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  • December 2, 2015 | Practice News
    Best Practice: Compensation arrangements when buying out a senior partner

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMC

    Q. I am the owner of a solo practice family law firm in Jackson, Mississippi. I have been in practice four years. I have been approached by a senior solo attorney that has a well established family law practice that generates $800,000 annually and is looking to sell his practice. We envision a merger where I would make an initial payment upon merging my firm with his and then buyout his interest over a five-year period. We have agreed on a fixed price for his ownership interest. However, we are not sure how to handle compensation. He wants to continue to work for another five to seven years. We would appreciate your thoughts.

  • November 25, 2015 | Practice News
    Best Practice: Creating a new law firm business development/marketing manager position

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMC

    Q. I am the managing partner of a 27 lawyer insurance defense firm in Orlando, Florida. In the last seven years we have grown from 10 lawyers to 27. Our firm is very dependent upon a handful of insurance companies and we are looking at ways to diversify our practice. Our rapid growth has caused us to outgrow our management structure. A few years ago we hired our first firm administrator to manage the business operations of the firm. We are now considering establishing a business development/marketing position to help focus our business development efforts. I would appreciate your thoughts.

  • November 18, 2015 | Practice News
    Best Practice: What to consider before raising legal fees

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMC

    Q. I am the partner in charge of finance at our 12 attorney litigation boutique firm located in downtown Chicago. For the past two years our profits have been down and we are considering raising our rates but we are concerned that we may lose some of our corporate clients. We welcome your thoughts.

  • November 11, 2015 | Practice News
    Best Practice: Owning vs. leasing a law firm building

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMCB

    Q. I am a partner in a 14-attorney firm in Chicago's western suburbs. We have five equity partners and nine associates. We are currently leasing office space that we have outgrown. As we are approaching the end of our lease we are considering buying our own building. We would appreciate your thoughts.

    A. I find that many firms have difficulty dealing with all of the moving parts of buying and building out a building and the distractions and time that it takes away from the law practice. Owning your own building can provide numerous financial and tax advantages and If you decide to go this route hire professionals to help expedite the process and a real estate building management company to manage the building when it is completed.

    I strongly suggest that you create a separate entity that will own the building and separate building ownership from the law firm ownership structure. I suggest that participation in ownership of the building be optional for law firm equity partners that want to invest in the building.

    It is hard enough for new partners to fund their capital accounts or buy-ins without having a mandatory building buy-in. Recently I have seen a few merger and lateral partner opportunities go south as a result of buildings, real estate, and mandatory buy-ins.

    Click here for our blog on offices and facilities

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  • November 4, 2015 | Practice News
    Best Practice: The struggles of a new law firm administrator

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMC

    Q. I am a new administrator in a 17-attorney law firm in the greater Boston area. I am the firm's first administrator and after the first six months I am struggling. It is unclear whether I am living up to the expectations of the partners and I feel like I am lost. I would appreciate your thoughts.

  • October 28, 2015 | Practice News
    Best Practice: 2-phase approach catching on for law firm successions

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMC

    Q. I am the solo owner of a five-attorney estate planning firm in Los Angeles consisting of myself and four associates. I am approaching retirement and looking at my exit options. Since there are no heirs apparent in the firm, I am looking to sell the practice. However, the potential buyer that I have been speaking with is nervous and concerned about client defections, proper transition, etc. Also, I would like to continue to practice for a few years and don't want to run afoul of the rules of professional conduct. I would appreciate your thoughts.

  • October 21, 2015 | Practice News
    Best Practice: How to stand out in a crowded legal market

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMC

    Q. I am the managing partner of a 16 attorney business transactional firm in Chicago. Over the last five years, we have lost several core clients due to consolidation of their outside law firms and mergers of the clients themselves. Competition is getting fierce in our market, our services are being viewed as commodities, and it is getting harder to stand out. What can we do to differentiate ourselves from everyone else? We welcome your thoughts.

    A. Creating a competitive advantage that is sustainable over time is difficult at best. It is so easy for your competitors to copycat your recent innovations. Clients of law firms advise us that they hire the lawyer - not the firm. However, this is only partly true. The firm - its image and brand - provides a backdrop for the individual attorneys marketing efforts as well and provides backup and bench strength that many clients require before retaining a lawyer.

    In general the law firm is faced with the dual challenge of developing a reputation (brand) at both the firm and the individual lawyer level. In general, client delivery practices and behaviors that are part of the firm's core values and have been burned into the firm's cultural fabric are the hardest to copycat.

    Areas in which you can consider differentiation strategies:

    1 comment (Most recent October 22, 2015)
  • October 14, 2015 | Practice News
    Best Practice: Law firm challenges - managing people

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMC

    Q. I am the managing partner of an eight-attorney firm in Austin, Texas, that was formed last year when several of us left another firm. The most frustrating part of the managing partner job is managing the people - this includes other partners, associates and staff. How do I deal with people that are not following firm policy or doing things they should not be doing?

  • October 7, 2015 | Practice News
    Best Practice: Is it better to grow firm through associates or acquisitions?

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMC

    Q. We are a two-partner firm located in Rochester, Minn. We have been approached by a solo practitioner that wants to sell us his practice. The price and terms seem fair, but we are concerned about staffing and managing the other office. His practice consists of himself and two staff members. We would have to maintain a second office, hire an associate or two for the office, and then manage both operations. We have recently tried to hire an associate without success by reaching out to targeted lawyers that we knew in our local area. Frankly, acquiring this practice is a little daunting. We would appreciate your thoughts.

    A. I believe the first issue is whether you are looking to grow the firm and are willing to undertake the additional management responsibilities that comes with growth. Some firms are ready for growth and others are not. Larger is not necessarily better. 

    I would not let your unsuccessful associate hiring attempts discourage you from acquiring the practice if you desire to grow and the price and terms are acceptable. You may need to cast a wider net and be more focused in your efforts. Recently a two-attorney firm in Mid-Missouri hired an associate from St. Louis. A two-attorney firm in Central Kentucky hired an associate from Lexington, Kentucky. It may take some time but a concentrated recruiting effort usually pays off regardless where you are located - even in small communities. 

    Click here for our blog on career management

  • September 30, 2015 | Practice News
    Best Practice: Improving Law Firm Profitability - Revenue vs. Expense Control

    Asked and Answered

    By John W. Olmstead, MBA, Ph.D, CMC

    Q. I am a recently elected managing partner of a 14 attorney firm in Orlando, Florida. For the last three years, our financial performance has been stagnant and my partners are asking me to cut all overhead expenses possible in order to improve profitability. Suggestions?