Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC For the past two weeks I have been discussing the characteristics of successful law firms and introduced the following basic building blocks that successful firms typically have in place:

• Partner Relations
• Leadership
• Firm Management
• Partner Compensation
• Planning
• Client Service
• Marketing

Partner relations and the leadership building blocks have been discussed. The third basic building block is management. Successful firms have a good governance and management structure in place and effectively manage the firm. A major problem facing many law firms is the lack of long range focus and the amount of partner time that is being spent on administrative issues as opposed to higher level management issues. Time spent in firm governance and management, if properly controlled, is as valuable as, if not more valuable, than the same time recorded as a billable hour. (client production time) There is a difference between management (governance) and administration. Partners and law firm owners should be focusing their time on the management issues rather than administration. Management includes:

• Productive activities, including those of individual lawyers and the firm as a whole.
• Quantity, quality, and economic soundness of the work.
• Development of lawyers and future leaders of the firm.
• Formulation of policies that will determine the firm’s character
• Financial planning, both short-term and long-range.
• Marketing and business development.
• Partner compensation and profit distribution systems
• Other decisions requiring partner approval.

Almost everything else is administration. Hire an office administrator, manager or assistant for the administrative matters so the partners/owner can focus on the management concerns of the firm. I will address each of the other building blocks in upcoming postings. John W. Olmstead, MBA, Ph.D, CMC, (www.olmsteadassoc.com) is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics. For more information on law office management please direct questions to the ISBA listserver, which John and other committee members review, or view archived copies of The Bottom Line Newsletters. Contact John at jolmstead@olmsteadassoc.com.