This website is for ISBA staff use only. All visitors should return to the main ISBA website.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our law firm is a 16-attorney intellectual property firm in Tampa, Florida. We have 10 partners and six associates. I am a member of our three-member executive committee and I have been given charge of looking into the pros and cons of having a firm retreat with all of our partners and associates. We have not had a retreat before and we would like your thoughts concerning the benefits that a small firm can receive from a retreat.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Our firm, a 14-attorney litigation firm in Sacramento, California, is planning on merging/acquiring a three-attorney firm in the area. We have completed our due diligence and both firms have agreed on the terms of the merger. What type of agreement and legal documents do we need to effect and implement the merger?
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. Four of my partners and I just split off from a large law firm in Phoenix, Arizona, and started a litigation boutique firm with five associates. As we staff our nine-attorney firm, we are planning on hiring someone to handle our accounting and manage our finances. What type of position should we create and what level of experience should we be looking for?
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I’m a second-generation attorney with about five years of experience at a small liability defense firm in Southern California. My father is the managing partner and we have three total attorneys. My father and his partner probably have five to seven years left practicing. We only do California workers’ compensation defense. I’m planning on taking over the practice but am concerned about trends in the industry that will affect profitability, such as more stringent billing guidelines/bill audits, cuts to travel time, etc. What are the characteristics of a successful liability defense firm that I should strive towards?
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the managing partner of a nine-attorney general practice firm in the Chicago suburbs. We practice in the areas of estate planning/administration and family law. While our estate planning and uncontested family law work is done on a flat-fee basis, our estate administration and contested family law work is billed by time. We collect initial retainers for these matters, but we fail to ensure that the retainers are replenished. We are having accounts receivable collection problems as a result. I would appreciate your thoughts.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the founder, majority partner (80 percent), and managing partner of a 22-attorney firm in Phoenix, Arizona. The firm practice is focused in the area of healthcare. There are 12 equity partners, five non-equity partners, and five associates. I manage the firm as a benevolent dictator. I am becoming overwhelmed trying to manage the firm and practice law and I believe the firm is now at a size where others must become involved in managing the firm. I have been considering forming a committee of all the equity partners to manage the firm. Your thoughts are welcomed.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am a sole practitioner in Peoria, Illinois. My firm is a general practice firm that services clients throughout central Illinois. I have four staff members. I am 58. While I have enjoyed having my own practice for the past 20 years, I am concerned – what if something were to happen to me today or tomorrow? What is my backup plan in the event of short-term illness, disability, death, and even vacations? How would the firm keep operating? Who would take care of the client’s needs? How would my staff be taken care of?
A. Sound practice continuation arrangements can solve this dilemma, preserve practice value, and help prevent a lawyer’s spouse or immediate heirs from facing a hasty sale or disposition of the practice in an emergency. A practice continuation arrangement can also give lawyer practitioners, staff, and families peace of mind.
A practice continuation arrangement is an arrangement, typically in the form of an agreement or contract made between an individual lawyer or a small law firm and another lawyer or law firm. The arrangement describes a course of action to transfer a lawyer’s practice and sets payment for its value. In the event of vacation, temporary or permanent disability, or death, a practice continuation arrangement protects the practice, the business interests of the lawyer or law firm’s clients, and the financial interests of the lawyer.
Approaches
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the managing partner of a 16-attorney insurance defense firm in Kansas City. Several of our insurance company clients have advised us that they are willing to send us cases in Texas. We have decided that we would like to establish an office in Texas. Our plan is to hire three lateral attorneys with seven to 12 years of experience with Texas-based insurance defense firms. We are not certain as to the best city to establish this office. We are thinking it should be a central location. We would appreciate your thoughts.
A. Unlike many states that have one or two major cities, Texas has several, including Austin, Dallas, San Antonio, Houston, Ft. Worth, El Paso, Corpus Christi, and others. Austin, Dallas, San Antonio, and Houston are all desirable locations for branch offices. Austin is more centrally located if your goal is to service the entire state.
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the managing partner of a 12-attorney firm in Toledo, Ohio. Our firm is evaluating new billing software and we are looking into some of the cloud-based solutions. We are currently using a desktop program that we have been using for 15 years. The program handles our billing as well as our accounting. We have kept up with the updates to the program and the software has worked well for us. Several of our younger attorneys have used a couple of cloud-based billing programs in other firms and are trying to convince the firm to change over to one of these programs. They believe it is easier to enter time sheets and the software is easier to work with. What are your thoughts?
A. I agree that the subscription cloud-based billing programs are easier to learn and use. In part this is due to limited function and capabilities. However, user simplicity is only part of the equation. The bigger question is whether the software will meet your needs. Many of the cloud-based programs were designed for solo practitioners or very small firms with limited reporting requirements. While these programs are getting better and inheriting more features they are still not up to par with the older desktop programs. Limitations include:
Asked and Answered
By John W. Olmstead, MBA, Ph.D, CMC
Q. I am the sole owner of a two-attorney firm in Atlanta. I have been in practice for 13 years. I have one associate who has been with me for one year, one full-time paralegal, and two part-time assistants. I have a general practice. Revenues have stagnated and I need to identify strategies for getting to the next level. My practice is struggling. I have been thinking about narrowing my practice and focusing on five or six practice areas. I am ready to invest in marketing. I would appreciate your thoughts.
A. This is the age of specialization – less often results in more. Many attorneys in small general practice firms are afraid to specialize and focus on three areas of practice or fewer. The concern is that by specializing, there simply will not be enough business of keep the attorneys busy generating sufficient revenues.
I have worked with several firms that have shifted their practices from general practices to practices limited to estate planning and elder law and they have performed far better as specialized practices than they did as general practices. I suggest that you consider focusing your practice on on no more than two or three key practice areas in which you can differentiate yourself.
Here are a few thoughts: