Law Practice Management
Making It Work
Effective law practice management for small to mid-sized firms.
By Joan Jenkins
Most lawyers choose our profession because they are interested in the
law and its application to real human situations. Few go to law school
to become office managers. Yet this is what the majority of lawyers,
especially those at small firms, become.
In my 33 years as an attorney, I have essentially stayed with one firm,
growing slowly from three employees and two lawyers to 11 lawyers and 30
employees. Over time, I have observed the management styles of many
small to mid-sized firms, and when it comes to law practice management,
I have come to identify the following common problems and practical
advice that can solve them.
BILLING AND COLLECTIONS
Every firm should have proper procedures for billing and collecting
fees. For young lawyers or those with small firms, practice management
software such as MyCase, Rocket Matter, or Clio can be an inexpensive
way to track time, manage trust accounts, generate bills and attorney
performance reports, and allow for online bill payments.
When managing a law practice, you must make sure that you, your
associates, and paralegals have good billing practices. Billers should
enter their time as they work through the day because it is nearly
impossible to reconstruct billable hours after the fact. Proper billing
not only increases your cash flow but also helps with collections.
Clients are suspicious of time entries that are too vague. Give them
detailed bills that demonstrate you are performing necessary work, not
padding your bills. Sending out bills in a timely manner is also
essential. Allowing two or three months to pass before sending the
client a bill results in large receivables.
When you run into problems with collecting bills, you need to have a
policy for handling the situation. A call from a staff member who has
never interacted with the client is not likely to achieve the same
results as one from the paralegal who has diligently worked on the
client’s case. When a case is over and fees still remain unpaid after
multiple attempts to collect, you must decide whether to send clients to
a collection attorney or simply write off the balance. While few lawyers
are in a position to risk suing a client for fees, a good collection
attorney can produce similar results.
STAFFING
While effective billing is the first ingredient to successful law
practice management, staffing and cultivating a good office culture are
just as important. Think long and hard about what kind of people you
want to work with. At my firm, we hire for both competency and
character. In the practice of family law, it is essential to have a team
that demonstrates compassion, firmness when necessary, and extreme
patience with people who are often on the “ragged edge.” Your legal team
will function far more effectively if its members have common values and
a shared approach to the way they treat others. It is also essential to
make sure that you have employees who will meet your needs. For
instance, firms should have at least one employee who is extremely
knowledgeable about current technology including computers, cellphones,
and tablets.
Retaining staff members can be as difficult as finding them. Almost
every successful lawyer has loyal, long-term employees. Small courtesies
to your employees can go a long way to increasing loyalty. Be reasonable
about time off and wise enough to provide the benefits your employees
need, such as health care as well as short- and long-term disability.
When thinking about ways to ensure the continuity of staff, consider
small things that make a big difference. For example, our firm has an
annual Halloween party. We close the office early and invite all
employees and their families to join in the fun.
OFFICE PROCEDURES
Every office should have a set of standardized procedures in order to
function properly, such as common forms, including those that meet
specific circumstances not covered by practice manual forms, and
procedures for handling new clients. This includes deciding who is going
to field new client calls and what should be said during this critical,
initial conversation. In our office, the lawyer’s paralegal takes the
call and schedules the appointment. This relieves the lawyer of the
burden of fielding calls from clients who are simply fishing for free
advice or whose issues cannot be handled by the firm.
You should also have a standard client intake form, information to
provide about your practice, and a contract for clients to sign before
you commence work on their case. One easy way to provide clients with
quick access to information is a client portal on your website. Our
clients are given a password allowing them access to the portal, which
contains information concerning the family law experience and
instructions for things like answering discovery requests.
With most offices going paperless or moving quickly in that direction,
your staff should also establish a logical way to store client case
information so that anyone can quickly access a case file. Your firm
should also have procedures for closing files, including a checklist of
tasks to be completed before the file is closed. Weekly staff meetings
to review current cases can help you avoid missing deadlines or frantic
last minute preparation.
MARKETING
Virtually every lawyer now has a website—or should. A prospective
client will likely go to your website—your first point of contact—to
learn more about you and your firm. Look at your website from the
perspective of a new client and objectively judge whether it conveys
professional, organized information that will make you stand out from
other lawyers. Do not establish a website only to neglect it. Keep the
content fresh and update lawyer credentials regularly.
We have found that one of the most successful ways to market our firm
is to encourage volunteering in our community. Supporting individual
attorney involvement in local charities, such as sponsoring a table at
charitable events where your firm name is prominently displayed,
generates goodwill and can be a better marketing tool than spending the
same amount of money on advertising.
Marketing equates to advertising, and the State Bar of Texas has rules
you must follow in that regard. If you are considering running an
advertisement for the first time, go to the State Bar website, texasbar.com/adreview,
to educate yourself about the rules.
OUTSOURCING
As the size of your firm increases, consider outsourcing your human
resources or financial analysis. Many firms employ outside HR to assist
the firm with hiring and firing employees, establishing a clear set of
employee rules and regulations, and ensuring the firm is in compliance
with all state and federal regulations, including the U.S. Health
Insurance Portability and Accountability Act. Outsourcing HR is
relatively inexpensive. We have done so for over 10 years at a fraction
of what we paid an office manager. Many HR groups that work with small
businesses provide services for less than $3,000 a month.
You may also consider employing a part-time chief financial officer.
If you do not have a clear understanding of your exact overhead and the
actual cost of each employee, including their proportional share of the
overhead, then it will be difficult for you to run a profitable
practice. Our CFO works a limited number of hours per month at a
reasonable rate and is responsible for producing detailed monthly
financial reports and analysis. Don’t be penny-wise and pound-foolish.
Your hourly rate is likely to be much higher than what you would pay an
HR person or a part-time CFO. Think logically about whether capturing
those billable hours would be more economical than continuing to do this
work yourself.
Firm management is not as exciting as trial work, but it is just as
important so put these suggestions to work and enjoy the profits they
generate.TBJ
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JOAN JENKINS is a partner in Jenkins & Kamin and a co-author of O’Connor’s Texas Family Code Plus. |
