firms I work with as a consultant.

First, creating a file folder for each client makes sense, it doesn't help if you have a number of different matters for the same client. Geer suggests that this is easily solved by naming the folders with the full name of the engagement, but this can also get confusing, and as your client base and the number of engagements with your office grows, you'll find that duplicates and other complications often arise. What happens if you have a practice in which you have a large number of cases with a particular client (for example, if you do insurance coverage work or all of the litigation for a particular company)? Long folder names can get cumbersome quickly.

Geer next suggests creating subfolders within each client's file for managing documents, and suggests folder names such as "pleadings, discovery, client communication, correspondence, documents and trial." But these categories are open for broad interpretation. Does a letter to a client go in correspondence or client communication? If you're in New York, does the bill of particulars get filed under pleadings or discovery? Does a witness statement get filed in documents or trial? If it is exchanged by another party during discovery, does it get filed under discovery? If a piece of correspondence addresses discovery issues, is it filed under correspondence or discovery?

While some of these issues can be resolved by creating rules within your office for electronic filing of documents, even those rules can get out of hand, and no set of rules will be able to account for every single document created or received in your practice.

Practice management software eliminates many of these headaches because the documents can be categorized as above (and multiple categories can be assigned to a single document), but search and retrieval of documents is much easier.

With regard to naming of documents, I am often baffled by lawyers who insist on saving documents and naming them using the date. Your operating system allows you to sort documents by date regardless of how they are named, so naming them using the date is not only redundant, but is another area open for error because many will forget to use the necessary zeros, causing documents to be out of order anyway. And all of those numbers before the name of the document makes scanning through a document list for a particular document type or name difficult.

Filing documents by file type also isn't necessarily productive or helpful - should it matter whether a document is a pdf or a word file in most instances? When you are searching for a particular document, is its format most important? Consider naming documents using criteria that you would use most often to search for them, or names that give you some idea of the substance of the document itself, to make the document easier to identify during your search.

If you are filing documents in client subfolders, it is also not necessary to include the name of the client in the file name - the document is already stored in that client's folder. The longer the file name, the more confusing it is and the less likely it is that you'll be able to see the entire name on your screen in some formats. Easy and simple but descriptive should be the order of the day. You should name documents in a way that allows you to tell at a glance what the document contains so that you dont' have to open multiple documents to find what you are looking for. While it is true that each operating system has its own search function, many of these search functions are not as robust as those that are made a part of practice management software packages.

Another big advantage of practice management software is its ability to link clients with matters and documents with clients or matters. You can easily see what work has been done for a particular client across multiple files, and any document created on a particular file is also linked to that client and contact - along with to-dos or tasks for that client and upcoming dates or calendar entries. This is a big advantage when communicating with clients, because you have all of the information at your fingertips, without having to search several different applications (Word processing, email, calendar, etc.) and individual client matters for information - you can get it all through the client interface.

Practice managemetn software also is a huge time saver when a client's information changes. Instead of having to go into each file separately to note an address change, a contact name change, telephone number change, etc., the change can be made once in the client's information screen and it will automatically be applied to each of that client's matters. Over and over I have seen law firms struggle with address, telephone number or contact person name changes where files and information are stored in individual file folders because lawyers and staff either are not informed of the change or they forget to make the change in each individual file.

Conflicts are another area of concern that can be addressed with practice management software. While it may be easy to determine whether you've ever represented a particular party before, it may not be as easy to determine whether you represented another party (such as a codefendant) with adverse interests without a robust database of information.

Practice management programs integrated with time and billing programs can help you not only create and assemble documents using information stored in the system (rather than constantly re-typing the same information over and over), but can help you track and bill your time for those activities as they're being performed (if you must bill hourly).

Is practice management software an absolute must? Probably not, but the advantages in productivity and efficiency and the time and effort it saves is well worth it - especially if you're not a true solo and you need to share information with staff and other attorneys.

Will alternative fee arrangements be profitable for lawyers?

Last week’s Legal Business Development Blog entry was part 16 on a series on alternative billing, entitled, “Alternative Fees (Part 16) - Win-win or win-lose?” The article opines that firms who are talking about their success with alternative fee arrangements may be over-stating their success, particularly in the short term.

