To hire or not to hire – that is the questions! The following chapter in Flying Solo: A Survival Guide for the Solo and Small Firm Lawyer, 4th Edition gets right to the heart of the matter. Gisela has managed law firms of many sizes deep in the heart of Texas and advises lawyers in Texas as the Practice Management Advisor for that great state’s bar association (Baja Oklahoma for those of us north of the Red River!).
What Kind of Help Do I Need?
Due to the fluctuating demands on a solo law practice caused by varying workloads, expansion into other practice areas, personal work schedules, or any number of other factors, every lawyer—at some point in his or her career—thinks about hiring additional staff to ease the daily responsibilities of serving the client in the most efficient and cost-effective way. The decision to expand the practice in this way should be followed by a careful analysis of the type of help that would bring the most relief to the lawyer and add service to the clients.
In years past, law firms hired support staff to “work for the lawyer.” Secretaries were assigned to specific lawyers, and receptionists were trained to carry out the lawyers’ work while answering the phone and greeting clients. Paralegals were given assignments by the lawyers and told to handle specific aspects of cases, often not knowing the key issues of the cases overall. This philosophy has changed somewhat, due to the movement of firms toward client-oriented service environments. Firms now look at staffing the office as a means to serving the clients better as a team. This means that more emphasis must be placed on skills beyond the traditional job skills, such as typing, drafting, filing, accounting, and research.
This chapter begins by looking at the legal requirements of becoming an employer, and then discusses a methodology for performing a needs analysis for proper staffing. The material presented here is meant for discussion purposes and is not meant to be an exhaustive study of the subject. For a thorough analysis of this topic, you are encouraged to seek individual advice from a human resource professional and/or management consultant.
So You Want to Be an Employer?
Before you hire anyone and become an employer, you may—depending upon the requirements of your state—be required to do the following:
- Obtain an employer’s federal identification number from the Internal Revenue Service (IRS)
- Obtain workers’ compensation insurance
- Establish an account for unemployment insurance payments
Obtaining an Employer’s Federal Identification Number
You may want to become familiar with the following: Circular E, Employers Tax Guide (IRS Publication 15), and IRS Form SS-4, which is the application form for your employer identification number (EIN), along with instructions for this form. The IRS has many helpful resources accessible at www.irs.gov, from where you can also e-mail any questions you may have.
Once you establish your EIN, the IRS will keep you current with important information, such as changes in requirements, due dates for tax reporting, and necessary forms.
Obtaining Workers’ Compensation Insurance
Generally, most firms obtain their workers’ compensation insurance from the same carriers that provide their general liability and property insurance. Insurance companies generally report the existence of this type of insurance to the state.
Establishing an Unemployment Insurance Account
This account is usually established with assistance from your payroll company. The payroll company remits this money on your behalf to the applicable state agency. This requirement or procedure is the one most likely to vary from state to state. In most states, the state government Web site has information about doing business in the state, which can be a helpful guide. Your accountant can also be of great assistance.
Now that you are set up to be an employer on the federal and state levels, we can proceed with the steps of finding you the help you need.
It Is Time to Get More Help!
If you have noticed any of the following symptoms, then it may be time to get more help:
- In your service to your client:
- You do not have enough time to do quite as much research as you would like to do on a particular issue
- You do not complete a task as quickly as you need to
- You cannot accept any more new cases or clients because you are overloaded as it is
- In your internal office organization (assuming you already have some staff members or temporary help):
- Your secretary is working overtime consistently
- Your bookkeeper does not give you the management reports on a timely basis
- Your file clerk consistently has a backlog of filing to do
- Your paralegal is not as thorough as he or she needs to be
- In your personal life:
- Your children are always asleep when you leave the house in the morning and when you return home at night
- Your spouse misses that fun-loving person you used to be
- You have not taken a vacation in three years
If you realize that any of these symptoms is a regular occurrence, do not rush to hire the neighbor who just lost his job, the cousin who would be so loyal, or the friend to whom you owe a favor! Any of these individuals may be the best suited for what you need, but look first at what you really need to enhance your practice and the service to your client.
This requires a needs analysis. You must establish (1) the type of tasks that, if done by someone else, would give you enough time to do what you need to do, and (2) the type of skills that would enhance your client services and that are not currently available. This type of needs analysis can be done only with a complete time study. I suggest you use your timekeeping software for this analysis, establishing categories for additional activities you may not currently track, such as billing, filing, handling personnel issues, taking care of office supplies, community activities, continuing legal education activities, marketing, training on equipment and software, and answering the phone.
Start the study on the first day of a month and require everyone in the firm to record everything they do. “Everyone” means no exceptions! At the end of the month, you can use the timekeeping software to obtain a report by individual, or you can total each person’s daily sheets by activity. The results should give you information that answers the following questions:
- How much time are you spending on nonclient-related issues that someone less expensive could be doing for you? Multiply that amount of time by your billing rate and see what it costs you to perform these tasks yourself.
- Are there redundancies in the systems that should be eliminated? For example, are the secretary and the paralegal performing filing tasks when a less expensive, part-time student could do this and free those individuals to do what they need to do?
- Are entire steps of the process missing? Are things falling through the cracks?
- Are there just not enough hours in the day to accomplish the work that has been accepted? For example, did you record a high number of hours on a project and still not get everything done in the expected amount of time?
This type of analysis will help you determine where the help is needed and what kind of help would be most beneficial to the overall efficiency and effectiveness of your practice. You will know if you need more legal support and can then decide to look for the right level of expansion. For example, would a law clerk with research capability be the answer, or a paralegal with drafting skills, or an associate with brief-writing abilities? Or should you look for a partner? If your office is lacking in clerical/administrative support, the time study will reflect the shortage in these areas as well. Ask yourself: What would help me serve my clients better, and what would make my life a little easier?
If you already have staff members and are simply trying to determine if it is time to create additional positions, this study can be instrumental in evaluating the type of new positions that would make your existing team more complete.
The important thing in hiring is developing a legal team and not adding more stress by unplanned hiring, which often results in costly, high turnover rates and fails to give you the desired results.
If you want to read more, you can order the book at http://tinyurl.com/yqa3bk or purchased selected chapters at http://tinyurl.com/6f5b7n. If you have questions, drop me an e-mail: email@example.com