Category: General Management

Why Branch Offices Fail

This is an issue which affects firms of all sizes. Branch offices open with fanfare and flourish, and a high level of expectation. Sometimes expectations are unrealistic. Sometimes expectations are not clearly defined. Too often, these same offices close later with a barely noticeable hush.  READ MORE …

 

When Your Needs Exceed Your Budget

Last year I worked with a firm which had been in decision paralysis for over a year about having a new website designed.  The existing site was clearly a cookie-cutter design.  Much of the information was no longer accurate.  The firm’s site sorely lacked search engine optimization (SEO).  READ MORE …

 

Why Family-Owned Businesses Fail

Business litigation attorney Edward T. Kang — Managing Member of  Kang Haggerty & Fetbroyt LLC in Philadelphia — recently appeared as a guest columnist in the September 2014 monthly edition of Philadelphia Business Journal.  His article, “The three big reasons family businesses fail . . . and how to avoid them” is right on target.

Four of my uncles worked in my grandfather’s healthy business, which he built from scratch.  My grandfather had a fur cleaning, alteration and storage business, and also created custom fur coats.  He raised a family of seven through the depression with that business, and managed to save for retirement as well.  Although the Philadelphia neighborhood which housed his 7-story refrigerated warehouse changed for the worse over the years, the building was unique and maintained a healthy market value to the end.

When my grandfather retired and left the business to the next generation, his lack of planning and know-how caused him to make all of the mistakes Kang writes about in his article. Departure of two unhappy sons over a relatively short number of years left the remaining two in an uneasy arrangement. Ultimately, those errors were magnified when the following generation took the reins, and sadly, the business closed.  Lots of hard feelings all around.

Kang points out that a family-owned business failure is inevitable because

  1.  Family feuds are inevitable when owners have equal status
  2. Emotions get out of control. When the owners are family, there is no “just business,” it’s always personal.
  3. Owners are ill-equipped to deal with complex business issues.

True, true and true.  Kang offers three simple steps to take to avoid these issues.  I won’t spoil the ending for you.  His writing is too enjoyable for me to deprive you of an opportunity to read it on your own.

Does this have anything to do with law firms — aside from the care and feeding of its business clients?  You betcha!  A lot of the small firms I work with are family-owned.  They struggle with the same issues.  These issues become more pronounced when the next generation wants to have their “turn” at running the firm.  Transition isn’t always peaceful or well executed.  Many times the younger generation leaves, with bad feelings all around.  If there are multiple family members running the firm, especially if of (fairly) equal status, there will frequently be impediments to growth and change, strong disagreements, and damaged relationships. And the issues become even more complex when a non-family member is added to the mix.

My take-away, based on personal observation, and many years of hands-on work with firms, is that a family-owned firm must take extra steps to avoid the landmines inherent in the working environment.

 

Coaching for PA Lawyers to Improve Marketing and Other Skills

My first major step onto the coaching soapbox came in the form of an article entitled “Coaching to Improve Skills,”  which appeared in the December 3, 2007 issue of The Pennsylvania Bar News.  I wrote it because I was sick and tired of hearing attorneys say that if an attorney did not instinctively know how to market, they would never learn.  It’s just wrong.

Most attorneys are not instinctively good at marketing.  However, marketing is very much a learned skill.  Any attorney is capable of learning how to become an effective rainmaker, or at least a strong contributor to a firm’s efforts.

The fact is that Baby Boomer attorneys grew up in a rapidly expanding marketplace.   Individuals and companies were happy to find an attorney who did decent work, and had a nice “bedside” manner.  That’s about all that was required to grow one’s practice through word of mouth.  There was plenty of room for new attorneys to try one methodology or another, and make mistakes along the way to honing one’s skills in asking for legal work, and referrals to new clients.  Those who chose not to do so were able to make partner by serving the needs of other partners’ clients.  Those “worker bees” chose not to develop skills outside their comfort level, because they didn’t need to do so in order to succeed.  That doesn’t mean that they weren’t capable of doing so.  Maybe they would have needed some assistance to get there, but if motivated, they could have.