The article suggests that some who have begun using fixed fees are not seeing additional profits above their hourly work. There was some discussion on one of my legal list serves last week pointing to this article as an example of why fixed fees won’t work, particularly in litigation. I’m not sure that conclusion was valid – even based on this article.  There seems to be a lot of information missing. For example, how are these firms calculating profits? Are they basing profits on hours? Are these firms staffing and working files the same way for hourly work as for fixed fee work? Have they implemented project management, technology and other productivity and efficiency boosting measures? Are their calculations taking into account the benefits of fixed fees with regard to time records and billing and collections issues?

When firms say that most of their non-hourly work is ‘less profitable’ than their hourly work, are they comparing non-hourly and hourly work on the same kinds of matters or on different kinds of matters (are they comparing apples to apples or apples to oranges)? What kind of fixed fee or non-hourly arrangements are we talking about here? None of these issues seems to be directly addressed in the article.

It doesn’t surprise me that the article indicated that the larger the firm was, the less profitable the reported non-hourly work. Large firms were built and staffed for and are used to working on an hourly basis, and they may not have adapted their processes to a non-hourly system.

It’s also telling that the article points out that, “Lawyers have been rewarded for their entire careers for putting in extra hours to analyze every risk from every possible angle.  Most lawyers will have a hard time delivering the quality they are comfortable with when they must work within hourly limits.” Placing ‘hourly limits’ on a matter isn’t the same as creating a true non-hourly billing system and fee structure - it’s merely capping the hours (or capping the fee and then trying to fit that into an old hourly mindset). That’s trying to change only half of the system – the way the client pays, rather than changing the whole system, including the lawyer’s reliance on hours as a basis for value.

That same paragraph goes on to talk about expecting lawyers to be productive for a certain number of hours, and finding those goals unreachable if some work is billed on a fixed fee basis. But why should the firm care if a lawyer is ‘productive’ for 2000 hours a year unless they’re still stuck in an hourly mindset? (And I’d challenge the idea that lawyers are ‘productive’ for 2000 or any other specific number of hours a year just because they’ve previously billed that number of hours per year).

The goal of fixed fees isn’t necessarily to make MORE money than you would make on the same matter billed on an hourly basis. The goal is to create a fee structure that your clients can understand and buy into, that doesn’t create conflicts between lawyer and client, and that rewards lawyers who can manage well, staff appropriately, resolve disputes expeditiously and work efficiently. In addition, it eliminates a lot of the traditional conflicts between lawyers and clients that are inherent in the hourly billing system, and it focuses on the knowledge, skill and ability of the lawyer in achieving the service and outcomes a client seeks, rather than focusing merely on hours expended. 

As the article correctly notes, increased competition is likely to drive down prices, particularly in this economy. So whether you’re billing hourly or not, you may see clients who are seeking to pay less for legal services – unless you can convince them that the value of those services justifies the fee. In my opinion, that’s harder to do on a pure hourly system. But even if it isn’t, it may be unrealistic to compare the profitability of work this year to the profitability of work last year in light of today's economic climate. Blaming it on the fee structure doesn’t necessarily tell the whole story.

Working with alternative fee structures and setting fixed fees is not necessarily 'easy.' It takes trial and error and a lot of work and specific discussions with clients up front. Change is never easy.People are used to the hourly billing system so it seems easier, but is it really? Just look at all of the problems and complaints it creates. Hourly billing has its own challenges with write downs, write offs, and constant challenges to the amount of time a task 'should have' taken. 

Might shifting to a non-hourly billing structure mean a loss in the short term? It most certainly might. But if it results in a long term gain, increased client loyalty and a better client base, (or even one of the above), it’s still probably worth it. Is the fact that it may be 'difficult,' (especially at first) to implement a reason to give up on alternative fee structures?

If, as the article suggests, alternative fees are going to be more and more prevalent, lawyers are going to have to learn how they can use them or risk losing clients. In some cases, they may be ‘less profitable’ than hourly fees, but less profit is better than no profit - and for some firms, the amount of ‘profit’ that they were making on particular matters might not have been reasonable in the first place.

The Busy Lawyer's Guide to Success

The Busy Lawyer’s Guide to Success - Essential Tips to Power Your Practice by Dan Pinnington and Reid F. Trautz is one of the ABA Law Practice Management section’s newest books. This book is only 132 pages long, but it is packed with powerful insights and tips for your practice. It’s small enough to fit into any lawyer's bag or briefcase and it belongs in every one.

