Law Practice Management Asked and Answered Blog

Category: Human Resources

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Feb 02, 2011

Why Training Programs for Lawyers and Staff Fail to Produce Results

Question:

I am the managing partner for a 8 attorney firm located in San Diego. During the past several years we have invested significantly in continuing education – primarily conferences and seminars – for our lawyers and staff. We have just completed a review of our expenses in this area and we are concerned that we are not getting a satisfactory return on this investment. Please advise as to your thoughts.

Response:

Training and skill development is not easy. Studies reveal that 90 percent of the people who attend seminars and training sessions see no improvement because they don’t take the time to implement what they learn. Practices create habits and habits determine your future. Up to 90 percent of our normal behavior is based on habits. The key to skill learning is to get the new skill to become a habit. Once the new habit is well developed it becomes your new normal behavior. This requires practice. Unfortunately, law firms do not give employees time to practice and experiment.

Research on memory and retention shows that upon completion of a training session, there is a precipitous drop in retention during the first few hours after exposure to the new information. We forget more than 60 percent of the information in less than nine hours. After seven days only 10 percent of the material is retained. Most memory loss occurs very rapidly after learning new information. Your employees can improve their memories:

Skills become automated through practice. The more we do a set of actions, the more likely we are to link those actions into a complete, fluid movement that we do not have to think about. With enough practice, employees can become fluent in many different physical and mental skills.

Skill development involves behavioral change and changing many habits and practices on the part of the employee. In some situations, beliefs, attitudes, values and the actual structure of an employee’s working environment are affected. Effective training and skill development cannot be achieved with one-shot training programs. Training programs should be considered by all involved to be a long-range effort.

In general, three elements drive human behavior and shape the habits we possess: antecedents, competencies and consequences.

Antecedents are those things that prompt us to take an action. In a law firm setting, these include policies, goals, directives, announcements, training programs, procedures, vision statements, organizational structures, accountabilities and so forth. They are very important because they provide each person with cues as to what to do in his or her job. They encourage certain actions, and they are intended to get people to start doing something by providing them with reasons, plans, skills or information to do it.

The second element – competencies – is the knowledge, skills and abilities that enable people to perform certain tasks. These abilities enable a behavior to occur. Employees develop competencies over time, a product of good antecedents and positive consequences and the focus for most selection and training strategies.

The third element is consequences. Consequences are those things that happen to a person when they perform certain actions. They always occur after a behavior. They may be positive or negative and, depending on their impact, will determine whether a person will repeat an activity. Rewards (compensation systems) are the typical consequences employed in law firms. However, a balanced mix of positive and negative consequences is often appropriate. Consequences drive human behavior.

Firm managers must address all three elements in any training program designed to produce lasting results.

Click here for our blog on human resources

Click here for my article on this topic

 

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

Dec 22, 2010

Year End Staff Bonuses and Raises

Question:

Our firm is meeting later this month to discuss year end bonuses and raises for our staff personnel. Due to the economy we did not give raises and bonuses last year. While we have been holding our own with the present economy we have been trying to watch our overhead very closely. However, we want to be fair to our staff and we don't want to lose key employees to our competitors. We are a five attorney firm and have four staff members that have been with us for many years. Do you have any ideas for us?

Response:

Your situation sounds quite familiar. Many law firms deferred raises and bonuses last year and are wondering what to do this year. Here is what we are seeing:

We are recommending to many of our clients that they use 2010 raises and bonuses to launch new performance base systems for 2011. They are awarding traditional raises and holiday bonuses for 2010 to clear-the-deck – and advising staff of new programs going into effect January 1, 2011 consisting of goal achievement bonuses where specific firm and personal goals are established at the beginning of the year for each staff member and annual performance reviews.

Click here for our blog archive on compensation

Click here for articles on other topics

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

Nov 17, 2010

Frustrations of a Law Firm Administrator

Question:

I am a law firm administrator with a 27 attorney firm in the southwest. This is my first law firm experience. I have been in my position for 8 months and am frustrated. Could you share your thoughts:

Response:

During the past decade the roles of legal administrators have expanded dramatically. Today legal administrators can be found in firms with less than ten attorneys. In larger firms, as well as many smaller firms, roles have shifted from day-to-day administration to firm wide leadership. A few large firm administrators are functioning as true CEOs. Large firm administrators are devoting more of their time and attention to strategic vs. administrative matters. Recent studies suggest that, in firms with more than 50 attorneys,there is an an uplifting of the role of principal administrators. Roles that have grown dramatically in recent years are strategic planning and practice management. Administrator’s roles in large law firms are no longer restricted to administrative matters. They are expanding and they include partner compensation, associate management, client and matter intake, lateral recruiting, and change management.

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

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.

