An Oldie and a Goodie: Empowering Law Practice Management Tips

Whilst strolling through the Internet one day, I came across this post by Peggy Gruenke at Attorney at Work. Twenty simple ideas that are timeless and critically important if you want your law firm to succeed. Here are a few of my financial-themed favorites with thoughts of my own.

Peggy’s five financial tips – greatly condensed

  • Write a business plan
  • Create a budget
  • Know your overhead costs
  • State your fee with authority
  • Bill early, often, and strategically

Money and goals

As the business owner, your goal is to see the big picture.  Who are you? Why are you unique? Who are you best equipped to serve? This is the purpose of a business plan, according to Peggy Gruenke.

My input? Don’t be intimated! Your business plan does not have to be a magnum opus. You can get it done in a few pages. Creating a business plan will give you:

  • Clarity about what you want to do
  • Control over your own fate
  • A strategy for staying organized and on track
  • Accountability
  • A way to measure and monitor your progress
  • A path to help you move forward

Want help? See my business plan checklist – originally designed for law students, but easily conformed to active law practices.

Budgeting and costs

Budgeting can be as simple as a basic spreadsheet. Track what comes in and what goes out. Don’t bother with incorporating prior years (unless you have a driving reason to do so). Just start now. Toward year-end use your 2018 data to create projections for 2019.

As Peggy says, “You should know (by heart) how much money you need to make to keep the doors open.”

To get started, revisit this article by yours truly, Dee Crocker and Sheila Blackford.  As motivation, consider this excerpt:

Every law office should have a budget. Without one, it’s easy to overspend and hard to plan for future purchases. Knowing your overhead costs will help you decide how much revenue you need to make and how much you need to charge to bring in that amount. Failure to budget can cause financial problems. Lawyers with financial problems may take on new clients who have money in hand, leaving the work for existing clients unfinished. This can lead to disciplinary complaints from clients whose work is not completed.

I guarantee that your monthly “budget to actual” report, which compares actual spending against budget projections, will become your new best friend.

Stating your fee with authority

When a prospective client tells you that Lawyer Smith is willing to do the same work for $2,000 less, tell the person kindly that he can then retain Lawyer Smith. When you reduce your fee, you will have lost the trust of your prospective client. Odds are, in time, that client will leave Lawyer Smith and retain you to handle the mess that Lawyer Smith made.

Set a fee and stick to it! I know this can be hard, especially if you’re new to solo practice. Know in advance what you propose to charge, don’t make it up on the fly. Be matter-of-fact, business-like, and deliver the number without hesitation. You’re always free to make adjustments with the next case, but don’t waiver with the client sitting in front of you. For help in getting started, see this post.

Bill early and often

When you are ready to bill, issue invoices as soon after the event as possible: “As each day passes after an event, the perception of your value is diminished. If you send out the bill even two weeks afterward, the client won’t perceive the value to be as high.” (Peggy’s words of wisdom.)

There is no reason you can’t deliver your final bill with transactional documents. Take advantage of the arc of client gratitude while it is still in your favor!

Looking for more billing tips? Check out this resource.

All Rights Reserved 2018 Beverly Michaelis

Bidding Adieu to TECHSHOW

Last month I highlighted the ever-popular “60 in 60” tips, websites, gadgets, and resources from the 2018 ABA TECHSHOW as well as some great advice from security experts. Before we say goodbye to 2018 entirely and turn our thoughts to 2019, I wanted to share some of the other stories I curated from this conference:

If any of these topics interest you, click on the links above to learn more.  See you next week at Best Practices for Docketing, Conflicts, Disengagement, and File Retention.

All Rights Reserved 2018 Beverly Michaelis

 

Last Chance to Register for 7 Steps to Building Better Client Relationships

Last Call to Register for “7 Steps to Building Better Client Relationships”

Join me for a CLE on Wednesday, December 6, 2017 about how to cultivate your network, balance client expectations, proactively control social media content, meet client needs, and become more client-centric by exploring the 7 steps to building better client relationships:

  • Capturing better clients
  • Polishing communication skills
  • Advancing client service through technology and staff
  • Managing social media
  • Improving client satisfaction
  • Strengthening client retention
  • Renewing relationships

Topics include how to CYA the right way, how to say “no” gracefully, dos and don’ts when responding to negative online reviews, how to thank clients as part of your everyday, the simple six-step process to stay in touch, and why you should modernize fee arrangements and billing.