An easy read, the book is broken up into sections and provides short, to the point statements that can be implemented easily and effectively. If you choose one section (or even one page), take the tips to heart and take action, you’ll see a difference in your practice.

If you’ve ever attended ABA Techshow, you know that the ’60 tips’ sessions are among the most popular and well-attended sessions in all of Techshow. This book is like an extended version of one of those lightning-fast tips sessions. It’s broken down into these essential sections:

• Client Service
• Marketing and Client Development
• Technology
• Coping with Email (it’s such a pain it needs a chapter all its own)
• Making (More) Money
• Ethics & Professionalism
• Management, Operations and Staff
• Strategy and Planning

Yes, the book is short. It’s written that way on purpose. The authors, busy, active lawyers themselves, know how valuable a lawyer's time is. They know you don’t want a big heavy book that you aren’t going to have time to read anyway. They’ve dispensed with long explanations and extra verbiage and distilled the book and each of their tips down to its core. The result? You get a book filled with just the ‘good stuff.’ You don’t need to search it out – it’s there on every page. For those of you that want more, they’ve included a Learning More section which points you in the direction of other resources on these topics.

Creating a book that’s comprised just of those golden nuggets undoubtedly took an awful lot of editing. It’s often easier to write something long than it is to write something short, because the short takes more editing. Your words need to be more precise. So if you’re wondering whether this ‘little’ book is worth the ‘big’ price, think about how much time (which, unfortunately, for most of you still translates into billable hours) these two guys saved you by giving you only the good stuff.

Still don’t believe me? Perhaps this will entice you:

• Check out pages 25-28 for a step by step individual marketing plan that you can start working on today.

• To find out which are your highest and lowest value clients, use the client report card found on Page 65.

• Learn how to conduct productive meetings by incorporating tips from pages 94-96 and 102-105.

You can get your copy of the book through the ABA ($69.95 for non-members, $44.95 for LPM members), or you can pre-order it from Amazon.com for $44.07, but it isn’t available yet.

Tips for Effective Law Firm Hiring

This is the final post in my series on tips from the "Get a Life" conference, sponsored by the Total Practice Management Association - this time on hiring.

Tim Ryan from Total PMA gave one of the most engaging and effective presentations from the conference, on a topic that directly affects both the bottom line and the quality of life at law firms - hiring. Payroll is usually a firm's biggest expense, and poor hiring decisions impact morale, productivity, client relations - and just about everything else in the firm.

Many lawyers lament that it's hard to find good people. What kind of staff do you have? If they left, would you be in trouble, or would you breathe a sigh of relief?

Ryan made a great point during his presentation about the reason why many law firms are not successful when it comes to hiring: they hire using a job description, rather than a people description. Ryan recommended taking a look at your best employees (the ones he calls your 'rock star' employees). Identify the behavior, thinking and attitudes that make them great. Use that information to create a blueprint for future hires.

How prepared are you when interviewing staff for a position? Are you reviewing the resume five minutes before the candidate arrives? If you are, you need to re-think your hiring process.

Here are some of Ryan’s general tips about hiring:

• Certain traits are cultural and are required for every position; many employees fail because of a poor cultural fit - not an inability to do the job

• You can compromise on education, but not on talent or culture [skills can be taught, but values and cultural fit cannot]

• Spend time up front benchmarking the people description/behavior profile - you won't change bad behavior once the person is hired

• In an interview ask for substantive, real life examples that demonstrate that candidate behaves in line with your behavior blueprint

• Don't interpret interview questions for candidate - it's giving them the answers. If a candidate is struggling to answer your questions, they may just not have what it takes

• Don't give interview candidates credit where credit isn't due and don’t make excuses for their inability to respond 

• Remember during the interview that you are looking for behavior – make sure answers are substantive and don’t try to shift blame to others

• When you're comparing candidate to candidate to make a hiring decision, you set yourself up to hire the tallest pygmy – in other words, comparing among candidates doesn’t necessarily mean that you’ll get the right person for the job – NONE of the candidates you have now may be right for the job. If that’s the case, keep looking

Ryan also reminds us that in addition to hiring the right people, sometimes you have to fire the wrong people. If you continue to allow 'bad' employees to remain, what does it say to the people who matter - your “rock stars”?

