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Best Practice tips

Best Practice Tips: Law Firm Equity Partner Succession

Posted on October 25, 2017 by Sara Anderson

Asked and Answered

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

Q. I am an equity partner in a 36-attorney firm in Miami. We have seven equity partners, eight non-equity partners, and 21 associates. Our practice is limited to civil litigation defense and our clients are institutional clients consisting of business firms, governmental agencies, and insurance companies. The ages of our equity-partners are: 64 62, 60, 58, 54, 48, and 44. The firm does not have a succession plan for the senior partners and has not discussed the matter. I am not sure what the partnership agreement provides. I am concerned about our future if we don’t start addressing this. I would appreciate your thoughts.

Best Practice Tips: Law Firm Merger Pitfalls to Avoid

Posted on October 18, 2017 by Sara Anderson

Asked and Answered

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

Q. I am a partner in a 12-attorney firm in Rockville, Maryland. We are a first-generation corporate transactional and litigation firm. The firm was founded by the four equity partners twelve years ago. We have been very successful over the years and this is borne out by our excellent financial performance. While we have done well in our core practice areas, we are considering diversifying our practice into government sector work due to our proximity to Washington, D.C. We are considering merging with a six-attorney (three partner) firm in D.C. that is totally focused on such work. Can you share with us any pitfalls that we should look out for?

Best Practice Tips: Law Firm Capitalization – Should There Be a Buy-In?

Posted on October 11, 2017 by Sara Anderson

Asked and Answered

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

Q. I am a partner in a firm in Los Angeles. We have nine attorneys: four partners and five associates. We are a young firm in that we have only been in business for four years. The four partners started the firm together, and we are equal partners who split the profits equally. When we started the firm, we each made equal capital contributions. We do not have a partnership agreement. We are thinking about bringing in two associates as equity partners and are trying to think through the mechanics. One of our questions is whether there should be a buy-in and, if so, how should we determine it. We would appreciate your thoughts.

Best Practice Tips: Personal Injury Law Firm Strategic Planning

Posted on October 4, 2017 by Sara Anderson

Asked and Answered

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

Q. I am a partner in a four-attorney plaintiff-side personal injury firm in Illinois. Three of us are partners and we have one associate attorney. We handle run of the mill slip and fall, vehicle, and premises accidents; products liability cases; and workers’ compensation cases. We have a very aggressive advertising and marketing program. We are having issues with reduced case flow and dwindling and diminishing profits and earnings. For the past year the partners have been living off our credit line. We believe that we need to be thinking about doing something different and are not sure as to what that should be. However, we have agreed to start doing some long-term planning. We would appreciate your thoughts.

Best Practice Tips: Becoming a Rainmaker as an Associate

Posted on September 27, 2017 by Sara Anderson

Asked and Answered

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

Q. I am an associate attorney in a 10-attorney firm in Atlanta. The firm represents mid-size to small businesses. There are six partners and four associates in the firm. I joined the firm after graduating from law school two years ago. All of my work is given to me by the partners and since joining the firm, I have not brought in any clients. When I joined the firm, I was told not to worry about bringing in clients – the firm has plenty of work. I am paid a salary and a bonus if my billable hours are at a certain level. There appears to be no desire by the partners for me to spend time developing clients. I have talked with my peers in other law firms who tell me that this is short-sighted, and that developing clients is a major factor in their firms for associates to be considered for partnership. I would appreciate your thoughts on what I should be doing and what direction I should take.

Best Practice Tips: Compensating Your First Associate

Posted on September 20, 2017 by Sara Anderson

Asked and Answered

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

Q. I am the owner of a law practice in Belleville, Illinois. My practice focuses on real estate, estate planning and administration, and bankruptcy. I have three legal assistants. While I have been in practice for ten years, I have never hired an associate. I have a busy practice and now is the time. I have identified a candidate with six years of experience that I want to hire. He has business that he can bring with him. He has been working with a larger firm as an associate and has been paid a straight salary. My next step is to make him an offer but I am struggling with how to pay him. I would like to hear your thoughts.

Best Practice Tips: Institutionalizing Your Law Practice

Posted on September 13, 2017 by Sara Anderson

Asked and Answered

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

Q. I am the sole owner of a six-attorney estate planning practice in Phoenix, Arizona. The five associates have been with me from five to fifteen years. I just turned 55 and would like to retire when I am 65, either by selling my practice to another firm or to one or more of my associates. I would like to receive some remuneration for the sweat equity that I have invested (goodwill). I have tried over the years to set up my practice in a way that it is not “just me.” I changed the name of my firm to a trade name that does not include my name, arranged the lawyers’ names on our letterhead and website alphabetically, and eliminated designations such as principal and associate. I believe that I have made it difficult for clients and prospective clients to know who the boss is. I hope that this will make my firm more salable and appealing in the future. I would appreciate your comments.

Best Practice Tips: Key Financial Goals and Metrics for Law Firms

Posted on September 6, 2017 by Sara Anderson

Asked and Answered

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

Q. I am a newly-elected managing partner of a 14-lawyer firm in San Diego. Although I was elected to this position, I feel disadvantaged because I don’t have a financial background. What metrics/measurements should I be looking at?

Best Practice Tips: Acquiring a Personal Injury Practice

Posted on August 30, 2017 by Sara Anderson

Asked and Answered

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

Q. I am a non-equity partner in a four-attorney personal injury plaintiff law firm in Newport Beach, California consisting of the firm owner, two associates, and myself. The owner is planning on retiring and has provided me with a proposal to sell me his practice. How do I determine whether this is an opportunity or a potential curse? Your advice would be appreciated.

Best Practice Tips: Measuring Partner Performance

Posted on August 23, 2017 by Sara Anderson

Asked and Answered

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

Q. I am a partner in a 12-attorney firm in Houston. The firm has five partners and seven associates. We are a first-generation firm and we, the partners, have never practiced in other law firms. Currently, the partners have equal ownership interests and are compensated equally. We are experiencing issues with the present method of partner compensation and we are giving some thought to considering other approaches. One of the issues that we are trying to wrap our heads around is how to measure each partner's performance, value, and overall contribution to the firm. Do you have any suggestions? 

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