Call Us Today! 1.856.779.0560|info@lawbill.com

5 Metrics Help Answer: “How am I doing?”

How will you measure success in 2014?

 

Ed Koch, the late mayor of New York City, was known for campaigning on street corners and at subway station entrances asking voters: “How am I doing?”

As January 2014 draws to a close, most law firms have held at least one partners’ meeting to review the results of 2013. Whether you are a partner of a large firm or you are on your own did you ask yourself: “How am I doing?”

Hopefully, besides the financial report from the office manager/bookkeeper,  there was a review of some of these benchmarks which are equally important for evaluating the current health of your law firm business:

1. Does the firm have more active cases today than it had 12 months ago? A sure sign of the health of a law firm practice is whether the work load is increasing year-over-year. Wall Street measures the success of a business by the growth of sales. Your practice management system should be able to provide a list cases filtered by “date opened”. An annual or quarterly review of this list will give the earliest indication of the health of the business.

2. Did the number of new clients obtained during 2013 exceed the number of new clients obtained in 2012? While a growing case list is one sign of a prospering business, a growing list of new clients is just as vital. This is where the use of social media, coupled with a constant customer relationship program, can directly add to the firm’s client list. Firm newsletters and emails to existing clients should be the first step to take. The easiest source of a new client is a referral from a happy existing client.

3. Did the average number of days between client contacts decrease in 2013, compared to 2012? Among the biggest complaints from law firm clients is that they do not hear from their lawyer often enough. A simple email costs literally nothing but the one minute to draft and click send. It should be the goal of every lawyer to reach out and “touch” each client a minimum of once every 90 days. A good practice management system can automate the process and keep track of which clients need to be contacted.

4. Did the ratio of employees to total firm income increase or decrease in 2013? This is not really a money question. Rather, it points to the need to create a working environment in which every employee can be as efficient as possible. This means using the latest time and billing, practice management and document management systems available. It requires acknowledging that smart phones, tablets and cloud-based document sharing are as critical to a successful law practice as was passing the Bar exam. Fear of technology is no longer acceptable.

5. Does each area of practice represent an increasing amount of total firm business? OK. This is a money issue, but it is best reviewed in a dashboard. The ebb and flow of the economy dictates which areas of law practice (real estate, immigration, bankruptcy) are in lesser or greater demand. Quarterly reviews of the trends of each practice area should help the firm decide where to invest the firm’s assets (time and money) for the highest return.

The law firm businesses which will succeed the most in 2014 will be the ones which continuously monitor these five metrics and adjust the firm’s business model accordingly. If done properly, in January 2015 they will be able to answer: “How am I doing?” with a resounding “Very well, thank you!”

Steve Miller, JD  has provided law office productivity consulting services since 1998. He is certified in LexisNexis PCLaw®, LexisNexis Time Matters® and Amicus Attorney®.

We’d love your comments. Please click on the Headline of this post to access the Comment section.

`

Happy New Year: Now snap out of it!

Snap out of it!

Snap out of it!

Is 2014 the year you improve the productivity of your law firm?

While I hope that happens, it is more likely that you and your staff will continue to follow the same procedures you used last year and the year before that. When was the last time you and your partners took a day to review each step performed by each employee from the front desk to the back room and analyzed how their tasks could be performed more efficiently?

Have you recently called into the office to see how long it takes for someone to answer an incoming call? How long were you kept on “Hold” after a curt “Law Office, one moment please?”

When was the last time someone reviewed all of the intermediate steps it required at your firm from initial telephone contact until obtaining a signed Retainer Agreement and initial payment receipt from a new client?

Has your firm adopted a policy to use an approved collection of Firm Documents so that your practice management or document assembly program auto-fills most of the text for those documents used repeatedly?

When was the last time you reviewed with the firm’s IT vendor the workstation lock-down policy so staff cannot use  firm time for shopping for shoes or checking sports scores? Can the staff use firm internet band-width to stream their favorite online music station or video?

Besides the bookkeeper, who else is reviewing who is not promptly posting billable time entries? What is the firm policy for penalizing perpetual late posts?

Is the firm utilizing all of the features of the practice management program? When was the last time the staff had a refresher course to review all of the productivity functions the software provides?

Who is developing the firm’s “paperless” office policy? Has someone performed a review of what incoming and outgoing documents should not be on paper?

What is the firm’s short-term goal for moving to a “cloud-based” working environment? Who last checked to confirm that the firm’s back-up system is really making current backups? Is every single document created or received by the firm located on a central server accessible by all and with multiple redundant copies?