Hire slowly, fire quickly. But fire people in a way that allows them to keep their dignity.

Systematize, Delegate and Outsource

Today's post focuses on more advice from speakers at this year's Total PMA Get a Life Conference, including advice from the panel on outsourcing, featuring Alexis Neely and Max Gardner and advice from Stephen Fairley about law firm systems and marketing because systems, delegation and outsourcing combine powerfully to make you and your firm more productive.

Outsourcing

When outsourcing, you must also consider security and confidentiality concerns. Make sure that those you hire to do work for you understand the attorney-client privilege and confidentiality issues. Have security in place so that outsourced work is protected.

The golden rule of outsourcing (from Alexis Neely):  Focus on what you love to do, what provides most value for your business, and what you're great at - outsource the rest.

Why use a virtual assistant? Max Gardner says that using virtual assistants eliminates concerns rabout benefits, vacations, payroll functions, while providing you with the extra hands to get the work done

Max Gardner also advises that, in his experience, a virtual assistant with no legal background is often better than someone who has worked for another firm. Usually, the other firm the assistant worked for doesn’t do things the same way you do. In addition, the assistant might have picked up some ‘bad habits’ from the former firm. Hiring someone with skills and the right attitude allows you to train them to provide the kind of work you want provided.

Be careful about the constraints you place on virtual assistants – you do not want them to become de facto employees. Become familiar with the rules regarding independent contractors and be sure that you are not over-stepping.

Alexis Neely recommends that if you have staff, you should get out of your office. If you’re in the office, it’s easy for your team to get lazy and just ask you to take care of things for them. But if you aren’t available, your team can often figure out the problem or issue and handle it on their own. If you want your team to rely on you less, freeing you up to do other things, make yourself scarce.

Why don’t more lawyers outsource work? I think that some resistance to outsourcing is just fear. Lawyers are afraid of change, of technology, and of the confidentiality issues. Sometimes they think that they’re better off just doing it on their own. Delegating effectively – whether within your firm or to others outside of your firm – is a skill. To learn how to delegate effectively see my posts on delegation: Do Something! Delegate Effectively, Even if You're a Solo and Do Something! How to Delegate Effectively (Part II).

Finally, Max Gardner recommends that you "Think INSIDE the box. Get things organized and systematized within your office."  And that leads us directly into Stephen Fairley’s presentation –

Create systems that will help you to grow your practice

Stephen Fairley advises that organization and systematization are important for all law firms. Systems you need include: client intake, client education, client retention, referral development, marketing and business development and Key Performance Indicator tracking.

Fairley emphasized how imperative these systems are for the working of your firm, saying that you need the right systems in your firm: “The people run your systems, but the systems run your law firm.”

One of the best systems to institute for your practice is a system for follow up with new contacts. Studies have shown that clients don't make buying decisions (including the decision to hire a lawyer) until there have been between 7 and 20 contacts with you. But 90% of lawyers give up before or after only four contacts. If you’re one of those lawyers, adding a fifth contact would probably add 10-15% to your business.

Fairley recommends using autoresponders to automate your follow up process with web visitors as well as strategic alliances.He recommends Aweber for autoresponder service; I use them for my email newsletter and autoresponders for other purposes.

According to Fairley, the #1 goal of your website is to capture leads. But recognize that 85% of your visitors to your website will stay less than 30 seconds and will never return. That means you've got a VERY short window of time in order to capture your web visitor's attention. And when that attention is captured, you want to capture their contact information so that you have permission to keep in touch with them – creating those all-important multiple contacts. He suggests that you get leads by giving free information in exchange for contact information from web visitors.

An e-newsletter is one way that firms stay in touch with their clients on a regular basis and offer free information to them. But your e-newsletter can get lost in a mountain of email. Include personal touches so that your list looks forward to receiving your email newsletter, and supplement the e-newsletter with personal touches, too.

Remember that your e-newsletter is only one part of your overall marketing plan. It can't do all of the work for you, but it can do a good job of automating some contact with your client and referral base on a regular basis - every 4-6 weeks is recommended. This is not too much contact if you’re providing value - from your reader's perspective.

