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Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the managing partner of a 12-lawyer insurance defense firm in Oklahoma City. We have four partners and eight associates. While we have grown over the last five or six years by adding associates, our profitability has remained flat. We feel that we are not getting the billable hours that we should out of our associates. What are other firms like ours getting out of their associates in terms of billable hours?
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am owner of a four-attorney firm in Amarillo, Texas. We represent both individual and institutional clients. Recently, we have had numerous complaints from clients advising us that our services took longer than expected and fees were also higher than expected. I would appreciate your thoughts.
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am part of a three member management committee of a 16-lawyer firm located in Akron, Ohio. We have 10 partners and 6 associates. Several of our partners are in their 50s and 60s. We have had recent discussions with a couple of potential merger partners and laterals and in all cases they have backed out because they were uncomfortable with our balance sheet. What can we do to better position ourselves? We desperately need to bring in new talent with books of business.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our firm has three partners, two associates, and 2 staff members. This is a new firm that started in practice a year ago. We are equal partners and allocate compensation equally based upon these ownership interests. We believe the current system has worked well, but have been considering whether one person should handle all the management duties and how that person should be compensated. We would appreciate your thoughts.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. We are a 14 lawyer firm in the Boston suburbs with four founding partners and 10 associates. Two of the partners are in their 50s and two are in their 60s. Several years ago we adopted a retirement buyout plan for the founding partners where each partner upon retirement is paid the balance of his cash-based capital account and a multiple of one times an average of his last three years earnings paid out over a five year period. I am concerned that when partners begin to retire the retirement payouts will place undue stress on operating funds and the firm's ability to be successful. I would appreciate your thoughts.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. We are an 18-attorney firm based in Tucson, Arizona. Our practice is a boutique general liability defense firm. Our clients tend to be self-insured large corporations and smaller business firms. Currently all of our clients are billed by the hour. Recently, we have been discussing whether we should propose an alternative billing approach to our clients. We would be interested in your thoughts.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our firm is an 18-attorney firm based in San Diego. We are considering hiring our first legal administrator and have interviewed several candidates and have narrowed our search down to two candidates. One candidate has a strong financial background and has worked as a director of administration in several very large firms - 200 plus attorneys. The other candidate has a strong HR background, a weaker financial background, and has worked as a firm administrator in two different law firms - a 30 attorney firm and a 20 attorney firm. We like both candidates. Which candidate would you lean toward?
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the owner of an estate planning firm in Oklahoma City. I have four associates that work for me in addition to two billable paralegals and three staff support members. I am looking for ways to improve our business development and marketing. The majority of our business comes from past client referrals and referrals from employees and friends. We spend a considerable amount on advertising which includes our website, print ads, collateral materials, newsletters, etc. We would like to do more to increase client business. I would appreciate your thoughts?
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our firm is an 18 attorney firm in Chicago that was formed by the existing four equity partners 10 years ago. We have four equity partners (founders), eight income (non-equity partners), and six associates. The income partners are not required to contribute capital. We are considering admitting a couple of the income partners as equity partners and also approaching possible laterals. What should we require in the form of buy-in or capital contribution?
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am a partner in a two owner personal injury plaintiff firm in Los Angeles. We have four other attorneys. We do traditional personal injury work with a high volume of medical practice and products liability. One hundred percent of our fees are contingency fees. My partner has expressed an interest in retiring and selling his interest to me. How do I go about determining a fair price to offer him for his shares? I would appreciate your thoughts.