Law Practice Management Asked and Answered Blog

Category: Human Resources

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Mar 13, 2019


Law Firm Attorneys Overuse of Email and Text Messaging

Question: 

I am the owner of a four-attorney firm in Indianapolis, Indiana. The firm has three associate attorneys plus three paralegals and three other staff members. One of my attorneys recently advised me that he wanted to do more work remotely. The next day I emailed him my thoughts and advised him that I would not let him work remotely. He then emailed me that he was giving me his two weeks notice. What should I have done differently?

Response: 

You should have met with him personally and discussed the matter face to face. Email has its uses but I find it is often overused and used in situations where it should not be.

Note the following scale of communication media and richness.

1. Face to face
2. Telephone
3. Email and texts

Face to face is the richest form of communications and should be used for sensitive communications such as performance reviews and other such discussions concerning performance, praise, training and mentoring, etc. It should have been used in the situation you discussed in your question.

Telephone is the second richest form of communications and should be used for less sensitive communications or for face to face situations discussed above when a face to face meeting is physically not possible.

Email, text, and other written communications should be used for routine communications such as assignment of projects and tasks, work instructions, etc.

Sensitive and difficult communications should be communicated through a rich medium such as face-to-face meetings and routine communications through a lean medium such as a memo.

Media richness is determined by the speed the media provides, the variety of communications channels on which it works, the extent of personal interactions allowed, and the richness of language it accommodates. As tasks become more ambiguous, you should increase the richness of the
media that you use.

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

Feb 12, 2019


Law Firm Communications – Tools that Can be Used to Improve Communications

Question:

Our firm is a sixteen attorney personal injury insurance defense firm located in Dallas, Texas. I am a member on our three-person management committee. We have been experiencing associate attorney and staff turnover. Recently, we had all employees complete confidential surveys concerning their thoughts and feedback concerning the firm. One theme that was central to all was that the firm has poor communications with employees. I would like to hear your thoughts on what we need to do to improve.

Response: 

Obviously, more specifics would be helpful. Communication is a broad topic. Are they talking about mentoring, training, updates of what is going on in the firm, etc? However, here a a few best practices to think about:

  1. Find ways to improve communications with members, associates and staff.
  2. Use the appropriate communications vehicle for the task at hand. (Face-to-face, voice mail, e-mail, memo, etc.)
  3. When a few employees are not following policies, or causing difficulties – resist the temptation to send out a blanket e-mail to all – and have the courage to counsel and discipline the individual offender. The will improve the overall morale and attitude of others in the firm.
  4.  Hiring
    1. Terminate marginal people.
    2. Develop procedures to ensure that the firm is hiring from a pool of qualified
    3. Formulate formal hiring and firing policies.
    4. Insure that hiring’s and firings are documented in accordance with the firm policies.
  5. Updated employee handbook.
  6. Training
    1. More formal training and mentoring programs should be designed for staff and associates alike. In addition to typical legal and office topics, other topics should include skill training in:
      1. English language (staff)
      2. Communications
      3. Law firm economics generally (associates)
      4. Management
      5. Time management
      6. Time Keeping
      7. Marketing
      8. Client service
      9. Speaking and writing
  7. Communications and Policies
    1. Communications can always be improved, and the appropriate channels used for the appropriate situation. (e.g. individual face-to-face, staff meetings, telephone call, memo or email.)
    2. The firm should insure that it is delegating as much as it should. In particular,
      partner time spent on administrivia.
    3. People with growth potential should be placed where they have the greatest potential to grow.
    4. The staff should know what they are trying to accomplish.
  8. Employee handbooks should insure that the following policies are included:
    1. Relations with clients
    2. Objectivity
    3. Confidentiality
    4. Investments and other financial dealings with clients
    5. Outside work
    6. Overtime or bonus
    7. Salary review
    8. Insurance coverage
    9. Sick leave
    10. Continuing education and tuition reimbursements
    11. Time off to attend various training and professional functions
    12. Dues for professional and other organizations
    13. Allowable expenses and reimbursement procedures
    14. Involvement in civic and other community organizations
    15. Speeches, articles and books
  9. Staff members should be made aware of the firm policies and changes in policy.
  10. The firm should develop a procedure for feedback from the associates and staff to use to improve the knowledge and skills of all staff. (Internal survey, suggestion box, and other tools)
  11. The firm should conduct regularly scheduled frequent meetings.
  12. Attorney and staff errors should be handled in a way to improve performance and maintain respect for the firm. Not placing blame.

