Law Practice Management Asked and Answered Blog

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March 2011

Mar 29, 2011


Marketing a Personal Injury Plaintiff Practice

Question:

I am a partner in a five attorney PI plaintiff law firm in Central Kentucky. We have three partners and two associates in the firm. We are first generation. Our practice is focused 100% on PI plaintiff cases. While we focus on all types and sizes of PI cases we are not a high volume advertising PI practice. Our practice has been built upon our successes and referrals from past clients and other lawyers. We have never done much in the way of other forms of marketing and advertising other than a small yellow page ad and a Martindale Hubbell listing. We are finding it harder to obtain a sufficient quantity of quality cases as a result of increased competition from the advertising PI firms, statutory changes, tight fisted insurance company claim managers, etc. We believe that we may need to being doing more to market our practice. What are your suggestions?

Response:

We are hearing similiar stories from our PI plaintiff law firm clients across the U.S. Case counts are down, quality of cases are not what they used to be, competition is fierce, and cases are getting harder to settle. The strategy is different from a firm that wants to build a high volume practice (build a factory) from a firm that desires to build a reputation-based practice. In essence you need to determine whether you want to build a high volume practice (a factory) or continue with a high quality reputation-based practice. Assuming that you want to continue your reputation-based practice here are a few suggestions:

  1. Develop a long range strategic business plan – 10 pages or less
  2. Enhance and broaden the firm-wide marketing program to increase market awareness (referral sources and potential clients) and generate new client business. Review ROI from the firm’s marketing expenditures. Consider increasing marketing budget to 5%-10% of fee revenue.
  3. Develop the firm’s marketing infrastructure to include:

–    Adequate budget
–    First Rate Web Site
–    Appropriate directory listings
–    Inside Marketing Coordinator
–    Relationship Management Database
–    Capability Materials
–    E-News Letters via Service
–    Articles
–    Testimonials
–     Public Relations
–     Accountability by all attorneys and staff

4.    Develop a program for increasing the firm’s exposure to the newer younger generation non-PI and solo attorneys and small firms.

5.    Provide excellent client service

6.   Keep your yellow page ad for now but reduce investment

7.  Understand the power of PR in Trial Strategy.

8. Develop a formal lead tracking process and invest in resources

9. Organize to maximize contact with potential clients.

Click here for our blog on marketing

Click here for our published articles

John W. Olmstead, MBA, Ph.D, CMC

Mar 22, 2011


Considering Merging or Joining Another Law Firm: What Should I Look For?

Question:

I am a solo practioner in Southern Missouri. I have been in practice for 20 years. I have a very successful practice with an excellent client base. I have three paralegals that I am able to keep busy. I have recently been thinking about whether I should consider joining another law firm. What should I be thinking about and what should I be looking for?

Response:

I believe that the key question is – can a law firm offer its lawyers a measure of value independent of the skills, talents, and contributions of its partners? The answer can only be answered by recalling the advantages that the best law firms have over sole practitioners or groups of lawyers who share overhead and nothing more. These advantages include the following:

Just because a law firm holds itself out to be a firm does not mean that the advantages listed above exist in that specific law firm. If not – you might be better off staying solo.

Click here for our blog on partnership topics

Click here for our published articles

John W. Olmstead, MBA, Ph.D, CMC

Mar 15, 2011


Does Law Firm Partner Compensation Make a Difference in Motivation and Actual Performance

Question:

We are a 21 attorney firm in San Francisco. Recently we have been considering overhauling our partner compensation in order to foster leadership and more of a team environment. Currently many of our partners are operating and functioning as if they are in separate law firms rather than part of a firm. What are your thoughts?

Response:

With thinner profit margins firms can no longer carry unproductive partners. Law firms are demanding more from their partners and asking everyone to think outside the box to help the firm innovate for the future and obtain/retain a competitive advantage.

This has renewed discussion and debate on the topic of partner compensation and in particular whether compensation can make a difference in motivation, actual performance, and contribution.

We are receiving many more inquiries from firms looking to overhaul and redesign their partner compensation systems. Based upon these inquiries we believe that many firms are expecting miracles from their compensation systems and are asking and expecting more than they will ever be able to accomplish. They are not just seeking to align pay with performance – but have far higher expectations. For example:

Expecting a compensation system to perform miracles such as these may be expecting more than any system can deliver.

Compensation does not drive behavior – it maintains the status quo. It serves as a reinforcing agent. Motivation requires leadership which can have a greater impact upon a firm than anything else.

