Women are moving up
In a recent study of the top 100 general counsel, a woman was listed as the top earner (more than $6 million) and more women (14) appeared in the list. This is the first and most since the study began.
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Tag Archive: Management
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Why do we do what we know injures us?
One of my clients recently asked me why we all do what we know is not good for us, in fact, hurts us? If you’ve got a choice between option A that is good for us an d option B that is not good for us, why do we oftentimes select option B? To be specific, why do we procrastinate? Why do we fail to enforce our own engagement agreements? Why do we continue to work for clients who do not pay our billings? And we could go on …
In this specific instance, my client complains about his partners and associates not collecting billings for work performed. There may be several possibilities to answer the “why.” One is that, despite being in an adversarial profession, most of us dislike being confrontational, especially with our own clients. Second, lawyers like doing what they love to do … and collecting (or any business related matter) is not what they love to do. And third, they don’t perceive this as their business.
There may be a number of solutions that will get their attention. First, you sign the paycheck. That carries a lot of weight if you care to wield the “stick.” Two, engage a staff person to be the collections manager for the firm; don’t ask lawyers to do that which they’re both not qualified to do and which takes them away from doing what they do best. Third, read my book, Collecting Your Fee: Getting Paid from Intake to Invoice, and follow the scenario and script outlined to interact with slow-paying clients.
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Accounts receivable and Pipeline: Case study
At a recent presentation on our Road to Revenue National Tour, a young lawyer was concerned. She said that she has a new practice and has been successful in keeping her accounts receivable to a minimum. In other words, she has been able to work, bill and get paid quickly, the three elements of my 3Dimensional Lawyer® . Her concern, though, is that her pipeline for new business seems to be empty. She is concerned that prompt payment has an impact on additional work to be lined up for her to do.
In order of priority, one needs to get the work … marketing. Then, one must do the work. Production. Next, one needs to get paid. Finance. These are the three legs of the stool. The successful lawyer/law firm must focus on collections. Less than a 90% realization/collection rate is a symbol of future trouble.
In this lawyer’s situation, she is successful in the collection phase. In fact, it’s difficult to imagine a higher success rate when you have little to no accounts receivable.
The focus, then, needs to be on marketing, getting more work to fill the pipeline. These are separate and distinct issues. Relish in your success collecting your billings and address the marketing to attract more clients.
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Staff education: Case study
Should a lawyer-employer lend or give money to an employee to improve her skills, to become a paralegal, when there is some concern that she may not remain with the firm more than 2 years more?
This is a question that is posed more often than we realize. How would you respond?
In my experience, the answer is determined by the contribution the employee makes to the firm. However, if there is concern about whether the employee will remain with the firm, my inclination would be to hesitate.
Continuing education,not only for lawyers, but also for staff is essential for improving skills and effective representation of clients. And we should do anything we can do to encourage staff improvement.
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Managing Partners are few and far between
Bob Denney says "… “70% of the managing partners [or CEOs] do not have a job description and most partners do not know what their MP does. In addition, in firms of more than 100 lawyers, only 10% have full-time managing partners.”
No wonder that in 1995, the USPO concurred with me that "The Business of Law" was a unique phrase and granted my request for a registered mark. Major law firms still, as Denny confirms, require that "managing partners" maintain a full client load of billable time. There may be some concessions, but by and large, they are evaluated on their client production rather than their effectiveness in keeping the firm together and moving forward.
I think of the analogy with Lee Iococca. Though he was given credit for designing and producing the Mustang, he could no longer perform the design or product management functions in his position as CEO and later Chairman of Chrysler. How is it that law firms believe the managing partner (CEO) of a multi-million dollar professional service organization can do more than an industry giant?
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Succession is uppermost in the minds of majority of lawyers
More than 23% of the Washington State Bar Association, a mandatory bar, are 60 years or older. Several years ago, the American Bar Association, a voluntary bar, estimated that 400,000 lawyers would retire in the next 10 years. For the ABA, that’s equal to its entire membership. And that’s equal to about 40% of all lawyers and a majority of private practitioners.
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Client expectations – Road to Revenue National Tour
The Oregon State Bar (OSB) Association was at its most hospitable best. The standing room only group of lawyers shared their experiences as I talked about how to create stronger bonds of loyalty between client and lawyer. When I asked why we should care about this issue, two very poignant answers were shouted out: i) We’d like to get paid and an unhappy client won’t pay their bill; and ii) when we deal with disappointed clients, disappointed in us, not the other party to the transaction or result of the matter, our own stress goes through the roof!
Increased revenue and decreased stress, two outstanding reasons why we should care … I think the members of this audience hit it on the nail!
Next stop is Seattle … come join us if you’re in the area..
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Outsource — or Not?
Outsourcing jobs typically pay better than temp work — and certainly better than no work at all. This is the message of a recent article. The legal profession is developing its own caste system. We all understand some of the differences, or castes:
- Big Law vs. Small Law
- Sole practitioner vs. Large firm lawyer
- Specialist vs. Generalist
- Boutique vs. Full product line
- Domestic vs. Outsource (overseas as in India and Philippines)
And I’m sure there are other distinctions that I’ve overlooked. But, now there is another phenomenon appearing. ….
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Succession is a hot button
What are the more than 400,000 “baby boomers” going to do in the next 10 years? For some, who are working in private practice law firms, the issue may be particularly important — because they may be “fired.” This may not be the word used; it may be “eased out,” “de-equitized,” “transitioned to new status” within the firm. If the lawyer is lucky, he/she may still have a place to go and income (though reduced) to receive. But, egos will be bruised.
This topic is handled nicely by recent article in the New York Times. In that article, Norm Levine (a friend and client) suggests that the real issue is not age, but rather productivity. Even lawyers who are quite young can have productivity issues while “old” lawyers are still going gangbusters. The EEOC is examining this issue in a number of current cases. And the ABA Journal is following the dialogue.
This issue applies to many professions, such as the nursing profession, the accounting profession and others.
The only real protection is to make sure you’re a vigorous rainmaker; don’t let your skills deteriorate or your energy lag as you get older. Make sure you have very good client relationships and “control” the firm – client business relationship. And/or make sure you have a unique skill set that is hard for the firm to replace with younger lawyers.
Of course, if you’re a sole practitioner, you can sell your law practice when you choose to vacate the office. I am find more and more lawyers calling me about creating their exit strategy, which they expect will include a sale. A client of mine wants to leave the practice later this year at the age of 80. He’s had a great career … and we/he just signed a contract for the sale of his practice. That’s a great way to go — on top, healthy and with time left to do other things you would like to enjoy.
Lawyers today are looking at this issue more closely than ever before. Succession planning is one of the hot topics bar associations are asking me to address as I start our on our Road to Revenue National Road Show. Call me if you want me to visit your community.
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Growing law firms
Despite today’s economy, some law firms are growing … by merger and acquisition.
In fact, I had lunch with such a law firm just this last week. They are an 100 lawyers firm that is seeking to grow. They are interested in acquiring my client, a substantial boutique that would add a significant presence for them both in the relevant practice area as well as the geographic area.
We couldn’t seem to connect, however. I made it very clear that my client was talking about selling his firm. Their offer suggested that they were interested in "merging." The reason was simple: No capital outlay was needed for a merger. The "offer" was structured in a way that would pay my client several hundred thousand dollars more than he is currently earning. And 100% of the payment to my client would be tax deductible as an ordinary expense, not a capital expenditure. They structured the offer this way also in order to be sure that the "book of business" follows my client for several years. This, was not what we wanted … we are not looking to become partners in the acquiring firm.
During our conversation, it became clear why we were communicating at different levels…
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