TechnoLawyer: Law Office Management

Originally published on March 29, 2011 in our free SmallLaw newsletter. Instead of reading SmallLaw here after the fact, sign up now to receive future issues in realtime.

In November 2009 I hung my shingle, and by some miracle I'm still in practice! The folks who publish SmallLaw asked for my opinion as to the most important lessons I've gleaned from my "minute" of practice. After wracking my brain for a week trying to answer this question, I have narrowed it down to three lessons any new solo should heed should they want to make a go of their own law practice.

1. Get a Mentor

A professor once told me that you'll never know more law than when you walk out of the bar exam, and you'll forget it all! That couldn't be truer. I am humbled every day by the vast amount of law that I don't know.

One of my favorite sayings is access is better than ownership. Since I don't own the knowledge yet I love to access it from my mentors. I'm truly blessed to come from a family of judges and lawyers. I call them at least once a day. I can't imagine how difficult it would be if I had to approach every legal problem from scratch. I couldn't do it. I don't know how solos without such mentors avoid malpractice. In fact, this connection with other lawyers explains why many lawyers practice together in law firms rather than alone.

If you don't have a personal relationship with your colleagues then pick one by reputation whom you admire and forge a connection. Get out your phone book and call them up. I would advise those in the hunt to not focus as much on the expertise of the attorney, but more on their reputation.

You may learn a lot from the local king of torts, but we all know how that book ended! Find someone people in your community praise and look upon favorably — an Atticus Finch. Better yet go talk to the toughest judge in your area and ask them whom they recommend. His Honor is basically the Simon Cowell of our profession. He'll be more than happy to mold you into the type of lawyer with whom he likes to deal by steering you toward an attorney he respects. By following the judge's advice you'll be well on your way to obtaining a quality mentor.

2. Don't Fall Into the Technology Trap

It's just human nature. You hung your shingle, paid the rent, and now you need all that shiny new technology to make your practice hum. It will go out and club potential clients over the head and drag 'em back to your office with checkbooks in hand. "Please, oh wise and technologically gifted one, take my money!" I had this dream once too, and have a veritable bone yard of gadgets and shelfware lying around as evidence. So does fellow SmallLaw columnist Pete Armstrong.

I've got countless programs that didn't do what I needed. I have a premium Evernote account I had forgotten about until it auto-renewed for $40! But perhaps the most shining example is the Livescribe pen I picked up last year for about $200. This little gem uses special paper (read $$) that a camera in the pen picks up and translates my writing into searchable text that is linked to an audio recording of what was said at that particular second. It works great, but it hasn't paid the bills. I thought it would serve me well in court as I took notes because if I missed something I could just tap the note and hear the audio from that second. In reality I don't have time to take notes. I think better on my feet — on the fly. Had I known that I could have saved some coin.

Balance the cost of the technology with the learning curve, and a take hard look at your true use for the tool. A prime example is my Web site. I spent a long time last year creating it from scratch. It looked awful, and my site lay in useless ruin for quite awhile. I had spent 100 bucks on Web hosting and had nothing to show for it. Had I used my balancing test up front I would have gotten with the times and used something like WordPress from the beginning. Now the site is functional and looks professional.

A final note on technology — do your homework. A good place to ask questions is of course Technolawyer's Answers to Questions newsletter as well as Solosez from the ABA — and the past searchable archives of both. They're chock full of answers to everything from accounting systems to smartphones — and in the case of Solosez lots more such as bicycles!

3. Communicate

Communication is the most important lesson to learn. A wise person once told me that procrastination is rooted in fear. I never put this aphorism into perspective until I started my practice.

I would put off phone calls with clients because I knew that they were not going to be happy with what I told them, or I just didn't have any updates. In reality your client doesn't really care if you know anything or not. They just find comfort in the fact that you're thinking about them and their case.

