DEVELOPING AND MANAGING A SOLO OR SMALL PRACTICE

Transcription

1 DEVELOPING AND MANAGING A SOLO OR SMALL PRACTICE BARBARA D. NUNNELEY Nunneley Family Law Center 1845 Precinct Line Road, Suite 209 Hurst, Texas State Bar of Texas 30 TH ANNUAL ADVANCED FAMILY LAW COURSE August 9-12, 2004 San Antonio CHAPTER 47

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3 BARBARA D. NUNNELEY, LAWYER NUNNELEY FAMILY LAW CENTER 1845 Precinct Line Road, Suite 209 Hurst, Texas (817) EDUCATION: B.A., Texas Woman's University M.A., Southern Methodist University J.D., Thurgood Marshall School of Law PROFESSIONAL ACTIVITIES: Certified Specialist in Family Law - Texas Board of Legal Specialization Fellow of the American Academy of Matrimonial Lawyers Texas Chapter, American Academy of Matrimonial Lawyers, Treasurer Family Law Council - State Bar of Texas Texas Academy of Family Law Specialists, Board of Directors, member State Bar Form Book Committee, Family Law, former member State Bar Grievance Committee, Professional Enhancement Program, former member Founding Member, Child Advocates of Tarrant County Tarrant County Bar Association Past President, Tarrant County Family Law Bar Association Board of Directors, Tarrant County Family Law Bar Association Past Chair, Texas Woman s University Foundation U.S. Marshals Posse Texas Super Lawyer 2003 & 2004 Top Attorneys 2003, Fort Worth, Texas Magazine RECENT LAW RELATED PUBLICATIONS AND SPEAKING ENGAGEMENTS: Relocation, Nunneley, Barbara, Family Law on the Front Lines, University of Texas School of Law, June 2004, Galveston, Texas. To Move or Not to Move, Nunneley, Barbara, 27 th Annual Marriage Dissolution Institute, April 2004, Fort Worth, Texas, State Bar of Texas. Managing a Small Practice, Nunneley, Barbara, American Academy of Matrimonial Lawyers, March 2004, Kaanapali Beach (Lahaina) Maui, Hawaii. Effective Presentation of the Truth, Nunneley, Barbara, Advanced Drafting, December 2003, Austin, Texas, State Bar of Texas. Practicing Law for Fun and Profit, Nunneley, Barbara, Nickelson, Gary, King, Heather and Loveless, James, 29 th Annual Advanced Family Law Course, August 2003, San Antonio, Texas, State Bar of Texas. Horses and Divorces, Nunneley, Barbara D. & Ball, J. C., 29 th Annual Advanced Family Law Course, August 2003, San Antonio, Texas, State Bar of Texas. Homestead: What You Need to Know in the 21 st Century, 26 th Annual Marriage Dissolution Institute, May 2003, Houston, Texas, State Bar of Texas.

4 The Closer, Houston Bar Association, April 4, 2003, Houston, Texas. Course Director, 17 th Annual Texas Academy of Family Law Specialists Trial Institute (TAFLS), Cancun, Mexico, January Criminal Law and The Family Practice, Nunneley, Barbara D. & Ball, J. C., 28 th Annual Advanced Family Law Course, August 2002, Dallas, Texas, State Bar of Texas. Demystifying Economic Contribution, 25 th Annual Marriage Dissolution Institute, May 2002, State Bar of Texas. Assistant Course Director, 16 th Annual Texas Academy of Family Law Specialists Trial Institute (TAFLS), Cancun, Mexico, January Course Director, New Frontiers - In Marital Property Law, Santa Fe, New Mexico, State Bar of Texas, October Exceeding or Varying from Possession Guidelines, 27 th Annual Advanced Family Law Course, San Antonio, Texas, August Sex, Lies & Psychologists, 27 th Annual Advanced Family Law Course, San Antonio, Texas, August Parental Alienation Syndrome: War and Peace; DeLipsey, J. M. and Nunneley, B. D., 24 th Annual Marriage Dissolution Course, 2001, Corpus Christi, Texas, May 2001, State Bar of Texas. Closing the File : Family Law on the Front Lines, University of Texas School of Law, Galveston, Texas, April The Motley Fool School - Components/Consequences of the Stock Market, 26 th Annual Advanced Family Law Course 2000, San Antonio, Texas, August Family Limited Partnership TAFLS Trial Institute, Las Vegas Nevada, February Drafting Real Estate Documents Advanced Family Law Drafting Course, December UIFSA, 25 th Annual Advanced Family Law Course, Dallas, Texas, August Representing the Non-Protecting Parent, State Bar of Texas Annual Meeting, June Invasion of Privacy and Illegally Gathered Evidence; Wiretapping, Recording Devices, Including Criminal Law Aspects, Moderator, 22 nd Annual Marriage Dissolution Institute, 1999, State Bar of Texas. Daubert Challenge of C.P.A., TAFLS Trial Institute, Las Vegas, Nevada, February Preparation, Preparation, Preparation, Winning Techniques in Family Law Litigation, State Bar of Texas, December, Tips for Trying the Low Budget Custody Case, 24 th Annual Advanced Family Law Course, San Antonio, Texas, State Bar of Texas, August, Definition of a Protective Order and a Temporary Restraining Order, 1998 Family Law and Domestic Violence Seminar, Fort Worth, Texas, May 15-16, Contempt and Enforcement of Court Orders, 8 th Annual Family Law Conference for the General Practitioner and Legal Assistant, Houston, February Characterization of Assets and Tracing-All You Ever Needed to Know, 6 th Annual Dallas Chapter TSCPA Divorce Conference, Dallas, Texas, September 25, 1997.