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

 

Nov 28, 2018


Associate Attorney Mentoring and Giving Feedback

Question:

I am the owner of an elder law firm in Jackson Mississippi. There are three associate attorneys working in the firm that have been with me under five years. All three were hired directly out of law school. While I try to mentor and train each of the associates as needed in “real time” I also conduct annual performance reviews with each associate and provide them with a written performance evaluation. I am getting frustrated as it seems that the feedback that I provide them does not stick and they continue to make the same errors and mistakes. I welcome any thoughts that you may have.

Response: 

You may need more frequent discussions that are scheduled. I have some law firm client owners  that have an ongoing scheduled meeting with each associate twice a month. You may also want to examine how you actually provide feedback to your associates. Often owners beat around the bush and don’t really provide meaningful feedback.

Giving meaningful feedback contributes an essential component to effective associate management. Whether you give feedback informally, midway through the work or at the end, or formally through a scheduled  evaluation process, it gives you a powerful management tool, assisting individuals in professional development, teaching those you manage to work more effectively, and giving recognition and showing appreciation when deserved.

Effective feedback should be:

Praise you associates when deserved. Praise provides an effective motivator for most associates and should include:

Provide constructive criticism when deserved. It should include the items listed above and you should give it:

Use the following outline when giving constructive feedback:

Try to implement some of these ideas and go from there.

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

Sep 18, 2018


Law Firm Shareholder Admission Criteria

Question:

Our firm is a small firm of two shareholders and two associates based in Bakersfield, California. The firm was formed fifteen years ago by the two existing shareholders. We have never made any additional shareholders but we believe that we owe it to our associates to have some guidelines as to what we are looking for in future shareholders. A partner track program/document if you will. Do you have any suggestions?

Response:

I believe you should have at least a general set of guidelines laid out in writing. For example:

Associates that have been seven years in practice and two years or longer employment with the firm as an attorney and consistently performing as outlined below are eligible for Equity Shareholder level review based upon equity shareholder level openings, competencies attained, performance, and behavior.

  1. Seven Years in Practice and Two Years or Longer Employment with the Firm as an attorney.
  2. Individual Production Requirement
    1. Annual Billable Hour Expectation
      1. The firm has an annual billable expectation of 1800 billable hours.
    2. Origination Fees Collected
      1. The firm has an expectation of $100,000 or more per year for a minimum of three consecutive years.
    3. Generated (Working Attorney) Fees Collected
      1. The firm has an expectation of $300,000 or more per year for a minimum of three consecutive years.
    4. Responsible (Managed Revenue) Fees Collected
      1. The firm has an expectation of $400,000 or more per year for a minimum of three  consecutive years.
  3. Competency Level Attainment at Shareholder Level
    1. Knowledge
      1. The firm expects associate candidates to be performing at shareholder level.
    2. Skills & Abilities
      1. The firm expects associate candidates to be performing at shareholder level.
    3. Work Management
      1. The firm expects associate candidates to be performing at shareholder level.
  4. Character and Commitment 
    1. The firm expects associate candidates to have the commitment and character that the firm expects of shareholders. This includes a “firm-first” and teamwork attitude and behavior. Lone wolfs and mavericks will not be considered for equity shareholder status.
  5. Professionalism 
    1. The firm expect professionalism in the firm of dress, appearance, and behavior in dealing with personal in the firm, clients, prospective clients, referral sources, and colleagues and other professionals outside the firm.
  6. Client Service and Business Development 
    1. The firm expects associate candidates to be performing at shareholder level.
  7. Supervision and Mentoring 
    1. The firm expects associate candidates to be supervising and mentoring junior associates, paralegals, and staff.
  8. Client Satisfaction 
    1. The firm expects associate candidates to have a client satisfaction rating average over the last three years of 4.0 (maximum rating is 5.0) or higher as measured by the firm’s client satisfaction questionnaires that clients complete at the conclusion of a matter.
  9. Other Factors Considered – Associates should: 
    1. Be willing to share in the risk and reward of ownership and invest time and capital in the firm.
    2. Have a firm-first orientation and share the vision and core values of other equity owners in the firm.
    3. Add value to the firm and pay for themselves, cover their costs and share of the firm overhead, and generate enough work to keep other attorneys busy.
    4. Act like owners of small businesses.
    5. Contribute to the management and marketing of the firm.
    6. Mentor younger attorneys.
    7. Follow firm policies systems and procedures.
    8. Contribute capital, sign for the office lease, firm credit line, and share in other financial obligations of the firm.
    9. Be good marriage partners considering the other equity members in the firm.
    10. Exhibited the ability to supervise junior associate attorneys, paralegals, and staff.
    11. Successfully tried cases (litigation attorneys).
    12. Demonstrated the ability to either originate new client business or developed such a relationship with existing clients or referral sources that clients have sent business to the firm as a result of the relationship.

