Features
Joe Danowsky
On a recent visit to Altman Weil management consultants in Newtown Square, PA, I met with James D. Cotterman, a longtime contributor to (and just-retiring Editorial Board member of) this newsletter. Jim was the lead author and editor of both the 2nd and 3rd editions of the ABA-published book <i>Compensation Plans for Law Firms</i>. Regrettably I can't share with you Altman Weil's excellent hazelnut coffee, but I hope you'll enjoy the following condensed excerpts from our conversation about Jim's book. With Jim's concurrence, I've also prettied up my sketched notes on some compensation system and profitability interrelationships explained in the book; these flow diagrams appear on pages 2 and 5.
Joseph B. Altonji
The early days of 2003 have brought a stark reminder to the leaders of law firms: While strong law firms have experienced an exceptional level of prosperity and growth in a consolidating market, continued expansion and ever increasing profitability are not the only potential destinies for law firms today. As the high profile closures of long established firms such as Brobeck; Peterson & Ross; Hill & Barlow and others demonstrate anew, firms can fail.
Joe Danowsky
The legal and accounting professions have made significant strides in defining standard invoice data codes as well as formats for law firm electronic invoices. The standards bandwagon has been in no danger, however, of tipping over from too many community members hurriedly jumping on it.
Features
James S. Maxwell
Our legal department at Atlantic Bank of New York was looking for an electronic invoicing system to make our outside counsel billing process more manageable. What we found was new technology and software that enabled us not only to improve the overall efficiency of our system but also to implement an invoice discounting policy that saves us money and gets our outside counsel paid quickly. Because the new invoicing system lets us turn invoices around so quickly, we have achieved such significant savings that we expect the invoicing system to pay for itself within just a few years.
Joe Danowsky
As argued in the accompanying article on one corporate law department's initiatives, implementation of electronic invoicing software should ideally be a win-win improvement benefiting outside law firms as well.
Features
Joe Danowsky
The Federal tax code and corresponding regulations require a lawyer to send a 1099-MISC form to certain individuals (and non-incorporated business entities) who receive disbursements from the lawyer's trust fund for legal awards and settlements. Writing on behalf of a law firm, an accounting firm reader has asked about the proper way to report such disbursements.
Joel A. Rose
Demands of clients and competition among law firms are causing fairly dramatic changes in the pricing of legal services, away from straight hourly billing.
William G. Ross
One of the most difficult attorney billing issues is how a lawyer may receive fair compensation for the "intellectual property" value of work products reused for a later client. An attorney who has spent substantial time developing interrogatories, jury charges, legal memoranda or other such documents for one client naturally will want to "recycle" the same materials when they are relevant to later clients. But on what, if any, basis can the lawyer legitimately bill for this recycled work?
Don Williams, Pete Peterson, Bill Bachman
&
Mike Short
Part One of this article offered a general overview and comparison of the major surveys currently available for US law firms (Altman Weil's "The Survey of Law Firm Economics"; Hoffman Alvary's "The Flash Report on Law Firm Economics"; and Pricewaterhouse Coopers' "The Law Firm Statistical Survey"). Part Two offers advice on how to select a survey.
