Jim Calloway's Law Practice Tips Blog

On Law Firm Profitability and Being a Jetson

Law firms are businesses. Businesses should have the goal of being profitable. The September/October 2016 issue of Law Practice Magazine is the annual finance issue. The cover story is Increasing Law Firm Profitability by Instilling Values by Katy Goshtasbi. This is a well-written “must read” piece which takes a bit of a different look at law firm profitability. Other articles include law firm budgeting, tips for getting paid ethically, alternative fee billing, managing debt for the new lawyer, creating a positive client experience and changes in banking relationships.

Every Law Firm Is a Technology Business is the title of my column on practice management advice in this issue. This column was actually inspired by the Wall Street Journal as I noted in the opening paragraph:

In early 2015 the Wall Street Journal, on the occasion of changing the name of its business section from "Marketplace" to "Business &Tech," stated that “[e]very business is a technology business.” Further, the newspaper noted that whether the business was taxicabs or taco delivery, it was nonetheless a technology business. Few doubted that the change in the name of the “B Section,” as it had always been called, was significant.

It is hard for many lawyers to appreciate that changes in the way business operates today force them to view their law firm as a technology business. But that is true today and will be increasingly true in the future. I hope this column (and this concept) provides valuable guidance for lawyers as they wrestle with everything from e-discovery to data analytics on their road to embracing being a technology business.

My conclusion is perhaps my favorite ending for anything I’ve ever written.

A general counsel addressing a group of lawyers stated that she still saw a lot of Flintstones versus Jetsons when addressing technology in firms she has dealt with. Be a Jetson.

Effective Client Intake and the Rise of Firm Pricers

Effective client intake and law firm pricing may not seem like closely connected topics, but they are connected and will be even more connected in the future. My column in the September Law Practice Magazine is Effective Client Intake and the Rise of Firm Pricers.

Law firms are retooling and reevaluating many of their operations and procedures. How long has it been since you have taken at look at your new client (or new matter for an existing client) intake procedures? What are the firm's goals? What critical information do you receive for conflict of interest checks? Are there normally handouts of some kind distributed at these initial meetings? Or does this happen completely differently depending on which lawyer is doing the intake? (Note: Decades ago "everyone doing their own thing" was standard operating procedure. Today more uniformity is required.)

Pricing can be a touchy subject. Most lawyers would say setting a fee is an essential part of the attorney client relationship. But in an hourly billing world, lawyers were not really engaged in pricing, but were just notifying the client of the hourly rate and giving a non-binding estimate of total fees.

When I was in private practice, I represented a family-owned company that did concrete and dirt work. The company had many employees, but only a select few could quote a price to potential customers or bind the company with a bid. These individuals, called estimators, were usually long term employees, often family members.

As fixed fees and other alternatives replace hourly billing, does the idea of a pricing specialists make sense for law firms? Law firms will also be coping with a mix of legal tasks, where some will be done by the lawyer and some handled by lawyer-designed-but-not-operated systems within the firm. A strong pricing expert may be needed to deal with the implications of that.

Your attention is also directed to a recent blog post by Greg Lambert on 3 Geeks and a Law Blog titled Client/Matter Opening — What Can We Add to the Process? Greg notes that there is frequently not much prep work done prior to an initial client interview, but there might be a way to automate collection of background information and reports that would be very helpful to the lawyer doing the initial interview. This is particularly true of the large firms, where just a report of everything that the law firm  has previously done (or is doing) on behalf of the client would be very useful.

After reading my column and Greg's post, maybe you will have some ideas about improving your client intake process, including consideration of the need for a pricing professional. Many large law firms have already taken that step.

I should also note that my column was contained in the September/October issue of Law Practice Magazine, which is The Leadership Issue. It contains many great articles on law firm leadership.

Those Hated Timesheets- Are You Still Using Them?

Most lawyers hate filling out timesheets to record their billable time. Lawyers are also not perfect at accomplishing this, leading every company with a time and billing product to tout how much money can be made if only every bit of "lost" time was recorded. But the practice of recording time by hand on paper timesheets really does need to go the way of the Dodo bird.

Your attention is directed to my Oklahoma Bar Journal column, Those Timesheets, Those Hated Timesheets: Are You Still Using Them?, where I wrote:

"[T]here’s one observation that I can make today with a great deal of certainty. A lawyer entering their time by using pen and ink on a paper timesheet is employing an inefficient practice that should no longer be used. You need to enter your time digitally. This means you."

There are a number of reasons for this, but two major ones are 1) that lawyers need to invest the time to digitally enter their time records so they are relieved from later spending some much time proofing billing and 2) in today's working environment, lawyers need to be able to enter their billable time from any remote location by using their smart phones or tablets. I then go through several examples of how the companies involved with our Practice Management Shootout at the OK BAR all allow for remote time entry. I also link to a blog post by Brian Focht discussing other stand-alone time keeping apps.

If you are still entering your time by hand on paper, you really need to read this column. Changing a deeply ingrained habit won't be easy, but I firmly believe this will result in freeing up staff time, lawyer time and producing a higher-quality bill for the client.

Tools for Tomorrow's Lawyers CLE and Webcast

What if you were asked to design a complete continuing legal education program about a very important topic where you thought you knew a fair amount about the topic? Well, here's mine - Tools for Tomorrow's Lawyers -- and you are welcome to attend, either in person or via webcast November 12, 2014 at the Hyatt Regency hotel in Tulsa.