Brand new lawyers will ask about malpractice insurance. The best malpractice insurance is to communicate with your clients! It's a pain in practice, but it's part of the job. My advice is to take a day each week and chalk it up as a loss. Spend that day making phone calls, jail visits, and writing letters.

I have certain clients who aren't happy no matter what miracle I work for them. Others I could slap with horrible news and they would thank me. It's kind of like publicity — even bad communication is good communication. The bottom line is that as long as your clients understand and believe that they can reach you when they need you they will have faith in you and tell their friends.

Conclusion

If you've thought about striking out on your own, now is the time. The economy may still be tanking, but advances in technology for the small firm practitioner have opened the door of what was once boutique law with a sledgehammer. It's a frustrating, fulfilling, and terrifying experience that I highly recommend to all lawyers!

Written by Gadsden, Alabama lawyer Clark Stewart.

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Originally published on March 21, 2011 in our free SmallLaw newsletter. Instead of reading SmallLaw here after the fact, sign up now to receive future issues in realtime.

Operating a law firm from your home is not for everybody. Two basic prerequisites exist for successfully setting up a home office.

First, if you enjoy day-to-day contact with colleagues, you may find yourself going stir crazy. On the other hand, if you just like to hole up and get your work done, it can be an ideal situation.

Second, you need to be reasonably computer literate. When working from home you will not have any onsite support. You can waste a tremendous amount of time trying to find a solution on the Web. After 14 years of working from my home office, I have many tips for lawyers considering this path. Below you'll find the five most important.

1. Use an Actual Room With a Door That Closes

Especially if you have kids, you need actual office space. You need to be able to leave all your papers and go have lunch and not have to clear off the dining room table. You need an "office environment" and avoid giving the impression that since you are "home" you can be interrupted at any time. If you have kids, you may actually want to post "office hours" on the door of your office.

2. Clients and Home Offices Don't Mix

Do you need to meet clients in your office? Obviously, if you plan to meet clients in a home office, you need to set it up much differently. Most people will have neither the space nor the desire to meet clients at home (and your clients probably feel the same way). You're better off renting an executive suite from companies such as Regus or subleasing unused office space in a local law firm. If you don't have many meetings, you can work from home and use an executive suite as a virtual office for its conference rooms and perhaps its call answering service as well.

3. Get a Virtual Assistant (Secretarial and/or Paralegal)

Investigate using online secretarial and paralegal services. They're widely available and frequently locally. Used in combination with Web-based collaboration tools such as Box.net you can easily share, edit, revise, and track documents. You upload documents to a secure shared space for editing. You receive an email message about any changes, etc. This arrangement is much more efficient than sending documents via email.

In a recent issue of BigLaw, Escape From the AmLaw 100, former Latham & Watkins partner Joshua Stein extolled the virtues of his virtual assistant when he set up a solo practice (though he leases office space and does not work from home).

4. Comfort First, Looks Second

Law office furniture is usually designed for show, not for functionality. Buy ergonomic and computer-friendly equipment. The ideal height for a computer keyboard is about 2" lower than the standard desk height. The "under the desk" drawers for keyboards are often flimsy and unproductive. Humanscale makes some of the most highly-rated keyboard systems.

Buy a good computer chair. TechnoLawyer publisher Neil Squillante (who does not work in a home office) uses a Herman Miller Embody chair (pictured above — the chair, not Neil), which he describes as "expensive but worth every Benjamin." He purchased it with a few non-standard options for $957 from WB Wood, a local office furniture dealership. While online stores often offer the best deals, that's not true for Herman Miller chairs according to Neil. He suggests finding a local authorized dealer.

My fellow SmallLaw columnist Yvonne Renfrew used to sit on a Herman Miller chair in her home office, but praises her new Verte Chair in her recent column, Under the Technology: Desk and Chair Recommendations for Small Offices.

