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In a profession historically structured on a linguistic framework, the letter of the law has morphed from words on paper to digital codes floating in cyberspace. From massive corporations employing hundreds of lawyers to small firms and government agencies; computers, the Internet and high-tech tools in general are impacting the way attorneys do business.
Tracking trends
Know what to go for
Into the Internet
Sales & Marketing [top] Inside the courtroom, lawyers must present the jury with good reason to rule in favor of a particular client. Similarly, attorneys must employ the same persuasive approach outside the halls of justice, ultimately convincing the target market to rule in favor of their services. Many industry insiders insist that advertising -- combined with a solid case record - represents the key to success in the highly populated world of law. In short, practices must stand out to prosper. The most recent count from the U.S. Census Bureau tallied well over 175,000 legal service firms nationwide, not to mention more than 1.1 million paid professionals. In a field so saturated with competition, marketing often determines if a firm scores a victory or loss when it comes to the bottom line. Online legal leads present one way for practices to increase service sales. With this approach, Web sites draw potential clients seeking attorney help - usually by providing tips, lawyer search engines and info. The site then offers to find an attorney ideal for that visitor's specific law problem. Once the visitor agrees and enters contact information, the site company sends the details to an attorney member. Most related operations guarantee: The prospect faces a current legal issue, and they requested a lawyer contact them. Leads usually include:
Hitting the Airwaves
You've Got Clients Customer Service [top] Client service fuels the legal industry. Even so, some researchers point out that few attorneys make concerted, quantitative efforts to keep their customers happy. This is unfortunate, they add, because strategies that include client satisfaction assessments and a few basic people skills clearly can keep a practice in business.
Client feedback: The secret's in the
questions
People skills: Up close and personal
Staffing & Employment [top] What type of legal practice do you have or want? - A general law firm usually isn’t a good idea, so you need to decide what you are good at and passionate about—immigration law, family law, real estate, elder care law, criminal defense, tax, labor, etc.? Where do you want to locate? Have you done your due diligence for the area in terms of already existing practices (aka, competition)? Is there someone retiring who might sell you her/his established practice, clients, office and staff? Do you have a “nest-egg” of a minimum of 6-9 months cash to pay for expenses (including paying your personal bills as well as the start-up cost of your new practice)? A conservative (but probably realistic approach) is after you have built your initial business/financial plan model for your new practice to reduce your projected revenue by one-third and increase your expenses by one-third and assume this is what your first year financials will look like if you are starting from scratch. Another big question is “can I afford to hire anyone my first year?” If you “save” by not hiring any help, are you willing to spend 40-50% of your time typing, filing, paying bills, collecting fees, answering the phone, etc., when you should be “lawyering” or “marketing”? One of the biggest eye-openers for lawyers starting their practice solo is the amount of time spent on “administrivia”. It is probably wise to hire at least a part-time secretary (possibly even from an employment agency where you pay a bit of a premium, but you don’t have to worry about taxes, recruiting costs, payroll reporting, benefits, holidays, and if the person isn’t a good “fit” with you, you can always ask for another person to be assigned to handle your needs). Another possible way to make it through the start-up/hardship year is to not invest in “brick and mortar” in terms of having your own personal office. There are many office complexes where you can “rent a small amount of space” that also come with office equipment that can be accessed for a charge (copying, phone system, receptionist/phone answerer, etc.), leaving you to spend most of your time on “lawyering” and growing your business (marketing/networking). Sometimes, even existing small law firms will allow you to use their space, library, etc., for a “rental” charge so that they can reduce their expenses (and this tends to work well if you are in a completely different practice than your host firm—nothing like cross-referrals to help a new business to grow). As for the “law library”, subscribe on-line to gain the access that you need. You don’t need books in today’s virtual world. Until you are “established” and beyond the uncertainty of start-up (meaning you have faith in your projected income and expenses), it is probably best to minimize the number of full-time “employees” on your payroll. Not only do you have a number of tax obligations (social security, Medicare, unemployment, etc.), but legislation requiring paid benefits continues to place the burden of things like medical insurance, paid days off for sick leave, paid holidays, etc., squarely on the backs even small business employers. Once you have defined the talent