5 "Interesting Cases", 23rd Annual Advanced Family Law Course, San Antonio, State Bar of Texas, August, "Closing the Case", Family Law Trial Skills Seminar, Fort Worth, Lawyers Against Domestic Violence, May 31, "Avoiding Pitfalls with Closing Documents", 7th Annual Family Law for General Practitioners Conference, April, Interviewing Children. The Child as a Witness, Attorney Ad Litem Training Seminar, April, Direct Examination of Mother in Relocation Case, 10 th Annual Trial Institute 1996, Texas Academy of Family Law Specialists. Interesting Cases, 22 nd Annual Advanced Family Law Course, San Antonio, August State Bar of Texas. Enforcement, 19 th Annual Marriage Dissolution Institute, 1996, State Bar of Texas. Real Estate Transfer Documents, Advanced Family Law Drafting Seminar 1995, State Bar of Texas. Direct Examination of Mother in Child Custody, Ninth annual Trial Institute 1995, Texas Academy of Family Law Specialists. Discovery Ethics and Sanctionable Behavior, The Ultimate Trial Notebook, 1994.

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7 TABLE OF CONTENTS I. LAW OFFICE MANAGEMENT INTRODUCTION... 1 II. POSITIONING... 1 A. Know your audience B. What is your point of difference?... 1 III. EMPLOYEES... 2 A. What to Look For Training Motivating Rewarding Retaining... 3 B. Employee Handbook Determining the Purpose of the Handbook Instructional Information that Everyone can Follow: Topics Generally Contained In An Employee Handbook Policies and Procedures... 4 IV. OPERATIONS... 5 A. Computers Checklist Conclusion:... 5 B. Internal Controls Practice Management Production Revenue Expenditures Financial and Management Reporting Conclusion... 6 C. Docket Control Docket Control System File Status Checklist Amended Pleadings Trial Court Loses Plenary Jurisdiction Designation of Experts TRCP D. Conflict of Interest System... 9 V. PROFITABILITY... 9 A. Get the Process Organized B. Evaluate your Competitiveness C. Internal Strengths and Weaknesses D. Reassess Your Strategy E. Evaluate Your Resources Objectively F. Business Projection G. Prepare Your Financial Plan H. Prepare Your Business Plan Document I. How to Successfully Implement "The Plan" J. Documenting Client Expenses and Attorney s Fees Time Keeping Tips Time Keeping Methods a. Manual System b. Automated System Tracking Client Expenses i

8 4. Document Checklist a. Copying Expense b. Facsimile Expense c. Courier Expense d. Postage Expenses e. Overnight Charges (Federal Express, Airborne, UPS) Conclusion VI. LAW A. Client Goals: B. Client Expectations: C. Preparation: VII. ENJOYMENT A. Career Satisfaction: B. Stress: C. Balance: APPENDIX A ii

