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Best Practice Tips

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is a 25-lawyer firm with 10 partners. Six of these partners are in their 60s. What should we be doing concerning planning the succession of these partners?

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the owner of an eight attorney estate planning firm in Jacksonville, Florida. Our firm handles estate planning and estate administration. For this entire year our financial numbers are way down and I am getting concerned. For example, compared to last year:

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. We are a 16-lawyer firm - eight partners and eight associates located in Memphis. We handle business transactional work and litigation for small to mid-size companies. However, for the past 40 years our mainstay has been small community banks. With recent bank mergers and new banking regulations, our banking business has dropped off significantly. We have reached a desperate stage and we must replace this business quickly or consider possible dissolution. We have talked with a possible lateral partner that has a $300,000 book of debtor bankruptcy business. Is adding a lateral partner a good strategy for us?

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. We are a 12-lawyer firm in Austin, Texas. We have been approached by the owner of a three-attorney firm in an adjacent city who has a complimentary practice consisting of institutional business clients. He is looking to retire within the next 30 days and he would like us to acquire his clients. We have reviewed his practice and we would be willing to take over his clients but not his personnel or other fixed assets. He has no interest in a merger or a lengthy relationship with us. It could add $800,000 per year to our practice. We would appreciate your thoughts.

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the owner of a seven attorney firm in New York City. I have a bookkeeper that handles the accounting function. I receive monthly financial reports - but I believe I need a better tool to stay on top of my firm. I feel that I am lost, I don't want to take time to access different software modules such as our billing system, accounts payable system, general ledger system, etc. to get the information that I need to effectively manage the firm. We use Timeslips for billing and QuickBooks for bookkeeping. I would appreciate your thoughts.

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the firm administrator of a 16-attorney firm in San Diego. We have six equity members, four non-equity members, and six associates. We also have four paralegals and six staff members. We are managed by a three member executive committee. Each month I provide the equity members and the executive committee with the same reports from our software system. They are quite numerous. The equity members and the executive committee complain that they get too many reports and they don't look at them while the non-equity members and the associate complain that they don't get access to any financial information. Do you have any suggestions?

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the managing partner of a five lawyer firm in Denton, Texas. We have the opportunity of acquiring a sole owner practice in a nearby city with a complimentary practice area. We have had one meeting and our firm is interested. We want to initially do a quick and dirty due diligence so see whether this firm is really a qualified opportunity. What sort of information should we ask for?

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am the managing partner of a 12-attorney firm in Providence, R.I. In our recent partner meetings we have been discussing ramping up marketing. How much should we be spending on marketing?

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. I am a partner in a 20-attorney firm in San Francisco. We have five partners. Two of the five partners are founders and the other three were made partners five years ago. From day one our compensation system has been an eat-what-you-kill compensation system based on a formula with two factors - working attorney collections and client origination. While the system worked OK for the founders, it is not working for the present firm. The newer partners are unhappy with the system and believe that it does not consider other factors that a partner contributes to the firm. Some of the partners are hoarding work, refuse to serve on committees, and don't want to do anything but bill. A couple of my partners suggested that we move to a totally subjective system. I would appreciate your thoughts.

Asked and Answered

By John W. Olmstead, MBA, Ph.D, CMC

Q. Our firm is reviewing its partner compensation system and one of my partners suggested that we incorporate realization rates. This term was new to me. Is realization the percent that we collect? Your comments would be appreciated by all of us.