Law Practice Management Asked and Answered Blog

Category: Human Resources

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Oct 06, 2015

Law Firm Growth – Associate Hiring and Retention

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

 

 

Aug 30, 2015

Law Firm Associates – Evaluation of Performance

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:

  1. To be effective, evaluation of associates must be meaningful. 
  2. Evaluation for associates right out of school should be done every six months for two years and annually thereafter.
  3. Written criteria must be developed and communicated to everyone as the basis for evaluation.
  4. The associate should be evaluated by every lawyer with whom the associate works.
  5. The evaluation process should be developmental. Weaknesses must be openly discussed, with a plan devised to eliminate the weaknesses. Professional goals should be set each year.
  6. Personal plans should be completed each year and be part of the evaluation process.
  7. The evaluations must be done timely.

Good luck with your program.

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

 

 

Aug 11, 2015

Law Firm Administrator – Performance and Expectations

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

 

Apr 22, 2015

Law Firm Associate Attorney Billable Hours

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

 

Jan 20, 2015

Law Firm Hiring Practices – Pros and Cons of Hiring Lawyers that are Children of Firm Partners

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:

  1. Recognize that for the family members there will be a family system, the family law firm, and an overlapping of these systems. This can be fertile ground for conflict if clear boundaries between the family role and the firm (business) role are not clear. Establish clear boundaries. Family dynamics and business dynamics seldom mix. Your objective should be to draw the clearest possible distinction between the two and make sure that everyone understands that the firm (business) is the firm and the family is the family.
  2. Children should not be brought into the firm unless they want to be involved and satisfy your standard hiring criteria for lawyers. I believe that before your children join the family law firm it is a good idea for them to work for another firm or organization. When they do join the family firm they can bring with them that experience, a supply of new ideas, a network of contacts, and a number of other benefits acquired.
  3. Make it clear to your children that they must "earn their stripes" and come up through the ranks in the same fashion as other associates in the firm. No special privileges. Make it clear that they must earn the respect of other attorneys and staff in the firm.
  4. Put your associates and staff at ease. Make it clear that your children are expected to "earn their stripes" and they will not be promoted to partner over other associates on family status alone. (Unless this is your intent)
  5. Clearly define the role of all parties.
  6. Monitor your own behavior. Don't take sides – either between your children if both join the firm or between your children and other employees in the firm.
  7. Be careful with compensation and other rewards. Compensation should be based up performance and results and consistent and competitive with other law firms of similar size and type.
  8. Communicate, communicate, communicate – your intentions, roles, etc. before and after your children join the firm.

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Good luck! 

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

Nov 18, 2014

Law Firm Administrators – Effecting Change by Selling Your Ideas to Your Partners

Question:

I am the firm administrator with a 27 attorney firm in Detroit. We have fifteen partners and twelve associates. I have been eight months with the firm and in this position. I replaced another administrator who was terminated because the partners did not believe he lived up to their expectations. He was their firm administrator. This is my first law firm and I want to be successful. I feel that I am struggling and am not sure of my priorities. I would appreciate your thoughts.

Response:

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:

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

 

 

Aug 26, 2014

Law Firm Attorney Staffing/Growth Models – Overview

Question:

I am the managing partner of a 16 attorney insurance defense firm in Chicago Southwest Suburbs. We have 4 partners and the balance of our attorneys are associates – many of which have been with us for several years. We are on a growth spree and needing to hire more associates to handle client assignments. Associate hiring, mentoring, and training has always been a challenge for us and our clients are restricting us in the way we use associates on their files. I would appreciate your thoughts.

Response:

Attorney staffing/growth models include:

  1. Grow Your Own Associate Staffing
  2. Lateral Associate Staffing
  3. Contract – Staff Associate Staffing
  4. Lateral Partners (Equity or Non-Equity)
  5. Of Counsel (Various Approaches and Purposes)
  6. Mergers (Or Small Firm Acquisitions)
  7. Branching

I will address the pros and cons of each model/approach in upcoming postings. I will begin by addressing the first one.

The traditional staffing model for insurance defense firms has been Grow Your Own Associate Staffing.

PROS

  1. Large available supply of new lawyers.
  2. Lower salary than experienced lawyers.
  3. Better odds of integrating them into the firm's existing culture.

