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Asked and Answered

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

Q. Our firm has three partners, two associates, and 2 staff members. This is a new firm that started in practice a year ago. We are equal partners and allocate compensation equally based upon these ownership interests. We believe the current system has worked well, but have been considering whether one person should handle all the management duties and how that person should be compensated. We would appreciate your thoughts.

Asked and Answered

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

Q. We are a 14 lawyer firm in the Boston suburbs with four founding partners and 10 associates. Two of the partners are in their 50s and two are in their 60s. Several years ago we adopted a retirement buyout plan for the founding partners where each partner upon retirement is paid the balance of his cash-based capital account and a multiple of one times an average of his last three years earnings paid out over a five year period. I am concerned that when partners begin to retire the retirement payouts will place undue stress on operating funds and the firm's ability to be successful. I would appreciate your thoughts.

Asked and Answered

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

Q. We are an 18-attorney firm based in Tucson, Arizona. Our practice is a boutique general liability defense firm. Our clients tend to be self-insured large corporations and smaller business firms. Currently all of our clients are billed by the hour. Recently, we have been discussing whether we should propose an alternative billing approach to our clients. We would be interested in your thoughts.

Asked and Answered

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

Q. Our firm is an 18-attorney firm based in San Diego. We are considering hiring our first legal administrator and have interviewed several candidates and have narrowed our search down to two candidates. One candidate has a strong financial background and has worked as a director of administration in several very large firms - 200 plus attorneys. The other candidate has a strong HR background, a weaker financial background, and has worked as a firm administrator in two different law firms - a 30 attorney firm and a 20 attorney firm. We like both candidates. Which candidate would you lean toward?

Asked and Answered

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

Q. I am the owner of an estate planning firm in Oklahoma City. I have four associates that work for me in addition to two billable paralegals and three staff support members. I am looking for ways to improve our business development and marketing. The majority of our business comes from past client referrals and referrals from employees and friends. We spend a considerable amount on advertising which includes our website, print ads, collateral materials, newsletters, etc. We would like to do more to increase client business. I would appreciate your thoughts?

Asked and Answered

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

Q. Our firm is an 18 attorney firm in Chicago that was formed by the existing four equity partners 10 years ago. We have four equity partners (founders), eight income (non-equity partners), and six associates. The income partners are not required to contribute capital. We are considering admitting a couple of the income partners as equity partners and also approaching possible laterals. What should we require in the form of buy-in or capital contribution?

Asked and Answered

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

Q. I am a partner in a two owner personal injury plaintiff firm in Los Angeles. We have four other attorneys. We do traditional personal injury work with a high volume of medical practice and products liability. One hundred percent of our fees are contingency fees. My partner has expressed an interest in retiring and selling his interest to me. How do I go about determining a fair price to offer him for his shares? I would appreciate your thoughts.

Asked and Answered

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

Q. We are a 25-lawyer insurance defense firm in Northwest Dallas. We are managed by a managing partner, firm administrator, and director of human resources. We have been discussing the need for a marketing director. Are we too small? If we decide to hire one what should we be looking for and where should we start our search?

Asked and Answered

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

Q. I am a lawyer from the Carbondale area. Last week I attended your Illinois State Bar Association CLE Webinar - Law Practice Succession and Transition - Ideas for Getting Started. I am 66 years old and I fit the "Sole Owner" model that you discussed. I am the practice. I have one associate and one legal assistant and my associate has neither the desire or the ability to take over my practice. I am tired and want to retire by the end of the year. With no successors in sight, I am thinking I should just close the doors. I welcome your thoughts.

Asked and Answered

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

Q. I am the managing member of an 14-attorney firm in Miami. We initiated discussions with a large firm in Boston concerning the possibility of our firm merging with their firm. We met with one of their partners recently at their offices and he presented our interest to his other partners. He has advised us that there is an interest in having us meet the other equity partners and taking discussions to the next level. He would like some initial financial information from us. We feel we must provide them with some financial information at this point, but are unsure what to provide at this stage. I would like to hear your thoughts.