you need (either on an on-going basis or on a project/client basis), it is time to assemble the folks who will assist you in achieving your grand plan/dream. Most law offices start with a secretary/legal secretary, then add maybe a legal assistant, followed by a paralegal and if you are really rolling in dough (and business) a law clerk, and possibly another lawyer (these positions are listed starting with the lowest paid to the highest). There are a plethora of people who have gained the education and training to fulfill the roles and duties usually associated with each of these “legal” employee classifications. Your job will be to ascertain which of your candidates best fits with the personality and style of the office/practice culture you are trying to create. In today’s world, it is also a “must” to make certain that every person you are hiring (or engaging) is fully fluent, functional, trained, and adept at using today’s tools to perform work in a virtual world. This training should include knowing how to maintain the integrity of e-files, systems, e-storage, and all forms of communication medium so that, the integrity of your clients’ information/data/case, is uncompromised. So, if you need to hire (or replace) people who have the skills, certification, training, and experience noted above, where do you find them? A quick internet search will give you the contact information for schools which provide training in your State or geography (and they usually have a referral service for alumni). Also, with today’s social media reach, using your private list of key contacts by simply letting them know you have a specific need for an employee will probably satisfy your talent needs faster than you can imagine. If you use your search engine to query “employment agencies near {zip c ode}” not only will you get names of a variety of hiring agencies (aka “headhunters”) who can relatively quickly provide you with suitable candidates at a reasonable cost, but you will also see a number of “job” boards on which you may post your “opening” at virtually no cost. If you use this tool, be prepared for an avalanche of candidates—the point being, be selective. For more ideas on how to find the people you need, please refer to the Human Resource for additional suggestions. Billing & Accounts Receivable [top] The image of lawyers running up their clients' tabs as costly seconds tick away on the office clock has long held a place in American pop culture. And because the legal profession can pay quite well - a median hourly rate of more than $200 for experienced attorneys nationwide, according to PayScale.com - the tenacity of this perception is not surprising. Even so, research from the American Bar Association suggests that getting money into a practice's coffers frequently proves more difficult than the general public realizes. Inadequate invoicing and collection methodologies, coupled with increasing public and industry controversy around the standard "billable hour" model have compelled today's attorneys to take a close look at how they do go about garnering the cash they've earned. Fortunately, a number of leading practitioners have devised a slate of solid strategies to ensure effective and timely billing and receivable cycles. Better yet, these tactics benefit both attorneys and their clients.
Consistency and Communication Equals
Collection Make payment easy. A thorough discussion of fees should take top priority in the initial meeting, with the client feeling free to ask questions or voice concerns. When possible, a wise attorney will take into account the client's preferences regarding the invoice's format and disbursement. Some experts suggest going over sample fee agreements to make sure clients thoroughly understand billing protocols, including when and why services would terminate. On a purely practical note, including stamped and preaddressed remittance envelopes with mailed statements often prompts quicker payments. Leave paper trails. Invoices should catalogue all documents, either reviewed or created, during the client-service period. This includes drafts and subsequent revisions. Other details, such as case names and numbers, dates and duration of telephone consults, and court information also should appear on the bill. Some experts suggest that cover letters sent with particularly complex invoices can speed up payment, simply because clients don't waste time getting confused. In all circumstances, maintaining a regular mailing schedule is key. Document digitally. Any paper contract, invoice, letter or notice should have its counterpart in an accessible electronic file. By the same token, maintaining files for cyber-communications, such as e-mails, is critical, too. In smaller practices, administrative support staff likely can handle this task; but larger firms might find it useful to employ a collections manager. Deposit checks immediately. Obviously, this tactic keeps a practice's cash flow running smoothly and the accounts receivable column flush. But more importantly, a prompt visit to the bank may lessen the likelihood of bounced checks or other complications. Know when to call it quits. Do not continue to serve clients who have not paid their bills. Do consult with delinquent clients as to the best means of resolving the issue. While legal analysts largely agree that discounting the agreed-upon fee should be a "when all else fails" measure, in the end, doing so may cost less than hiring a collection agency.