Click here for articles on other topics

Click here for our blog postings on partnership and governance

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

Oct 27, 2010

Hiring Lawyers that are Children of Firm Owners or Partners

Question:

I am an owner of a 5 attorney law firm in the upper midwest. There are 4 associates in the firm and I hope to eventually make them partners. I have two children that will be finishing law school in the next year or two and they have expressed an interest in joining the firm. Is this a good idea? I have heard horror stories about such arrangements? What are 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. Put in place a succession plan sooner than later with a workable buy-sell agreement.
  9. Communicate, communicate, communicate – your intentions, roles, etc. before and after your children join the firm.

Click here for other articles

Click here for my blog postings on succession

Good luck! 

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

Sep 28, 2010

Dealing with Difficult – Maverick Partners

Question:

Our firm has been discussing how to handle one of our partners. We are are 25 attorney firm. One of mid-level partners who is one of our highest fee producers and best business getter's simply won't follow firm policy or play by the rules. He won't turn in time-sheets in a timely manner, he is argumentative with others in the office, and not a team player. He is "me first" while the rest of the partners in the firm are mostly "firm first". We are trying to build a team based practice and this one partner is holding up our progress. Do you have any thoughts or suggestions on how we should handle this?

Response:

Dealing with "maverick partners" is always a challenge. Of course they seem to always be the heavy hitters and this makes it that much more difficult as often there are major clients and large sums of money at stake – at least in the short term. This can also be major issues and large sums of money at stake in the long term if you don't deal with the maverick partner as well. In addition you won't be able to achieve the vision and goals the firm is trying to achieve.

Many firms have had to deal with the problem of a maverick "huge business generator" who just wouldn’t cooperate with firm policies and caused conflict and tension in the firm.  It is an unplesant task – but in the end – worth the investment. In the end he or she either conforms or leaves the firm. We have been advised by our clients that even though they may have struggled in the short term as the result of the loss of a major fee producer – in the long run the firm was better off and should have done it earlier.

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

 

Sep 14, 2010

Characteristics of Successful Law Firms – Basic Building Blocks – Block 4 – Partner Compensation

For the past three weeks I have been discussing the characteristics of successful law firms and introduced the following basic building blocks that successful firms typically have in place:

Partner relations, leadership building, and management blocks have been discussed. 

The fourth basic building block is partner compensation. Successful firms have a good partner compensation in place. Partners frequently advise us in confidential interviews that they are more dissatisfied with the method used to determine compensation than with the amount of compensation itself.

How much and how partners are paid are probably the two most challenging management issues that law firms face. Many law firms are struggling with compensation systems that no longer meet the needs of the firm and the individual partners. Failure to explore alternatives to failing systems often result in partner dissatisfaction leading to partner defections and disintegration of the firm.

In many law firms compensation systems have been counter-cultural and failed to align compensation systems with business strategies. As more law firms move toward teams many are incorporating new ways to compensate partners in order to develop a more motivated and productive workforce. Team goals are being linked to business plans and compensation is linked to achieving team goals. Such systems reinforce a culture that significantly advances the firm’s strategic goals.

People tend to behave the way they're measured and paid.

What gets measured and rewarded – is what gets done.

However, be advised that compensation does not drive behavior – it maintains status quo. Motivation requires leadership which can have a greater impact upon a firm than anything else.

Compensation systems should do more than simply allocate the pie – they should reinforce the behaviors and efforts that the firm seeks from its attorneys. Many firms are discovering that desired behaviors and results must go beyond short term fee production and must include contributions in areas such as marketing, mentoring, firm management, etc. to ensure the long term viability of the firm.

Click here to read my article on the topic

I will address each of the other building blocks in upcoming postings.

John W. Olmstead, MBA, Ph.D, CMC
www.olmsteadassoc.com

 

Sep 08, 2010

Characteristics of Successful Law Firms – Basic Building Blocks – Block 3 – Management

For the past two weeks I have been discussing the characteristics of successful law firms and introduced the following basic building blocks that successful firms typically have in place:

Partner relations and the leadership building blocks have been discussed. 

The third basic building block is management. Successful firms have a good governance and management structure in place and effectively manage the firm. A major problem facing many law firms is the lack of long range focus and the amount of partner time that is being spent on administrivia issues as opposed to higher level management issues. Time spent in firm governance and management, if properly controlled, is as valuable as, if not more valuable, than the same time recorded as a billable hour. (client production time)

There is a difference between management (governance) and administration.

Partners and law firm owners should be focusing their time on the management issues rather than administration.

