Transcript LAW PRACTICE MANAGEMENT: Hot Topics and Current Practices

Materials Prepared by
Cheryl Betten
Presented by Carol L. Schlein
Newark NJ February 22, 2013
Managing Legal Costs
 Attorney Compensation
 Direct Expenses (Staff Compensation)
 Indirect Expenses such as
 Rent and Utilities
 Office Supplies
 Information Systems
 Professional Fees
 Research and Subscriptions
Carol L. Schlein, Esq.
 President, Law Office Systems, Inc.
 [email protected] www.losinc.com
 Montclair NJ
 Founding Member Lawtopia LLC
 www.lawtopia.net
 National partnership of legal technology consultants
 Former chair Computer Division,
ABA Law Practice Management Section
 Former columnist, New Jersey Law Journal
‘’’
Budget Your Revenue & Expenses
 Calculate estimated revenue
 Estimated Revenue = Billable Hours * Rate * # of
Timekeepers
 Make sure all lawyers are meeting baseline
expectations
Track Your Expenses
 Negotiate better rates
 Streamline processes
 Use Firm Admin to manage finances
instead of practicing attorneys
Identify Money Makers
 Benchmarking- compare your firm to other firms with
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goal of improving your own business practices
Negotiate with your vendors for the best deals
Shop around for services
Put systems in place to track costs and bill them out
where appropriate
Automate where possible
Eliminate Money Wasters
 Don’t waste money on bad advertising
or a bad marketing plan
 Make sure your marketing plan is focused
 Turnover – “there are plenty more where that one
came from” is a bad HR strategy and will cost your firm
 Don’t sign long term leases. Technology changes too
fast.
Maximize 80/20 Rule
 20% of your clients are responsible for majority of your
revenue – make sure they are happy
 20% of your employees are billing 80% of the hours –
make sure they are rewarded
 Learn from both
 Find more lucrative clients
 Find ways to motivate employees
Case Budgeting
Conferring with your Client
 Budgets for cases often happen
when lawyer least familiar with
facts and players
 Communicate with client when
budget changes
Be Audit-Minded
 Work with a CPA or Accounting Firm to ensure
compliance with payroll taxes, income taxes, trust
funds
 Audit-minded professionals will create audit trail and
ensure reliable financial reporting
 Avoid problems with random audits
 Have system of checks and balances
Billing and Collections
 Fee/ Engagement Agreements
 Outlines services your firm will perform
 Details Fee arrangement
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Hourly/ Flat/ Contingent
Retainer required?
Frequency of billing
Interest or late fees?
Detail of billing (itemize)
Types and costs for services charged
Rates for each timekeeper level
 No “air-tight” fee agreement but can prevent disputes
Tracking Work and Time Spent
 Factors to Consider in Selecting
 How many timekeepers in the firm?
 Will they enter their own time?
 Do you want the system to also track accounting?
 Standalone or network?
 What’s your budget?
 What other programs share similar data?
Popular Timekeeping/
Billing Programs
 Timeslips
 PCLaw
 Time Matters/ Billing Matters
 Tabs3
 Clio
 RocketMatter
Strategies for Pursuing Fees Owed
 Be Proactive
 Start with Written fee agreement
 Adhere to the agreed terms
 Follow up within 30 days
 Determine if firm will or can sever relationship
 Use systematic process to demand payment
 Follow collection laws
 Fee Arbitration process
Considerations to Sue a Client
 Can your firm handle claim through the courts?
 Will number of suits impact your malpractice
coverage?
 How much is owed?
 What is the risk of a retaliation law suit?
 Will judgment be collectable if obtained?
Outsource Your Collections
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Consider using third-party vendor
Do your homework about vendor before proceeding
Negotiate the fee with collection vendor
Ask for trial period
Compare pricing
Understand difference between agency and collection
law firm
 Ask for detailed list of process flow
 Choose a company or firm that understands your
business