Some work is better suited for other chairs so in addition to a computer chair, consider buying a comfortable armchair for reading final drafts, using your iPad, or simply taking a break. Finally, don't miss Marin Feldman's evergreen BigLaw column, Top Five Ergonomic Problems at Large Law Firms, which applies equally to home offices.

5. Reliable, Secure Telephone Service

Consider me old-fashioned, but I still find landlines the way to go. About 75% of the time I can tell if someone is using a cell phone or even VoIP by the quality of the call. A crackly line, dead spots of a second or two, a call that sounds under water, etc. makes you seem and literally "sound" unprofessional. So I stick with my cordless Plantronics telephone and headset and nationwide calling plan. That said, many other options cost less.

Vonage is the leading VoIP company. VoIP services have the advantage of call hunting — ringing your smartphone and other phones when you're not in your home office. If you make a lot of international calls, Skype can save you a lot of money. I have used Skype for technical support and demonstrations with people in Egypt, India, and Vietnam. Given that the calls are free, the quality was perfectly acceptable. Lastly Google's Google Voice offers an array of services plus you can now port your Google Voice number to your smartphone. Yvonne covered these and other services in more detail her SmallLaw column, Everything Law Firms Need to Know About Switching to VoIP Telephone Service.

A variety of answering services exist — at a price. Decide what functionality you need before spending money on such services. Your practice may require nothing fancier than voicemail.

A related issue concerns the question of a fax line. With the importance of faxes declining rapidly, you probably will be better off with a scanner and an email/fax solution such as MyFax. I pay $10 a month and have yet to exceed the page limit. That's much less costly than a dedicated fax line.

Conclusion

As for everything else you need, don't skimp. When you hear yourself thinking "I can manage without that," stop. Within a very short period of time you will discover you can't manage. For example, you can't have a law practice today without a Web site. For email on the go, a smartphone is essential. Buy a dedicated laser printer and scanner rather than a multifunction inkjet printer. You get the idea. Considering what you'll save on rent, go for the best when it comes to the rest of what you need.

Written by John Heckman of Heckman Consulting.

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Originally published on March 15, 2011 in our free BigLaw newsletter. Instead of reading BigLaw here after the fact, sign up now to receive future issues in realtime.

Think of a vehicle's instrument panel. With a car, the data points you need most are your current speed, engine revolutions per minute, engine temperature, and gasoline level. Other data exists, especially nowadays, but these are the essentials you really need to watch to stay out of trouble.

On the instrument panel of an airplane, however, you have a lot more going on — and more opportunities for getting yourself in big trouble fast. In addition to the same data points found on a car's dashboard, you also need to track attitude, altitude, rate of acceleration, compass bearing, rate of climb, etc.

Carry this analogy to its logical conclusion and you'll find yourself contemplating whether running a law firm without instant access to key metrics — in one location — is like trying to fly a plane with a collection of printed reports.

Houston, Our Dashboard Indicates That We Have a Problem

Okay, you get it. And because dashboards group related data collections together on the same Web page, trends and interrelationships become easier to discover. Consider this common example.

Looking at WIP (rolled up to the client and sorted by total unbilled time, fees, and costs), Aged AR (sorted by Total AR > 30/60/90/120+ days by client), and Client Funds Available in a single dashboard can give you a sense of just how much trouble that one big client could cause you.

Nothing in retainer? $1,250,000 of AR beyond 120 days? And $750,000 in unbilled time and costs? You'd better get that unbilled time and cost invoiced pronto. And you'd better light a fire under that billing attorney to get on the phone with the client.

What Dashboards Does Your Firm Need?

Let's start with three:

1. Billing Attorney/Collections Dashboard

Start with the scenario described above: AR aged, rolled up to the client level. Billers will only see their own time. But the Treasurer/Practice Group Chair/Collections Team/Executive Management will see everything rolled up across all timekeepers for a given client. WIP next, also aged. Finally, Client Funds Available.

2. Profitability Dashboard

Start with billing efficiency by Practice Group, client, client size, and attorney — then add leverage.

