Question: I am the sole owner of a 12 attorney practice. I am 55 years old and am beginning to think about retirement. The other attorneys are associates in the firm. What do I need to be thinking about in order that I can transition out of my practice and have money for retirement. While I have put some money in a 401k, I am not yet financially secure enough to retire.
You are not alone. As the baby boom generation ages – more and more attorneys are asking this question. Unless you have an appropriate Exit Planning Strategy and put in place a sound Exit Plan, it is doubtful that you will be able to cash in on the full value of the goodwill that you have created. To exit successfully you need:
You will need to consider whether you should consider merger, sale of the practice to an outside buyer, or sale of the firm to the other lawyers in the firm. You need to find ways to institutionize the firm so that in additional to professional goodwill (your personal reputation and goodwill) you develop practice goodwill (goodwill of the firm that will remain after you have left the firm). Develop your lawyers and create a desire and motivation for them to want to be owners/partners in the firm. Develop your staff and practice systems. Diversify and stabilize your client base.
If you decide to sell to attorneys in the firm – begin the process early so that most of the buy-in is completed before your actually leave the firm. The longer the planning horizon – the easier they buy-in burden will be for others
John W. Olmstead, MBA, Ph.D, CMC
Question: I am a legal administrator with a midsized firm in the southwest. Our firm has recently lost two major clients and we have not acquired any new major clients for many years. Other problems regarding failure to innovate also exist. I am concerned that if the partners do not change their ways that we may not still be in business in the next few years. The firm need to change. Where do we start? How can I teach old dogs new tricks?
Response: This is a common problem being reported to us by several of our clients. Institutional clients are now shopping for legal services. They are looking for innovative solutions to their problems. They are looking for law firms that they can partner with and that becomes in essence a part of their team. The old ways of conducting business is no longer working with institutional clients. Law firms need to rethink their business and perhaps reinvent their practices. This will not be an easy task for many law firms. Change does not come easy and it cannot happen unless the firm sincerely desires to change and do things differently. In many cases law firms cultures will need to be changed to a client orientated model. This will take time and patience. Legal administrators will play an instrumental part in this process. The firm may want to start by getting out of the day-to day management rut and begin a process of long term strategic planning. Only then will the roadmap to change be able to be formulated.
John W. Olmstead, Jr., MBA, Ph.D, CMC
As you begin 2008 here for getting started.
As law firms begin to plan for the new year we suggest the following key strategies:
Research indicates that three of the biggest challenges facing professionals today are: time pressures, financial pressures, and the struggle to maintain a healthy balance between work and home. Billable time, non-billable time or the firm’s investment time, and personal time must be well managed, targeted and focused.
Today well-focused specialists are winning the marketplace wars. Trying to be all things to all people is not a good strategy. Such full-service strategies only lead to lack of identity and reputation. For most small firms it is not feasible to specialize in more than two or three core practice areas.
Based upon our experience from client engagements we have concluded that lack of focus and accountability is one of the major problems facing law firms. Often the problem is too many ideas, alternatives, and options. The result often is no action at all or actions that fail to distinguish firms from their competitors and provide them with a sustained competitive advantage. Ideas, recommendations, suggestions, etc. are of no value unless implemented.
We suggest the following:
Question: Do you have any suggestions concerning how we can determine if our compensation system is functioning properly?
You can start with the following firm – self-test. Has the firm experienced or is it experiencing:
If your firm is experiencing or has experienced the above symptoms, it is time to really examine where the firm is headed and what messages your compensation is sending out to your partners. Is the firm trying to be a firm or merely a group of lone rangers.
John W. Olmstead, MBA, Ph.D, CMC
We have recently lost a key partner, several key institutional clients, and we don't know why. We are considering doing a client satisfaction survey to insure that we are not falling asleep at the wheel and providing the best service possible. We also want to make sure we understand current client needs and whether our services are still adequate. What are your thoughts?
For institutional clients we would recommend telephone interviews, face-to-face interviews, or a combination of both.
Typically, when we work with a client we establish the initial research objectives of the project and then the best way to achieve them. For example, do you just want obtain feedback from your top 10, 25, or 50 institutional/busines clients or your entire client base?
In the case of a study population of your top 10, 25, or 50 clients we usually recommend a telephone interview technique. We shoot for a 90%+ response/participation rate. We develop the questionnaire with the client and then conduct the interviews and compile a report consisting of both statistical metrics (grades if you will) and client commentary/narrative. Often it is the narrative commentary that provides the most actionable information. Recently, when conducting interviews of an insurance defense law firm's insurance company clients a client advised us that they had stopped sending new files/cases to the firm because of poor communication and status reporting. Based upon our interviews the firm was able to resolve the internal issues and repair the relationship with the client. The law firm was also contemplating implementing a blended billing rate structure and wanted us to obtain the client's reaction. We also obtain feedback from these clients on what topics they wanted presented in seminars that the law firm put on for their insurance clients – both in group sessions with other insurance company clients and private onsite sessions for individual insurance company clients.
Before conducting the interviews we ask the law firm client to contact the client and solicit (sell them on) their participation in the study. We then contact them, make the appointment, and conduct the interview. In our proposal for these services we pledge client confidentiality and are willing to sign a confidentiality agreement with the firm as well.