Associates selected for admission should be notified by the Executive Committee/Managing Shareholder and a meeting will be scheduled to discuss whether the Associate has a tentative interest in taking this step. If the Associate is interested in taking this step and after executing a non-disclosure agreement, the Executive Committee/managing shareholder should then prepare a detailed proposal outlining the mechanics and details required for admission. The proposal will include firm financial information, the buy-in or capital contribution requirement, and a copy of the firm’s shareholder agreement and equity shareholder compensation plan.

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

 

Sep 12, 2018


Lawyer Retention Incentives

Question: 

I am the administrator of a sixteen lawyer firm in South Florida. There are six equity partners, two non-equity partners, and eight associates. The firm was formed nine years ago and we have lost no attorneys during this period of time. We believe that we have a positive culture and have great lawyer retention. However, we would like to do more to ensure that lawyers stay with the firm and implement more incentives for them to stay. I would appreciate your thoughts.

Response: 

Interviews with associates and partners in law firms conducted by our firm as well as other consulting firms suggests the following key factors and best practices concerning attorney retention:

  1. Compensation. The firm must have a compensation system that is competitive, pays lawyers the market rate, and has the potential to pay above market rate.
  2. Benefits. The firm must offer competitive benefits especially medical insurance, life insurance, disability insurance, and a 401k plan.
  3. Work life balance. This involves flexibility and control over one’s practice, work hours, workplace – whether at the office or working remotely.
  4. Culture. Lawyers want to work in a culture that is supporting and encouraging. They want to work with peers and clients they respect. They want meaningful work.
  5. Individual marketing plan for lawyers. Lawyers need help focusing their time on business development. Firms need to help lawyers market their services in ways that benefit the firm and the lawyer alike but use non-billable time efficiently and effectively.
  6. Growth Opportunities. Lawyers need to perceive that the firm provides them with opportunities for growth in their work, type of clients, progression to partnership. They want to know if there is a partnership track and specific details if there is a track.
  7. Recognition. Lawyers join firms to receive prestige, opportunity, and clients. Junior lawyers want to maximize their options and get good training. Senior lawyers want profitable work. They want name recognition.
  8. Environment. Many lawyers are not interested in working in a rigid environment. Casual dress policies and informal policies concerning how to address lawyers and staff in the firm can go a long way in creating a relaxed atmosphere.
  9. Team spirit. Lawyers join firms to work cooperatively with others. Lawyers that want to work alone are solo practitioners.
  10. Quality Facilities. Don’t skimp on your facilities and systems. Invest in quality office facilities, furnishings,  and office systems.  Use state of the art technology. Many lawyers have left their firms and joined other firms because antiquated technology at the prior firm.
  11. Competent support staff. Failure to provide lawyers with competent support staff can be a major irritant and can cause lawyers to look at other firms.

For sure, ensure that your compensation and benefits for your lawyers are competitive. While compensation and monetary benefits play a key role in lawyer retention, many of the above factors plan an important role as well. Many of the lawyers that I see changing firms are for other reasons other than compensation and benefits. In fact, some leave for less money when they feel they are undervalued and see more opportunity for growth and development in another firm. Some leave when they see the opportunity for equity in another firm.

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

 

 

 

Jul 04, 2018


Lawyer Performance and Setting Expectations

Question:

I am the owner of a real estate practice in Rockford, Illinois. I have two offices – one in Rockford and the other in Chicago. I started my practice twenty years ago and have had my associate for the past five years. He works in the Chicago office and I work in the Rockford office. Prior to this associate I had two other associates that did not work out. My present associate has fourteen years’ experience and worked in three other law firms prior to joining my firm.  While he has been with me for five years I am not happy with his performance. The legal assistant that works with him has advised me that he often does not come in the office until ten and often leaves in the middle of the day. Clients have complained that he does not return phone calls or emails. His production is low – his annual billable hours have never been above 1200 hours. I am paying him a salary of $98,000. I have had numerous conversations with him about these issues to no avail. Frankly, I am sick of it – I don’t trust him and things need to change. What should be my next step?