3. Performance Dashboard

Start with timekeeper calendars, both billable and non-billable, by working timekeeper and Practice Group.

Variations on these three themes will probably keep you busy developing, in all seriousness, for the next two years. For what it's worth, they'll also keep you on the Christmas list of the CFO, Collections Team, and Executive Management!

What Technology Should You Use to Create These Dashboards?

Any Web-based architecture in which your firm has already invested is probably a fine choice. But I propose SharePoint as an affordable framework easy for consumers to use and relatively easy for administrators to implement and maintain. That is a big reason why so many large law firms have already implemented SharePoint. But technology platform-wise, SharePoint alone is not quite enough to get started.

Several facilitating technologies can provide your firm with significant savings in development time and costs over creating your own Web parts from scratch (e.g., Visual Studio). Many law firms have implemented toolkit/connector technology solutions "on top of" SharePoint such as those offered by Handshake Software, XMLAW, and Bamboo Solutions. Using one of these toolkits will get you the fastest results.

What Steps Are Entailed in Creating a Dashboard?

Well, it depends upon how much existing content you can leverage (e.g., any stored procedures, views, or data warehouse tables that you have already created for more traditional reporting purposes). But for the most part you can break down the process into four steps (with some variation in the jargon used by the different solutions companies):

Step 1. Identify and Assemble the Data

Have a favorite collections or profitability report? Find the SQL stored procedure that it uses on the back-end. Don't have exactly the data warehouse tables you want? Create a view, or create a new table and schedule a SQL Agent job to automatically populate it with just the joined and/or calculated fields you want.

Step 2. Build a Class

It sounds very developer-ish. But really you just need to define a connection to a particular database (e.g., Elite, Aderant, or Rainmaker) within your toolkit/connector platform of choice.

Step 3. Build a Schema

A schema, in this usage, is a dataset within a particular Class wherein you define the data fields or columns in which you are interested. You'll need to know SQL, or enlist the aid of folks who do, and use the queries you developed in Step 1, above. But beyond a working knowledge of SQL, the process is pretty straightforward. In fact, many of these solutions will actually build the entire schema for you if you paste a known query into their schema-building function.

Step 4. Pick or Build a "Skin" to Present the Schema You Just Created

This step involves the "presentation layer" of the process. Essentially, you decide how to display the information (data grid, bar chart, line graph, pie chart, etc.). Another advantage of the toolkit technology solutions over developing something from scratch is that you don't have to reinvent the wheel when attempting to display your data. These solutions provide the mechanism for creating attractive charts and graphs, and will also enable all of the additional "must have" functions you will want (sorting, filtering, exporting to Word and Excel, etc.).

Conclusion

Dashboards don't have to cost your firm hundreds of thousands of dollars from Business Intelligence vendors. With SharePoint and one of a handful of solutions that you can implement essentially "off the shelf," you can build your own instrument panels to help your firm navigate its way to a more efficient and profitable future.

Written by Matthew Berg, Director of IT at Wolf, Greenfield & Sacks, P.C..

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Originally published on March 8, 2011 in our free SmallLaw newsletter. Instead of reading SmallLaw here after the fact, sign up now to receive future issues in realtime.

The notion of lawyers departing from the billable hour is the talk of the profession. You can't swing a timesheet without hitting another article on this topic. Even the world's largest and most profitable firms are seriously evaluating "alternative fee arrangements" or AFAs as some call them. For all the words being spoken and written, few have discussed the core proposition behind alternative fee arrangements — value to clients. Small firms in particular must understand this key concept before they can make the transition.

A Brief History of (Hourly) Time: Are You a Contractor or a Lawyer?

When a lawyer bills by the hour, or every six minutes to be more precise, the sole determinant is lawyer time expended to perform the task. How much time did you spend on the client's matter? Notwithstanding write-downs, hourly billing mostly ignores your productivity and whether you achieved the client's desired result. Many lawyers have hanging in their office the image of President Lincoln accompanying the quote that "A lawyer's time and advice are his stock in trade."