Date/Time/Location

Wednesday, December 6, 2017 from 10:00 a.m. to 11:30 a.m. Pacific Time. This is a live, online webinar.

Who Should Attend?

Lawyers, office administrators, or staff – anyone interested in building better client relationships.

Group Discounts

Discounts available to firms who wish to register 5 or more attendees. Contact organizer to arrange a discount code before registering: beverly@oregonlawpracticemanagement.org.

Does the Program Include Written Materials?

Yes. Written materials are distributed electronically with your registration confirmation.

Ask Questions/Live Polling

Questions are welcome during the live event. Attendees are also encouraged to participate in live, anonymous polling.

Registration Fee

$25 – Visit the Upcoming CLE page, click here, or choose the Register button below. Secure payment processing powered by Eventbrite. Visa, MasterCard, Discover, and American Express accepted. Program materials included in the registration price.

Eventbrite - 7 Steps to Building Better Client Relationships

MCLE Credits
1.50 practical skills pending.

Can’t Attend?

Video and audio recordings of 7 Steps to Building Better Client Relationships will be available to download along with the program materials following the December 6 CLE. Price: $25. Contact me or visit my online CLE store after December 6.

All Rights Reserved [2017] Beverly Michaelis

7 Steps to Building Better Client Relationships

Join me for a CLE on Wednesday, December 6, 2017 about how to cultivate your network, balance client expectations, proactively control social media content, meet client needs, and become more client-centric by exploring the 7 steps to building better client relationships:

  • Capturing better clients
  • Polishing communication skills
  • Advancing client service through technology and staff
  • Managing social media
  • Improving client satisfaction
  • Strengthening client retention
  • Renewing relationships

Topics include how to CYA the right way, how to say “no” gracefully, dos and don’ts when responding to negative online reviews, how to thank clients as part of your everyday, the simple six-step process to stay in touch, and why you should modernize fee arrangements and billing.

Date/Time/Location

Wednesday, December 6, 2017 from 10:00 a.m. to 11:30 a.m. Pacific Time. This is a live, online webinar.

Who Should Attend?

Lawyers, office administrators, or staff – anyone interested in building better client relationships.

Group Discounts

Discounts available to firms who wish to register 5 or more attendees. Contact organizer to arrange a discount code before registering: beverly@oregonlawpracticemanagement.org.

Does the Program Include Written Materials?

Yes. Written materials are distributed electronically with your registration confirmation.

Ask Questions/Live Polling

Questions are welcome during the live event. Attendees are also encouraged to participate in live, anonymous polling.

Registration Fee

$25 – Visit the Upcoming CLE page, click here, or choose the Register button below. Secure payment processing powered by Eventbrite. Visa, MasterCard, Discover, and American Express accepted. Program materials included in the registration price.

Eventbrite - 7 Steps to Building Better Client Relationships

MCLE Credits
1.50 practical skills pending.

Can’t Attend?

Video and audio recordings of 7 Steps to Building Better Client Relationships will be available to download along with the program materials following the December 6 CLE. Price: $25. Contact me or visit my online CLE store after December 6.

All Rights Reserved [2017] Beverly Michaelis

Should You Take a Cue from Uber?

Getting your “side hustle” on is Uber’s way of suggesting that you join their team to earn extra money. Lawyers sometimes face this dilemma when first transitioning into private practice – giving up a regular paycheck is a high price to pay in exchange for the uncertainty of going solo.

For other lawyers, the practice of law is a second career.  Does this mean they are required to relinquish their first?

Not necessarily.  However, practicing on the side or in addition to another career, does raise some red flags.

Conflicts of Interest

Assuming your employer agrees to let you “moonlight” (and that’s a big assumption), you must address potential conflicts.  At first blush, you might think this concern applies only to lawyers who currently work in a law firm and wish to “work on the side” in a solo practice.  Not true!  If your other job is working as a real estate broker, mortgage broker, financial planner, psychologist, mediator, arbitrator, etc., you must also screen for conflicts.

In her article, Multidisciplinary practice: When Wearing Two Hats May Get You Burned  Helen Hierschbiel points out:

Recognizing and avoiding conflicts of interest is one of the more common concerns for lawyers who have side businesses, particularly when their clients do business with those other companies. Oregon RPC 1.7(a)(2) provides that a current conflict of interest exists if “there is a significant risk that the representation of one or more clients will be materially limited by the lawyer’s responsibilities to another client, a former client or a third person or by a personal interest of the lawyer…” Thus, when there is a significant risk that a lawyer’s personal or other financial interests in a non-legal business will materially limit the lawyer’s responsibilities to a client, that lawyer has a conflict under RPC 1.7(a)(2).

In addition, when a lawyer’s side business is doing business with the lawyer’s client, consideration must be given to the limitations set forth in RPC 1.8(a), which provides more stringent requirements for obtaining client consent than those under RPC 1.7(b). RPC 1.8(a) provides:

A lawyer shall not enter into a business transaction with a client or knowingly acquire an ownership, possessory, security or other pecuniary interest adverse to a client unless:

1. The transaction and terms on which the lawyer acquires the interest are fair and reasonable to the client and are fully disclosed and transmitted in writing in a manner that can be reasonably understood by the client;

2. The client is advised in writing of the desirability of seeking and is given a reasonable opportunity to seek the advice of independent legal counsel on the transaction; and

3. The client gives informed consent, in a writing signed by the client, to the essential terms of the transaction and the lawyer’s role in the transaction, including whether the lawyer is representing the client in the transaction.

Note:  Learn more about this issue and other common conflict traps by attending Limiting Exposure to Conflicts on October 25, 2017.

Other Ethical Concerns

A “side practice” coupled with another job also raises potential concerns about advertising, solicitation, and fee sharing.  Here are Helen’s comments:

Advertising
“Oregon RPC 7.1 generally provides that any communication about a lawyer may not be false or misleading. Determining whether a statement is false may be simple, but assessing whether it is misleading can be more difficult. The cautious approach in making that assessment requires considering how the statement is likely to be interpreted by an unsophisticated consumer. Thus, OSB Formal Op 2005-108 concludes that a lawyer who has an active mediation practice may advertise the practice under “counselors — marriage, family, child and individual” sections of the yellow pages as long as the advertisement reflects the lawyer’s status as a lawyer offering mediation services.”

Solicitation
“Lawyers should also take care to observe the ban on in-person solicitation of legal business when providing non-legal services. The non-legal business may not be used to solicit clients with legal needs in a manner that violates RPC 7.3… (L)awyers would be wise to exercise extra caution when confronted in their non-legal business with an individual who has legal needs as well.”

Fee Sharing
“… (L)awyers should be mindful when setting up an ancillary business, not to allow non-lawyers any control or influence over their law practice.”

Employment Law and Liability Implications

Before you set up a side practice, check your employer’s policy and personnel manuals.  Some employers prohibit moonlighting altogether, others require preapproval of “outside employment activities.”  If you are a contract lawyer and a true independent contractor you should be completely free to have your own solo practice and perform contract work for other lawyers.  Be sure the principal lawyers who hire you agree.  Contact the OSB Professional Liability Fund for more information on setting up a contract practice.

Query:  If a lawyer commits malpractice in the course and scope of his or her “side practice,” could the lawyer’s primary law firm employer be held vicariously liable?  (Food for thought…. as clients have attempted to hold firms responsible for the negligence of “sole practitioners” who were leasing space in the firm’s office suite.)

Professional Liability Coverage

Lawyers engaged in the private practice of law in the State of Oregon are required to carry professional liability coverage through the Oregon State Bar Professional Liability Fund.  This requirement applies equally to full-time and part-time practitioners.  In other words, if you are a lawyer in private practice in Oregon (as defined in the PLF plan), it does not matter whether you provide legal services 50 hours per week or 10 hours per week – coverage is required in either case – and the cost of coverage does not vary based on the hours worked.  With that said, liability coverage in Oregon is complex.  Your best bet is to contact the Professional Liability Fund for more information.

Is it Worth it?

It may not be.  If you are not an active member of the Oregon State Bar, it will be necessary to pay bar dues.  If you intend to engage in the private practice of law and require professional liability coverage, the cost is currently $3500 per year (assuming coverage is not prorated and no discounts apply).

To assess whether a “side practice” makes sense, go through all the steps you would normally follow to set up a full-time law practice.  This includes forming an entity (or not), naming your business, choosing a space option, developing a business plan and budget, opening appropriate bank accounts, consulting with a CPA, creating (and implementing) a marketing plan, and establishing office systems.  If it sounds like your proposed “side practice” is getting more complicated by the minute, it is.  Don’t assume setting up a “side practice” is any less work than committing to the full-time private practice of law.

All Rights Reserved 2017 Beverly Michaelis
Eventbrite - Limiting Exposure to Conflicts