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Practical Practice Management for Law Firms (Part One)

Guest post by: Lawrence Atkinson

Article Overview: Most lawyers are good at understanding and interpreting the law. What they are not good at, in many cases, is running a business. A law practice is just another business and needs to be run as such. Why don't some lawyers get this?

Practical Practice Management for Law Firms (Part One)

Law firms are businesses like any other business. They are in business to make money for the owners, just like any other business. They have "front office" people - the sales people, and "back office" people - the support staff, just like any other business.

Is this so difficult to understand? Then why do so many lawyers not get it? Is it because, as a "profession" it is deemed to bean area of life that sits above us ordinary folk? I don't think so.

I think the real problem is that, having been high achievers throughout school, college, university, law college etc most practitioners will have had no inkling about going to business school, and learning how to run a business. And let's face it, if you are really bright, you will be picked up by one of the larger firms where all the management and "back office stuff" is already being taken care of by professional managers.

So let's put the bigger firms to one side and concentrate on the mid-tier and smaller firms.

Apart fromthe normal HR issues associated with managing people, what are some of the more important things that need to be considered?

First and foremost is for the business owner and/or manager to consider what product or service the business is selling, and then all the sales management criteria around that. By thatI mean the product being such things as a Will, or a commercial transactionor a service being advice in regards to say taxation or business structure. They are your saleable items.

Nearly all lawyers (although one can hope that this nearly 100 year old practice will soon be put to rest) still bill in units of six minutes (or part thereof). Therefore, six minutes equals one unit and where the charge out rate is $600 per hour, one unit is worth $100... or is it? (That's a question for another time).

So, having established the product/service and the price to be charged, you'd think that the business would maintain a very tight focus on how they and their legal staff were spending each day, particularly in regards to accurate and efficent recording of time on clients' matters. Sadly, not so.

The good firms do, and probably could do better. The smaller firms do, to a degree. A note on a file is just not good enough, particularly if a client disputes the fees charges and you then need to have your costs assess by an independent body. They will want to see an accurate recording of how the bill was calculated, and will want to ensure there has been no duplication of work. How can this be achieved if there is not an accurate record.

So Time Sheets/accurate Time Recording - Important Point Number One.

I'll come back to furthet Important Points in subsequent articles. Please feel free to comment on my website - see details elsewhere on this page.

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Article Tags: billable hours, fees, law, legal, practice management, time sheets



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