Management includes:

  – Productive activities, including those of individual lawyers and the firm as a whole.
  – Quantity, quality, and economic soundness of the work.
  – Development of lawyers and future leaders of the firm.
  – Formulation of policies that will determine the firm’s character
  – Financial planning, both short-term and long-range.
  – Marketing and business development.
  – Partner compensation and profit distribution systems

  – Other decisions requiring partner approval

Almost everything else is administration.

Hire an office administrator, manager or assistant for the administrivia matters so the partners can focus on the management concerns of the firm.

I will address each of the other building blocks in upcoming postings.

John W. Olmstead, MBA, Ph.D, CMC
www.olmsteadassoc.com

 

 

 

 

 

Almost everything else is administration.

Hire an office administrator,office manager or assistant for the administrivia matters so the partners can focus on the management concerns of the firm

I will address each of the other building blocks in upcoming postings.

John W. Olmstead, MBA, Ph.D, CMC
www.olmsteadassoc.com

 

 

 

 

  

 

 

Aug 31, 2010

Characteristics of Successful Law Firms: Basic Building Blocks – Block Two – Leadership

Last week I discussed the characteristics of successful law firms and introduced the basic building blocks that successful firms typically have in place. These are:

Last week we focused on partner relations as a core foundational building block.

The second basic building block is leadership. Successful firms have good leadership in place. This may be a single individual or a core group of individuals. Leadership does not always come from the formalized management structure of the firm.

Leadership is one of the major problems facing law firms. Leaders are needed for managing partner posts, executive committee chairs, and practice group heads.  

Leadership behaviors include:

Leadership skills will need to be included in compensation systems.

Seven traits of effective leaders include:

  1. Make others feel important
  2. Promote a vision
  3. Follow the golden rule and establish trust
  4. Admit mistakes
  5. Criticize others only in private
  6. Stay close to the action
  7. Walk the talk.

Leadership is what makes things happen and propels the firm forward, facilitates new directions and attainment of strategic goals, and provides the firms the resiliency needed in today's challenging competitive climate.

Law firms without leadership are easy to spot. They are the firms that are "stuck-in-a-rut", unable to reach agreement or concensus on new ideas, stagnating profitability, partner defections.

Firm must pay attention to this key area and develop leaders for all roles mentioned above.

Click here to read my article on leadership

I will address each of the other building blocks in upcoming postings.

John W. Olmstead, MBA, Ph.D, CMC
www.olmsteadassoc.com

 


 

 

Aug 23, 2010

Characteristics of Successful Law Firms: Basic Building Blocks – Block One

Question:

My partner and I just started our firm two years ago. We have one associate attorney and one staff member. As we grow our firm what should we keep in mind so we don't repeat some of the mistakes that I have seen in other firms that have not been successful?

Response:

I often refer to what I call the Basic Building Blocks of Successful Law Firms which are:

Lets take the first one – Partner Relations. This is the foundation (bedrock) of a successful firm. A successful firm has a healthy partner culture – a good marriage. In such a culture partners share common vision and purpose, respect one another, shoot straight with each other, and have difficult conversations and discussions when needed and deal with issues and problems. In many firms this is not the case and these firms often are characterized by the following:

Such firms are often doomed from the start. Firms that don't get this foundational building block right will build a firm on a shaky foundation. Before forming a partnership – go slow and get to know the other lawyer or lawyers and insure that the marriage makes sense, that you share similar goals and values, that you will be compatible, and you will be good partners. Once you have made the commitment – communicate, communicate, communicate and deal with issues in real time.

I will address each of the other building blocks in upcoming postings.

John W. Olmstead, MBA, Ph.D, CMC
www.olmsteadassoc.com

 

Jul 15, 2010

Getting Control of the Financial Side of Your Law Practice

Question:

I am a partner in a 14 attorney firm. Our bookkeeper has been with us for 20 years. We have a time and billing system, a separate bookkeeping system, and a separate database for clients, and something else for trust accounting. The other partners and myself do not know the name of the software that we are using, don't know how to access the software, and we have to ask the bookkeeper for any financial information that we require. We feel like "hostages". She gets offended when we ask questions. When we do receive information we don't know how to read or interpret much of the information. How can we get control of our firm back?

Response:

It is imperative that owners and partners in a law firm have access to financial information on a timely basis, understand the information, and use the information in a proactive way to manage the practice. We suggest:

The owner (or an appointed partner(s) in larger firms) obtain detailed training on the accounting software system(s) along side the bookkeeper when the system is implemented. In addition to general operation of the software, special training should also be obtained on intepretation and use of the management reports.

In your current situation – this may be a good time to consider upgrading your system and at that time obtain training on the new system, review the roles of all parties, and current procedures.

Insure that you have accounting controls in place and appropriate segregation of accounting duties.

Outline your expectations and requirements of the bookkeeper, meet with her/him, and communicate appropriately.

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


 

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