Law is both a profession and a business. So what pearls of wisdom did the experts at the 2014 ABA TECHSHOW have to say about the business side of law practice? Read on…

How Are We Doing?

• According to Lexis’s Chris Anderson, over 50% of solos have no accounting software at all. @MrsMacLawyer RT @lawyerist (My 2 cents: true and sadly ineffective – the return on investment in purchasing quality billing and accounting software can’t be overstated.)
• Law firms used to raise rates 10% a year; now just about 3% says @gnawledge – @Business_of_Law
• Key Business Challenges for Lawyers [INFOGRAPHIC] – MyCase Blog @nikiblack

Talking to Clients about Fees

• Calling a client that’s behind on payment is a hard thing to do; manage expectations — says Steve Best of @affinitytech @Business_of_Law
• Lawyers are not comfortable having conversations about fees (both sides) – feels “salesy” and “confrontational” says @gnawledge – @Business_of_Law

Setting Rates and Crafting Agreements: The Rule of 3

• Law firm billing discounts are a 1-way street; once you give them, you’ll continue to give them; protect the price – @gnawledge – @Business_of_Law  (My thought: I don’t believe in continually marking down bills.  I do believe in offering early payment discounts.  The client saves money.  The lawyer is paid more quickly.  Win-win.)
• Rule of 3 in law firm pricing: 1% cut in price = 3% cut in profit – @gnawledge – @Business_of_Law
• Rule of 3 defined: Attorney bills at $300/hr; 1st 100 is salary; 2^nd 100 is law firm cost; 3rd 100 is profit – @gnawledge – @Business_of_Law
• Bills Out – Money In – #ABATECHSHOW session @PeggyGruenke makes this case for flat fees – @Business_of_Law
• New meaning for AFA: “appropriate” fee arrangement – @gnawledge – @Business_of_Law
• The better law firms are at pricing, the better it is for the market – @gnawledge – @Business_of_Law
• Resources for law firm pricing: LMA Group (Legal Marketing Association) | ILTA. (International Legal Technology Association) @gnawledge – @Business_of_Law

Billing

• Some firms have 300 billing codes…but just 20 are used. Need to think through codes – @gnawledge – @Business_of_Law
• Billing codes are gamed; got a cap on one code, the hours get logged in another. @gnawledge – @Business_of_Law
• Where’d those billable hours go? Right here in the matter management system – @Business_of_Law (Link to LexisNexis FirmManager “Money Finder.”)

Trends and Where to go from Here

• Litigation finance is a growing trend — several financing companies have raised lots of capital @gnawledge – @Business_of_Law  (My input – this can be a slippery slope.)
• The Essential Survival Guide for the Independent Attorney: summary here. @Business_of_Law
• Session Summary: 5 Effective Law Firm Billing Techniques – @Business_of_Law

All Rights Reserved – Beverly Michaelis [2014]