Thinking of starting your own firm newsletter? Check out these tips from one of my previous posts about firm newsletters.

 

More on Work/Life Balance for Lawyers

I recently posted about work/life balance in "It's more important than ever for lawyers to 'Get a Life.'" Now, an update.

The ABA Journal Law News Now posted an online article entitled, "Are We Closing the Book on Work/Life Balance?" picking up on Jordan Furlong's post on Law 21: The legacy of work-life balance.

Furlong notes that although work-life balance (or WLB) was 'all the rage' only a few short years ago, the economy may be signaling the end of the WLB movement. He says:

Most lawyers seeking WLB were really seeking an answer to the question: “Does a legal career have to be all-consuming and exhausting?” ... 

The whole thing got wrapped up too often in buzzwords like “personal fulfillment,” “family time,” and WLB, but what it really came down to was lawyers’ rational response to market conditions. They had a chance to get more rewards for their time and effort — unfortunately, many of them chose those rewards in $160,000 annual packages.

...

Where proponents of “work-life balance” went off-track, to my mind, was that they argued the duty to ensure a satisfactory proportion between a lawyer’s work and the rest of her life was an institutional responsibility — that it was up to the law firm, basically. The  firms disagreed, and all they had to do was wait for the marketplace to turn their way to make that clear.

...

The thing is, “work-life balance” is a lawyer’s personal choice and responsibility. If money and “prestige” are that important to you, you’ll sign up to work 3,000 hours a year at a law firm, and you can reap the rewards and suffer the personal consequences accordingly.

Furlong goes on to say that one of the problems is that the 'unspoken symbiosis between law schools and law firms - the law schools charge large sums for legal education but provide little or no practical training, resulting in newly-minted lawyers with large indebtedness but low skills. These lawyers are then hired by big firms who can offer high salaries that will allow students to make a dent in their loans, and provide training - often requiring endless hours of work.

I don't believe that the most proponents of WLB looked at it as an entitlement that law firms were obligated to provide, or that a lucrative, prestigious legal career and a personally fulfilling life are mutually exclusive. What WLB seeks is for all lawyers - as a profession - to tackle the issues facing members of the profession. It is clear that the demands of the profession as it exists currently have resulted in an increase in lawyer dissatisfaction, alcoholism, depression and other ills.

For some lawyers, WLB has been wrongfully interpreted as an entitlement mentality or as a euphamism for laziness and an aversion to working hard or providing excellent client experience. I couldn't disagree more, as I noted in my previous post. Indeed, WLB is all about being a professional and providing a professional level of service to clients, creating a lucrative legal career and a healthy personal life. A tall order? Perhaps, but that doesn't mean it's impossible - although many of the current 'norms' in the legal profession make it so.

Being harnessed to the billable hour, which reduces a lawyer's value to the hours logged, rather than to the solutions and service provided to clients, is one such 'norm' that needs serious change. Billable hours are a rather unprofessional measure of worth - certainly not one that acknowleges lawyers as knowledge workers.

But as noted in many of the comments to Jordan's post, WLB isn't just a debate about billable hours and going home early. Lawyers need opportunities for professional growth and development, intellectual stimulation, collegiality, and personal time - and they need them not just for themselves, but for the good of the firms and clients, too.

As noted in my previous post on this issue, in order to be intellectually challenged, to come to work with your best foot forward and to provide your clients with the excellent service they deserve, you've got to have balance in your life. Healthy lawyers do better work for their clients and their firms. Lawyers who are supported personally and professionally by their firms will do better work for those firms and are likely to be more loyal to those firms. Stressed out, angry, unfulfilled lawyers who are battling personal issues at home (or worse, who are unable to develop strong personal relationships outside of the office) aren't likely to be particularly effective.

In an article entitled, Situation re-evaluation:creating balance, author Kate DeBevois cites a 2009 study of over 50,000 global workers which indicates that employees who feel they have achieved work-life balance work, on average, 21 percent harder than employees who feel they have not achieved work-life balance.  And, as professional organizer and life coach Dorothy Breininger notes in the same article, "Where there’s difficulty in one area of life, chances are, it will show up in most areas of life.” 

