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Best Practice Tips


Asked and Answered

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

Q. I am a solo practitioner in upstate New York. I am 66-years-old, looking to retire, and trying to figure out what to do with my practice. My practice is a general practice and there is just me and one secretary. I welcome your suggestions.


Asked and Answered 

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

Q. I am the owner of a six-attorney elder law firm in Dallas. I manage the firm and practice law. I am finding it more and more difficult to do both. I would like to shift my time totally to managing the practice. I would appreciate your thoughts.       

A. You are not alone. This is a common problem in law and other professional service firms. I have similar problems in my own firm — it is very difficult to serve two masters — serving your clients and managing your firm. Eventually you have to pick one — client service (doing legal work) or managing and running your business — as the area that receives your primary focus. This is not to say that you should not do both — but you select the primary area that you are going to focus on and get help with the other area.

A question that I typically ask my new law firm clients is, “What do you want to be: A business person or a lawyer?” The answer to the question often provides a hint to how you should structure your firm. If you want to be more of a business person, hire legal talent to help with serving clients and performing legal work and spend more time working on your firm rather than in it. If you want to be a lawyer and do legal work and serve clients, hire a legal administrator or business manager (this is more than an office manager) to manage and run your firm.


Asked and Answered 

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

Q. Our law firm is a 16-attorney intellectual property firm in Tampa, Florida. We have 10 partners and six associates. I am a member of our three-member executive committee and I have been given charge of looking into the pros and cons of having a firm retreat with all of our partners and associates. We have not had a retreat before and we would like your thoughts concerning the benefits that a small firm can receive from a retreat.


Asked and Answered 

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

Q. Our firm, a 14-attorney litigation firm in Sacramento, California, is planning on merging/acquiring a three-attorney firm in the area. We have completed our due diligence and both firms have agreed on the terms of the merger. What type of agreement and legal documents do we need to effect and implement the merger?


Asked and Answered 

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

Q. Four of my partners and I just split off from a large law firm in Phoenix, Arizona, and started a litigation boutique firm with five associates. As we staff our nine-attorney firm, we are planning on hiring someone to handle our accounting and manage our finances. What type of position should we create and what level of experience should we be looking for?


Asked and Answered 

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

Q. I’m a second-generation attorney with about five years of experience at a small liability defense firm in Southern California. My father is the managing partner and we have three total attorneys. My father and his partner probably have five to seven years left practicing. We only do California workers’ compensation defense. I’m planning on taking over the practice but am concerned about trends in the industry that will affect profitability, such as more stringent billing guidelines/bill audits, cuts to travel time, etc. What are the characteristics of a successful liability defense firm that I should strive towards?


Asked and Answered 

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

Q. I am the managing partner of a nine-attorney general practice firm in the Chicago suburbs. We practice in the areas of estate planning/administration and family law. While our estate planning and uncontested family law work is done on a flat-fee basis, our estate administration and contested family law work is billed by time. We collect initial retainers for these matters, but we fail to ensure that the retainers are replenished. We are having accounts receivable collection problems as a result. I would appreciate your thoughts.


Asked and Answered 

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

Q.  I am the founder, majority partner (80 percent), and managing partner of a 22-attorney firm in Phoenix, Arizona. The firm practice is focused in the area of healthcare. There are 12 equity partners, five non-equity partners, and five associates. I manage the firm as a benevolent dictator. I am becoming overwhelmed trying to manage the firm and practice law and I believe the firm is now at a size where others must become involved in managing the firm. I have been considering forming a committee of all the equity partners to manage the firm. Your thoughts are welcomed.


Asked and Answered 

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

Q. I am a sole practitioner in Peoria, Illinois. My firm is a general practice firm that services clients throughout central Illinois. I have four staff members. I am 58. While I have enjoyed having my own practice for the past 20 years, I am concerned – what if something were to happen to me today or tomorrow? What is my backup plan in the event of short-term illness, disability, death, and even vacations? How would the firm keep operating? Who would take care of the client’s needs? How would my staff be taken care of?

A. Sound practice continuation arrangements can solve this dilemma, preserve practice value, and help prevent a lawyer’s spouse or immediate heirs from facing a hasty sale or disposition of the practice in an emergency. A practice continuation arrangement can also give lawyer practitioners, staff, and families peace of mind.

A practice continuation arrangement is an arrangement, typically in the form of an agreement or contract made between an individual lawyer or a small law firm and another lawyer or law firm. The arrangement describes a course of action to transfer a lawyer’s practice and sets payment for its value. In the event of vacation, temporary or permanent disability, or death, a practice continuation arrangement protects the practice, the business interests of the lawyer or law firm’s clients, and the financial interests of the lawyer.

Approaches


Asked and Answered

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

Q. I am the managing partner of a 16-attorney insurance defense firm in Kansas City. Several of our insurance company clients have advised us that they are willing to send us cases in Texas. We have decided that we would like to establish an office in Texas. Our plan is to hire three lateral attorneys with seven to 12 years of experience with Texas-based insurance defense firms. We are not certain as to the best city to establish this office. We are thinking it should be a central location. We would appreciate your thoughts.

A. Unlike many states that have one or two major cities, Texas has several, including Austin, Dallas, San Antonio, Houston, Ft. Worth, El Paso, Corpus Christi, and others. Austin, Dallas, San Antonio, and Houston are all desirable locations for branch offices. Austin is more centrally located if your goal is to service the entire state.