For individual clients, due to the number of clients, a paper mailed survey is typically used. The response rates will be less (30% tops usually), these will less narrative/commentary, less actionable information, and there will be no ability to probe. In these cases we develop the questionnaire, the law firm mails out the questionnaires for us, the returned questionnaires come to us directly in the provided reply envelope, we compile the data and the report and provide to the firm.
If you decide to handle the project in-house rather than outsourcing a similar approach would be recommended. Just insure that you staff and resource the project properly.
John W. Olmstead, MBA, Ph.D, CMC
By John W. Olmstead, MBA, Ph.D, CMC
I am often asked to help law firms design and implement strategic business plans. I also coach many solo and small firm attorneys in career as well as personal and professional life balance issues. In both situations the starting point is the same. Begin by taking inventory of your personal life goals. Only then can you effectively begin planning an effective career strategy or law practice. Unfortunately, may attorneys start with the law practice and take care of business first and fail to take care of their personal lives until it is too late. It is much easier to begin your life and career with balance that it is to try to bring your life back into balance later in life.
Ask yourself the following questions:
1. Do you find yourself spending more and more time on client and firm work-related projects?
2. Do you often feel that you don't have any time for yourself or your family and friends?
3. Does it seem that every minute of every day is always scheduled for something?
4. Do you sometimes feel as though you've lost sight of who you are and why you chose law as a career?
5. Can you remember the last time you were able to find the time to take a day off to do something fun — something just for yourself?
6. Do you feel stressed out most of the time?
7. Can you remember the last time you used all your allotted vacation and personal days?
8. Does it sometimes feel as though you have never even have a chance to catch your breath before you have to move on to the next client project/crisis?
9. Can you remember the last time you read — and finished — a book that you were reading purely for pleasure?
10. Do you wish you had more time for some outside interests and hobbies, but simply don't
11. Do you often feel exhausted — even early in the week?
12. Can you remember the last time you went to the movies or visited a museum or attended some other cultural event?
13. Do you do what you do because so many people (children, partners, parents) depend on you for support?
14. Have you missed many of your family's important events because of work-related time pressures and responsibilities?
15. Do you almost always bring work home with you?
If you answered with non-positive responses to more than five questions your life is out of balance and you need to take steps to correct the situation.
Here are some ideas:
Keys To Happiness
Tips For Staying Energized And Productive
TIP #1: Develop a Personal Life Plan and a Career/Practice Business Plan.
TIP #2: Use and work your plan.
TIP #3: Work smarter not harder. Improve your time management skills.
TIP #4: Create your life balance expectations for you clients and your superiors in the firm. When interviewing for a new job or position let your future employer know your expectations upfront.
TIP #5: Tend to your physical health. Insure that you address prevention and treatment of diseases, weight control, physical fitness and stress management. Schedule and keep annual physicals. Exercise daily.
TIP #6: Begin looking for ways to implement alternative billing. Look for alternatives to billable hours.
TIP #7: Take time for yourself and family. Take vacations.
TIP #8: Define what is important to you and define your personal-professional life balance boundaries.
TIP #9: Enjoy life and get involved in activities other than the practice of law. Pursue hobbies and other interests.
TIP #10: Know your personal and professional goals.
TIP #11: Learn to relax. Take time everyday for meditation, prayer, yoga or some other activity that is focused solely on relaxation.
TIP #12: Schedule time for relationship building and maintenance.
TIP #13: Never eat alone. Use mealtime to network with referral sources, potential clients, and other professionals.
TIP #14: Turn off e-mail notifications, pagers, and cell phones.
TIP #15: Develop a personal and business budget and follow it.
TIP #16: Network, Network, Network both inside and outside of the firm.
TIP #17: Develop your conversational skills.
TIP #18: Eliminate clutter at home and at work. Develop a filing system for your personal papers and business files and documents. Open and review your mail immediately and discard anything that you do not intend to keep.
TIP #19: Use technology to streamline your work.
TIP #20: Delegate work.
It takes 30 days or longer to form new habits. PRACTICE, PRACTICE, PRACTICE. Celebrate your successes, reward yourself, and continually strive for improvement.
We are becoming more and more concerned about the firm’s future? Recently we have lost a couple of our insurance defense clients and others may be sending us less files? Do you have any suggestions?
Our firm recently completed client satisfaction interviews for several of our insurance defense law firm clients. Here are a few quotes and a summary of what these insurance company law firm clients told us:
Much can be learned by talking to your clients. Structured telephone interviews conducted by a neutral third party can provide many surprises as well as answers. Client satisfaction interviews can be the best marketing investment that you can make.
John W. Olmstead, MBA, Ph.D, CMC
Question: I have heard you speak about Business Identity Plans. What is a Business Identity Plan?
Response: A business identity plan is a communications design plan that insures a consistent and professional firm identity and message is being conveyed through all of its collateral marketing materials and vehicles. It begins with identifying the firm’s core values, uniqueness, and essence which frequently is a result of a strategic planning process. Then designers create graphic identity scenarios depicting illustrative letterheads, business cards, web site, etc. Frequently logos and tag lines are developed. Once the firm selects an identity plan it is incorporated in a consistent manner into all marketing materials including: