Revisiting Smart Delegation

mg1ysmkWhen we last discussed the subject of delegation, I shared tips for supervising lawyers and associates. That advice was fine as far as it went, but it left a gaping hole: how can we best utilize support staff? Being S-M-A-R-T is the best answer I’ve found to date.

S-M-A-R-T is shorthand for delegating tasks that are:

  • Specific
  • Measurable
  • Agreed
  • Realistic
  • Time-bound

The idea comes from Associate’s Mind, and the simplicity is genius.

The original post gives this additional advice:

Define the task. The more specific the better. Don’t attempt to delegate some open-ended assignment and then get upset with what you get back.
Assess ability. Who on your staff is capable of completing the task? Certain tasks are likely better suited to paralegals, while others are better suited to assistants. You need to take the time to learn who can do what. Once you’ve done that, you can select the right individual for the job.
Explain the reasons behind the task and why they were chosen.  This only applies if it’s a new, or novel task.
State required results.  Again, think specificity NOT “Tell me about the local rules in Court X.” Instead: “Please draft a memo on the local rules in Court X regarding discovery deadlines and how they apply to case Y.”
Agreed upon deadline. Don’t just assign a task and not give a deadline. Otherwise, the person you’re delegating the task to has no clue how urgent it is.
Support and communicate through the process if they need further information or assistance. Sometimes there are speed bumps in the process. This is to be expected, especially if it’s a novel task. You need to be available to give assistance if they stumble.
Provide feedback on results.  If the work product that is returned to you is sub-par, they need to know. On the flipside, if the work product is exactly what you needed and delivered on time, they deserve positive feedback as well.

My two cents?

If a task is complex or time-consuming, make regular progress reports part of the delegated assignment.  This will keep you informed and ease your mind about the status of the work.  Encourage staff to ask questions and use this opportunity to ferret out problems.

When giving feedback, be constructive.  Simply telling staff that work product is “sub-par,” doesn’t help you or them.  In fact, statistics show that people who receive feedback only apply it about 30% of the time.  If you want to improve those odds, follow these tips:

  • Assess what went wrong and consider your role – maybe you used the S-M-A-R-T method and maybe you didn’t….
  • Focus on the task, not the person. This is a training opportunity!
  • Is your quarrel with the method or the result?  If the result is desirable, but you would have done it differently, try not to be a nitpicker unless you have a good reason to be.
  • Be specific about what needs to be done differently and provide context.
  • Deliver the feedback as soon as possible.

All Rights Reserved (2017) Beverly Michaelis

 

 

 

 

 

 

 

 

 

Choice of Entity for New Lawyers

coffee-cup-and-docs-bought-at-ssChoosing a legal structure and entity type for your law firm seems like an easy decision. But is it? Consider the following scenarios:

New lawyer establishes law practice with the goal of becoming an associate

If this is you, being a straight-up sole proprietor may be the best choice, assuming you have no employees.

A sole proprietorship is the simplest and most common structure chosen to start a business:

  • No formal action is required to start your business
  • It’s inexpensive
  • No papers to file
  • Nothing to dissolve
  • Simple tax preparation

When you’re ready to make the move from running your own practice to becoming an associate, the transition couldn’t be any easier.

On the downside, sole proprietorship means you have unlimited contractual liability and potentially higher taxes.

But how significant is the liability exposure?

Lenders, property managers, and others with whom you do business will typically require a personal guarantee for loans, leases, or other business transactions.  A personal guarantee means YOU are on the hook, even if you form a professional corporation or single-member limited liability company. As a result, contractual liability protection doesn’t count for much in evaluating whether to form an entity.

The real choice between sole proprietorship and forming a PC or single-member LLC comes down to taxes and the trade-off between potentially saving money (with entity formation) and simplicity (going with the sole proprietorship model).  Talk to a CPA so you can make an informed decision.

What if I’m planning to practice business law or intellectual property?

Why would your area of practice make a difference?  And didn’t we just say entity choice is driven by risk aversion – wreaking whatever benefit you can from contractual liability protection – and saving money – courtesy of a lower tax burden?  So what difference could practicing business and IP law possibly make?