We are all excited to have well-known futurist Richard Susskind, author of Tomorrow’s Lawyers, speaking at our Oklahoma Bar Association Annual Meeting. Our day-long CLE in advance of his program will discuss in depth the tools I believe lawyers need to use to more positively shape their futures. Our faculty includes Donna Brown of Beyond Square One, a software consulting, implementation and training services firm, OBA Ethics Counsel Travis Pickens and Doug Sorocco, a partner with Dunlap Codding, PC, in Oklahoma City. If you have never met Doug, check out this online profile, Douglas Sorocco, Enterprising Lawyer, that which was published this week by AttorneyatWork.

Here is registration information for the live program in Tulsa and also the webcast. We are only applying for MCLE credit in Oklahoma and Texas, but you will receive a certificate to use to apply in other jurisdictions. Register before midnight November 9th to receive the early-bird discount and save an additional $10 by registering online.  Download PDF Flyer Tools for Tomorrows Lawyers

The written materials provided include some additional papers I have written on topics like Alternative Fee Agreements and lawyers using iPads.

Alternative Billing Comes to Main Street

I was very pleased to have been interviewed for the cover story of the October 2014 Illinois Bar Journal titled Alternative Billing Comes to Main Street. It is available online. Patrick Lamb of Valorem Law Group in Chicago, the author of the recently released Alternative Fees for Litigators and their Clients (American Bar Association, 2014) is also interviewed, as is Patricia A. O'Connor, a partner in a 60 lawyer Chicago firm.

This is a very well-written piece on this critical topic for the legal profession. While this is a much-discussed topic in our profession, I think you may find some new ideas here. It also seems increasingly clear that document assembly and law office automation are now an even bigger part of this discussion.

What is Your Job Description?

The Law Practice Magazine Sept/Oct 2014 issue is out and the theme is law firm Finance.

As always. there is lots of good content, including Starting a Financial Relationship With Your Client- Packaging your fee agreement with an eye toward client relations, written by my colleague and friend Peter Roberts.

My Practice Management Advice column in this issue is What is Your Job Description? Many law firms have recently updated their job descriptions and some have a policy of doing that task regularly. Hopefully this will serve as a quick outline on the mechanics of drafting and updating job descriptions for those lawyers and firms who can use it.

Many of you will see a different look when you click on the article links above. The magazine board has decided to publish the e-magazine version publicly when it was previously only available to Law Practice Division members. So now you can read the entire magazine online and see all of the great color graphic images (and advertisements), along with a few items that were not previously published online.

Fee Agreements for Lawyers

Jared Correia had a nice piece on AttorneyatWork.com today entitled Fee Tale: This Is Not Your Father’s Engagement Agreement in which he outlines some "upgrades" to attorney-client fee agreements that perhaps have not be reviewed or refreshed for a number of years. He links to some other well-written articles and of course, as Jared often does, links to a few irreverent references that might make you laugh. Nice work, Jared. And if your law firm had been using the same old engagement agree for the last ten yuears, maybe you should read Jared's work and share the link to the article with your firm's management committee.

Alternative Fee Arrangements is the Subject of Digital Edge Podcast

For the Digital Edge: Lawyers and Technology podcast this month, Sharon Nelson and I took on the weighty subject of billable hours and alternative fee arrangements (AFA's.) Since I co-authored Winning Alternatives to the Billable Hour with Mark Robertson, it is a topic I am always happy to discuss. 

From Departing Employees to the Digital Edge to Diversity

What do all of those things have in common? They were all featured topics in the April 2010 edition of Law Practice Today.

Sharon Nelson and I posted our 30th Digtal Edge: Lawyers and Technology podcast "ABA TECHSHOW – It's a Wrap." There have been other post-TECHSHOW articles and blog posts. But Sharon and I shared what we found interesting there and our show notes provide links to various products and presentations we found noteworthy.

Effective Diversity Strategies In Law Practice Management was the theme of this issue, with eight articles focused on that subject.

Natalie Kelly and I were honored that our materials for our Alternative Billing program at ABA TECHSHOW 2010 were the first materials featured in Best of ABA TECHSHOW section for 2010.

Another article that should be of interest to everyone, but is probably more of interest to those heavily into technology is Will Free Fit into Your Technology Budget? An Open Source Software Primer for the Solo and Small Firm Lawyer By Dennis Kennedy and Gwynne Monahan.

Law Practice Today is a great free resource and I do not know why every lawyer doesn't take the time to subscribe.

The Billable Hour Debate: August 24, 2009

On Monday, August 24th, the debate about alternatives to the billiable hour got even more high profile as articles appeared about the topic in both the Wall Street Journal and Corporate Counsel. I received Corporate Counsel in the morning mail and soon thereafter my inbox received notices of the WSJ feature from a discussion group. (Note that unless you are a WSJ subscriber, the link above only gets you a small part of the front page article, but you can watch the video and read the comments to the article.)

This reminded me, first, that there is still a lot of discussion to be had and work to do in this area, and, second, that the 2008 book Winning Alternatives to the Billable Hour, Third Edition: Strategies that Work by Mark Robertson and me is now for sale on Amazon, at a cheaper price than at the ABA bookstore.

Bruce MacEwen on his Adam Smith, Esq. blog has a great analysis of this discussion in his post The Billable Hour Debate Is Not About the Billable Hour,  I would encourage you to read his thoughts. I'm in the camp of those who believe law firm billing is now a matter of corporate focus and it is unlikely that large law firm billing practices will return to "normal" after the economy rights itself.