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Wouldn’t it be nice to make a clean sweep and set up your practice from scratch—applying all your hard-earned wisdom? Big ideas for setting up a new law practice was the focus of the Chicago Bar Association’s Law Practice Start Up Boot Camp last week. A dream team of practice management advisors — Jim Calloway, Natalie Kelly and Reid Trautz, along with Catherine Sanders Reach of the CBA — delivered rapid-fire information on the A to Zs: Budgeting, billing, marketing, client service, ethics, technology and more.
Here are some of their best bits of wisdom for fine-tuning your practice — whether you are just starting up or you need a productivity boost.
1. Eat a frog for breakfast. Or, as Trautz says, tackle the most-dreaded task on your to-do list first. Don’t put off the bad stuff. Overcoming procrastination and learning how to prioritize tasks and time is critical for lawyers—especially solos juggling multiple business and client responsibilities. Missed deadlines mean unhappy judges and clients; late invoices and sloppy records can lead to collections and cash flow problems. At best, your reputation suffers and your stress skyrockets. At the worst end, procrastination leads to disciplinary action. So suck it up now, and eat that frog!
2. Sometimes it really is all about the money. The two big reasons businesses fail, says Kelly, are poor management practices and inappropriate financial controls. You can beat the odds by learning basic accounting principles—including for client trust accounts—and how to read financial statements. Start by creating a basic budget. This may seem obvious, but even the “too big to fail” firms seem to have a little trouble with it. Most accounting systems have a budgeting feature, but you can use just a spreadsheet, says Kelly, to list your total expenses and your total income projections. Just subtract the expected expenses from the projected income and you’ve got a budget. Budgeting will also help with one of the hardest parts of any practice: Setting fees. Other factors come into play—like the market rate and your particular clientele—but it’s a lot easier to establish your price if you know your costs.
3. Budget pro bono time, too. At first you may think it is a good idea to work a ton of pro bono cases to gain experience. But the panel’s advice is to be stingy with your time when just starting out. Focus on finding paying clients and setting up procedures that will help you serve them efficiently—a marketing plan, client intake, and billing and collections systems, for example. If you don’t build a sustainable practice now, you won’t be able to fulfill any pro bono obligations later on. Trouble saying no? Here’s where that budget process comes in handy. Figure out how many hours you can afford to work pro bono each year, and track those hours. When asked for free legal services, check your hours and let the numbers make the decision for you. The panelists also caution against turning a collection problem into a pro bono client. If a client is having trouble paying you, decide early on whether to shift it to the pro bono side of your ledger. If you are going to work for free, make sure it’s your choice and not your client’s.
4. The skinny on referral fees. Can you accept referral fees or pay them to other lawyers—or even your staff? Well yes—and no. As a rule of thumb, according to the panel, as long as both lawyers have professional liability insurance, it is usually okay to accept or pay a referral fee. In some jurisdictions, beware that you must continue to play a role in the matter and maintain some “ongoing responsibility.” However, says Trautz, the risks of accepting a referral fee, ethics-wise, often aren’t worth the small fee you earn in exchange—especially when you are a new lawyer. Instead of a referral fee, he advises asking the firm to add you to the case as an associate. You gain experience by working side by side with seasoned lawyers, and can start building a relationship for future business. As for anyone else—your staff, bondsmen, emergency room workers—just don’t do it.
5. Don’t reinvent the wheel. Ever, ever. Your goal, if you expect to have lots of happy clients and turn a sweet profit, is efficiency. That means creating systems, for instance, that eliminate double and triple entry of information—client information, case information, conflicts information—and looking for systems that save you time and reduce paper and administrivia. The good news is there are great tools out there. Start with practice management software designed for law firms—traditional or cloud-based. It can track matters, clients and contacts, conflicts, calendars, time and fees, and it can sync with your accounting tools and document management systems.
“Practice management software is a must-have,” says Kelly. “You enter information once and use it multiple ways, and you need to learn these efficiencies to be profitable.” According to 2012 ABA Legal Technology Survey results, 47 percent of respondents reported owning case/practice management software—and 30 percent actually use it. Get some now (and use it!) and you will be way ahead of most of your competitors, says Calloway.
Look for ways to be more efficient in how you get out the work, too. Microsoft QuickParts makes assembling documents a breeze from within Word, says Calloway. Plus check out assembly tools like The Form Tool, HotDocs and Pathagoras. Use quick keys and text expansion apps, too, for text blocks you find yourself repeating.
Find great information on these panelists’ blogs as well:
Joan Feldman is Editor-in-Cheif at Attorney at Work. Follow her @joanhfeldman and @attnyatwork.
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Get on the path to reducing invoicing inefficiencies and receiving payments faster.November 16, 2018 0 2 0