If your goal is to help clients form entities and protect intellectual property, it could look a little odd that you haven’t followed the usual formalities in establishing your own business.

Fair or not, client perception counts.  So does marketing.  And part of marketing is how you brand your law firm.  Appending a PC or LLC designation to your business name may actually be an important part of how you choose to present yourself to potential clients.

If you plan to have employees …

This is an entirely different ballgame.  Without a doubt, form an entity. If you are a solo, choose a PC or single-member limited liability company (LLC).

Both entity types offer liability protection for non-professional torts committed by your employees.  The contractual liability protection discussed above will also kick in.  Talk to a CPA, but the likelihood is that forming an entity will also result in a noticeable tax savings.

If you plan to practice with others …

This is another occasion when forming an entity is a no brainer.  Do it for the avoidance of liability discussed in the preceding paragraph and for the limitation on vicarious liability.  The ideal structure may be to form a sole owner PC or single-member LLC that belongs to the firm’s entity. This may allow you, as the individual lawyer, to completely escape personal vicarious liability.

Multi-tier entities are complex, administratively messy, and no longer have the tax benefits they once enjoyed.  BUT avoiding vicarious liability is a big plus.  To learn more about this strategy, read Choice of Entity for a Legal Practice and Lawyers as PCs, LLCs, & LLPs in Oregon, referenced below.

Being fully informed in the premises

This post skates over some pretty significant content that deserves more in-depth thought.  Do your homework.  Recommended reading includes:

  • Sole Proprietorship as a business structure choice, courtesy of the Small Business Administration.  While you’re on the SBA site, poke around.  There is a ton of great content here.  And don’t forget about the help and resources available from the Small Business Development Center.
  • Law Firm Choice of Entity, from the ABA Young Lawyers Division.
  • Choice of Entity for a Legal Practice in Oregon, available on the PLF website. Select Practice Management > Forms > Entity Formation for Lawyers.
  • Lawyers as PCs, LLCs, & LLPs in Oregon, available on the PLF website.  Select Practice Management > Forms > Entity Formation for Lawyers.
  • Tax Considerations for Choice of Business Entity, Chapter 3 of the OSB CLE Seminar Handbook Broadbrush Taxation: Tax Law for the Nonspecialist (2015). Available in BarBooks behind the member login on the OSB website.

Most importantly

Talk with a CPA.  I can’t say this enough.  This is one of the best investments you can make in getting your practice up and running.  A CPA can help you determine whether forming an entity will result in tax savings.  He or she can also help you select an entity type – which is highly driven by tax considerations.

You’ll also learn about property tax, business income tax, business licensing, and other obligations you may not be familiar with – all of which are determined by where your business is located.

All Rights Reserved 2017 Beverly Michaelis

The Best Legal Blog Posts of 2016

2016-word-cloudIf you’ve followed my blog for a year or more, you know I generally publish a “Year in Review” post.  This December I thought I’d take a slightly different approach. Instead of a comprehensive list, I’m filtering it down to my personal favorites. And while it may be controversial, I’m calling this compilation The Best Legal Blog Posts of 2016.  There is plenty of good stuff out there, but this is the best that has appeared here.  Mostly my content, but also sourced from other great writers.

Client Relations

eCourt and court procedures

Finances

Marketing

Security

Staffing

Technology

Time Management

All Rights Reserved 2016 Beverly Michaelis

Starting Salaries for Legal Support Staff

Newly posted on the Multnomah Bar Association website:

How to Succeed in Practice

Succeeding in practice requires momentum, courage, and hard work.  No one knows
that better than a solo practitioner or small firm lawyer.Motivation1

Whether you’re starting out, retooling, or want to make a change, consider this sage advice from Ann Guinn, one of the presenters at the Oregon State Bar Solo & Small Firm Conference.  She may just motivate you to get moving!

All Rights Reserved 2016 Beverly Michaelis

Postscript

For related content with a greater focus on the financial side of practice see this post on Storify.