9 MANAGING A SOLO OR SMALL LAW PRACTICE I. LAW OFFICE MANAGEMENT INTRODUCTION You ve undoubtedly heard the phrase, People make the world go around. Nothing could be more true than such a reference to a law office! Your law practice is so much more than just you practicing law. It takes people to make everything happen. People are the foundation of our practices. In fact, the acronym that aptly describes what we re going to be talking about today in the management of the small law practice is indeed: POSITIONING EMPLOYEES OPERATIONS PROFITABILITY LAW ENJOYMENT With these six fundamental building blocks you can manage your law practice and effectively and efficiently represent the interests of your clients. While I feel like I m preaching to the choir, try to keep an open mind and maybe you ll pick up a tip that you can take back to your offices to enhance your respective practices. II. POSITIONING A. Know your audience. Who is your customer? Who is it that you want to represent? Half of our battle as solo or small office practitioners is obtaining and maintaining our clientele. If you have an aversion to representing airline pilots (who can imagine such a thing) then you don t want to be positioning your law firm as having expertise with pilots for equal rights. If you are more comfortable or interested in women clients, then you want to position your firm to be visible in areas where women can learn about your practice and consider hiring you for her representation. What type of cases interest you? Are you a property kind of divorce lawyer or do you like the custody aspects of a divorce? We know lawyers who can t stand to be involved in custody litigation and we know lawyers who simply don t want to mess with an intricate and time consuming tracing case. Spend a little time thinking about what it is you really enjoy doing or what it is you really aspire to do and go after that type of lawsuit. What are your capabilities? As a lawyer, are you competent to handle a complex custody or property case? Just as importantly in this phase of your legal life, is your staff competent to assist you in handling a complex custody or property case? You will find that the more familiarity you have with a type of case, the more comfortable you are with that type of case; the more comfortable you are with a particular type of case, the better job you will do and the less procrastinating you will do. B. What is your point of difference? To paraphrase ol Humphrey Bogart, Out of all the gin joints in all the world you had to find me... In other words, why on earth would a client choose to interview and to retain your services? What differentiates you from the woman down the street or the man ten minutes away? Give some serious thought as to why someone would want you to represent them over your competition. We all know who our competition is, they are the men and women who have been practicing approximately the same number of years we have, handling the same types of cases we handle and requiring approximately the same retainers and fees we request. It is critical that you establish a point of difference for your firm from your competitors. I ll give you an example. My approach is to use my proprietary whole person approach. That is, from the beginning of a client s representation and throughout the case to its conclusion, each lawyer, legal assistant and staff person keeps in mind how we can meet the client s needs before, during and after the divorce process. This unique approach differentiates me from my competitors. It is a marketing tool that helps define who we are and why a client would want to choose us over another firm. You have to position your law firm and you have to market your skills and those of your firm in order to be successful. Once you have given critical thought to the questions raised above, then you will be ready to illustrate those answers on your own website which in itself can be a wonderful marketing tool. Additionally, once you have positioned your firm you may want to venture outside the comfortable family law people with whom you practice every week and attend activities of people in other areas of practice such as monthly luncheons or bench-bar conferences. Let people outside the family law circle know who you are and what you do best. They are a marvelous source of referrals and managing that all important facet of the practice, getting and keeping clients! When people do refer cases to you, be sure and send them a thank- you note (with the permission of the client) and include a brief one page CV and/or short article on yourself. That will keep you in the forefront of their thoughts when the opportunity arises to refer a client to a family law attorney. Other marketing tips include volunteering so as to meet an entirely new circle of contacts while doing something worthwhile for your community and writing 1