Billing options: By the hour or the job? On the flip side, several thorny ethical issues - too complex to address here - have made the subject rather controversial. All the same, a growing number of legal pundits are suggesting that retainers, flat fees and other systems may be better suited to the modern practice of law. And while shifting gears within a corporate structure can be tricky, the following list is a sampling of alternative billing models that are becoming more commonplace. Fixed fee or project billing: In this arrangement, the attorney agrees to perform specified client services for a predetermined cost. Work that extends beyond the original agreement typically requires a second contract. Fixed fees function most effectively when the lawyer can accurately access the amount of work involved in a particular job. Examples include uncontested divorce cases, non-compete agreements and simple wills. Retainer: This model involves ongoing service to a particular client for a regular, predetermined monthly fee, usually for a set period, such as six months to a year. A meticulous itemization of exactly what the retainer covers - and excludes - should be part of the written agreement. Straight contingency fee: Typically utilized in personal injury suits, this model assigns a percentage of the amount recovered to the attorney handling the case. In fact, a straight contingency fee applies in any situation where money or benefits come into play. Fee combination: Depending on the nature of the service, coupling various fee types can benefit both attorney and client. These include: combination hourly rate and fixed fee; combination hourly rate and contingency; and combination flat fee and contingency. Besides providing the maximum level of service to clients who cannot afford straight hourly rates, combination models assures attorneys of a degree of cash flow stability during the service period. Vendor Relations & Purchasing [top] Judging by the shear number of legal supply vendors, attorneys need much more than an easily-pursued jury to win cases. While most folks associate the field of law with the drama that unfolds in the courtroom, the action that takes place when it comes time to order supplies for the firm also can deliver an exciting storyline. Legal outfits must frequently buy materials for documentation, upgrade from one high-powered computer system to the next, and purchase a variety of other tools of justice. It's all about staying ahead of the game. The good news is that legal professionals can choose from a wide range of vendors. Even more, many of these product providers offer expanded operations. For instance, some vendors don't just provide materials, but also advice and other resources pertinent to the world of law. Simply put, they're improving vendor relations by putting all legal necessities under one umbrella, making it easy for firms to find everything in a single supplier. If only for this reason, attorneys and firms should always research what's available before settling on a variety of vendors to fulfill a bunch of niches. With competition in the legal supply market becoming ever-more stiff, these one-stop shops for attorneys usually offer great deals to repeat clients and can save folks a lot of time. From selling office furniture to business insurance, some of today's legal supply vendors cover the gamut. Listed below are just a few of the latest specialty services offered by certain suppliers striving to broaden their capabilities and reach out to their attorney customers.
When it comes to actual merchandise as opposed to business support services, more and more vendors in the legal field realize convenience sells. Many suppliers offer users manuals and tip guides on their Website for products. Most also offer shopping cart accounts, allowing those in the legal profession to log on and load up on supplies without the hassle of punching in credit information each time. Through these accounts, customers also can track purchase history and shipping progress. Legal Insurance [top] By Jason Frye Insuring your car, home and family is a no-brainer. You need these things, you love these things, and you insure them to protect them. What do you do about your legal practice? With legal malpractice insurance, prior acts coverage and extended reporting endorsements (or extended reporting options), your practice can be covered at any phase of your career. Everyone Else is Doing It The doctors and accountants are doing it anyway. Just as medical malpractice protects doctors from an unforeseen circumstance resulting in some type of injury to a patient, and accountants' coverage protects them from a dropped digit or misplaced decimal, legal malpractice insurance protects you in the same way. You're not doing surgery on your clients - so there's no slip of the scalpel - but you could miss a deadline. Or file a day late and overrun the statute of limitations. Or a host of other things. Legal malpractice insurance shields you in these situations. Types of Insurance Did you know that, according to the American Bar Association (abanet.org), 5-6% of all lawyers will have a legal malpractice suit brought against them this year, and that one third of all lawyers are unprotected? The protection provided by legal malpractice insurance is for the current coverage period (generally a year) for any acts performed as an attorney, notary public, title agent, trustee or executor/executrix. This runs the gamut of duties performed by lawyers while they practice. Legal Malpractice Insurance: This coverage guards against an instance of malpractice (generally accidental, but more on that later) during the current coverage period, but what about cases brought before the current period or after you have retired and do not carry legal malpractice insurance any longer? Prior acts coverage and extended reporting endorsement policies cover you here. Prior Acts Coverage: This type of insurance does just that-covers you for any acts occurring before the current coverage period. But how long before the current period? That depends on the level of coverage you buy (most are sold in 1-5 year increments), where you buy it and the specific terms of your policy. The value in prior acts coverage comes with knowing you are protected from any of the hundreds of cases you took, as long as you took them during the coverage period. Extended Reporting Endorsement Policies: Commonly called "risk tail" or "tail coverage," this type of insurance covers your profession tail after you've left practice for retirement, a new firm, or another type of employment altogether. Tail coverage protects you in the future for cases you handle now, no matter what you are doing in the future. Often, if you are leaving a larger firm for another firm or to start your solo practice, your prior employer may provide tail coverage for you, extending back to cases you worked for them. Remember, they want to cover their tails too, so ask. The Run-Down on