Happy New Year and Best Wishes for a Personal and Professional 2017
As 2016 comes to an end we begin with a clean slate for 2017. As with anything new – the uncertain future can be scary and exciting at the same time. Year-end provides an opportune time for reflection on the past year and setting goals for the next year – both personal and professional. Goal setting can improve your personal life and your practice.
Here are a few ideas for 2017:
Best of luck for a prosperous 2017!
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Question:
I am the sole owner of a four attorney firm in St. Louis, Missouri. Our firm has four staff members – 2 legal assistants, a receptionist, and a office manager/bookkeeper. It is that time of year again where I anguish over year end bonuses for staff which end up being Santa Claus bonuses with no relationship to actual performance. I would like to move away from this approach and tie their bonuses to performance. How do I measure performance for bonuses?
Response:
I like to tie salary increases to performance reviews tied to skills, competencies, value of the position in the market, cost of living, etc. Bonuses on the other hand should be tied to accomplishment of specific measurable results. Since staff results usually cannot be measured in terms of billable hours or collected dollars another measure must be used. I prefer to tie bonuses to accomplishment of specific agreed to goals or objectives.
Here is a system that some of my clients are using:
The goals should be tough.
Example of individual goals that meet the SMART test:
Other approaches can be taken – the key is to tie variable bonus to actual results.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the sole owner of a five attorney personal injury plaintiff firm in the Dallas suburbs. Over the years I have built a sustainable brand through advertising. I have helped my associates develop their reputations, handle substantial cases, and be involved in various areas of firm management. I am planning on retiring in five years and I would like to begin the transition early next year by selling some stock (minority interests) to deserving associates with the remainder of my shares to be purchased upon my retirement. Originally, I had through about selling shares to two associates that have been with the firm for over fifteen years – now I am thinking about selling shares to all four associates. I think it would be easier for the four to come up with the required money. I welcome your thoughts.
Response:
If you are asking for a goodwill value plus cash-based book value as well as a percentage of completion estimated value of your contingency fee cases in process, the amount you are asking for your stock could be considerable. This would indeed be difficult for one or two people to raise and on its face it would make sense to sell your shares to all the associates. If this is not the case if may be possible to the two senior associates to raise the required funds.
Here are my thoughts:
Don't try to force future partners on your two senior associates. I will rather see you initially admit the two senior associates as partners and let them admit other partners after your retirement when they are ready.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
Our firm is a fourteen attorney general practice firm located in Dayton, Ohio. Two of our attorneys focus their practice on personal injury defense and the other attorneys are transactional attorneys. While the practice is doing well overall, our litigation work is dropping off. I would appreciate any ideas that you have pertaining to marketing a litigation defense practice.
Response:
Insurance carriers are a leading purchaser of insurance defense services – but so are self-insureds – big box retainers, national restaurants and food chains, sports arenas, shopping centers, and municipalities. Typical decision-makers:
The law firm needs to know who they want to target and often have to make application to get on the panel/list of approved counsel, respond to RFP’s, submit proposals, etc. to get the business. In other words, the law firm needs to first get on the list. Then the law firm needs to cultivate relationships with the typical decision-makers. This is getting harder as many companies have policies against such other than education formats such as seminars, presentations, etc.
Some marketing tools needed to market a defense litigation practice:
I would start by developing a target client list, an action plan, and go from there.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
Our firm is a twenty two lawyer insurance defense firm in Seattle. Over the years we have told our associates that they were hired to work on firm business and there was no requirement for them to develop or bring in client business. In fact we specifically asked them not to bring in business. Now we are rethinking that policy. Many of our equity partners are retiring and we are finding we have a group of grinders – with very few minders or finders capable of either retaining existing clients or bringing in new clients. What are your thoughts?
Response:
Over the years, I have seen many law firms hire associates and tell them that there is plenty of work and they are hired to service the firm’s work and there is no need, or even desire, for them to develop and bring client business into the firm. For years, these associates meet their billable hour expectations, work their files, and get good results on their cases. Twenty years later they are still associates – what went wrong? What are they not equity partners? Often it is because they have not developed client business.
Successful lawyers in private practice must not only do excellent legal work for their clients they must also develop client business. I believe that each attorney must invest money and time in building and promoting their expertise, professional reputation, and their personal brand. Law firms should not only encourage but should require, support, and fund (money and non-billable time) marketing/business development at the individual attorney level. Client development skills have to be developed and practiced early on.
Due to your client base (insurance companies) it may not be that easy for associates to actually bring in new clients unless the firm is diversifying into other practice areas (unless that is your goal). However, they can start by being good minders – client relationship managers – and work on getting more business from existing clients and maintaining client relationships that the firm has.
Client Development is externally focused – relationship management is more internally focused.
Skills for developing new clients and those needed for maintaining good relations are not the same.
While you associates will each have different abilities they should be honing their skills in one of the following areas:
Rainmakers – win new business from new clients and their strength is networking.They serve on boards, attend events, play golf, and entertain clients; prospective clients.
Hired Guns – win new business from new clients – emphasis on expertise.(They speak, write, give seminars, and become experts in a specific field)
Brain Surgeons – win new business from existing clients – internal focus; emphasis is on expertise – they solve problems that others cannot.
The Point Person – wins new business from existing clients and have an internal focus.
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John W. Olmstead, MBA, Ph.D, CMC