Some law firms use the phrase "non-rate realization." They judge lawyers on whether they realized their hourly rate. In the annual lawyer review, law firms do not consider whether lawyers created value for their clients. However, the reality is sinking in at many law firms that while lawyers do not often discuss value creation, clients are asking: "What have you done for me lately?"

Hourly billing is akin to cost plus construction, which has the effect of eliminating all risk on the contractor and shifting all risk to the property owner. If the contractor is inefficient, the property owner pays. If the contractor departs from the plans, the property owner pays. So it is with hourly billing — the lawyer's major risk is non-payment of the bill.

The client's world focuses on whether its customers receive value. Yet, when clients look at the business model of their lawyers, they see the cost plus construction model. Few businesses operate on a cost plus model — at least for long.

Four Hurdles on the Road to Alternative Fee Arrangements

A lawyer's value to a client encompasses a wide variety of factors, including the following:

1. What Was the Outcome?

Among the most important of value determinants is the outcome you achieve. The client will ask whether you obtained the result the client wanted. When the client is writing the check to pay the legal bill, the client is thinking about the outcome. In the client's world, results matter.

2. What Will It Cost?

When you charge by the hour, the client does not know how much the legal services will cost. In the client's world, businesses operate on the basis of knowing what something costs before making the decision to purchase the item or service. Yet, in the legal world, cost is an open ended matter.

Lawyers respond, of course, that no one knows how long a matter will take and, therefore, it is perfectly reasonable for the legal bill to remain uncertain. Yet, in the business world, the cost of just about everything can be measured with sufficient effort. Even lawyers can look to prior cases of a similar nature and project costs. Software can capture information to assist with this statistical analysis. If lawyers can find a way to predict in advance the cost of the legal service, lawyers can give value to the client.

3. Was It Finished on Time?

In the client's world, deadlines matter. Customers want and demand a service or a widget on time. Businesses that deliver on time succeed in the marketplace. In the legal world, the duration of a matter is often not a major consideration.

To be sure, some external deadlines exist such as docket control by judges, or closing a deal by year end for tax purposes. But for the vast majority of legal work, whether it be wills, contracts, etc., there is no specific deadline. Yet, clients judge you by whether you performed the legal service on time even in the absence of a specific deadline.

This issue concerns efficiency. If lawyers are efficient and get the legal work finished and to the client quickly, then the client judges the lawyer favorably. The perception exists, rightly or wrongly, that lawyers want to take longer to finish something because they charge by the hour.

4. How Well Do You Know Your Clients?

To state the obvious, your value is directly proportional to what you know. This knowledge is not simply about the law, but includes your knowledge about your clients. Lawyers who know their clients well are valued.

Knowledge about clients is a moving target though. Clients change. New business ideas are hatched, key employees depart, customers of clients come and go, business fortunes decline or improve, cash flow becomes constrained, etc. Lawyers who keep up with the activities of their clients become highly valued.

In-house lawyers often describe a critical source of information — the water cooler conversation. The idea is that in-house lawyers gain valuable information at the so-called water cooler. For outside counsel, the hourly billing model stands in the way of water cooler information.

When a client thinks about picking up the phone to have a conversation with the lawyer, the client thinks about the cost of the call. Often, the concern of a legal bill prevents the client from making the call. Lawyers should wonder about how many client contacts they miss on account of hourly billing.

An alternative billing arrangement removes this barrier. How much additional legal work could you obtain as a result?

I'm Out of Time but the Conversation Must Continue

Many other factors exist regarding value apart from those discussed above. Instead of thinking about how you spent your last six minutes, alternative billing focuses your mind on how you can become not just valuable but invaluable to your clients. As far as aspirations go, I can't think of a better one for small firms.

Written by William D. Elliott.

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Ten Legal Technology Commandments

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