When the marketplace leveled off, development of marketing skills started to become a determinant of who would make partner, and who would not.  Firms would invest enormous resources in helping attorneys develop professional skills.  But when the same attorneys did not “naturally” develop marketing skills by a certain point in their career, they were cut loose, on the assumption that they were a lost cause.  Such a shame.  Many who were cast aside went on to develop the skills out of necessity, in order to survive on their own.  Some did better than others, but most managed to survive in the profession.

Now that we’re in a highly-competitive, contracting marketplace, there is even less room for experimentation and trial and error in client development.  Smart firms are realizing that training in this area is as necessary as any other area.  And let’s keep in mind that real learning by lawyers is acquired by “doing” and not by “studying” about it.  That means one must know what to do, how to do it, and then practice and perfect the skills.

For many attorneys, coaching can provide the difference between success and failure.  And that doesn’t apply just to development of rainmaking skills.  Coaches work directly with attorneys to help them create a personal action plan.  They help attorneys identify what is holding them back, and develop strategies to overcome the roadblocks.

I have searched for coaches I can recommend for many years.  Most that I have met over the years do not meet my expectations.  It’s not about the credentials; it’s about the person and their methodology.  I have a few I can recommend to PA Bar Members.  Some focus just in marketing.  Others in more general areas contributing to success.  However, I was recently so impressed by one in particular, I will mention her here.

We became acquainted through LinkedIn.  After some e-conversation, we met in person.  Obviously I was impressed.  So let me recommend you take a look at the credentials of Dena Lefkowitz.  If you decide to call, tell her Ellen sent you.  I don’t get any referral,  just satisfaction knowing attorneys are getting the additional skill training they need to be successful.

 

Why You Need to Connect With Your Colleagues

Attorneys who practice in a solo or small firm (15 or fewer attorneys) setting have lots of advantages.  One big disadvantage for many is a lack of feedback and support mechanisms.  That’s certainly one area where a larger firm provides benefit.  At the larger firm, one need only walk down the hallway and poke a face in to get some immediate feedback.  Whether one seeks a dispassionate perspective, some additional creative thought, sympathy about a matter gone awry, or even direct assistance on client work or a marketing initiative, help is often just down the hall.

For those operating in small or solo environments, the need for connection to ones colleagues was often met by regular lunches at the bar association, or the neighborhood restaurant.  Regrettably, lives for most attorneys have become so hectic, it’s hard to squeeze in these type of events unless one can justify the time with CLE credit or some other more tangible justification.

The solo and small firm attorneys who experience the greatest feeling of loss of collegiality are those who have at one time or another experienced life in a larger firm setting.  It takes little time for them to realize that they are more isolated, and in a real way handicapped, than they were in the larger setting.  What to do?

Well, in most states, the state bar association has a section just for solo and small firm attorneys.  That’s the case in PA.  Not only is there a Section, but there is a Listserv which enables all of the members of the section, who choose to join, to communicate with each other with a single email.  Talk about collegiality . . . responses are usually received within minutes for anything from vendor or technology information, to sample forms, cites, and creative strategies to pursue on behalf of clients.  The Listserv also provides a means for geographically diverse attorneys to get to know one another, for referral purposes.  What a relief to be able to identify attorneys who can provide expertise in a specific practice area, without worrying about them stealing your client.

As in many other states, the PA Bar Association‘s Solo & Small Firm Section has an educational conference.  It is a two day event which is packed with excellent educational opportunities, networking opportunities, and many options for family fun as well.  Talk about multi-tasking!  Earn a full year’s CLE credit, meet a whole bunch of helpful colleagues face to face, and have a family vacation as well at the awesome Bedford Springs Resort, where there is activity desirable to any family member of any age.  Probably the greatest value of these events are obtained  at the social events, or at the bar, where you get to compare notes with colleagues, and find out they are facing the same challenges, and how they’re doing it.  It will recharge your batteries.

Bedford Springs Resort

 

 

The closing date to lock in the special resort rate for the conference is almost here.  You’ve been working hard.  You probably haven’t properly rewarded yourself with some well-deserved downtime.  And no doubt you’re feeling too “alone” in your solo or small firm practice.

