By John W. Olmstead, MBA, Ph.D, CMC Q. Our five lawyer firm has had a very successful past couple of years. We have been growing in terms of clients, billings and revenues. However, we are getting deeper into our credit line and we simply don't have adequate cash to pay our bills. I would appreciate your thoughts on this matter.A. Sounds like you are caught in the growth-cash flow trap. Growth puts strain on cash and increases demand for additional working capital. There have been many law firms and small businesses that were profitable - but failed due to simply running out of cash. While you cannot escape this paradox - by actively managing your cash flow (timing of the intake of cash against the outflow of expenses) you can minimize the impact of the following traps:1. Lack of Attention Paid to Financial Management. Many law firms, especially solos, often give this task a low priority on their to do list. Servicing clients and new client development are given higher priorities. There is often a lack of understanding of financial reports and statements. Understanding financial reports such as income statements v.s. cash flow statements are important is providing early detection of potential cash problems requiring corrective actions. Law firms should develop reasonable monthly, quarterly, and annual cash flow projections as well as income and expense projections.
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October 5, 2011 |
Practice News
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October 5, 2011 |
Events
Please join us in supporting the 14th Annual Holiday Party to benefit the Illinois Bar Foundation/ISBA Young Lawyers Division’s Children’s Assistance Fund. Over the past decade, we raised over $400,000 and collected countless toys and books that were donated to children’s waiting rooms throughout the State of Illinois. Please continue this worthy tradition by joining us this year in person or support our event with your generous contribution:WHEN: Friday, December 2, 2011, 6:00-10:00 p.m.WHERE: Cubby Bear Lounge, 1059 W. Addison, Chicago, IL (see map)WHAT: Open Bar, Warm Appetizers, Live Music by Rod Tuffcurls & The Bench Press, and FUN!COST: $35.00 per person, for tickets purchased by November 21, 2011$30.00 per law student, per tickets purchased by November 21, 2011$40.00 per person, for tickets purchased after November 21, 2011Click here to registerThe YLD Children's Assistance Fund is a fund of the Illinois Bar Foundation, a 501(c)(3) charitable entity.
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October 3, 2011 |
Practice News
The Illinois Supreme Court has appointed Diann K. Marsalek as a Circuit Judge of Cook County, at Large. This vacancy was created by the retirement of the Honorable Margaret O'Mara Frossard.This appointment is effective on Oct. 3, 2011, and terminates on Dec. 3, 2012.2 comments (Most recent October 6, 2011)
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September 30, 2011 |
Practice News
The Illinois Supreme Court has announced that the Twenty-First Judicial Circuit judges voted to select Thomas W. Cunnington as an associate judge of the Twenty-First Judicial Circuit.Mr. Cunnington received his undergraduate degree in 1977 from Illinois Wesleyan University, Bloomington, and his Juris Doctor in 1981 from John Marshall School of Law. Mr. Cunnington is currently engaged in solo practice in Kankakee.
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September 30, 2011 |
CLE | Practice News
The Illinois Supreme Court has amended some of the rules regarding Minimum Continuing Legal Education (MCLE) for Illinois attorneys.Among other things, the changes will provide greater flexibility to newly admitted attorneys who need to complete their initial MCLE requirements and make it more attractive for them to participate in an approved mentoring program as part of their initial MCLE requirements.The Court also eliminated a $20 fee which attorneys had been required to pay to claim credit for participation in non-traditional activities to meet the MCLE requirements.The amended rules do not change the basic MCLE requirement that attorneys, other than newly admitted lawyers, earn 30 hours of CLE activity during two-year reporting periods beginning in 2012, and 24 hours of certified credit through the 2011 reporting period.Previously, newly-admitted attorneys were required to take a 15-hour Basic Skills Course. New attorneys admitted after October 1, 2011 are still required to take a total of 15 hours of credit for their initial MCLE requirements but the amended rules give these attorneys more options to fulfill these requirements. New attorneys need to participate in six hours of professional responsibility credit either by attending a six-hour Basic Skills Course or by participating in a mentoring program pre-approved by the Commission on Professionalism. The additional nine MCLE hours can be according to the new lawyer's choosing and may include professional responsibility credits.
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September 30, 2011
The Illinois State Bar Association's Young Lawyers Division hosted a Day at the Races at Arlington Racetrack on Sept. 24. -
September 29, 2011 |
CLE | Practice News
New attorneys have heard all about the 15 hour basic skills requirement, but Supreme Court rule changes announced this week allow more flexibility in meeting the requirement.Up to now, new admittees were required to complete a 15 hour basic skills course within their first year of admission. Effective immediately, the Minimum Continuing Legal Education (MCLE) Board will accept a 15 hour combination of basic skills instruction (6 hours), mentoring through the Supreme Court’s Commission on Professionalism (6 hours), plus traditional or non-traditional CLE credits to complete the balance.ISBA is gearing up to help new admittees meet the requirements in the amended rule.Read more for details.
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September 29, 2011 |
Practice News
ISBA Director of Legislation Jim Covington looks at bill in Springfield of interest to ISBA members. This week he looks at: Public Act 97-148 access to a principal's medical records by his or her agent under a power of attorney for health care; House Bill 1589 may pass in veto session changing law on custody and visitation orders for deployed service members; House Bill 1712's amendatory veto that affects limited powers of attorney for property by financial institutions for limited business purposes.
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September 28, 2011 |
Practice News
Do you really need that expensive office space you're leasing? Internet-based legal software lets you cut costs while expanding your potential client base by taking part -- or maybe all -- of your practice online. In the October Illinois Bar Journal, Peter Olson explains what he other ISBA lawyers, like Cheryl Morrison of Mokena, are doing to create virtual practices.
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September 28, 2011 |
Practice News
Asked and AnsweredBy John W. Olmstead, MBA, Ph.D, CMCQ. Our firm is a three partner general practice firm in a small community. Our ages are 72, 68, and 64 respectively. Our firm has not adequately prepared for succession/exit of the partners. We have over the years hired associates but have been unable to keep them - they have all left for greener pastures. We are now contemplating merger with a much larger firm that has 40 plus attorneys. We have had several meetings at the office and we have provided them with our financials. They have not provided us with detailed information. We are getting frustrated. It has been over four months since we began talking with this firm and we seem to be "stuck" and not maintaining momentum. We have other options that we have just begun exploring. How can we get "unstuck" and move this process along?A. Right off the bat - admit that this is not a merger of equals - it is more of an acquisition. Hopefully, you have discussed firm name, whether your existing office will be retained or closed, and the future roles of each you as well as your staff. These are often deal breakers and many firm merger talks never get past this point.