How mobile is the firm? Can each lawyer access their appointments, matter list and documents on their smartphone and tablet? How about creating time and expense entries in the field in real time?

If you or one of your partners are not addressing these issues today, then how do you expect your firm to work at maximum productivity and gain maximum profits in 2014?

Make today The Day: Snap Out of it!

Steve Miller, JD  has provided law office productivity consulting services since 1998. He is certified in LexisNexis PCLaw®, LexisNexis Time Matters® and Amicus Attorney®.

We’d love your comments. Please click on the Headline of this post to access the Comment section.

5 Practice Management lessons from the local Christmas Tree Lot

Christmas Trees for sale on re-purposed Italian Ices parking lot

There are five Practice Management lessons for law firms I have learned from the local Christmas Tree lot. Every year for the last 5 years, right after Thanksgiving,  the local Italian ices stand transforms itself into a Christmas Tree lot. The first time I witnessed the change I realized that in its simplicity it was a brilliant idea. It operates from the 1st day of Spring (Opening Day) through early-September. When school reopens in the Fall and the temperatures drop here outside of Philadelphia PA (Go Eagles!), customers are far and few between. By October 1st the business is closed for the season. Instead of no source of income for a half year, the owner turns the parking lot into a Christmas Tree lot for 5 weeks, thus retaining a portion of his customer base in the off season. And don’t be fooled: the sales of Christmas Trees is Big Business, as described in a recent NY Times story.

This year I happened to be passing the lot on the day the trees were delivered. It required a crew of 8 to unload the 53 foot 18-wheeler of the 800 trees (I asked) that had been ordered for this season. The site had been already prepared with a portable 6-foot chain link fence around the lot perimeter, the delivery and electrical connection of a portable heated hut for the workers, the delivery and electrical connection of a portable 8-foot marquee highway sign and the delivery of the tree wrapping machine and various other incidental signs, supplies and tools.

As can be seen in the photo above, taken on 12/25/13, they did very well this year. I counted less than 40 trees left and I don’t know if there had been additional tree deliveries after the one I had witnessed. The moral of this story: once you understand your business model and develop a successful system for that model stick with it.

So, how does this apply to operating a successful law firm business? Here are 5 lessons that I came up with:

1) Maximize the productivity process of your law firm. The Christmas Tree lot was operated with a carefully designed system. Even though it appears to be a simple business, there are many moving parts which all must work in tandem to produce a profitable outcome. Too many law firms run by rote: they continue to operate today as they had five or ten years ago. Utilizing the latest law firm productivity software, hardware innovations (tablets and cloud) and sophisticated social networking policies would improve productivity and profitability.

2) Diversify your income stream. If you can’t sell ices in the winter, sell Christmas Trees instead. If your law firm only practices certain types of law, which for economic or social reasons fall out of favor, partner up with another practice so you can cross-refer clients.

3) Location. Location. Location. The Christmas Tree lot needs to be located on a heavily traveled road. It has only a 5-week tree selling season and needs to be exposed to many eyeballs. A law firm can find a good “location” by optimizing the firm website for maximum traffic, networking at local and state bar association meetings and sponsoring local charity and sports events. If your marketing campaign is to wait for the telephone to ring you need to up your game.

4) Offer Special Services The obvious purpose of the highway sign was to promote the Christmas Tree lot. The sign announced: “Tree Coupons Here” with an email address. The real “cross-marketing” purpose, I imagine, was to obtain the email addresses of the tree customers to send them coupons and announcements for the Italian ices business in the Spring. What could your law firm offer to existing clients to sell them additional services? A free wills and estate consultation? Title insurance for real estate clients? Health Insurance review for accident clients?

5) Learn from your mistakes  There is not much similarity between selling Christmas Trees and selling Italian ices other than the seasonality of each business. After the first year of operation I’m certain that the tree lot owner had a list of mistakes he had made and improvements he envisioned for the next selling season. (For example, there was no heated hut until this past year.) Operating a law firm business requires annual reviews not only of the performance of the staff (dollars earned per hours worked) but the performance of the business itself. Which areas of the practice are not producing a profit after all costs are included? Which departments are overworked? Underutilized? Retaining the services of a law firm management consultant, not the firm’s accountant, could provide valuable insight into how the firm’s productivity could be maximized.

The takeaway for every law firm should be to operate like a Christmas Tree lot: squeeze the maximum profit from the assets already owned.

Steve Miller, JD  has provided law office productivity consulting services since 1998. He is certified in LexisNexis PCLaw®, LexisNexis Time Matters® and Amicus Attorney®.

We’d love your comments. Please click on the Headline of this post to access the Comment section.