Question:
I am sole owner of a law firm in Western Kentucky. My practice consists of myself, a legal assistant, a part-time bookkeeper, and a part-time contract attorney. The practice is limited to employment law – both plaintiff and defense side. Approximately 80% of my business is contingency fee and 20% is time-billed and or retainer. While the practice has done okay over the past fifteen or so years worrying about paying bills (cash flow) is a constant source of stress for me and my family. I do no marketing – all of my business comes from lawyer referrals. Do you have any suggestions?
Response:
Cash flow has always been a challenge for contingency fee practices. However, times are getting harder. For personal injury plaintiff firms insurance companies are refusing to settle cases, stretching out timelines for settling cases that they do settle, paying less, and becoming even harder to deal with. Other contingency fee practices are also facing similar challenges and everyone is finding it harder to find adequate lines of credit. Many firms that were once 100% contingency fee practices are looking for ways to improve cash flow implementing different fee arrangements or by adding non-contingency fee practice areas.
I suggest that you evaluate ways that you might re-balance your case portfolio to say 60% contingency/time-bill mix. You might consider:
Review your case pipeline report and your work habits to insure that you are putting the right effort and mix into the cases that you have so that when your time bill matters come up for billing at the end of the month – all can be billed.
Good luck!
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the co-founder of an estate planning firm in Chicago. We have two associate attorneys, myself and my partner, and 6 support staff members. Our practice is limited to estate planning, estate administration, and elder law. Our marketing consists totally of referrals from other attorneys, past clients, and other referral sources. We believe that we have a successful practice with revenues consistently exceeding $1.8 million per year. We spend very little on business development and marketing. Should we be doing more?
Response:
If you have a good website, e-newsletter, and are meeting your revenue and growth goals you may not need to invest any more in marketing and business development. You have been blessed with the referral sources that you have and you should be grateful. However, don't take them for granted – continue to nurture them and give first class service to the clients that they refer to you. Your primary marketing investments should be designed to nurture and enhance these and future referral relationships.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the sole owner of a law firm in Tucson, Arizona. I have 7 associates working for the firm. I have one very senior level associate that I want to consider for partnership. I want to do this to keep him interested (he has been approached by other firms) and I envision him being a cornerstone of my succession plan – 10 years out. How should I start the process with him?
Response:
It sounds like you have found the person – or whom you believe is the right person for partnership. However, just because he has been a good associate does not mean that he will be a good partner – the relationship will be different. But at least he is somewhat of a known quantity since you know him and have worked with him for several years.
Here are a few ideas of where you might start:
Once you can come to terms with some of the above issues craft a suitable partnership or operating agreement that you can both live with.
Good luck!
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John W. Olmstead, MBA, Ph.D, CMC
Question:
Our firm is a 9 attorney firm in Joplin, Missouri. We have our first partner meeting this weekend and we are looking for ideas that we can implement this year to improve our practice and profitability. We would appreciate any ideas that you may have?
Response:
Based upon our experience from client engagements I have concluded that lack of focus and accountability is one of the major problems facing law firms. Often the problem is too many ideas, alternatives, and options. The result often is no action at all or actions that fail to distinguish firms from their competitors and provide them with a sustained competitive advantage. Ideas, recommendations, suggestions, etc. are of no value unless implemented.
I suggest the following:
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the chair of our firm's executive committee. Our firm – located in downtown Columbus, Ohio – has 20 attorneys. In an effort to expand our practice and talent base as well as our geographic reach we are currently considering a seasoned lateral. We have a person in mind that currently works for a very large law firm. What suggestions do you have concerning starting the discussion and process?
Response:
Initially consider and decide upon the actual goals and objectives that you hope to achieve by bringing in the lateral and your particular requirements and specifications for the candidate. Start by focusing on the person – then move to the other areas that must be considered. It is critical that you get the right person on the bus.
Here are a few ideas to help you get started:
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John W. Olmstead, MBA, Ph.D, CMC