Guidetolawfirmmanageme

GUIDE TOBEST LAW FIRM PRACTICES MANAGEMENT Ideas For Managing Your Practice John W. Olmstead MBA PhD CMC Author Olmstead & Associates LEGAL MANAGEMENT CONSULTANTS GUIDE TOBEST LAW FIRM PRACTICES MANAGEMENT Ideas For Managing Your Practice John W. Olmstead MBA PhD CMC Author Olmstead & Associates LEGAL MANAGEMENT CONSULTANTS Olmstead & Associates is a practice management, marketing, and technology consulting firm that works with law and other professional service firms ranging in size from 100 professionals to firms with solo practitioners. The firm, founded in 1984 and based out of St. Louis, Missouri, serves clients across the United States assisting them with implementing change and improving operational and financial performance, management, leadership, client development and marketing. Clients benefit from a results-orientated team approach to consulting engagements where focus is on implementing change and improvements rather than simply providing advisory services. Olmstead & Associates partners with clients and serves as a member of the clients management team and functions as an advisor, coach, teacher, and facilitator. Coaching pro- grams provides attorneys and staff with one-on-one as well as group coaching to help them get “unstuck” and move forward on initiatives, reinventing both themselves and their law practices. The firm’s consultants and staff have extensive backgrounds in law firm strategy and marketing, management, administration, organizational behavior and development, human resources, technology and accounting. © 2003 By Olmstead & Associates All Rights Reserved Contents Introduction......................................................................................................................................1 How to Use the Management Review Checklist.............................................................................4 Overall Law Office Management Self-Assessment Scale...............................................................5 Interpretation of Self-Assessment Scale Results.................................................................7 Detail Operational and Management Review Checklist.................................................................8 Governance..........................................................................................................................8 Image...................................................................................................................................9 Long Range Planning..........................................................................................................9 Marketing, Business Development & Client Relations.....................................................10 Business Organization........................................................................................................13 Business Operations...........................................................................................................13 Financial.............................................................................................................................15 Human Resources...............................................................................................................21 Administration....................................................................................................................24 Interpretation of Results.....................................................................................................26 Case Study..........................................................................................................................26 Management Resources for Improving Performance....................................................................28 Introduction The 21st century is presenting law firms with new challenges. The general business economy is in turmoil and law firms are facing new risks and uncertainties. Clients are no longer tolerating arrogance and mediocre services. Clients are holding law firms to higher service standards. In order to prosper in the 21st century, law firms are going to have to drastically change their models for conducting business. Organizational performance, effectiveness, and leadership must rise to higher standards. General management, problem solving, and action taking skills must be enhanced. Firms will have to improve their overall marketing initiatives. This will require that many firms improve their overall management effectiveness and use every management tool available. Law firms will need to identify “best management practices” that can be employed to enhance management effectiveness. The following trends are continuing to present firm management with even more challenges: • Competition is intensifying and becoming more severe. Since law firms are sellers of legal services and buyers of legal talent they must compete effectively in both markets. • Convergence and reconsolidation of legal work is continuing. Institutional clients are using fewer law firms. • Insurance Defense firms are continuing to struggle. Many are closing their doors, merging with other firms, and reinventing their practices. • Law firms are merging at an increasing rate, especially in New York, San Francisco and Chicago. • While entry level associate attorney hiring is still strong, lateral hiring is outpacing entry level hiring. • Intellectual property is still the hottest practice area and the primary target for firms looking for merg- er candidates. • More law firms are implementing sophisticated branding campaigns. In a recent survey conducted by the Legal Marketing Association, fifty-one percent of the respondents reported that they had conducted comprehensive branding campaigns. Of those law firms that had not conducted a comprehensive branding campaign, more than one-half indicated that they planned to start one within the next twelve months. Many of these firms have shortened their firm name and adopted sophisticated identity pro- grams. • While the MDP issue is up in the air, especially since Enron, law firms are not sitting back. Ancillary businesses are being formed at an increasing rate. Examples include areas such as insurance planning, employee relations, finance and trade, healthcare, government affairs, strategic planning, technology, human resources, and wealth management. • More firms have strategic business and marketing plans. In a recent survey conducted by the Legal Marketing Association, fifty-nine percent reported that their firms have a written strategic plan and fifty-five percent reported that they have a written marketing plan. As the profit squeeze, competition, and the maturing marketplace for legal services continues, law firms must be on top of every opportunity and aware of every threat to survive in the changing 2000s and beyond. As markets change; approaches to the delivery of legal services must change as well. This will require strong and effective law firm management. Lawyers and administrators and other management professionals will need to continue to sharpen their management skills. Managing partners, executive directors, legal administrators, marketing directors, and practice group leaders express common concerns regarding the lack of benchmark data and general information on “best practices.” Law firm management needs answers to questions such as: Guide To Law Firm Management Best Practices 2 • How are we doing financially? • Is our attorney/staff ratio in line with comparable firms? • Should and how do we offer new practice areas? • Are our billing rates competitive with other firms? • Is our partner compensation in line with comparable firms? • Are we paying competitive salaries to our management and staff professionals? • How do we maximize client loyalty and the amount of business from each client? • Should and how do we open a new office? • What lawyers should we recruit as lateral hires? • How do we position the firm in the market to most effectively compete for desired business? • Which marketing tactics will be the most effective? The Law Office Management Review Checklist provides attorneys and law firm administrators with an assessment tool designed to outline management best practices and identify the firm’s strong areas as well as areas needing improvement. The Law Office Management Review Checklist will provide attorneys and law firm administrators with the following benefits: • An overall management self-assessment scale with guidelines on interpretation of results. This self- assessment scale (on a 1-5 rating scale), which focuses on the broader “management issues” asks the respondent to respond to questions which rates the firm in the following areas considered to be the Cornerstones of Successful Law Firms: - Partner Relations - Firm Management and Leadership - Firm Administration - Partner Compensation - Marketing and Planning • Short and easy to use general operational management and administration checklist designed to outline best management and administrative practices and identify “red flags” with simple YES/NO/NA responses in the following areas: - Governance & Structure - Image - Long Range Planning - Marketing, Business Development & Client Relations Market Research Market Planning Pricing & Fee Setting Practice Management Client Relations - Business Organization - Business Operations Technology Deployment Purchasing 3 Guide To Law Firm Management Best Practices Library Supplies File Opening/Closing Docket Control and Scheduling Conflict of Interest - Financial Bookkeeping

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