Law Practice Management News
Ideas for Lawyers and Managers That Dare To Be Different November 2011

in this issue

Law Firm Succession and Retirement Options

Law Firm Management Projects and Implementation

Improving Law Firm Profits By Improving Processes

Solo-Small Firm Question of the Month - Law Firm Succession: Opportunities for Solos and Small Firms to Join Other Small Firms Looking for Talent to Implement Their Succession Strategies

Looking to Sell or Merge Your Practice - Let Us Know

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John W. Olmstead


Welcome to Olmstead & Associates Law Practice News, a law practice management resource for practicing attorneys, managing partners, administrators, and others that must keep updated on all aspects of law firm management.

Our Law Practice Management E-Newsletter is distributed on the first Wednesday of each month. Look for it and send us your emails with your ideas for topics that you would like covered. I wish to thank those who take the time to email me with their thoughts and comments. I encourage our readers to do so.

Read Helen Gunnarsson's article "Planning to Succeed" in the Illinois Bar Journal, November 2011 issue. An interview that Helen conducted with John Olmstead serves as a centerpiece for the article. Click here for a link to the article.

  • Law Firm Succession and Retirement Options
  • There are almost as many approaches as there are law firms - ranging from partners that just leave and give their practices to the others partners to various methods for buying out the departing partner's interest in the partnership. In the final analysis the optimal approach is what makes everyone happy and a solution that everyone can live with. Here are a few illustrations.

    Read on . . .
  • Law Firm Management Projects and Implementation
  • It it difficult serving two masters - the firm (non-billable time) and your clients (billable time). Firm management issues always seems to take a back seat to client priorities. To do otherwise requires that you be very focused and effective time manager. You must balance both balls at the same time. Your administrator has a similar problem. His or her priorities are often focused on day-to-day operations management and there never seems to be time - especially large chunks of time - for long term projects. Law firms have a hard time getting long term initiatives or projects. Here are a few ideas.

    Read on . . .
  • Improving Law Firm Profits By Improving Processes
  • Raising fees is one approach to improving profitability. Clients are starting to push back more and more concerning legal fees. If you are at the high end of the rate scale I suggest that before charging off and raising rates you step back and conduct a process review by using an approach similar to the following:

    1. Pull a random representative list (by timekeeper and type of matter) of matters that have been concluded during the past six months. Say 10-20 matters.
    2. Calculate the effective hourly rates for each matter overall as well as by timekeeper class. (partner, associate, paralegal)
    3. Compare the calculated effective rate to your internal standard time billing rates as well as to external benchmarks. (Other firms from published survey data) How do they compare? What did it cost to staff the matter?
    4. Review the time detail for each of these matters and ask questions. You might want to flow chart and document the work flow. Is the firm working smart? Is time being dumped on these flat rate matters so that a timekeeper's hours look good on the production reports? Is the firm using the right mix of paralegals and attorneys to staff the work? Is there wasted or duplicative effort? Is technology being used? Can work steps be eliminated or reduced? Should the firm consider a "limited representation" unbundled option?
    5. Pilot test a few new approaches and measure the impact upon profitability.

    Keep in mind that raising fees is one way of improving profitability. There are other ways as well. In today's competitive environment. Working smarter, efficiently, and more effective is another.

  • Solo-Small Firm Question of the Month - Law Firm Succession: Opportunities for Solos and Small Firms to Join Other Small Firms Looking for Talent to Implement Their Succession Strategies
  • Question I am a solo practitioner located in the Chicago suburbs. I have one staff member. I am 53 and have been practicing law for over 25 years. I try to limit my practice to estate planning and estate administration. However, I do have to take on other general practice type matters to stay busy. Practicing law by myself is beginning to take its toll on me - it gets lonely practicing alone, coverage and backup for clients is difficult, and I have the full burden of the worry 24/7. What do I do with the practice when I get older and reach retirement age? I have not taken a vacation in years. I have been thinking about the pros and cons of joining another firm? What are your thoughts?

    Answer:One option would be to grow your practice internally. You could add a younger associate attorney. However, it sounds like you currently don't have the business that would support the position. Then you would have to train and mentor the assoicate and pray that once they become productive - two or three years down the road that they stay with you and don't leave for greener pastures.

    Another option would be to bring in a more senior lateral attorney with experience and a book of business.

    A third option would be to look around for another solo or small firm that is looking for someone to carry the firm into the next generation as a part of their succession strategy.

    According to a 1995 American Bar Foundation Lawyer Statistical Report the number of bar admissions has been consistently around 30,000 each year since 1977. Further, the number of lawyers by age reached 30,000 for lawyers under 50. Those lawyers in 1995 who were in their late 40s will be reaching retirement age between 2010 and 2015. Law firms have a larger population of lawyers in their 50s and 60s that will be approaching retirement and must develop strategies for transitioning their legal and leadership skills as well as their client relationships and market presence.

    Sixty-five percent of law firms' equity partners are in their late 50s or early 60s. Over the next 10 years there are going to be a lot of successions.

    There are a lot of firms looking for someone just like you. I am currently working with several firms in the ChicagoLand area that have asked us to help then find someone just like you. So there is a lot of opportunity to join a firm that is looking for a succession strategy that will carry the firm into the next generation. The big questions is always the "who" more than the "what". So put together a plan and start looking around and see if you can find a compatible firm.

  • Looking to Sell or Merge Your Practice - Let Us Know
  • We frequently consult and work with law firm clients working on implementing succession strategies that involve the sale of a law practice, merging with another firm, or hiring lateral talent. If you are looking to join up with another firm keep us in mind. We will be posting confidential listings on our website in the near future.

  • FREE Guide to Law Firm Management Best Practices
  • Download a FREE copy of our Guide to Law Firm Management Best Practices.

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