While big firms may not be willing to make changes in this regard (particularly in this economy, when they feel their associates are just lucky to have jobs), clients may demand it. And firms that want to continue to attract top talent - both from law schools and laterally - will need to address these issues, since top talent will always have other options and opportunities. When clients defect in larger numbers to smaller firms and lawyers defect to smaller firms or solo practices - or even larger firms that are committed to innovation, creativity, professional development AND work/life balance, perhaps the big firms will finally see the light.

Furlong says, "What we were groping towards, under the banner of WLB, was the gnawing sense that most everyone starts their legal career behind the eight-ball for no particularly good reason." But WLB issues are limited to younger lawyers. While the issues Furlong cites may be the WLB issues faced by newer lawyers in large firms, the majority of lawyers in the U.S. are solo practitioners or work in small firms. Work/life balance issues affect all lawyers, regardless of the length of their experience or the size of their practice.

Furlong concludes his post saying,  "There are still some serious institutional problems for our profession to resolve — dealing with them openly and effectively would be the kind of legacy “work-life balance” deserves." Only too true - which is why it isn't time to 'close the book' on work-life balance yet.

(Hat tip to Kevin Chern of Total Attorneys, for pointing out the DeBevois article).

It's more important than ever for lawyers to "Get a Life"

As many of you already know, I was in Chicago last week for the first annual Total Practice Management Association "Get a Life" (TM) conference. This month's Lawyer Meltdown Newsletter included a recap of some tips from the conference speakers, and I'll be posting more of them on the blog in the next week or so.

The purpose of the conference, as well as the Total Practice Management Association's new magazine, Total Balance, (which you can get for free) was to teach lawyers ways to achieve greater work/life balance. If you look at the roster of speakers and programs from the event and the conference recap, you'll realize that work/life balance doesn't mean not working hard or not taking the business of law seriously - in fact, it's just the opposite.

I firmly believe that in order to be intellectually challenged, to come to work with your best foot forward and to provide your clients with the excellent service they deserve, you've got to have balance in your life.

But work/life balance doesn't just have one meaning that's universal to everyone. For some, it can be working long hours doing something they're passionate about. For others, balance comes by defining your priorities and focusing on what you love and what you do best, outsourcing the rest. For others, balance is achieved through flexible work schedules, and technological advances. Still others achieve balance by focusing their marketing and their practice only on the highest value clients. And of course, work/life balance also means determining your personal priorities and incorporating those into your life - whether through your practice or outside of your practice.

Yesterday, I came across an article in Law.com entitled, "Are Today's Lawyers Stretched Too Far?" by Susan Beck of The American Lawyer. The article begins by talking about tough times faced by big law firms, and the depression and even suicides that have resulted from recent layoffs and firm restructuring. Beck notes that the current law firm model is not sustainable, either financially or practically. She says, "Expecting lawyers to devote every ounce of their energy to their firm and its clients is not sustainable."

So what is the alternative? I've heard some lawyers from large firms commenting that one 'bright spot' in the economic downturn is that the lawyers who still have jobs won't be 'whining about work/life balance any more; they'll just be glad to be working.' I couldn't disagree more.

Work/life balance is even more important now, when financial pressures are mounting, client expectations are increasing, budgets are being scrutinized, and some workloads have increased due to under-staffing. And again - clients are better served by lawyers who are committed and focused, which necessarily means that those lawyers are taking care of themselves, too.

Beck suggests that it's time to, "knock [lawyers] out of the daily grind, to get [them]to stop, look around and think." Hopefully, focus on these issues - including conferences like "Get a Life" will help lawyers to do that. 

If you'd like to see the conference recap from my newsletter, you can get it here. While you're there, subscribe to the newsletter - next month's issue will include some lessons learned from all of the conferences I've attended over the past year.

Need help defining your priorities or structuring your firm for better balance? Contact me to see how I can help.

Law Practice Today - A Great Resource for Lawyers

The Law Practice Management Section of the American Bar Association publishes Law Practice Today, an online magazine specifically targeted toward the business issues involved in the practice of law in four core areas: Management, Marketing, Finance and Technology.

Law Practice Today is a FREE resource for attorneys - you don't have to be a member of the LPM Section, or even a member of the ABA, in order to access the magazine and its articles. The May issue was just posted. It focuses on the issues encountered by lawyers starting or re-starting their own practices.