10 articles in your field and submitting them to your local and perhaps national continuing legal education programs. May I suggest the following if you would like to know more about marketing: The ABA Guide to Legal Marketing: A Collection of the Best Ideas, Approaches, and Success Stories, edited by Gary A. Munneke and Susan Raridon. Action Steps to Marketing Success: How to Implement your Marketing Program by Robert W. Denney and Carol Scott James. The Complete Guide to Marketing your Law Practice by Hollis Weishar and James Durham. Lawyer s Guide to Marketing on the Internet by Greg Siskind. Marketing and Legal Ethics, 3 RD edition by William E. Hornsby, Jr. III. EMPLOYEES A. What to Look For Law office employees including the attorneys, legal assistants, secretaries, word processors, receptionists, bookkeeping and billing personnel are the people with whom your client will deal. Therefore, first impressions are lasting ones and you must strive to hire personnel who will complement your practice rather than detract from it. It is important to always keep in mind when interviewing prospective employees that they must not only get along with you, but they must get along with everyone else in the office as well as the clients. In all likelihood your employees will spend more time with your client than you will! Law office chemistry is not an exact science. However, having people from diverse backgrounds with different opinions and ideas need to be prompted at your very first interview that it is essential that they fit in and that such qualities are equally as important as their skill sets. One grumpy, unhappy curmudgeon in the law office can wreak havoc and put a damper on everyone in the workplace. Law firm employees must be selected carefully and cared for and protected carefully. To accomplish this feeding and nurturing of employees, there are four fundamentals: Training, Motivating, Retaining, Rewarding. 1. Training According to the author of How to Start and Build a Law Office Practice, 4 th Edition, Jay Foonberg, Failure to provide adequate training is the single worst mistake lawyers make with employees. Every one of your employees needs to know what is expected of the employee and should be trained on exactly how to accomplish the expected tasks. If you haven t told them what their job is and what your expectations are, they can t possibly meet up to those expectations and their failure to satisfy you will result in friction, hard feelings and a lack of productivity and quality for the client. 2. Motivating Ask almost anyone in your office where they would rather be today and you will get a response of something other than right here in your office working for you. People take jobs and go to work primarily because they need the money. Keep that in mind every time you pile on an assignment to an employee. Employees need more than a paycheck to stay motivated. Motivation is your job and it cannot be simply a once a year token! To motivate one in the law office, you must vest the employee with ownership of a client, of a case, or of a task. They need to feel a real reward for the work they do that results in career satisfaction from the lawyer right down to the receptionist. By carefully observing your employee s personalities you can ascertain what motivates your employees and thereby understand how to inspire them to do the best job possible. 3. Rewarding The employer must step into the shoes of the employee to evaluate rewarding the employee. We typically want to look at an employee and think to ourselves, Golly, we re paying this person an awful lot of money surely they could do a better job, be more punctual, be happier, be more friendly, etc. You have to step back and think like the employee! Gee, I barely get paid enough to make all my bills and she still wants me to get here early, stay late, put a smile on my face and deal with all her crazy clients! You see, the employee already thinks they re underpaid and that a paycheck is an expectation and is a perfunctory given. Rewards can come in many varieties. Surprise employees with a monthly chair massage or take the employees out for lunch or drinks after work. Buy lottery tickets and distribute them one day as a surprise at lunch! All of those gestures will excite the employees, but the most successful reward of all is you expressing appreciation for the individual employee and letting that person know how truly valuable they are to you. Showing your appreciation is not easy when we are caught up in the day to day minutia of running our offices and practicing law. However, we can t practice law without our employees and we want to keep them satisfied and vested in our own selfish pursuit of our practices. So go ahead and cut loose one day and let everyone go home an hour early, totally unexpectedly and just see the renewed and 2

