Practice News

Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. I am a partner in a 14 attorney firm. Our bookkeeper has been with us for 20 years. We have a time and billing system, a separate bookkeeping system, and a separate database for clients, and something else for trust accounting. The other partners and myself do not know the name of the software that we are using, don't know how to access the software, and we have to ask the bookkeeper for any financial information that we require. We feel like "hostages". She gets offended when we ask questions. When we do receive information we don't know how to read or interpret much of the information. How can we get control of our firm back? A. It is imperative that owners and partners in a law firm have access to financial information on a timely basis, understand the information, and use the information in a proactive way to manage the practice. We suggest:

• The owner, or an appointed partner(s) in larger firms, obtain a basic level of understanding in basic accounting/bookkeeping and law firm financial management.
• The owner, or an appointed partner(s) in larger firms, obtain detailed training on the accounting software system(s) along-side the bookkeeper when the system is implemented.

Gov. Quinn will announce his budget plan for fiscal year 2011 on Wednesday, March 10. For the first time in state history, the governor's office has launched a website to gather public comment on what to include in the budget. This is a chance to let the Gov. know the importance of civil legal aid in our communities. The Governor's office is tracking the issues so your voice will be heard. The Illinois Equal Justice Foundation's appropriation for civil legal aid was cut 50% this year - from $3.5 million to $1.75 million. Eight long-standing grantees were cut, no new programs were funded and the awarded grants were reduced 20%-79% compared to 2009. This means 37,000 fewer people will have their civil legal needs met at a time when legal aid is needed most. Click here to post your comment to the Governor's budget website

You might have heard that the new Illinois Rules of Professional Conduct allow so-called "limited scope legal representation," aka "unbundling" of legal services. Meaning what? Well, veteran lawyer John Phipps gives an example in the latest General Practice, Solo & Small Firm newsletter: "For example, a client might want to hire a lawyer to present their case or defend them in a small-claims case but limit the lawyer’s role to attend the hearing and either make a court presentation or advise a client as to how to represent himself or herself during the hearing." John explains further and describes what he regards as the benefits and possibilities of unbundling in his editor's column. (Note: John speaketh for himself -- the ISBA has yet to take a position on this issue.)

Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. We are currently using an “eat what you kill” compensation system in our firm. Is this appropriate method for our firm to use? A. It depends. You must ask yourself what kind of firm you want to be – a team-based firm or a group of space sharers or a partnership of individual firms. Such systems are not appropriate for law firms that want to build a firm and create a team-based practice since such compensation systems typically reinforce “lone ranger” behavior resulting in a “me first vs. firm first” orientation. It is hard to build a team-based firm with such an orientation. However, some firms do not want to practice as team-based firms – they want to practice as groups of individuals. For these firms such a system may be appropriate. The challenge will be to nail down a method of allocation revenue and overhead that is fair and equitable to all members concerned. Compensation systems should do more than simply allocate the pie – they should reinforce the behaviors and efforts that the firm seeks from its attorneys. Many firms are discovering that desired behaviors and results must go beyond short term fee production and must include contributions in areas such as marketing, mentoring, firm management, etc. to ensure the long term viability of the firm. Eat-what-you-kill systems discourage these behaviors. John W. Olmstead, MBA, Ph.D, CMC, is a past chair and member of the ISBA Standing Committee on Law Office Management and Economics.