There’s an excellent faculty waiting to assist you with substantive practice area education, and practice management expertise.  I am honored to be the opening and closing presenter.  In between I will be offering “One-on-one with Ellen” private consulting meetings for anyone who signs up at the conference.  First come, first served.

If you’re not a PA attorney, take time now to go the web site of your county or state bar association, to determine if they have a similar event.  PA welcomes non-members of the Section or Association. Those who sign up for the Section while at the Conference typically get the first year of Section Membership free.

Additional information and registration is found here.  The conference is August 1st and 2nd.  Don’t think about it, just DO IT!  You deserve it.

Does Communication Overload Impact Civility in the Profession?

I have  theory, but I’m not sure I have any answers.    I’m hoping you do, and will take the time to express your thoughts.

My theory starts with a base assumption that most people in the legal environment are suffering from information-overload anxiety.  Some refer to the new forms of communication known as social media as a “sea change” in communications.  I don’t think it’s a change; meaning that these forms of communication have not replaced traditional forms of communication.  Rather, it’s more like a Tsunami.  New forms of communication have been added in addition to traditional forms.

Yes, for the most part, email attachments have replaced faxes.  And in that one respect, we’re dealing with change.  But we now must process additional forms of communication.  Facebook, LinkedIn, Google+, eNewsletters, Tweets, Blog posts, Alerts, Listservs, Discussion Groups, and text messaging.  This on top of traditional business-related email, voicemail, and for some, video mail.

If I’m out of the office just one day, I come back to a backlog of 350 – 450 emails, mostly excluding spam.  That means on the day I’m back in the office I will have to go through 700 – 900 emails to stay current.  On top of all the other work waiting for me.  Yeah, right!

Even though I teach lawyers and law firm staff how to use Rules and Folders to allow the cream to rise to the top of the inbox, and follow those suggestions myself, it’s just not enough anymore.  What’s that old saying?  The faster I go the farther behind I get!

Over the span of several decades serving the legal industry, I have observed a myriad of changes.  Some have been for the good, some not.  A matured marketplace presents profitability and competitive challenges.  The pendulum has swung from flat fee to hourly billing, and back toward flat fee in many practice areas.

From my perspective, one of the most undesirable consequences of industry changes has been a considerable decrease in the civility which had been an outstanding characteristic of this profession.

Have you noticed it?  Simple courtesy seems all but lost.  One-upmanship prevails.  Competitors act more like enemies than colleagues.

I am writing an article for an upcoming issue of  The Pennsylvania Lawyer.  It’s the annual technology issue.  However, even though I am a “techie” from the perspective of most, and am always promoting working smarter instead of harder through effective use of technology, I firmly believe that the entire legal industry is being crushed under the daily onslaught of communications.  I believe each and every lawyer is trying to keep their head above water in this area.  And I conclude that this constant barrage is making a lot of you cranky . . . really, really cranky.

Tell me what you think. Are you suffering from information overload? Are your colleagues? What techniques have worked, and which have failed, to help you stay on top? Does the pressure get to you? Are you crankier than you used to be?  Or are you just cranky for a whole set of other reasons?

Please share!

Gaze Into the Crystal Ball at 2013

I would love your perspective on what you think are going to be the top issues law firms and individual lawyers will be wrestling with in 2013.  I’m researching for an article which will appear in The Pennsylvania Lawyer.  I would do it from my own perspective alone, but then again, I predicted the Beatles would never catch on, and since then I have been reluctant to trust my instincts alone to predict the future.  🙂

Of course there will be obvious issues: profitability, marketing, increased competition for clients and even jobs.  And then I am hoping some of you will tackle the more subtle issues, such as what seems the decline of civility, reduction in face-to-face communications, and so forth.

I will gladly provide attribution if you indicate I can quote you, and I choose to do so.   So gaze into your crystal ball and predict what you see coming in 2013, and more importantly, share what keeps you up at night regarding 2013 and beyond.

