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Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our 16 attorney firm is having our first planning retreat next week to plan for 2013. I have been charged with putting together the agenda and program. Do you have any suggestions that we as a firm might consider or think about adopting?
A. Here are a few ideas that you might want to consider.
An undocumented alien can sue his former employer, but his recovery for future earnings is limited to what he could make outside of the U.S., an Illinois-based federal court ruled recently. Find out more in the December Illinois Bar Journal.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our firm is an 18 lawyer general practice firm in the western Chicago suburbs. Recently, we are beginning to take on more personal injury cases on a contingency fee work which is creating some cash flow strain. Do you have suggestions regarding firms doing contingency fee work?
On November 28, the Illinois Supreme Court promulgated Supreme Court Rule 10-101, "Standardized Forms." Paragraph (a) of the new rule reads as follows: "The Illinois Supreme Court Commission on Access to Justice shall establish a process to develop and approve standardized, legally sufficient forms for areas of law and practice where the Commission determines that there is a high volume of self-represented litigants and that standardized forms will enhance access to justice."
So what is the Commission, and what are these forms designed to do? Read Adam Lasker's background piece in the December IBJ (the article was written a couple of weeks before the rule's adoption).
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our 17 attorney firm has had less than stellar revenues and profitability for the last several years. Our billing and realization rates are in line, we have a good mix of partners and associates, we have managed our expenses effectively, and our accounts receivable are at satisfactory levels. The culprit is utilization - billable hours. Partner annual billable hours are around 1100 hours and associate billable hours are around 1300. Everyone seems to be working hard. I would be interested in your thoughts?
A. Sounds like you have given the RULES (rates/realization, utilization, leverage, expenses, and speed/collection) formula careful thought and analysis. I agree that you have a problem with utilization. General guidelines for partners and associates for annual billable hours are in the 1700 range with litigation firms being much higher and smaller general practice firms being lower - sometimes in the 1500 range. However, 1100/1300 billable hours is a problem and should be looked into to determine the exact nature of the cause. Causes could be any one or a combination of the following:
Illinois Public Act 97-0839 -- aka the Business Law Cleanup Bill -- amends the Limited Liability Company Act, the Uniform Partnership Act, and the Uniform Limited Partnership Act, as Scott M. Metzger explains in the latest issue of The Corporate Lawyer, newsletter of the ISBA's Corporate Law Departments Section Council. The new law "makes fees, filing, and procedures for reinstatement more consistent across the various types of entities," Metzger writes. Read his article, which summarizes changes to each statute affected by PA 97-0839.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. We are a two lawyer firm in New Orleans. We are both partners in the firm. We have 5 staff members. My partner is 68 and I am 63. Recently, we have starting thinking about what we are going to do with the practice in the next few years and we aren't sure where to start. Do you have any thoughts along these lines?
A. You will need to consider whether you should consider merger, sale of the practice to an outside buyer, or sale of the firm to the other lawyers in the firm that you bring in and grow over the next few years. You need to find ways to institutionalize the firm so that in additional to professional goodwill (your personal reputation and goodwill) you develop practice goodwill (goodwill of the firm that will remain after you have left the firm). If you bring in other lawyers develop them and create a desire and motivation for them to want to be owners/partners in the firm. Develop your staff and practice systems. Diversify and stabilize your client base.
If you decide to sell to attorneys in the firm - begin the process early so that most of the buy-in is completed before your actually leave the firm. The longer the planning horizon - the easier they buy-in burden will be for others.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am a 52-year-old solo practitioner in Memphis with one non-attorney staff member. While I do have some concerns about my long term succession exit strategy my immediate concerns are more short term in nature. How do I cover and serve my clients if I take vacation, get sick, or get busy and need help? What are your thoughts?
In a decision that gives more strength to the terms of joint parenting agreements, the Illinois Supreme Court ruled that reasonable clauses of such agreements should be honored and enforced by lower courts that had already incorporated those terms into a judgment of divorce. Find out more in the November IBJ.
Fannie Mae’s and Freddie Mac’s new and improved preforeclosure sales program takes effect today. Proponents hope it will make processing short sales easier and "provide a much needed alternative to borrowers facing foreclosure," Philip J. Vacco writes in the latest ISBA Real Property newsletter. Read his analysis.