Here's what you'll find in this issue:

Finance
Two of the questions most frequently asked by lawyers are: “How much money do I need in order to open my own practice?” and “What do I do about clients who want me to reduce my fees?” This month’s issue addresses both. Erik Mazzone’s article, “How Much Money Do You Need to Start a Law Firm” providing tips for lawyers to help them determine whether they’re ready to go out on their own.

 

It’s no secret that the recession is hitting the legal profession hard. Ed Poll addresses the ways law firms can retain income and clients by demonstrating value, managing knowledge appropriately, unbundling services and more in Legal Fees: How to Address the Client Pressure to Lower Fees.

Technology
Technology can give lawyers an advantage by helping them to be more productive, but it has its downside, too. In this month’s The Legal Mac Column, David Sparks discusses Using Windows on Your Mac, eliminating one more obstacle for those seeking to switch from PCs to Macs, whether you want to use Windows exclusively or Windows and OS X on the same machine. In BlackBerry Behavior: Is It Ruining Your Reputation? the darker side of technology rears its ugly head when BlackBerry users forget to be considerate of those around them (this article previously appeared as a post on this blog).

 

It’s tough keeping up with the latest technology, but Dennis Kennedy’s article, Legal Technology Trends for 2009: The Year of Hunkering Down identifies trends and provides tips for what lawyers can do now to stay ahead of the curve – even if they’re on a budget.

Speaking of budgets – most lawyers are looking for ways to cut expenses during the downturn. Joseph Kashi identifies Low-Cost Computer Fixes for Tough Times. And our own Rodney Dowell reviews Dragon Naturally Speaking 10 Legal and tells of his personal experience installing and using the software across multiple platforms.

Marketing Yourself and Your Firm
Can small firms compete with big firms for business? Davis C. Bae shows how small firms can do just that in The Illusion of Size (And Other Ways to Compete with the Big Competition).  Looking for a job? If so, you’re marketing YOU. Meri J. Kahan shows law students how their performance at a summer job or internship is an important first step to landing a full time position in Alchemy in a Down Economy: Turning a 2L Summer Associate Job into a Golden Full-Time One.

In Make Giving Part of Your Business Strategy, Andrea Malone shows lawyers how they can contribute to charity, even in tough times, and to do so strategically to benefit the firm as well as the charity. And Mister Thorne provides A Formula for Shy Attorneys, demonstrating how even shy attorneys can attract business, and learn successful rainmaking tips from Rainmaker Linda J. Ravdin in an interview by Beverly A. Loder.  

Management
One of the decisions lawyers need to make when opening their own practices is about where to establish an office. Home office? Executive suite? Office share? The Essentials of Office Sharing and Executive Suites, an excerpt from Flying Solo provides tips to help lawyers make this all-important decision.

 You’ve probably heard about the swine flu even if you haven’t been directly affected by it yet – but how will an outbreak affect your firm or your clients? Read Swine Flu – Some Employment Issues by Bernard Jacques to find out.

Podcast – Productivity Tips
This month’s installment of The Digital Edge Technology Podcast by Jim Calloway and Sharon Nelson is a discussion with Reid Trautz and Dan Pinnington about their new book, The Busy Lawyer’s Guide to Success: Essential Tips to Power Your Practice. 

These articles and more are available at no cost to you and your readers on the LPM website. This month’s issue can be found at: http://www.abanet.org/lpm/lpt/home.shtml.

Help Clients Perceive the Value of Your Service by Serving Them In Unexpected Ways

Take a look at this post from Scott Gibson of the law firm Gibson Ferrin Riggs on new blog BiziBoom.com about Harry Beckwith's book, What Clients Love: A Field Guide to Growing Your Business. I highly recommend Beckwith's books, which also include Selling the Invisible: A Field Guide to Modern Marketing. As I mentioned in a previous post about planning, Beckwith's books are easy to read and chock full of advice that you can begin implementing immediately. Gibson recommends reading with highlighter in hand while asking yourself as you read how you can implement the ideas in your own practice - a suggestion worth implementing in itself.

One of the things I loved about the BiziBoom.com post was that Gibson not only read the book and implemented some of the ideas, but he passes the book along to his clients so that they can improve their  businesses. That kind of service creates a completely different relationship between you and your clients. It shows that you care about them beyond the individual matter you're handling for them.

