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  Practice Management Advisors

FAQs from the Practice Management Advisors

November 2008

This month marks the debut of this new column, Your Practice Management Advisor, in Law Practice Today. It will feature content from the Practice Management Advisors. PMA’s are consultants who work for state bar associations, law societies or some other law-related entity whose primary job is to help lawyers with practice management advise. This column will vary between group authorship and individual authorship For more information about PMA programs, including the contact information for the program in your area or information on how to get such a program started, visit www.abanet.org/practicemanagementadvisors.

For this initial column we decided to ask the PMAs:

 

What are your most frequently asked questions (and answers)?

 One of the questions I am asked most frequently is, “is it worth going paperless?” to which I answer, “yes, if.” As in: yes, if you commit to not doing it halfway, if you are willing to invest in the right equipment, and if you will train your staff adequately. Moving to a paperless solution can save you money over the long haul in overhead (digital files are a lot smaller and cheaper to store than paper) and time (reducing the non-billable time you spend trying to locate documents). Throw in dramatically increased collaboration opportunities, remote access to client files from virtually anywhere and ease of off-site storage to aid in disaster planning and it’s a slam dunk. Figure on start up costs of somewhere between $2,000 and $5,000 (scanners, computers, software and peripherals) depending on the state of your existing technology and 8 to 12 hours of staff training to get started. Don’t bother scanning every closed case file, just implement your paperless system proactively for the present and future. Last, create and adhere to a well-organized digital filing system so that every paperless client file is laid out the same way. – Erik Mazzone, Director, Center for Practice Management, North Carolina Bar Association

Over the last 8 years our most frequently asked questions are "what time/billing/practice management software should I buy" and the second is "I'm going solo, what do I need?" Everyone's need set is a little different, which is why we have the hotline (312-988-5465) to work with each attorney's unique situation. However, we've got great "getting started" information on our website, including a comparison chart of some of the popular legal case management/time/billing programs and FYIs on a variety of topics. -- Catherine Sanders Reach, Director, ABA Legal Technology Resource Center

By far, the most frequently asked question that I receive is the multi-faceted question about starting a law practice.  It’s a serious, compound question because it involves the need for so much information as well as dealing with the anxiety that this step can bring.  I usually begin by providing a checklist on starting a practice, a general packet of information, and suggesting that the caller read How to Start & Build a Law Practice by Jay Foonberg.  The book is available from our lending library.  I usually direct the conversation around what sort of planning the caller has done.  I find that some have truly done their homework while others are taking this step without much planning.  I always recommend the caller seriously consider writing a thorough business and marketing plan before undertaking this adventure.  I also provide information on how to write a business plan.  We typically discuss talking with a CPA for business advice on the best entity to choose to set up their practice.  We discuss where the clients are going to come from so the new practice may thrive as well housekeeping issues such as practice management software choices, thinking through and writing an office manual, and other office systems critical to a well run practice.  Linda Oligschlaeger, Membership Services Director, The Missouri Bar

Interestingly, questions about records retention issues, particularly how long one is required to keep old closed files were mentioned by the many PMAs is a hot topic. In the interest of brevity, we have omitted many of the PMA’s detailed responses. It should be noted that any specific time frame is likely jurisdiction-specific.

How long do I need to keep client files? This question is both a practice management question and an ethics question. First, I direct lawyers to the pertinent ethics rule and to our web site, where our state Bar Ethics Advisory Committee addressed this question on their FAQ page. Then I discuss practical and ethical means of storing and disposing of client files. Many lawyers in small communities are unsure of how to properly dispose of documents, and I try to steer them towards reputable paper shredding companies.  Sooner or later, almost every lawyer has to deal with old client files.  A typical call is from a lawyer with more than ten years’ worth, but I have talked to lawyers with many decades worth of files. If solo lawyers don’t deal with their old files, when they die it can end up being a problem for family members.  I’ve had to advise many widows about what to do with their late husband’s files.– Courtney Kennaday, Director, Practice Management Assistance Program, South Carolina Bar

