Law Practice Management Asked and Answered Blog

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October 2013

Oct 29, 2013


Insurance Defense Law Firms – Risks and Strategies

Question:

I am the managing partner of a 22 attorney firm in Des Moines, Iowa. Our practice is 100% insurance defense representing insurance companies and their insured's. We are aware of some firms such as ours that have had to close their doors during the last few years. What should we be thinking about? You ideas would be appreciated.

Response:

Insurance defense law firms that have been approved as panel counsel for multiple insurance companies can inadvertently find that their revenue base is increasingly dependent on a shrinking number of insurance companies over time.

RISKS

  1. Small number of companies representing the lion's share of the firm's revenues
  2. Changing Rules for Insurance Panels – General Industry Consolidation
  3. Regionalization
  4. Insurance Companies putting work "out for bid"
  5. Trapped by a "Paradigm of Pass Success" and failure to institutionalize business development processes and practices
  6. Promoting an "entitlement generation" of partners with no business development skill
  7. Failure to stay abreast of changes within the client's organization. (Needs, players, policy changes, etc.)
  8. Aging/retirement of founding partners
  9. In house assignments
  10. Departing partners
  11. Lack of time and focus to allocate to new business development

STRATEGIES

  1. Use a structured client feedback process to obtain hard data from your clients on firm performance, client satisfaction, projected case assignments in the future, your firm's share of the client wallet, changing management (people) and policies, unmet needs, and future opportunities.
  2. If you don't have one develop a strategic plan and a marketing plan (including a specific budget) for the firm.
  3. Diversify the client base. Target new clients. Aggressively pursue new panel applications, track submissions, and monitor. Once approved – look for opportunities to build relationships. Consider educational forums and venues.
  4. Determine if regionalization is an appropriate strategy for your firm. (Ask your clients)
  5. Look for ways to obtain additional business from existing clients. (Ask your clients)
  6. Write and publish more articles – externally and internally (website).
  7. Beef up the blog on the website.
  8. Get more attorneys in the firm involved in business development.
  9. Develop a succession plan for the founders.

Click here for our blog on law firm strategy

Click here for my article on strategies for Insurance Defense Firms

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

Oct 22, 2013


Law Firm Partnership – The Importance of Compatibility and Good Fit

Question:

I am the sole owner of a estate planning firm in Evansville, Indiana. I have three associates that work for me and four staff members. I am 64 and wanting to get started on a succession program – either by forming a partnership with one or more of the associates or with another attorney or attorneys that I might bring into the firm via merger. I have always been on my own so I am a little cautious. I do want to work another eight years or so. What pitfalls should I be looking out for?

Response:

Creating and maintaining a successful partnership takes a lot of work. Partnerships fail for numerous reasons but the number one reason for failure is "poor fit." Poor fit can destroy a partnership before it even gets started. Fit isn't as much about "the money" (financial goals) as it is about personal and professional goals.

As you consider future partners give some thought to the following:

  1. Compatible work ethic – Determine whether each of you envision working long, hard hours to accomplish firm goals. Are each of you willing to do whatever it takes to get the job done?
  2. Shared vision – Do each of you see a similar outcome? If everything were working perfectly what would that look like?
  3. Alignment of values – Do you share consistent and similar values? Each of you list your top five and compare.
  4. Integrity – Do each of you have the same views and principles?
  5. Dealing with conflict – How do each of you deal with and manage conflict?
  6. Trust – Do you trust each other?
  7. Sense of humor – Can each of you laugh, be lighthearted and have fun?

Before you decide to partner with someone it is critical that you determine where you agree and where you disagree on key issues.

Invest the time in getting to know your future partners at a deep interpersonal level and make sure that your personal and professional goals mesh.

If you do a good job insuring that you have a good fit you will go a long way toward insuring a successful partnership.

Click here for our partnership blog

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

 

 

Oct 15, 2013


Law Firm Client Satisfaction Interviews

Question:

I am the chair of the marketing committee of our 22 attorney insurance defense firm located in the Chicago suburbs. We are considering conducting structured interviews with our top 10 insurance company clients. This would be the first time that we have done this so I would appreciate your thoughts.

Response:

There is nothing worse than asking clients for feedback and then doing nothing and not following up. The benefits of gathering feedback can be negated if you do not follow through on the results. Once your firm has taken the initiative to actively invite feedback, you must take actions to correct at least some, if not all, of the problem areas identified. Doing so is vital. You must also act on business opportunities identified as well. Going to the effort of gathering the information and then not doing anything about the problems identified is not only a waste of time and money but can also increase the likelihood that future service improvement efforts will be viewed with skepticism. For this reason, you must close the loop on the surveys you have conducted by getting back to the people who provided you with the feedback. Doing so benefits your relationship with your clients because you not only confirm what they said but that you are making changes accordingly.

Click here for our blog on marketing

Click here for our published articles

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

Oct 08, 2013


Managing Law Firm Partners – How to Herd the Cats

Questions:

I have just been elected as the firm's first managing partner. We are a 9 attorney firm in El Paso, Texas. After a month I am already frustrated and wish I had declined the role. I have two partners that are simply not producing, do as they please, and I am powerless. I would appreciate your thoughts.

Response:

Non-productive partners always pose a challenge. They are usually the “nice – easy to get along with folks” which makes it difficult to confront and deal with them as well. However, the longer that you let such problems fester the harder these situations will be to deal with in the long term. Layout performance expectations and deal with them in real time.

Consider:

You will need to sit down with your other partners and get their support and commitment to stand behind you and support you before you embark on this journey.

Click here for our partnership blog

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

 

Oct 01, 2013


Law Firm Partner Compensation – Origination Credit in a Two Partner Firm

Question:

Our firm is a 8 attorney firm in Fort Worth, Texas. We have two partners – myself and my partner. Our approach to compensation has been based upon our ownership interest percentages which have been adjusted over time based upon working attorney (personal) collections. We have been discussing implementing a formula using working attorney collections and also bringing client origination credit into the equation has well – weighing each equally. Our ownership percentages would be adjusted based upon the fee credit ratio between the two of us. I would appreciate your thoughts on the matter.

Response:

My first thought is whether you are trying to build a firm-first firm or a group of separate practitioners. How will you incorporate other factors such as firm management, business development, mentoring and training associates, etc? If both of you are making roughly equal contributions in these areas your approach might have merit but be careful that you do not head down the path of separate practices – and become a lone ranger firm. My other concern is with client origination – this often gets tricky. With only two partners you don't have anyone to serve in the capacity of attribution police when and if there are disagreements as to origination credit. (attribution committee) So you will have to be able to discuss this subject openly and hopefully upfront. Share origination credit when appropriate, allocate to firm when it appears that a client came to the firm based upon firm brand or name recognition, and consider a 5 year sunset provision whereby the credit reverts to firm or responsible attorneys.

Click here for our blog on compensation

Click here for articles on other topics

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

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