What new ways can you think of to demonstrate your value to clients?

Gibson says, "[I]n selling services we must focus on helping the client perceive the value of the services.  Clients perceive value through their interactions with your company.  If you want your clients to understand that your services are valuable, help them see that value." One way to help your clients see the value of working with you is to provide them with an exceptional client experience that goes beyond the confines of the representation.

(Hat tip to Lance Godard for alerting me to this post via Twitter).

NY judge rules matrimonial lawyer forfeits fees since bills were not timely

Billing requirements in New York matrimonial cases are very strict. The strict rules were put into place in order to avoid abuses. One of those rules, which can be found in New York 22 NYCRR 1400 et seq, requires matrimonial lawyers to bill their clients at least every 60 days (1400.3). The bills must be written and itemized.

Recently, a Long Island, NY lawyer who handled a matrimonial action for a client in Suffolk County was denied the right to recover legal fees earned due to her failure to follow these rules.

The lawyer took a retainer from the client and sent bills in December and then in February. At the time of the Februrary bill, the client had a credit balance of over $2,000. However, the attorney failed to provide the client with another itemized bill until June - more than 120 days since the date of the previous bill.

Although the lawyer claimed that she had several conversations with the client during the months between February and June, and that she advised the client that the retainer had been exhasted and that additional charges were accruing, at no time did she provide the client with a written, itemized bill.

The client claimed not only that he did not receive a bill, but also that he was never told by the attorney that he owed additional legal fees. Further, he claimed that he had advised the attorney that he was financially unable to pay additional legal fees, a fact he claimed the attorney was well aware of, as the attorney was working on a modification of the separatin agreement with the client's wife due to changed financial circumstances.

Nassau County Supreme Court judge William LaMarca, in Verkowtiz v. Torres held that the attorney, Charlene Verkowitz, failed to follow the rules set forth for matrimonial attorneys and therefore, held that she was not entitled to recover the legal fees contained in the June bill. [Verkowitz was discharged by Torres in July]. However, the court also held that she did not have to return the balance of the retainer which had not yet been earned at the time of the February bill, since those fees were properly earned.

The message for attorneys is twofold: 

Be mindful of the rules of your jurisdiction regarding legal fees, and read them very carefully. Follow the rules to the letter. Where a bright line rule such as this one exists, there is no room for error. There is no reason to forfeit an earned legal fee by failing to timely send a bill to the client.

Where a client indicates an unwillingness or inability to pay for legal services, or where the representation makes clear that the client is experiencing financial difficulty, do everything in your power to safeguard your fees. Put everything in writing as often as you can. Unless you're willing to work for free, get additional retainer funds up front and monitor billing and collections closely.

Whether specifically advised by the client that he was unable to pay or not, the attorney should have been aware of the client's financial situation, since she was requesting a modification of the separation agreement on that grounds. Not only should the attorney have been extra vigilant about timely billing, but she should have taken steps to ascertain whether the client was able to pay, or taken steps to withdraw to avoid performing legal work for which she couldn't be compensated. While the court may not have granted the request to withdraw, at least the lawyer would have made a record with respect to the legal fee issues.

Under any circumstances, 120 days is far too long between legal bills, particularly when you are dealing with clients in financial distress. Rather than failing to send the bill in 60 days, this attorney should have considered sending bills every 30 days if she suspected that the client would not be able to pay, or if significant legal work was being performed.

According to the court's decision, as of February, the client had a credit totaling over $2,000, and yet the attorney sued for almost $8,000 on the June bill. That means that between February and June, over $10,000 in legal work was performed for a client who was in financial difficulty, and yet the attorney failed to put anything in writing to document the work performed or to bill the client for the work during that 120 day period.

This situation is more common than it might seem. Lawyers are focused on performing the legal work that their clients require, but they often neglect the business side of their practice, failing to send bills timely, failing to follow up on accounts receivable, and taking little, if any action to collect until it's too late.

While it's important to do good work for your clients and to keep up with your obligations to them, you must also pay attention to your bottom line.

If you need help developing an effective billing, A/R and collections procedure, or any other systems and procedures in your office, visit my website, www.LawyerMeltdown.com to see how I might be able to help.