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Best Practice tips

Best Practice Tips: What Does it Cost to Operate a Law Firm?

Posted on November 14, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is a four-attorney personal injury plaintiff law firm with three partners and two associates located in upstate New York. Could you advise us what the expected cost range is per year for an attorney to practice? Assume the attorney generates gross revenue of $500,000 per year. What should that attorney expect to earn as gross income based on that revenue?

Best Practice Tips: Gradually Selling a Law Practice to an Associate

Posted on November 8, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the owner of an elder law firm in Phoenix, Arizona. I have one full-time associate, one part-time associate, and three staff members. I am earning around $300,000 a year from the practice and my full-time associate’s salary is $100,000 a year. I am 60 years old and would like to retire and be out of the practice in five years. I would like to begin phasing down and working part time in the next year or two. My full-time associate has been with the firm for 10 years. I feel that I should be entitled to some sweat equity from the practice in the form of retirement compensation or buy-out. With this said I would prefer that my practice “stay in the family” and be sold to my associate rather than selling my practice to an outside buyer. I would appreciate your suggestions.

Best Practice Tips: What Law Firms Must Do to Remain Competitive in the Internet Age

Posted on October 31, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the managing partner of a 12-attorney family law firm in Kansas City, Mo. We have been in practice for about 30 years. During the last 10 years we have shifted more of our advertising from print directories and advertising to the internet. Today virtually all of our work comes from the internet. While to some extent this has been a blessing, it has also been a curse as we must continue to make investments in search engine optimization, update the website, and pay to be included in online directories. It is a vicious circle and we are losing business to new attorneys who are just starting out, creating first-class websites, and making online investments.  I would appreciate your thoughts.

Best Practice Tips: Developing a Client-Service Improvement Plan

Posted on October 24, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. We have a 24-attorney litigation firm in Pittsburgh. We represent insurance companies and business firms. We recently conducted a client satisfaction survey of our top-tier clients via telephone and face-to-face interviews. We have discovered that we have numerous issues regarding client satisfaction. Where do we go from here?

Best Practice Tips: The Focused Law Firm

Posted on October 17, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am part of a three-member management committee. We have a 25-attorney firm located in the greater Washington D.C. area. We specialize in governmental law. We are feeling that our committee and the firm spend a lot of time in meetings discussing management problems and strategies to no avail. Not much changes or gets implemented. I welcome your comments.

Best Practice Tips: Law Firm Merger as an Exit Strategy for Sole Owners

Posted on October 10, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the owner of a small general practice firm in Novato, Calif. I have three associates working in the firm, three legal assistants, and one office manager/bookkeeper. I started my practice 35 years ago right out of law school. I am 60 years old and wanting to retire within the next five years. None of my associates have the ability or the desire to take over the firm. I believe that my best option is to sell my practice to another practitioner or join another firm through a merger or other arrangement. I would appreciate your ideas regarding merging with another firm and how I would be compensated and receive payment for the goodwill value of my firm.

Best Practice Tips: Small Law Firm Financial Performance Indicators

Posted on October 3, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the owner of an estate planning firm in Milwaukee, Wis. I have five associates and four paralegals working in the firm. More of my time is spent on managing the practice and marketing than on servicing clients. I am trying to develop financial goals for the firm, but I am clueless as to what financial indicators or ratios I should be looking at and what constitutes good or bad performance. Anything that you are willing to share would be appreciated.

Best Practice Tips: Associate Attorney Compensation – Five Approaches

Posted on September 26, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the owner of a six-attorney firm in the western suburbs of Chicago. There are five full-time associate attorneys working with the firm. Two have been with the firm for more than 15 years, two over 10 years, and one for seven years. All are being paid salaries in excess of $100,000 per year and none are even close to generating $300,000 or more in working attorney fee collections per year. Their billable hours are dismal as well. While I have an expectation of 1,200 annual billable hours, none are meeting that expectation. My income is suffering as a result. In addition to salaries, they sometimes receive a discretionary bonus. I am at my wit’s end. What are your thoughts?

Best Practice Tips: Law Firm Shareholder Admission Criteria

Posted on September 19, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is a small firm of two shareholders and two associates based in Bakersfield, Calif. The firm was formed 15 years ago by the two existing shareholders. We have never added additional shareholders, but we believe that we owe it to our associates to have some guidelines as to what we are looking for in future shareholders. We’re considering a partner track program/document. Do you have any suggestions?

A. I believe you should have at least a general set of guidelines laid out in writing. For example:

Associates who have been in practice for seven years and employed by your firm for two or more years and who have consistently performed as outlined below should be eligible for equity shareholder-level review based on equity shareholder-level openings, competencies attained, performance, and behavior.

Best Practice Tips: Lawyer Retention Incentives

Posted on September 12, 2018 by Rhys Saunders

Asked and Answered 

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the administrator of a 16-lawyer firm in south Florida. There are six equity partners, two non-equity partners, and eight associates. The firm was formed nine years ago, and we have not lost any attorneys during this period of time. We believe that we have a positive culture and great lawyer retention. However, we would like to do more to ensure that lawyers stay with the firm and implement more incentives for them to do so. I would appreciate your thoughts.

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