Supply and Demand

Supply and demand.  Buyer’s vs Seller’s market.  These fundamental economic concepts are learned early. Where’s the legal industry now?  Where is it headed?  We know that we headed into a Buyer’s market long before the economic downturn.  As we entered the new century, we encountered increasing numbers of client RFPs which boldly laid out the new terms of engagement.  We endured beauty contests.  We submitted to electronic billing and auditing.  We modified billing systems to produce what clients wanted.  We timidly stepped into the uncertain waters of alternative billing.  Adapt or starve.  That simple.

There is no doubt that there is a current imbalance between supply and demand.  We’ve been reading articles about the big lie that law schools have told to prospective students about the percentages of graduates obtaining jobs which require a legal degree.  Scandalous scoundrels.  A few singled out under the bright light of scrutiny to pay for this misstep. 

Let’s take a look at the statistics presented in a Washington Post article entitled “Will law school students have jobs after they graduate?”

In 2011, more than 44,000 students graduated from the 200-odd U.S. law schools accredited by the American Bar Association. Nine months after graduation, only a bit more than half had found full-time jobs as lawyers.

The U.S. Bureau of Labor Statistics forecasts 73,600 new lawyer jobs from 2010 to 2020. But just three years into that decade, about 132,757 new lawyers have hit the job market.

While not every new JD seeks employment as a lawyer, it is safe to say that planning to work as an attorney is not rare among law students. But perhaps it should be. Data from the National Association of Legal Career Professionals indicate that since 2010, about 75,000 new law grads have found full-time jobs as lawyers.

So, in theory, all of the BLS-forecasted job openings through 2020 have already been filled, and 59,157 new lawyers are still looking for “real” law jobs.

Yes, of course some of the JD graduates this year and in the years to come will find high-paying, partner-track jobs at big firms and elsewhere. But the scale of the imbalance over a decade gives some indication of just how tough it is — and will be — as armies of newly minted JDs rise every year. By 2020, about 300,000 additional grads will join those 59,157 in a hunt for jobs that, statistically, are not to be found.

Those are pretty grim numbers.  And they’re mostly believable.  An ABA Journal Law News Now article entitled “Law School by the Numbers: 300K Additional Law Grads by 2020; 73K New Jobs Forecast for Decade” reported on the Washington Post article.  They noted that

Mark Medice, national program director for a Thomson Reuters unit that tracks jobs and pay at large law firms. . . believes a new legal education model may be needed that emphasizes specific skills such as discovery, regulatory matters and litigation support. The cost would be relatively cheap and the focus would be on jobs that are available.

Yikes!  What a terrible idea.  Well, not terrible from the perspective that one would likely get a job.  But it would be a greatly downgraded job.  And a cubby-hole career-wise.  This would likely hasten the further commoditizing of legal services.  Commoditizing = devaluation from my perspective.

What I don’t know is whether the statistics take into account the massive number of baby boomers who are set to retire over the coming two decades.  I have to just “assume” that is the case.  But even if not, that mathematical correction would not be enough to swing the pendulum back into a Seller’s market.  So what are tomorrow’s grads to do?