An appropriate document retention policy will obviously reflect the ethics rules, but must also reflect the attorney’s practice area, the attorney’s risk management philosophy, and the attorney’s willingness to implement existing technology to scan and store documents. This policy is then reflected in new fee agreements and applied as appropriate to older files to ensure that the paper is dealt with now and in the future. – Rodney Dowell, Director, Massachusetts Law Office Management Assistance Program

Lawyers frequently ask how long they must keep a closed file. It is ultimately a professional judgment that the lawyer and law firm have to make after considering the type of file at hand, the particular matter and the particular client especially when that client has ignored your advice, or when the client has limited the scope of your retainer. Without a file, it is almost impossible to defend against a negligence claim. Property, family, commercial, and wills and estates files may be needed long after the file is closed. Our organization has seen claims in family and real estate matters arise more than 20 years after representation has ended. Having access to the lawyer’s well-documented closed files was critical in the successful defence of the claim.– Deborah Gillis, Risk and Practice Management Advisor, Lawyers Insurance Association of Nova Scotia

How do I bill more time without working a longer day? I work primarily with solo and small firm attorneys and try to identify roles that they can safely delegate to third-party vendors or part-time employees in a way that pays for itself through increased productivity. In addition, we focus on prioritizing projects, prevent duplication of work and minimize interruptions during critical work periods. I find that one of the most effective ways for attorneys to gain control of their schedule, prioritize projects, and prevent duplicative efforts is to implement an integrated case management program that allows for information to be entered once while giving the attorney a simple way to get a big picture view of each client's matter. – Rodney Dowell, Director, Massachusetts Law Office Management Assistance Program

How much do I charge (from new attorneys)?  I explain that we can’t tell them that and there is no fee schedule.  I then go into great detail about budgeting and billing and keeping good records.  I also send them some information about billing and budgeting. – Patricia Yevics, Director, Law Office Management Assistance, Maryland State Bar Association

Over 60% of the questions I get concern technology – hardware, software, peripheral equipment and telephony.  I gather as much information about the firm and its clients as possible, and then encourage them to focus first on what I believe are the best choices of the many resources I provide.  I provide questions to ask, and strong encouragement to perform adequate due diligence before making a final decision.  I also encourage our attorneys to contact me again once they have narrowed their focus or made a selection, so that I can recommend high-quality vendor(s) who can assist with a successful bid and installation and training. – Ellen Freedman, Law Practice Management Coordinator, Pennsylvania Bar Association

The most frequent issues are setting fees (for new practitioners), purchasing and understanding professional liability insurance policies, purchasing immigration case management software, marketing/client development, and understanding multi-jurisdictional practice—i.e. federal immigration practice in a state bar world. – Reid Trautz, Director, Practice & Professionalism Center, American Immigration Lawyers Association

What is the best practice management system for my law practice.  Answer:  It depends.  For smaller firms, we recommend (in no order of preference) ABACUS Law, Amicus Attorney, PracticeMaster and TimeMatters.  With these systems, you need to check your current slate of software, hardware configuration and practice needs before purchasing.  Members can call or visit with us to help make an informed decision for their practices. – Natalie Kelly, Director, Law Practice Management Program, State Bar of Georgia

While I can’t say that I have a specific topic that is the most frequently asked, the clear majority of questions are technology related covering such topics as scanning, document and practice management. Fee agreements, collecting your fee and trust and accounting issues are probably in second place. – Nerino Petro, Practice Management Advisor, State Bar of Wisconsin

My most frequently asked questions, hands down, involve maintaining trust account records and reconciliations without messing up and getting an ethics complaint.  (Our state is very tough on any trust accounting errors, and there are some very technical provisions that I have not seen in other states.) – Anonymous

I also receive lots of questions about collecting fees.  Of course, I suggest that they not allow themselves to get in the situation of having a lot of accounts receivables in the first place.  However, if the horse has already left the barn, we talk about developing a detailed collection policy and putting it in place.  Some issues to include in the policy include not allowing accounts to age beyond 30 days.  I encourage them to find out why the client isn’t paying.  Is it a question of not having the means or is the client is dissatisfied about the lawyer’s services?  If so, it can be a great opportunity to rebuild the relationship.  So many lawyers have trouble asking for fees, to which I remind them that unless they have a plush trust fund to support them, they must keep their practice viable by collecting for their hard earned work.  Of course, I counsel written fee agreements. – Linda Oligschlaeger, Membership Services Director, The Missouri Bar

