09.20.07

Meaning…

Posted in Law Practice Management, Philosophy at 2:24 am by 3rdgenlawyer

The perfect practice should mean something.  What I mean is this:  what you do as a lawyer should mean something.  Now this varies from person to person — not everyone feels that you need to champion some cause or work for the greater good of humanity with every breath — but it should mean something to you.

I bring this up because it’s a problem I’ve been having at my job recently.  As I handled what seemed like my bazzillionith commercial landlord-tenant case, where the goal was simply to stall and let the tenant (our client) stay as long as possible, I realized how little I cared for what I was doing.  Sure, it’s important to our clients — the longer they get to stay somewhere, the longer they stay in business (for some clients, like some restaurants we work for, leaving a location is basically the death of the business).  It’s not important to me however.  I feel like I’m not really doing anything but pushing some papers around and asking for adjournments.  Not a great feeling.

So what do I consider important?  I’m not totally sure.   I’ve yet to find that area of civil law where I can honestly say that I’m doing something important.  When I was working in a prosecutor’s office, it was easy to find that.  So what am I destined for?  Maybe a job with Child Protective Services?  Maybe guardian ad litem work for children?  Who knows.  Maybe I’ll find it in PI work.  Whatever it may be, it needs to be important.

09.10.07

Phone calls and clients and meetings, oh my!

Posted in Billing, Clients, Law Practice Management at 9:00 pm by 3rdgenlawyer

The more I work for others, the more I realize what won’t fit into my vision of a perfect firm.  One of the biggest problems I see with the attorney I currently work for are time management, and client management, issues.

The attorney I work for (let’s call him Boss) spends half his day dealing with clients.  Boss is constantly on the phone with clients, or sitting with them in his office.  There are no designated “phone call” or “meeting” times.  A client calls and they get transferred to him.  A client walks in and, while they may have to wait a little bit, they end up in his office eating up his time.

One of the reasons for these constant interruptions (at least based on what I’ve heard and seen) is that Boss charges by the hour.  Boss constantly has clients in the office or on the phone asking about bills.  While the client bills are “detailed” in their listing of what went on during a period of time, it’s difficult for a client to see the value of some of the services.  As a result, Boss ends up spending too much of his time dealing with explaining the bill, when he could be working on their case.

I think this is a good argument against the billable hour.  In fact, I think this is one of the better arguments out there.  I’ve always dismissed the idea that the billable hour puts you at odds with your client (i.e., the conflict of interest theory) because any billing method does that.  Let me explain.  Opponents of the billable hour often say the following: when you bill by the hour, your interests are in conflict with the client.  This is because your interest is in stretching everything out and being inefficient in your work (i.e., take more time, charge more money).  Of course, these opponents rarely see the opposite side of the coin:  any flat-fee arrangement (whether or not it’s called value billing) puts you at odds with the client as well.  When you make the same amount of money regardless of time spent, it’s in your best interest to come to a conclusion as quickly as possible.  Either way there’s a conflict with the client.

The difference is this: when you have some sort of a flat-fee arrangement, your clients know what they’re paying up front, and, usually are paying it up front.  The money is earned upon payment, so unlike funds in a trust account, the money is yours.  If you charge a flat rate, you don’t have to spend time explaining what every little charge is for.

In the perfect practice, there will be a phone system in place that minimizes the amount of time I will have to spend on the phone.  Meetings with clients will be when truly necessary and by appointment only.  Most importantly, I will use a billing system that minimizes the amount of time I have to spend explaining my bills to my clients, so I can spend more time working for them.

09.06.07

What you can learn from the drop in the price of the iPhone

Posted in Billing, Clients, Law Practice Management, News at 2:04 pm by 3rdgenlawyer

Apple just announced that it’s cutting the price of the 8gb iPhone and discontinuing the 4gb iPhone.  Of course, this has the people who bought the iPhone already upset and the people who have yet to buy the iPhone happy.  What’s also interesting about this is that it’s basically the reverse of the standard “introductory rate” package.  Normally, when someone is entering into a contract or buying consumer goods, any discount is upfront — think of Columbia House DVDs — get so many for $1 and then buy a bunch for $20.  In this case, it’s the opposite — pay so much for it now,  pay less if you wait and get it later.

Yes I know that prices for electronics eventually fall.  But this is different simply because of (a) the timing [the phone only came a couple months ago]; (b) market demand hasn’t slowed down; and (c) there isn’t a new “replacement” technology.

So what can you, the lawyer, learn from the drop in the price of the iPhone?  Take a look at your rates — probably not everyone in your target market can afford your rates as is.