Response: 

I find that often owners of law firms and partners in multi-partner firms when dealing with associates often fail to really lay their cards on the table when counselling associates. They beat around the bush and fail to lay out expectations and consequences for non-compliance.

As owner of your firm you can’t beat around the bush and be sheepish concerning your expectations concerning desired performance and behavior in the office. Confront the performance or behavioral problem immediately. Manage such problems in real time. Don’t wait for the annual performance review and don’t treat serious problem as a “self-improvement” effort. Tell him how you feel about the performance or behavioral issue, the consequences for failure to resolve the issue, your timeline for resolving the issue, and the follow-up schedule that you will be using to follow-up and monitor the issue. If he must resolve the performance or behavioral issue in order to keep his job tell him so. He may need this level of confrontation in order to give him the strength to be able to deal with his issues.

Being a wimp does not help you or him. Tell him like it is and conduct a heart-to-heart discussion. You will be glad you did.

I would set a timeline for his performance improvement – say 60 or 90 days with weekly coaching follow-up meetings. Document these meetings. If he does not meet your expectations by the timeline you should terminate his employment and look for a replacement.

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

May 30, 2018


Outsourcing Appellate Work

Question: 

Our firm is a six attorney insurance defense firm in Kansas City. For the last few years our associate attorney costs have gotten out of control and in some cases revenues generated by particular attorneys are not even close to where they should be considering their costs. We have one associate attorney that we are paying a base salary that only does appellate brief work. He does not like litigation and does a poor job doing our bread and butter litigation work. We simply don’t have enough appeals to keep him busy. We are paying him a base salary of $100,000 a year. Last year his working attorney fees collected were $110,000. I welcome your thoughts.

Response: 

Obviously, you are losing money on him. An associate being paid $100,000 per year should be generating $300,000+ if you are looking to make any margin from him. Overall you should be making 25%-30% profit from your associates. Margin from associates is critical in an insurance defense firm. You are not even covering his direct cost alone any indirect overhead cost.

I believe you cannot justify this position and should consider eliminating this position and outsourcing your appellate work . Many insurance defense and other litigation firms that I work with are outsourcing appellate work to other law firms that provide this service for other law firms. There are also solo practitioners and freelance attorneys with appellate expertise that are working as contract lawyers for law firms doing appellate work. Another option is a legal process outsourcing firm.

It is imperative that you conduct proper due diligence and really check out the background, experience, and appellate track record of the firm or individual attorney that you are considering. Your short list should only include firms or attorneys that have a proven track record of appellate wins. Talk with some other law firms that are doing this.

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

Apr 04, 2018


Associate Attorney Motivation

Question: 

Our firm is a fourteen attorney firm in Chicago. There are nine partners and five associate attorneys in the firm. Our practice is limited to insurance defense. I am one of the founders and senior partners in the firm and have been practicing for 35 years. We are having problems getting our associates to produce at the levels that we need for the firm to be profitable. We have a 1800 annual billable hour requirement and several of our associates aren’t even close. We have a bonus system that pays associates a bonus based upon billable hours exceeding 1800 billable hours. What are we doing wrong?

Response:

It often takes more than setting up a bonus system and then leaving it on autopilot. I am finding that the intrinsic reward of doing a good job and meeting the expectations of the firm’s partners are as important as the bonus system. In client law firms that have had similar problems we have found that by supplementing the bonus system with monthly reviews and coaching sessions with associates not meeting their targets has made the difference. Here is an outline of the process:

  1. Review you monthly billing/hours reports for all associates each month.
  2. Identify those are below targets and expectations.
  3. Meet with those associates that are below targets and expectations.
  4. Discuss why there are having problems meeting expectations. Lack of work, not working enough hours, poor time management habits, or poor timekeeping habits.
  5. Identify solutions to the above problems.
  6. Monitor and follow-up.
  7. Continue to meet every month until such time as the associate is meeting targets and expectations.

The bonus rewards those that want to push beyond the 1800 billable hours but does nothing to solve the problem of those not meeting the 1800 billable hour expectation.