  1. Put every single molecule of energy into graduating at the highest possible ranking.  Although it is not a determinant of career success in the long run, most law firms see class ranking as an factor in candidate desirability.  Remember, you have to actually have a job as a lawyer to demonstrate how skilled a lawyer you can be.
  2. Pick your focus carefully, and early.  Too many graduates have no idea what type of law they want to practice.  They accept jobs which often cubby-hole them.  Too often they become trapped  in practice areas which may forever doom them to higher hours and lower wages.  Serendipity is not an acceptable career strategy, in my book.
  3. Prepare to hang out your own shingle.  Don’t be dissuaded by condescending or pessimistic professors, partners at large firms where you intern, or overly concerned judges where you may be fortunate enough to clerk, that going out on your own without spending time in someone else’s firm first is a formula for malpractice.  Just be sure that you connect with other more experienced solo and small firm attorneys through your bar association.  The Pennsylvania Bar Association has both a Young Lawyer’s Division, and the Solo & Small Firm Section.  Belonging and participating in both should be an essential part of your career.
  4. Nurture the business side of your practice.  The legal industry is unique in that it is both a profession and  a business.  You can’t have one without the other.  So avail yourself of the law practice management resources available through the Pennsylvania Bar Association (or whatever your state bar is), as well as the resources of the American Bar Association
  5. If you’re determined to work for another firm you can greatly increase your success in finding a job by focusing on smaller firms in smaller towns.  Find the law firms online, and send your resume to every firm.  Sometimes you just have to be in the right place at the right time.  Contact the executive director at the local bar and find out if they have a job bank, a way to circulate your resume or advertise your availability, or know of any openings.  Remember that small-town firms usually provide more opportunities for direct client contact, rainmaking, and variety of assignments.  The pay is lower, but after a few years you can — notice I didn’t say will — have the skills necessary to locate a more desirable situation, or open your own practice in the location you desire.  And there’s a distinct possibility you may learn you actually like small-town practice and life.
  6. Learn to market.  For a small percentage of lucky individuals, it is natural.  For the vast majority it is learned.  Just as you learn to become a skilled lawyer by practicing your trade, you learn to become a successful rainmaker by practicing your marketing skills.  It gets easier, and you get better, over time.  Networking.   Teaching. Publishing.  Leadership.  Community Service.  All of these are still successful methods.  Except now you can — and should — leverage yourself with social media tools as well. 
  7. Find your value proposition.  Somehow you have to find a way to differentiate yourself from the mass of other attorneys trying to attract attention in a crowded marketplace.  How will your voice be heard?  If it is somehow different, it will be.  Focus on responsiveness, creative pricing strategies — note I didn’t say cheap, which is different — which are based on leveraging your intellectual property to the max and running a highly efficient operation, and helping the client focus on value provided instead of hours x cost. 

Today’s grads think it’s tough?  The road ahead for future grads will be tougher.  Don’t wallow in self-pity.  Don’t be passive or weak in your efforts to get your career going.  Most people are, even while thinking they’re not.  Finding a job is a full-time job.   Get active about creating your future. 

If law school is ahead of you, put thought into where you want to be when you graduate.  Take courses, even undergraduate courses, appropriately.  And for goodness sake, don’t go to law school just because it seems like a good idea.  I see too many graduates who land a job only to learn, after all that time and effort and expense, that they really don’t like being a lawyer at all.  Don’t choose law school because you don’t have a better plan.  Choose law school because you’re passionate about becoming a member of the profession, with an open eye toward all that entails in a world of supply and demand.

 

ABA Provides Resource Center for Solo and Small Firm Lawyers

Most PA attorneys are not members of ABA, in my experience. That’s likely a result of the fact that most firms are solos/smalls, and paying dues at the local and/or state level is daunting enough, leaving little room in the budget for dues at the national level.   But that doesn’t mean you can’t take advantage of much of ABA’s vast wealth of resources.  I have participated in their LawTech Listserv for years, and find the information flow and available expertise invaluable. Although I am a member in good standing now, I participated in the Listserv for many years before taking the leap.  You should take time to check out the vast wealth of resources yourself.

New PA Bar Institute president, Sara Austin, recently brought to my attention the relatively new ABA Solo and Small Firm Resource Center.  It is in its infancy, but is growing and maturing rapidly.  It contains information on practice management and career services, technology, products, CLE, news and articles.  All appropriate for solo and small firms.  Check it out.  And don’t forget, if you’re a PA Bar Association member, our members-only Law Practice Management Section has a considerable array of resources, too.

Why Your Firm Needs a Written Partnership / Shareholder Agreement

We know the adage about the shoemaker’s children running barefoot.  In the law firm the equivalent is a firm built on a handshake and nod, without the benefit of a written agreement.  The result?  Just as dangerous as those shoemaker’s children running around barefoot on a bed of broken glass and rusty nails.  Aw comeon, you’re thinking, we’ve operated that way for years and it’s working just fine.  Hey, good for you.  The problem is what happens when you’re not getting along just fine.

The time to agree about things is when everyone is feeling agreeable.  When times are good.  That’s when people are most likely to be reasonable.  And that’s when you should nail down details that will be vital should things devolve into something less agreeable.  Let’s be honest, we are seeing a decided uptick in law firm dissolutions, defections, implosions, explosions, and outright financial failures.  Without a written agreement which spells out some critical actions, you will likely end up in court, or at least in the newspapers.