CONS

  1. Takes time training, mentoring, getting them ramped up.
  2. May take 2-3 years before they are profitable.
  3. Once they become profitable you may lose them to another firm.
  4. No business comes with them so you must have enough work to keep they busy.
  5. Clients may be unwilling to allow you to use them or dictate how you use them.
  6. Clients may be unwilling to allow them to train on their dime.
  7. Will have to bill them out at lower billing rates than lateral associates or lateral partners.

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

Jun 03, 2014

Law Firm Policies and Procedures

Question:

I am a solo practitioner in Central Illinois. As my staff seems to expand, I feel a need to become more formal.  I have a question about nondisclosure agreements with staff?  Also office procedures or rules?   Also in hiring I am finding less and less candidates that lack any experience in a legal setting. The Illinois State Bar Association Law Practice Management Section may want to consider a half day program that is internet based to acquaint staff who have office experience but no legal experience with some of the basic issues including nomenclature, confidentiality, basic legal drafting, etc.

Response:

Our committee has not addressed this of late – we may have years ago and if we did there might be an article in the dark past in the Bottom Newsletter which is the newsletter of the Standing Committee on Law Office Management and Economics. 

Most of my law firm clients are addressing the topic usually in their office policy handbook as opposed to a separate document. You might want to begin to put together both an office policy (employee handbook) as well as a "how to procedural manual" as well.

Suggest that the office policy (employee handbook), in addition to other topics, cover policies on:

Have a sign-off page in the Policy (Employee Handbook) and have each employee acknowledge that they have read said policies and file a copy in each employee's personnel file.

ABA has a book on Office Policies and Procedures that can be purchased that you might find helpful: 

http://shop.americanbar.org/eBus/Store/ProductDetails.aspx?productId=218026

Thanks for the suggestion regarding the CLE. I am the CLE coordinator for our committee – so I will bring up the topic and see what the group thinks.

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

 

 

Apr 29, 2014

Law Firm Associate Training and Mentoring – Ideas for Reducing Spin Time and Increasing Profitability

Question:

We are a three attorney personal injury plaintiff firm in Moline, Illinois. There are two partners and one associate in the firm. We handle a large volume of small PI files – currently we have 700+ open files handled by three attorneys and 5 assistants. We recently hired our fourth attorney – second associate – that came to us with 20 year's experience as an associate in several large firms (100 plus attorney firms). The attorney, who has been with us for about 8 weeks, has never handled personal injury cases and is having some problems getting organized. Do you have any suggestions?

Response:

I am a believer that time invested in orientation, training, and mentoring upfront can dramatically reduce a new associate's spin time, help them get online quicker, and improve overall profitability. Even though your associate has 20 year's experience in a large law firm – the work and the case management challenges are different. The associate may never have had overall management responsibility for cases or client relationships. The associate may have been assigned tasks to be completed with the partner having the case and client management responsibility. If the attorney did manage cases there is a major difference between managing say 25-50 large cases versus managing 150 small cases. There are new case management and client management skill sets and practices that will have to be developed and practiced in addition to the new area of law.

Invest time training and mentoring and share case and client management tools that can help your associate get off to a faster start.

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

 

Mar 04, 2014

Lawyer or Businessperson

Question:

I am an attorney in Miami. I have been out of law school for five years. I worked with a small firm for a year and then went solo and have been doing contract work for other law firms for the past four years. For the past year I have been trying to get a position as an associate with a small firm – but have not had any success. Recently, I had an interview with a 2 attorney (2 partners in their early 70s) firm and I thought the interview went well – I believe that I impressed them with my legal knowledge and skills. However, I did not get the position. They advised me that they were looking for less of a lawyer and more of a business person. What am I doing wrong?

Response:

I help many of our law firm clients hire lawyers for associate and lateral positions as well as search for merger candidates. One of my favorite questions is – are you more of a lawyer or a business man or woman. Small firms are more often than not looking for candidates that are both. In a small firm you must be able to bring in clients, manage people (clients, lawyers, and staff), and perform quality legal work. There are a lot of good lawyers available on the market – there are less good lawyers that are also good business persons.

I suspect that the firm you interviewed with is looking at this hire to be part of the firm's succession strategy and the partners are looking for a lawyer/business person that can carry the firm to the next generation of practice.

Next time you interview with a firm in a similar situation – blend in a discussion of business topics as well. Even though you are a solo doing contract work you can still share some business experiences. You have had to bill for your services, manage your receivable and payables, market yourself and your practice, etc. Share your thoughts.

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

 

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