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

 

Mar 14, 2018


Attorney Career Progression – Competency Model

Question: 

I am a member of a three member executive committee with our twelve-attorney firm in San Antonio, Texas. One of our responsibilities is oversight of our career development program for associates and non-equity partners. We  have been discussing our policy of admitting associates to non-equity partner and non-equity partners to equity partner. Presently, we do not have anything in writing regarding timeline for consideration or what qualifies one to move to the next level. Associates and non-equity partners are unhappy with the present process. They want more clarity concerning their career advancement within the firm. You advise would be helpful to us.

Response: 

Several of my clients are developing career advancement programs that incorporate a competency-based approach that  outlines specifically what is takes to be successful and advance from associate to non-equity partner and from non-equity partner to equity partner. Rather than leaving the formula for success in the minds of the equity partners, a competency model gives each attorney in the firm an understanding of how he or she will need to perform in order to be perceived as progressing, an ultimately, as successful. Competency models offer transparency and clarity. The model outlines specific behavioral observations as the primary source of performance information. Benefits are as follows:

Associates are presented with clear information on expectations for their level of experience and a road map of what is expected as they progress. Specific expectations are laid out for progression to non-equity partner as opposed to a specific timeline.

Non-equity partners are presented with clear information on expectations for their level of experience and a road map of what is expected as they progress. Specific expectations are laid out for progression to equity-partner as opposed to a specific timeline.

Equity partners and senior lawyers benefit from a consistent description of performance standards that allow them to access performance, assign work effectively, and offer more meaningful career guidance.

The firm has a consistent methodology for making and compensation decisions.

In order to work, a competency model should be integrated with attorney recruiting, performance evaluations, training, and compensation systems. Associates and partners must invest time in attorney development.

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

 

Feb 21, 2018


Law Firm Staff Work Distribution Analysis

Question: 

I am a new firm administrator with a thirty-five attorney litigation firm in Los Angeles, California. In my accounting department I have seven staff members handling a variety of tasks. My partners are concerning that we are inefficient and over staffed. I am having a hard time finding where to start so to get a handle on  this issue. Please provide any information that you are willing to share.

Response: 

There are questions that you must ask yourself in order to analyze the work distribution of your accounting department. Such questions as the following will help you in knowing what to look for:

  1. What activities take the most time?
  2. Is there any misdirected effort?
  3. Are skills being used properly?
  4. Are you staff doing too many unrelated tasks?
  5. Are tasks spread too thinly?
  6. Is work distributed evenly?
  7. Are the right people on the bus?

Before you can analyze your accounting department you must be able to see clearly, in one place, all the activities of your accounting department and the contribution of each employee on each activity. A work distribution chart is the easiest and best way to arrange these facts in simple form. A properly made work distribution chart will help you determine if the largest time of your staff is devoted to the major function of your department. (Operations list down the left rows and staff names listed across the columns) It may indicate that more time is being devoted to other functions than is necessary. A function or task may require a more detailed study, as might be indicated where total hours seem unreasonable. You may discover that your accounting department is spending too much time on relatively unimportant or unnecessary work. Misdirected effort appears on the work distribution chart when staff are involved in tasks not contribution directly to the mission of the accounting department.

Here is an overview of the process:

  1. Have each staff member prepare a task list.
    1. List specific and clear activities for a specific time period with time listed for each activity.
    2. Task lists should cover a complete cycle of work. (Weekly, Monthly, etc.)
  2. Determine operations performed
    1. Prepare an operations list grouping related or same kind of tasks (operations).
    2. Check operations list against breakdown of department mission.
  3. Complete the work distribution chart
    1. Complete heading.
    2. List operations.
    3. Enter staff names in a column of the chart.
    4. Enter tasks, time, and work count for each operation.
    5. Total the columns and rows.
  4. Examine the present work distribution
    1. What operations take the most time?
    2. Are they essential?
    3. Is there misdirected effort?
    4. Are skills used properly?
    5. Are you staff doing too many unrelated tasks?
    6. Are tasks spread too thinly?
    7. Is work distributed equitably?
    8. Is the department overstaffed?
    9. Are the right people on the bus?
  5. Improve work distribution
    1. Consider eliminations, additions, and rearrangement of tasks and operations.
    2. Prepare a proposed work distribution chart.
    3. Discuss proposed changes with your partners.
    4. Put proposed changes into effect.

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

 

 

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