Perhaps you’ve been practicing for a long-time and have slowly increased your rates over that time.  Your long-term clients have seen the rates climb slowly and steadily and have been able to adapt to the growing costs.  New clients may not be in a position to do this.  Frankly, there’s nothing wrong with having different rates for different clients.  While a large number of iPhones have already sold, there’s a large portion of the market that simply cannot spend $600 on a cell phone.  Those who can and are willing to probably already bought the iPhone if they wanted it.  Those that can’t may be able to buy it now that the price went down.

I’m not saying that you should always charge new clients less for the same work — it’s not fair to you and it’s not necessarily good business.  However, you should look into different aspects — if you do corporate law, you may want to charge small start-ups a little less for some of the upfront/initial work (articles of incorporation, etc…) and develop them into long-term clients.  A few years down the line they may be in a better place and able to pay some of your higher fees.  A young couple without a family may only need the most basic of wills — charging a little less when they get them may lead them back to you as their assets and family grow, creating the need for more complicated wills and trusts done at higher costs.

If you have a sufficient client/work load as is, then you don’t need to consider this.  If you’ve been thinking of ways to bring in new long-term clients to replace ones that may no longer need your services (i.e., businesses that have been sold, clients who have moved or passed away), then you may want to target them at their inception, at a rate they mind easier to swallow.

After all, if Apple needs to drop the price of the iPhone to reach more of their target market, perhaps you do too.

08.30.07

Niche-ism

Posted in Law Practice Management, Philosophy at 3:32 pm by 3rdgenlawyer

The firm I’m currently working at is a litigation based general practice firm.  Basically, if it’s litigation, we take it (along with the rare transactional matter for our long-term clients).  This is a great thing for me — I’m getting exposure to a number of different areas of litigation practice.  Of course, this philosophy of taking it all has me thinking about the future launch of my own practice.

When you open up your own small firm, you have to ask yourself — do I want to be a generalist or a niche-ist?  That’s right — niche-ist, not specialist (I steer clear of the term specialist because a number of states are considering having “specialist” certifications for different practice areas, a philospohy I’m opposed to for a number of reasons I’ll discuss at a later time).

The answer to that question really comes down to several different factors.  First, you have your desired practice areas.  You may only want to do estate planning, or criminal defense work, or you may want to practice in a large number of areas.

Second, you have your target location.  This can be very important.  If you’re planning on running your practice in a small town/isolated community, you’ll probably have to be a generalist — there likely won’t be enough business in a particular practice area to support you.  Of course, if you have a working spouse and only want to practice a little on the side while raising kids (or some other situation akin to this), you can probably then get by limiting your practice areas.  If you plan on practicing in a large metropolis, then you’re probably better off finding a niche.

Third, you need to consider your future clientele.  Who do you want to serve?  If you want to serve Fortune 500 companies, you need to figure out what they’re looking for in outside counsel.  Are they looking for someone who has a niche practice in commercial litgation, or someone with a practice that does criminal defense, personal injury, commercial litigation, estate planning and elder law, among other things?  If you want to serve the poor/underprivileged/disenfranchised, look at the practice areas they’re most likely to need representation in.  Large scale commercial litigation, insurance defense and intellectual property law are probably not their biggest concerns.

Of course, what it really comes down to is which of these factors is most important to you.  Perhaps you really want to do estate planning — you’ll fnd a location that makes it work and an appropriate target market.  You’re from a small town and really want to spend the rest of your life there?  You’ll open a practice that provides a broad enough range of legal services to support yourself.  You don’t care about money — you’re still that bright-eyed, bushy-tailed idealist out of law school?  You’ll open a practice to serve the people you want to help.

The important thing is figuring out which of these factors is most important to you, and defining your ideal practice in such a way that it address all three factors.

08.24.07

The Paperless Office

Posted in Law Practice Management, Technology at 7:34 pm by 3rdgenlawyer

As I’ve said before, all lawyers (and especially small firms) should strive to be high-tech. When I open my own practice, I plan on going paperless (or as near as possible). As part of my pre-planning, I’ve started listing the technology I want/need for the office. Here’s a rough (though detailed) list:

  • Computer Setup:
    • Laptop
      • Maxed out RAM
      • Large internal HD space
      • Highly portable
      • Long battery life
      • Lots of USB ports
    • External Setup
      • Large monitor
      • Full size keyboard and mouse
      • USB hubs
  • Peripherals
    • Scanners
      • Feeder
      • Flatbed
    • Printers
      • Photo
      • Laser
    • Camera
      • Digital
      • Digital Camcorder?
    • Digital Dictation equipment
    • PDA
  • Network
    • High speed internet
    • Secure wireless router
  • Software
    • Office software
      • Microsoft Office
      • Adobe Acrobat
      • Photo/video editing software
      • Document creation/form creation
      • Case management/document management
      • Financial
      • Time tracking
      • Database software?
    • Applications
      • Online fax
      • Collaboration
      • Desktop search
    • Security
      • Antivirus
      • Firewall
      • Metadata cleaning
  • Backup
    • Backup software
    • External drives
    • Off-site backup?

