Question:
I am the owner of a twenty attorney litigation firm in Seattle. The nineteen associates are all in the same tier or category and are paid a salary plus bonus. Their time with the firm ranges from one to fifteen years. I enjoy sole ownership but I realize that to continue to grow and prosper I must make some changes. I have recently lost several associates that I would have liked to have stayed with the firm. I am also getting stressed having all of the management responsibility since I currently make all of the decisions. Several associates have told me that the morale is low. I welcome your thoughts.
Response:
Compensation and benefits is one determinant as to whether associates are satisfied with employment at a firm. However, compensation and benefits is not enough to motivate and retain top performers. Law firms must help their associates invest in their careers and motivate and help them develop competencies and skills to enhance their productivity. With the downsizing, push for 2000+ annual billable hour push, etc., associates are skeptical about their futures and feel they have no power or ability to influence their careers. Associates want:
Here are a few thoughts:
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John W. Olmstead, MBA, Ph.D, CMC
Question:
Our firm is a 15 attorney firm in Kansas City, Missouri. I am a member of the management committee and our committee is charged with the responsibility of determining partner, associate, and staff compensation. Several years ago we switched to a competency based goal driven system for partners, associates, and staff. The system requires self-evaluations, peer evaluations for partners and associates, and self-evaluations. This requires extensive performance reviews, tracking, scheduling, and documentation. We are using Excel spreadsheets and MS Word documents and having a hard time managing all of this. Do you have any ideas?
Response:
With 15 attorneys you probably have close to 30 people in the firm. I would look into performance management software (performance appraisal software) to management the process. Typical features of performance management/appraisal software, depending on the vendor, include:
Some vendors offer cloud-based solutions and others offer install software solutions.
Just a few of the vendors include:
Some of these solutions can be pricey – so look into a solution is right-sized for your firm. I have firm's your size using solutions that are costing around $3000.00 per year.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the owner of a five attorney firm in Austin, Texas. My accounting/office manager has just advised me that she is resigning her position as a result of her husband's job being relocated to another city on the west coast. She is the best employee that I have had the pleasure of working with and I am not sure where to start regarding finding her replacement. She will be hard to replace – – not just her skills – but her manner, relationship with me and other members in the firm, clients, etc. She is truly a class act. I would appreciate any thoughts that you may have.
Response:
Maybe you don't have to lose her. Why not consider a remote/virtual arrangement. I know – it sounds crazy but I have several law firm clients that were in similar situations and decided rather that lose a key employee to have them work remotely.
The first situation occurred several years ago in Chicago. The firm was going to lose a key paralegal that had been with the firm for fifteen years when her husband was relocated to Washington state. The firm was already paperless and had an excellent computer system that facilitated remote communication. The missing link was the telephone system and how to handle client calls coming in for the paralegal. The firm installed a VOIP phone system that could seamlessly transfer a call as if the paralegal were down the hall. An office was setup in the paralegal's home in Washington state, procedures and protocols put in place, and other practices such as joining her in via Skype on the weekly firm meetings. The arrangement has worked out exceptionally well for five years.
The second situation occurred six months ago in Chicago. The firms accounting manager's husband was transferred to Florida and she tendered her resignation. The owner asked me to help him find a replacement and I asked what he thought about a remote arrangement. We discussed how the various accounting tasks would be handled and coordinated remotely from running pre-bills, making bank deposits, recording client payments, billing, paying bills vendor bills, etc. and he decided to give it a try. A virtual private network was installed, her home office was outfitted, and procedures, protocols, and checks and balances put in place. The arrangement has worked out well. Four months after the arrangement was implemented the firm merged with another firm and now has two office locations and the accounting manager is effectively handling the billing and accounting for both offices from her Miami Florida remote location. The owner is very happy with the arrangement.
So, before you accept her resignation and begin looking for a replacement – you might want to consider a remote/virtual arrangement.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am a new administrator in a 17 attorney law firm in the greater Boston area. I am the firm's first administrator and this is the first law firm that I have worked for as a firm administrator. I been on the job for six months and I am struggling. I don't know whether I am living up to the expectations of the partners and I feel like I am lost. I would appreciate your thoughts.
Response:
While administrators have made great strides in terms of role and acceptance during the past decade, administrators in firms of all sizes still remain frustrated with:
– Poor, slow, and ineffective decision making
– Ineffective firm leadership and governance
– Internal politics and infighting
– Micromanaging
– Management by committee
– Lack of influence and ability to effect change
Being the first administrator for a law firm is tough. In additional to proving yourself to your partners you will have the additional task of justifying the position itself. After a few months when the honeymoon is over some partners will start questioning whether the position is necessary and worth the expense. Don't assume that the partners really thought through what their expectations were for the position prior to hiring you. Don't wait for them to manage you – you must take a proactive role – initiate discussions regarding expectations and identify priorities, projects, etc. Look for low hanging fruit when you can enhance revenue or reduce costs in the short term and track any results achieved.