How do I make a living and keep my fees at a level that moderate income clients can pay? My first answer is that I wish I knew, but we focus on two areas- (a) increasing efficiency, small offices generally do not try to manage knowledge assets, precedents, well drafted correspondence, agreements; and (b) reducing reliance on paper files to improve efficiency in delivering services. – Jim Knapp, Practice Management Coordinator, Law Practice Management Program, Vermont Bar Association

Do I have to print e-mails? Absolutely not!  As long as you file them electronically so you can find them when you need them, and this includes archiving them in a manner that keeps them available after your close out your files (burn onto CD, use Acrobat e-mail archive). – Dan Pinnington, Director, PracticePRO, Lawyers Professional Indemnity Corporation, Ontario, Canada

Lately, I have been getting a lot of calls over buying or switching practice management software. I am hearing a great deal of dissatisfaction in the practice management software market. There are many long term users who like the software they use, but are unhappy with the service from the company that produces the software. Frequent expensive upgrades, failing to support older versions, paying more for much worse tech support and adding too many new complex features lead the list of complaints. While I do advise them that it will be an expensive and difficult process to switch, I note some vendors may help with converting their data to the new system. Retraining would be a pain. But I do tell first time buyers about tales of woe that are passed on to me. My guess is we will see significant realignment in this market based on price and customer service. – Jim Calloway, Director, Management Assistance Program, Oklahoma Bar Association

We asked Laura Calloway, Director, Practice Management Assistance Program, Alabama State Bar and chair of ABA TECHSHOW 2009 to give us some comments about business development.

I believe the business development activity that more lawyers should be engaging in is keeping their existing clients satisfied.  I blogged about the tendency of businesses in general to chase new customers at the expense of providing good customer service to existing clientele . Since studies have shown that potential clients turn to friends and family members before any other source (Internet, yellow pages, lawyer directories) for recommendations when searching for a lawyer, treating your current clients well, making sure staff treat them like gold, and spending time making sure they understand their legal situation and the choices they have to make is the single easiest marketing activity any lawyer can engage in. – Laura Calloway, Alabama

1. Help me get started in my practice.  We send a New Practice Packet and offer a consultation at a modest fee

2. We get lots of various technology questions;

3. How do I leave the practice? The short answer is to plan at least a year in advance and guard the interests of your clients. -- Peter Roberts, Practice Management Advisor, Law Office Management Assistance Program, Washington State Bar Association

Do I need to register with D.C. local government to open a law office and do I need an IOLTA (Interest on Lawyer’s Trust Accounts) account?  I send them an article I’ve written about practicing as an entity, if they elect to do that, but it also contains information on completing the FR500 and filing it with the DC Office of Tax and Revenue.  I encourage them to open an IOLTA account if they will ever handle funds which will not belong to them and I send them information on how to open an IOLTA account. – Daniel Mills, Manager, Practice Management Advisory Service, The District of Columbia Bar

Well, as you can see, our PMA’s are a diverse group and field questions in many areas. So for lots of free good practice management information, be sure and check Your Practice Management Advisor in each month’s issue of Law Practice Today.

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About the Author

Jim Calloway is the Director of the Oklahoma Bar Association Management Assistance Program. He publishes the blog Jim Calloway's Law Practice Tips and was the co-author of the book Winning Alternatives to the Billable Hour (2nd ed.) (2002 ABA.) He was chair of ABA TECHSHOW 2005. He is a member of the Council of the ABA's Law Practice Management Section and chair of its Practice Management Advisors Committee. He is co-chair of the 2007 GP/SOLO National Solo and Small Firm Conference. He has been named a Fellow of the College of Law Practice Management. He writes Law Practice Tips column for the Oklahoma Bar Journal. The archives of that column are available online here.

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