Is this an exhaustive list?  No.  Of course, not all of this may be necessary, and there may be things I’m missing.  As I get closer to the opening of my own practice, I’ll update this list, discuss various options for some of these requirements and distinguish between needs and wants (which is often a problem for us cyber-geeks).

08.20.07

Small Firm Technology 101

Posted in Law Practice Management, Technology at 2:32 am by 3rdgenlawyer

One of the precepts of the “perfect practice” I discussed was technology.  Technology provides several advantages for law firms.  It makes the practice of law more efficient.  Tasks can be accomplished faster.  Attorneys, paralegals, law clerks and administrative personnel don’t have to be tied down to a physical location. 

As a solo/small firm practitioner, you are in a better position to evaluate and use technology.  The decision to try out a piece of equipment/software/internet application rests in the hands of a single person (or two or three) as opposed to a committee.

The beauty of planning out your own firm is that you can determine the level of technology that you are comfortable with, and can quickly adapt your plans to emerging technologies as they come available.

With that in mind, there are several levels of law office technology to consider, each with some pros and cons.  I’ll briefly discuss some levels of technology, touching on some of the pros and cons.

First, you have low-tech.  This would encompass a system using basic word-processing technology and not too much else.  The pro side?  Cheap to implement and basically no learning curve.  Cons?  Extremely inefficient, and bad for profits.  This will cost you in the long run, both in lost time, money and opportunity.

Second, you have what I’ll refer to as “standard”-tech.  This is the level you’ll see at many of the larger law firms.  In addition to the standard office software, you’ll have case management, time-tracking/billing software and electronic research (plus a few miscellaneous apps).  Pros:  this level utilizes some technology to run a more efficient practice; it’s generally simple to implement/upkeep; the cost requirements are usually front-loaded; and the learning curve isn’t that harsh.  Cons: Well, let me ask you a question:  do you only want to be as efficient as BigLaw?  This level of technology may keep you at the status quo, but does not allow you to truly take advantage of technological advances to make your practice as efficient as possible.

Third: High-tech.  This level takes advantage of new technological advances to streamline business and legal processes.  Collaboration, remote desktop and VPN software allows off-site and virtual workers, as well as clients, to work on and view the file as it develops and progresses.  Pros:  This level optimizes technology to create efficient business practices.  Once adapted, high-tech law practices no longer need to rely on sheer numbers of attorneys/staff members to handle complex matters.  Cons:  A high-tech practice can cost a hunk of money — both in start-up costs and upgrades.  For those who aren’t very tech-savvy, the learning curve can be real real steep.  Getting staff up to speed can also be time consuming.

I am a firm believer that every solo and small-firm attorney should strive for a high-tech practice.  Because of that, in this blog, I’ll only be focusing on higher tech solutions for law-firms.  In coming posts, I’ll discuss some of the law office technology concepts available for the high-tech practice.

08.17.07

My Philosophy

Posted in Law Practice Management, Philosophy at 7:05 pm by 3rdgenlawyer

So what do I think would make a perfect practice?  Well, there are a number of factors.

First, technology.  I want to utilize technology as fully and efficiently as possible, in order to streamline business and legal processes.  In a perfect practice, business processes would be streamlined to the point that they require de minimus time and could be resolved with a few keystrokes.  Legal processes would also be streamlined, so time could be sent resolving client concerns.

This of course, leads into the second factor: clients.  A perfect practice acknowledges a simple truth — we, as lawyers, exist to help clients.  My perfect practice will be client driven and results oriented.  While I do believe that the practice of law is a business as well as a profession, I also believe that when diligent, professional and quality service is provided to clients, money will follow.  The primary drive of the practice should be to provide the proper service to clients.

The concept of money and clients leads to the third factor: alternative billing.  The perfect practice uses the perfect billing method.  I’m planning on using some form of value billing, though I’m still working out the details.  This of course ties back into streamlined processes — value billing requires less paperwork than something like hourly billing.

There will be more components to this philosophy, which will be dissected and discussed further in the future.