Few things are as important to an administrator’s future as that person’s ability to influence the decision-making process and effect change. Skills and competencies are important but so are results. In order to transcend to the next level and enhance their value to their law firms, administrators must help their firms actually effect positive changes and improvements and improve performance. This requires selling ideas to partners in the firm and having them accept and actually implemented. To succeed administrators must achieve three outcomes:
- Provide new solutions or methods
– The firm must achieve measurable improvement in its results by adopting the solutions
– The firm must be able to sustain the improvements over time.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the managing partner of a newly formed 8 attorney firm in Austin, Texas that was formed last year when several of us left another firm and started this firm. The most frustrating part of the managing partner job is managing the people – this includes other partners, associates, and staff. How do I deal with people that are not following firm policy or doing things they should not be doing?
Response:
Managing people is one of the toughest challenges that law firms face. Challenges often involve people not following firm policy and doing what they should not be doing. It drives owners, managing partners, and administrators crazy.
My advice to frustrated owners, managing partners, and administrators – tell them to stop. Seriously. As the managing partner 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 them 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 they must resolve the performance or behavioral issue in order to keep their job tell them so. They may need this level of confrontation in order to give them the strength to be able to deal with their issues.
Being a wimp does not help you or them. Tell them like it is and conduct a heart-to-heart discussion. You will be glad you did.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
Our firm is a two partner firm located in Rochester, MN. We have been approached by a solo practitioner that wants to sell us his practice. The price and terms seem fair but we are concerned about staffing and managing the other office. His practice consists of himself and two staff members. We would have to maintain a second office, hire an associate or two for the office, and then manage both operations. We have recently tried to hire an associate without success by reaching out to targeted lawyers that we knew in our local area. Frankly, acquiring this practice is a little daunting. We would appreciate your thoughts.
Response:
I believe the first issue is whether you are looking to grow the firm and are willing to undertake the additional management responsibilities that comes with growth. Some firms are ready for growth and others are not. Larger is not necessarily better.
I would not let your unsuccessful associate hiring attempts discourage you from acquiring the practice if you desire to grow and the price and terms are acceptable. You may need to cast a wider net and be more focused in your efforts. Recently a two attorney firm in Mid-Missouri hired an associate from St. Louis. A two attorney firm in Central Kentucky hired an associate from Lexington, Kentucky. It may take some time but a concentrated recruiting effort usually pays off regardless where you are located – even in small communities.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
We are a six partner litigation firm in Des Moines, Iowa. This year we hired two associates and they are our first. We have not provided them with the best mentoring or guidance – it has sort of baptism by fire. I would appreciate your thoughts on what we should be doing concerning performance management.
Response:
Baptism by fire is not the best approach for managing associate performance. It may work in the long term but in the short term it will result in excessive "spin time" and lost revenue and profits for the firm. Here are a few thoughts:
Good luck with your program.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am the managing partner in an 8 attorney general practice firm in Tulsa, Oklahoma. A year and a half ago we hired our first legal administrator to run all business aspects of our practice. We decided that we wanted more than an office manager – we wanted an administrator to serve in the capacity of a COO. We hired an experienced administrator at a good salary, developed a well-conceived job description, and the work began. My partners and I are frustrated. We have to follow-up on projects and task assignments, do not see the leadership that we had hoped for, and have concerns that our administrator may not be up to the tasks. We just realized that we have not have a performance review since he started. I would appreciate your suggestions.
Response:
Sounds like you did a good job clarifying the role and initially laying out your expectations. However, you cannot stop there. You have not conducted a performance review and I suspect that he has received little feedback regarding his performance. During the first year feedback needs to be ongoing with a mini review every ninety days and ongoing coaching and follow-up. You need to conduct a review with him ASAP, layout expectations and compare to actual performance, discuss gaps, and reach an agreement as to a plan with milestones and dates to resolve performance gaps. They you will have a better picture as to whether your administrator was the right hire or not.
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am a solo attorney in upstate New York. My practice is limited to estate planning, estate administration, and elder law. I have just hired my first associate and am trying to get a sense of the number of billable hours I should expect her to produce. You comments would be appreciated.
Response:
For many years the national norm for all firms has been around 1750 billable hours – much higher for litigation firms – often in the 1800-2000+ range. In my experience I find 1650-1700 a good target for most firms. However, I am finding that 1500 is more the norm for estate planning firms such as yours, especially if the attorney is also doing new client intake interviews and meetings. As a general rule attorneys should be billing approximately 70% of their total worked time. Of course this all assumes that you have adequate work to keep you both busy on a full load.
Lexis has published a couple of studies on billable hours that you might find useful - Billable Hours Survey Report, Non-Billable Hours Survey Report and Where Do all the Hours Go
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John W. Olmstead, MBA, Ph.D, CMC
Question:
I am a partner in a four partner firm located in Houston. We have three associates in the firm. One of our partners has a son just finishing law school and he would like him to join the firm. We have never had children of partners work in the firm before and I am concerned about setting a precedent. We have a good relationship among all of the attorneys and I do not want to see our relationship tarnished. I would appreciate your thoughts.
Response:
I have seen it go both ways. Many firms have brought children and other family members into the firm and have had excellent results. Others have not. In general I believe that law firms do a better job at this than do other business firms. Your situation is more complicated since you have associates in place that may feel threatened and uncertain as to their futures when you bring in family members. I believe that if you lay the proper foundation and go about it correctly you can successfully bring your children into the firm. Here are a few ideas:
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Good luck!
John W. Olmstead, MBA, Ph.D, CMC