Law Practice Management Asked and Answered Blog
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May 28, 2012
Improving Law Firm Management Team Performance
Question:
Our firm has 24 attorneys. We are managed by a management team consisting of a managing partner (25% of his time), a full-time office administrator, controller, and marketing director. I am currently serving as the managing partner. Recently we have been having conflict between various members of the management team. Our team meetings are stressful and I fear that our effectiveness is being compromised. Do you any suggestions?
Response:
I suggest you start by identifying some of the causes. Poor communications often can be the root cause of such problems. Interview each of your team members individually and probe. What do they think? Is communications a problem? Are roles, duties, and responsibilities clarified? Lack of clarity can in these areas can lead to turf wars. You may want to design a team charter as well as job descriptions for each employee and clarify roles, duties, and responsibilities for each team member. Conduct short weekly team meetings to enhance communications. Use agendas. Take minutes of the meetings. Advise each team member of your expectations including all members working together as team members. Let them know that working together as a team is a performance factor that will be considered in performance evaluations and reviews. Conduct periodic performance reviews. Counsel and take action against problem team members.
Take stock of your performance as well. Are you micro managing the team or second guessing team members? Have you honed your leadership skills? If not – work on your management and leadership skills as well and consider coaching and leadership training if necessary.
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John W. Olmstead, MBA, Ph.D, CMC
May 20, 2012
Law Firm Branch Office – Key Issues
Question:
Our firm represents general business clients in Cleveland, Ohio. We have 37 attorneys. Currently we have only one office at the present time. As part of our planning process we have been discussing whether we should open a branch office in another major city in Ohio. What issues should we be thinking about?
Response:
Branching is being incorporated into more firm strategic plans. However, often the results do not meet firm expectations considering the time, effort and investment made. Overhead increases, anticipated opportunities do not materialize, management becomes more complex, resources are spread too thin, and the firm loses sight of its common identity.
Branching can be risky due to the dollars and managerial time investment. However, there can be significant benefits as well.
The starting point is to avoid knee jerk reactions such as branching because other firms are doing it, assuming that clients want you to have a presence in another geographical area, etc. Do your homework and build a business case for the branch office. Here are ideas to get you started:
1. Ask your clients what they think about the move. Is the move important to them?
2. Determine your objectives for the branch office. For example:
a. It meets the firm's strategies outlined in the firm strategic plan
b. Geographic expansion
c. Client requirements
d. Defensive measures
e. Convenience office for client meetings
3. Obtain and analyze quantitative data.
a. Client information obtained from meetings and surveys
b. Information concerning referral sources
c. Competitor analysis
d. Business growth market research
Build your business case (a business plan for the branch office if you will) and make sure that a branch office makes business sense for your firm. Create a pro forma budget and review the financial impact. If a branch office makes sense begin thinking about implementation issues such as staffing, actual location, management, etc.
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May 16, 2012
Law Firm Business Plan Implementation and Accountability
Often firms are strong on ideas but weak on implementation. Typically, there is lack of management and structure and a general lack of leadership and focus. Communication is generally poor. Partner compensation systems are often not defined nor tied to goal attainment or performance.
What makes strategic management projects so difficult is that they are often complex and results are not immediate and are often delayed into the future. It is extremely hard for a group of attorneys to focus on strategic long term projects when they are up to their elbows in daily crisis. Lawyers must learn how to effectively partition their routines to enable an appropriate focus on long term projects. Lawyers must learn to think differently. This will require changes in skills, behaviors and working relationships.
The primary problems facing law firms are accountability, implementation, follow-up, and a reluctance to explore new ways of delivering legal services. Partners must begin to raise their hands and sign up for special firm management projects and be accountable to other members of the firm.
Any good plan has an action item section with a timeline built into the plan with due dates and names of responsible parties next to each of the action items. Unless there is an action plan with consequences for non-compliance – there is little chance of success.
Also suggest that the firm discuss the issue of accountability in general. A group of lone rangers often have little chance of implementing firm level strategies.
May 09, 2012
Using Financial Dashboards to Manage the Law Firm’s Pipeline
Question:
Our firm is an 8 attorney general practice firm in Kansas City. In addition to hourly work we have a heavy mix of contingency fee work as well. Other than our monthly profit and loss statement and a report of hours produced we have no other financial reports that we use. I have read about financial dashboards. What might we use them for in our firm?
Response:
In these economic times effective pipeline management is becoming more and more important in law firms – especially in those firms that do a lot of contingency fee work. This might be a good place to start using some dashboard metrics.
Pipeline management is a term used in the management consulting profession to refer to the process by which you continually evaluate your active opportunities (prospective clients to booked clients) for their balance of QUALITY and QUANTITY. The goal is to continually stay on top of the overall health which is a full pipeline. Pipeline management allows client relationship managers to more accurately forecast fee revenues, better staff and manage client engagements, and close more client business.
I often also refer to Pipeline Management in law firms in the context of using financial dashboards by which the individual charged with financial management responsibilities is continuously aware of significant changes in the firm's Pipeline (from prospects to cash):
- Number of new business inquiries for the month
- Number of pending prospective clients
- Number of open client matters
- Dollar value of Unbilled Work in Process/Age
- Dollar value of Accounts Receivable/Age
- Dollar value of billings
- Dollar value of unearned retainers
- Dollar value of fee receipts/collections
By comparing these dashboard statistics to a prior month, quarter, or year – you are able to measure the effectiveness of your marketing and avoid financial surprises down the road.
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John W. Olmstead, MBA, Ph.D, CMC
May 01, 2012
Problem Partners – Do You Have the Right Folks on the Bus?
Question:
I am managing partner for a 16 attorney firm in Minneapolis. We have been having problems with one of our senior partners. He is our highest fee generator – both origination and generation. He operates as a "lone ranger" and refuses to work as a team member with others. He won't follow firm policy or play by the rules. 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?
Response:
Getting and keeping the right people on the bus is a key challenge for law firm management and 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.
- For starters – if you have not already – create a well understood set of firm core values or code of conduct that governs behavior in the firm. For example, in most firms people are expected to work hard, be honest, and treat each other with respect.
- Partners as well as all other attorneys and staff should behave in a collaborative, cooperative, and team-orientated manner.
- Partners as well as all other attorneys and staff should comply with all firm policies and procedures.
- Enforce firm policies for all – no exceptions.
- Consider coaching, counseling or other forms of outside assistance if they could prove helpful.
- Lay down the law – confront and deal with the problem partner sooner than later – even if it means he or her leaving the firm.
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 unpleasant 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.
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John W. Olmstead, MBA, Ph.D, CMC
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