For example, read this recent article from the ABA Journal Law News Now entitled “Suit Claims Former Partners of Dissolved Law Firm Won’t Leave.”  I admit I laughed out loud when attorney Ronald Minkoff, a partner at Frankfurt Kurnit Klein & Selz who represents lawyers in partnership disputes, was quoted as saying that it is “unusual in this day and age” not to have a partnership agreement.  Ok, remember back in law school when you were told to look to your left, and to your right, and realize that by the end of 3 years only one of you would be remaining and passing the bar?  Same exercise, only this time it’s less than one of you will have a written agreement with your business partners.

You may be wondering what the big deal is . . . we’ll just go our own way, right?  Nope.  In all likelihood it will be getting nasty fairly quickly.  You may find yourself in the headlines.  You will certainly lose tons of time and energy which could be better used transitioning your clients to a new practice with you.  It will cost you legal fees in addition to emotional trauma.  And you may wind up with disciplinary issues and/or malpractice claims to boot.  Need examples of the issues which crop up the most?

Malpractice insurance coverage after the lights go out. 

Many of you immediately recognize we’re talking about “the tail” or what is otherwise known as an Extended Reporting Period Endorsement.  Malpractice insurance policies for lawyers are almost exclusively written on a “claims-made” basis.  This means that if you don’t report a claim within your policy period, or an act, error, or omission which you know about which may reasonably give rise to a claim in the future, you will have no coverage if a claim arises after the policy period expires.  For many lawyers, it is a rude awakening to find out that their new law firm home may have a policy which excludes prior acts coverage.  If you wind up on your own, you may not be able to afford a policy with full prior acts coverage.  The best policy for all concerned is to require the dissolving firm to purchase the tail, in order to protect everyone going forward.  However, absent a written requirement, I can assure you that it rarely happens, as those departing refuse to pay their fair portion of the premium.

Retention and disposition of remaining client files.

This is a complex and problematic area.  Just because a law firm closes doesn’t mean the firm is relieved of its obligation under Rule 1.15 [Safekeeping Client Property].  In fact, those obligations continue and can — and have in the past — impacted even former partners of a dissolved firm with disciplinary action if ignored. 

A few years ago I read about a dissolving New York firm which could not get the partners to agree to pay for a storage facility for all the closed client files.  The debate became heated.  No one wanted to pay to store files for former partners, let alone their own former clients.  Eventually, the few partners who stayed behind, responsible for winding things down, became sufficiently disgusted and literally threw away all the files. Ultimately, all partners who had left files behind, even those who had departed before the closing of the firm was announced, were disciplined for failure to properly safeguard client property. 

On top of these issues, firms must be concerned about discovery and possible accusations of spoliation if client records are dealt with inconsistently.  When it is left to individual attorneys to determine what gets saved and what gets destroyed at a given interval, every inconsistency becomes suspect under the bright glare of litigation discovery.

Future liabilities and audits.

When a firm winds down, unpaid liabilities can rear their ugly head.  While not every nuance can be anticipated, you want to make sure that any departed partners remain liable for their share of any back taxes, penalties and interest, defaulted loan payments, unpaid vendor bills, or whatever later arises from a period in which they were a member of the firm.  Gone should never mean off the hook for these obligations.  Look to your partnership or shareholder agreement to make this obligation clear.

These represent just three examples off the top of my head of what can — and frequently does — rear its ugly head in the absence of a written partnership agreement, when a firm dissolves.  If I didn’t have a backlog of work calling my name right now, I’d delve even into how a firm’s ability to nimbly realign and implement change in response to an evolving marketplace can be seriously hampered when there is no partnership agreement spelling out how decisions get made.  If you’re relying on 100% consensus to accomplish everything, you better hope you never disagree.  Because when you do (notice I didn’t say if) you will be thwarted by decision paralysis.

If you’re not convinced, search Google News for past headlines regarding law firm dissolutions and the thorny and ugly issues which emerged. You will find a common theme in most — the lack of a written agreement between members of the firm.  Don’t let your future follow a similar path.

WordPress Themes