Law Practice Management Asked and Answered Blog

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July 2014

Jul 29, 2014


Law Firm Fall Retreat – Insuring Success

Question:

I am a member of the firm planning committee. We are an 18 attorney firm based in downtown Chicago. We have had planning retreats in the past with mixed results. Some believe that they have been a waste of time. We are planning a fall retreat. I would appreciate any ideas that you may have that would help us accomplish more from these retreats.

Response:

A retreat will not be successful unless an implementation plan is formulated during the actual retreat and made a part of the proceeding. Specific assignments and completion dates must be agreed upon during the retreat itself and schedules for reporting on progress must be determined.

At the conclusion of the retreat the outcome of the retreat and the implementation plan should be summarized.

Within two weeks after the conclusion of the retreat a retreat report should be written and distributed to all firm members in attendance. Completion dates should be placed on the firm's calendar as well as the individual's calendar. A retreat follow-up item should be on each and every firm meeting agenda. A post retreat evaluation should be conducted six months after the conclusion of the retreat.

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

Jul 22, 2014


Law Firm Attorney Retirement – How Law Firms Are Coping With Aging Attorneys

Question:

I am the Director of Administrator in a 45 attorney law firm in Miami. Twenty of these attorneys are partners and ten of the partners are in their late fifties and mid to late sixties. While we have a semi-retirement program in place it is not mandatory and many of our senior attorneys are unwilling to address issues pertaining to succession and transition of their practices. Do you have any thoughts or ideas you can share regarding creating incentives for senior attorneys to address and deal with the issue of retirement?

Response:

Larger law firms are moving away from mandatory retirement. However, many large law firms still have mandatory retirement. According to a recent survey approximately 57% of law firms with over 100 attorneys have mandatory retirement programs. At the other end of the spectrum many smaller firms that never had mandatory retirement are beginning to incorporate some form of mandatory retirement in their agreements. In firms of all sizes and whether they have mandatory retirement programs or not – getting senior attorneys to deal and cope with aging is a challenge. Here are a few thoughts:

  1. Begin planting seeds to get senior attorneys thinking about retirement and the next stage of their lives.
  2. Conduct educational programs designed to help senior attorneys visualize their retirement years.
  3. Help provide senior attorneys with a reason to want to retire.
  4. Provide career life coaching services to senior attorneys and help them develop other interests and hobbies.
  5. Help senior attorneys develop individualized retirement/succession plans.
  6. Provide financial incentives to those that retire by say age 70 in payout agreements.
  7. Implement phased retirement/wind-down options/approaches.
  8. Consider optional roles in the firm for senior attorneys after they retire and surrender their equity interests.
  9. Insure that the firm has in place competency/peer reviews for all attorneys including senior partners and Of Counsel attorneys.
  10. Insure that the firm has a program that effectively deals with underperforming attorneys.

Aging is a difficult time for all of us and it is normal not to want to think about age related issues much less to begin planning. Your role will be to help senior attorneys take baby steps and come to terms with aging in general.

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

Jul 15, 2014


Law Firm Advertising – Should Our PI Firm Consider TV Advertising

Question:

Our firm is a three attorney personal injury plaintiff located in Los Angeles. We started the firm fifteen years ago. Two of the three attorneys are equity owners. Our firm is a high volume/low case value practice – we currently have 500 open cases. A high percentage of our cases are settled without a law suit ever being filed. We are an advertising driven practice. While over the years we have effectively used a variety of advertising vehicles we have never ventured into TV advertising. We are considering venturing into TV and would appreciate your thoughts regarding TV advertising.

Response:

I have personal injury plaintiff law firm clients that have had great success with TV advertising and other clients that have had poor results. High case volume/low case value firms such as yours have had the greatest success. In order to be successful you must have the budget to be able to stay the course and the infrastructure to support and manage the advertising effort and to support the work and cases. The worst thing you can "dabble" with TV advertising. Here are a few thoughts:

  1. Be prepared to invest in TV advertising for a least six months – or don't do it.
  2. TV advertising can be scary from two vantage points. If it is not successful you will have invested a great deal of money without receiving an adequate return on your investment. I have client firms spending one to two million dollars a year on TV advertising. You could easily spend $100,000 to $200,000 before you find out that the investment is not paying off. If your campaign is successful you may not be prepared to handle the volume of work that could result – either in the form of infrastructure or working capital. (Cash Flow)
  3. Be prepared to respond to client inquiries 24/7.
  4. Prepare your infrastructure scalability plan. Do you have the facilities, communications system capacity, staff and other resources to handle an immediate dramatic increase in case volume if it comes? If not, how quickly can you scale up? Do you have access to the capital to finance such expansion?
  5. Measure and monitor ROI from your program and fine tune adjust your program.
  6. Use a placement agency that has experience with personal injury law firms. Solicit law firm references from other markets and call each one and discuss their results in-depth.

Like any other business venture – if you do the proper due diligence and do your homework – TV advertising can be a great investment – if not it can be a nightmare. I have seen it go both ways.

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

 

Jul 08, 2014


Law Firm Partnership – Client Origination Expectations for New Associate Attorney

Question:

I am the sole owner of a four attorney general practice firm in Rockford, Illinois. I am 58 and realize that in the next few years I will need to begin implementing a succession and exit strategy by probably bringing in a partner. Two of the associates have no interest in partnership. However, the newest associate hired, who had his own practice for several years, does have such an interest even though he was recently hired. He is off to a good start as far as his production. However, I believe that he must be able to originate and bring in client business as well. So far his energy and focus has been totally on performing legal work. I want to get him started on the right track in order that I can make him a partner in a few years. Please provide any thoughts that you may have.

Response:

I agree that in a practice such as yours that client origination is important. I suggest that you start by laying out and discussing with him your expectations. In other words what will it take for him to become a partner – production, quality of legal work, billings, client satisfaction, and origination of new client business? Be specific and set specific goals for him and your expectations for him but also your timeline for partnership consideration. I would suggest five years. Personally, I believe his client origination goal at the five year point should be between $300,000 and $500,000 or higher. Establish baby step goals for origination – say $50,000 after year one, $100,000 after year two, $200,000 after year three, $300,000 after year four, $400,000 after year five. This will require that you track origination fee dollars in your billing/accounting system. Specific guidelines and rules regarding the attribution of origination credit should be developed. In other words an attorney should not receive origination because a client calls as a result of the firm's brand, advertising, etc. and he is passed the call because he is the only attorney in the office to take the call.

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

Jul 01, 2014


Law Firm Marketing Investments – Investing Wisely

Question:

I am a partner in a 16 attorney firm located in Baltimore, Maryland. Our clients are primarily business firms. I am the chair of our three member marketing committee which was formed three years ago. Our firm is increasing our commitment to marketing and have increased our budget over the past three years. However, we are not sure what we should be spending our money on. Your suggestions would be appreciated.

Response:

Hopefully, you have developed a marketing plan and a marketing budget tied to the specific objectives outlined in the plan. Here are a few general guidelines, tips, and best practices:

  1. Money spent on good clients is money well spent.
  2. Allocate more money to specific practice areas or niches and individual lawyers than to the firm as a whole.
  3. Tie passive initiatives to active participation.
  4. Stand out as a major contributor to a single or a few campaigns rather than making many small contributors.
  5. Constantly measure and monitor your return on marketing investment. (ROMI)

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

 

 

 

 

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