An effective compensation system serves as a strong messaging and reinforcement agent that helps you obtain and retain top partner talent and helps align their goals and activities with the strategies and goals of the firm.

A well designed compensation system should provide:

While you must get partner compensation right in order to acquire and retain top partner talent as well as reward performance and reinforce desired behaviors, the starting point is hiring and retaining the right people to begin with. Jim Collins in his book Good to Great sums it up well with the following comment: “get the right people on the bus, the wrong people off the bus, and the right people in the right seats. People are not your most important asset. The right people are.”

“Your compensation system should not be designed to get the right behaviors from the wrong people, but to get the right people on the bus in the first place, and to keep them there. Your compensation system should support that effort.

I believe that the following three pronged approach is needed to strategically manage and motivate partner talent in your firm:

  1. Get Maverick and Unproductive Partners off the Bus (Deal with Problem Partners)
  2. Get the Right People on the Bus and in the Right Seats (Hire Right and Retain)
  3. Insure that the Partner Compensation is Reinforcing the Right Behaviors, Rewarding the Right People and Keeping the Right People on the Bus

Click here for our blog on compensation

 

Click here for our published articles

John W. Olmstead, MBA, Ph.D, CMC

Mar 09, 2011


Optimal Time to Hire Additional Lawyers and Staff

Question:

We have 14 attorneys in our firm and we are located in Indianapolis. A couple of weeks ago in a partner meeting we discussed hiring an additional associate attorney or two. A couple of our partners are concerned whether we have ample work on day one to keep an associate busy. Is there an optimal time to hire additional lawyers?

Response:

I believe that it is important for firms to remember that they are competing in two markets – a market for clients and a market for talent. Firms must be competitive in both areas and sometimes there is not direct alignment. In other words – you may identify an excellent attorney or staff candidate sooner than you may have wanted to hire someone. What then? Will it pay for itself?

Many years ago when I worked in a law firm the managing partner came to me and said – “are you free for lunch today – I want us to interview a lawyer that is interested in a position with our firm.” I responded – “I didn’t know we were looking to hire anyone.” The managing partner responded “I am always looking for good talent and am willing to made an investment when I see quality talent – my motto is hire and retain quality talent – and market harder if we must to generate the revenue to pay the overhead – the money will come.”

Obviously cash flow and financial concerns must be taken into considerations. However, many law firms are sometimes too cautious and timid when it comes to make investments – and investment in top notch talent is one of the best investments that law firms can make.

Successful firms maintain surplus talent. When other firms are cutting attorneys and staff to cut costs, they go in the opposite direction. They cultivate serious talent with the capacity to grow new business. We will see this as law firms rebound from the recession.

Click here for our blog on HR Related Topics

 

Click here for our published articles

John W. Olmstead, MBA, Ph.D, CMC

Mar 01, 2011


What Makes an Effective Law Firm Managing Partner or Administrator?

Question:

I was just elected as our firm’s managing partner. I will still maintain a full client practice as well. We have a total of 14 attorneys, nine of which are partners. I will be the firm’s first managing partner. Previously we all weighed in on every single decision. While I have been a practicing attorney for twenty years I have no prior management experience in law firms or elsewhere. What skills will I need to develope to be effective in this job?

Response:

Congratulations on your new role! Effective law firm managing partners:

  1. Ask – what needs to be done.
  2. Ask – what is right for the firm.
  3. Develop and implement action plans.
  4. Take responsibility for their decisions.
  5. Take responsibility to communicating.
  6. Focus on opportunities rather than problems.
  7. Run productive meetings.
  8. Think and say we rather than I.
  9. Are “Firm First” focused rather than Lone Rangers “Me First” focused.
  10. Know that you have to spend money to make money and encourges the firm to invest in the firm’s future.

The first two practices will provide you with the knowledge and insight about the firm that you will need. The next four will help you convert knoweldge into action. The next four will ensure that the whole firm is responsible and accountable.

Early on, as you transition into your managing partner role, you and the firm should formulate a constitution (governance plan) for the firm which outlines roles and decision-making rules for the partnership, your position, and other management or administrative positions in the firm. In order for this new structure to be successful you and the firm must:

  1. Stop talking about the firm’s future destination, and start thinking about the rules that all firm members will have to live by in order to get there; and
  2. Confirm that firm members are, in fact, prepared to be held accountable and live by these rules.

Rome was not build in a day. Your new structure and role will take take time. Be patient and it will all come together.

Click here for our blog on governance

Click here for my article on leadership

 

John W. Olmstead, MBA, Ph.D, CMC

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