Webworthy News & Advice
For a closer look at these recent accounting-financial items, take a quick trip to the Web.
Managing 70%
Imagine the CEO of a major international corporation saying to her Board of Directors, 'We are doing a great job of managing 70% of our productive capacity.' And the Board responding, 'Great job, here's your bonus.' Or another CEO who says, 'We don't need to hire managers for our regional plants, because 70% of our capacity is in the main plant anyway. Let the others do what they want.' Hard to imagine, isn't it? Of course it is, because the concept of ignoring 30% of your business' productive capacity ' leaving it to 'manage itself' or, worse, considering it unimportant ' would get you fired in any business in the world.
Managing Fiscal Fundamentals
Understanding a law firm's fiscal affairs is not that difficult. One need only understand a few basic concepts ' concepts that are no different for the law firm or the law firm's clients. The trick is not in understanding the numbers but in managing for results. For a law firm, this is an even greater challenge. Its owners are well educated, strong willed, success driven, practice focused, independent minded and, at least for trial lawyers, somewhat more argumentative than the general population. The owners are also large in number relative to the total number of employees and are active in the day-to-day operations of the firm.
CALENDAR OF EVENTS
San Francisco will be the site of the 16th annual conference and workshops on <b>Law Firm Management & Economics</b>, hosted by our Board member Joel A. Rose on March 20-21.
Committing Firm Resources to a Proposed Ancillary Business: A Checklist
The following discussion and checklist are based on guidance provided in <i>Beyond Legal Practice: Organizing and Managing Ancillary Businesses</i>. Thanks are due to The Hildebrandt Institute and author James W. Jones for permission to adapt their material. For details on this currently very popular booklet, see Hildebrandt's website, www.hildebrandtinstitute.com. (We're looking forward to more Hildebrandt advice on ancillary businesses: another topic from this popular booklet will be expanded upon in a future edition of the <i>A&FP</i> newsletter.)
Motivating Partners to Bill and Collect
As in refining any other law practice skill, the key to improving billing and collection is self-motivation, enhanced and supported by the firm's operative structure.
Building a Comp Plan That Works
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.
Avoiding Extinction in a Turbulent Legal Market: Financial Hygiene Perils
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.
Progress in Standardizing Law Firm Invoices
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.
E-Invoicing: A Client Perspective
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.