Insurance Types Legal malpractice insurance, prior acts coverage, and tail coverage all protect you in the many phases and functions of your career, but how do they work? The first thing to consider is your deductible. With these types of insurances, deductibles come in several types: per claim, aggregate, "damages only" or "loss only." Per claim deductibles apply to each claim separately, while the aggregate deductible tallies the deductible s for the year into one payment. With damages only or loss only deductibles, you pay the deductible only in the event of a settlement or judgment. Next come the terms of the coverage, which vary from provider to provider. Commonly the terms include any exclusions (dishonest, fraudulent, criminal or malicious acts), terms dictating your right to select defense counsel or not, terms of settlement indicating who (insured or insurer) must consent to settle a claim, and liability limits. There may also be a set of conditions that must be met in order to secure the services and protections offered by the insurer. These include a timeline of notice a claim has been made, arbitration provisions, and cancellation notices by either party. Where You Get It Like anything else, comparison shop for legal malpractice, prior acts and tail coverages. Prices and terms will vary from insurer to insurer, and the right fit for you is out there. One place to start researching is your state Bar Association. In North Carolina, log onto ncbar.com; in South Carolina, visit scbar.org. The national Bar Association website, abanet.org, contains links to information regarding insurance, as well as links to the state Bar Associations. Often the state Bar Associations have done much of the research and can find deals for their members. When shopping for coverage, keep in mind that several factors affect the cost of coverage: claim history, area of practice (some areas are higher risk than others), geographic location, deductible amount, and coverage amounts. How much coverage do you purchase? That depends largely on two factors: 1) How much do you need to protect your assets? and 2) How much do you need to protect your clients? Many legal malpractice insurance holders seek $300,000 to $1 million per lawyer in their firm. Some insurers will write policies in excess of $1 million, and if you need that type of coverage, that factor will narrow your search for you. Legal Communication [top] By Jason Frye What are the biggest challenges you face in your law office today? Finding time to read the latest rulings? Juggling your client and court calendar? Keeping track of important legal documents? Tracking billable time and assigning it to clients? If any of these apply to you, an upgrade in your communication system may be just what the court ordered. Cellular telephones (cell phones) allow easy telephone access to your office and clients, while Smartphones and Portable Digital Assistants (PDAs) expand this capability by accessing the Internet and e-mail, among other things. More impressive, however, is the software and services that accommodate these devices - many of which are tailored to quell the demands of the legal industry. The Witnesses As you likely know by now, cell phones let you send and receive telephone calls from almost anywhere (the courtroom being one obvious exception). They also allow for Short Message Services, or "text messages." Text messages, typed and transmitted via the alphanumeric keypad on the cell phone, are too short for even the briefest of legal briefs, but a quick note when a phone call would be unnecessary. Some cell phones come equipped with digital video and still cameras, allowing you to send photo or video messages similar to a text message. Rudimentary Internet access, integral mp3 players, and Global Positioning Systems (GPS) software have all become available on more models recently. Smartphones and PDAs, the beefier cousins of cell phones, combine the functions available on cell phones with expanded access to the Internet and e-mail, a host of software applications, and, often, voice recording abilities. The Facts of the Case While limited in their overall capabilities compared to smart phones and PDAs, cell phones set the precedent for today's communication needs-the ability to send and receive phone calls from anywhere. Does one of your paralegals have some important information you need before your case today? A call to your cell phone can solve that from the parking lot or courthouse hallway. If that does not suffice and you need to review legal briefs or examine new evidentiary photos, a smart phone or PDA may be a better choice. Smart phones and PDAs perform the same functions as the cell phone, but push beyond their limitations to include full Internet access and your e-mail (just like in your office, but without the bulky desktop computer), a full suite of office and productivity applications, and a host of accessories and software which could help maximize the time you spend on your caseload. The Evidence The idea behind all these devices is streamlining your time, and deciding which one is best for you and your practice can be burdensome. The evidence below will help ease that burden. Exhibit A: Cell phones
Exhibit B: Smartphones Smart phones do everything cell phones do in addition to:
Exhibit C: PDAs PDAs build on smart and cell phone performance and allow:
Exhibit D: Software Cutting-edge software tailored for mobility allows:
Closing Arguments Analyze your needs and wants and find the perfect balance in one of these devices. Do you need to review case background files before a court session, take calls in your car on the way to a meeting, and have an mp3 player for the gym? A PDA works well for you. Just need to call and check in? A cell phone. Want to access the full range of the Internet, as well as text messaging and the ability to work on spreadsheets? A smart phone meets your needs perfectly. Remember to include prices in your analysis. Each device has base models at moderate price, high-end models with high-end prices, and everything in-between. Cost of the device is not the only cost associated with it; the monthly wireless plan also factors in. With cell phones, the plans include the available number of minutes, as well as the number of text or picture messages you may send, from only a handful to an unlimited amount. GPS service requires initial additional charges and, often, a monthly access fee. The same holds true with smart phones and PDAs, but they have additional data plans that allow you to send and receive data such as e-mail and Internet searches. Data plans can also range from limited to unlimited access. The software and hardware packages you choose with your PDA and smart phone carry additional charges. Whatever your needs-a simple call in or out, or the ability to do Internet research anywhere-with a little examination, you will find the device that best suits you. |
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