11 refreshed attitudes that greet you the next day in your office. 4. Retaining If you have trained the employee adequately, practiced motivating your employees constantly and rewarded those employees with a sense of ownership, pride and appreciation from you, you will have helped create an employee who is loyal and who won t go job hunting elsewhere. As we all know, the learning curve for a new employee is steep and the down time it takes to train a new employee to get up to speed, is enormous. It costs time and profitability from every aspect of your practice. Make a promise to yourself to re-read this section of the paper at least once a year so that you keep in the forefront what is truly important to your employees which will result in what is truly important to you...an excellent staff with which to work. B. Employee Handbook An Employee Handbook should be tailored to the individual needs of the employer and the employer's management style. It is to be used as a guideline and should never be interpreted as a form of an Employment Contract. These guidelines are utilized by both the employee and employer as a means to ensure consistency in matters of office policy. Your initial steps should include: 1. Determining the Purpose of the Handbook Recruitment information Referral source for employees, ie., history of the firm, etc. Standardization of policies and procedures to ensure consistent application of work rules Legal compliance with non-discriminatory laws and Worker's Compensation and OSHA Brief guidelines providing information to employees while preserving flexibility 2. Instructional Information that Everyone can Follow: Be careful to cover all employees equally Be clear and concise in developing and implementing office policies that you and/or your firm's management can follow Clearly define "full-time", "part-time" and "temporary" employees and what benefits may or may not apply to each. Refrain from using the term "permanent employee". Remember that Texas is an employment-atwill state, unless a written Employment Contract is entered into. Do not attempt to make policies so comprehensive that they can be assumed to cover every conceivable situation. Leave Flexibility in your policies and procedures. Use accent words such as "may", "can" and "generally", rather than words such as "will" or "must". 3. Topics Generally Contained In An Employee Handbook Introduction Welcome, Organization of Firm, Mission Statement Employment Policies Equal Employment Opportunities, Sexual Harassment & Complaint Procedures, Anti-Nepotism Policy, Orientation Program, Transfer/Promotions Policy, Privacy Rights, Personnel Records, Emergency and Safety Procedures. Compensation Policies Classification of Employment Levels, Provisionary Status, Work Hours/Office Hours, Part-Time and Temporary Employees, Payroll Procedures, (1) Overtime Procedures, (2) Bonus Plans, (3) Request for Driving Record and Employee Performance Evaluations. Time-Off Benefits Vacation, Holidays, Personal Time, Sick Leave, Death/Illness in Family, Jury Duty, Voting/Election Rights, Military Leave Group Health & Related Benefits Employee Benefit Programs, Health Insurance, Basic Life Insurance, Disability Plans, Workers Compensation or Non-Subscriber Status, Dental Insurance, and Retirement Plan. Employee Conduct Personal appearance, Absenteeism and Tardiness, Outside Employment, Americans With Disabilities Act, Solicitation, Employment References, Drug-Free Work Place and (1) Employers must pay all hourly and nonexempt employees overtime for all hours in excess of 40 hours per week. It is important to state if advanced approval of overtime is needed.(2) Bonus Plans - discuss if they are discretionary or non-discretionary(3) Waiver to Obtain a Driving Record of your employee if they are to do any driving during firm hours and/or for firm business.(4) Discipline/Termination of Employment - be certain to include a statement that this is not intended to be all inclusive, but that these are some of the reasons for immediate discipline and/or termination. 3

12 Implementation of Policies. Policies that are implemented must be consistently followed by Management. Termination Provisions should avoid phraseology such as "for just cause" or "good cause" -- these types of phrases lend credibility to the fact that an employee cannot be terminated in the absence of "cause" -- remember Texas is an employment at-will state. Disciplinary Procedures. Include a statement that gives you the right to terminate an employee immediately for certain conduct such as theft, being under the influence of nonprescription drugs, or alcohol at work. Be sure to include language indicating that the list of termination offenses is not all inclusive. Probationary Period. Make it understood that even after an employee has completed their probationary period this does not create a contract or a guarantee of employment for any specific duration. Employee Benefits. Employers need to be aware that the Employee Retirement Income Security Act (ERISA) requires employers to provide employees a separate Summary Plan Description. This handbook summarizes all benefits offered by the firm. Include a General Disclaimer Example: This is not intended to be an all inclusive list of policies and procedures of this firm, however, it is a guide to help answer the most commonly asked questions and sets forth the guidelines under which this firm operates. This firm reserves the right to change any terms or provisions at any time. Employment with this firm is "at will". This means that either you (the employee) or the firm may terminate the employment relationship at any time, for any reason. Include an Acknowledgment Page for Both Employee and Management. Example: I, the undersigned Employee, have read and understand the policies contained in this Employee Handbook. I further understand that it is only a general guide and that the provisions and/or terms may be changed and/or terminated at any time during my employment with this Firm. I expressly understand that this Employee Handbook does not create nor constitutes a Contract of Employment; furthermore, it does not change my status as an Employee "at will". These suggestions on how to draft an employee handbook are from the State Bar of Texas Law Office Management Program and can be accessed on the web at LOMP@texasbar.com. 4. Policies and Procedures So that every employee knows what is expected of them and the procedures to follow from the beginning of a case to the end, your office will need a policies and procedures manual. An excellent resource is Law Office Staff Manual for Solos and Small Law Firms by Demetrious Dimitriou. This manual is a proven model specifically directed to solos and small law firm office staff manual for solos and small law firms and is based on author Demetrious Dimitriou s own experience in a small law firm. It follows the successful law office staff manual: model policies and procedures for law office personnel that has been produced by the ABA Law Practice Management section for twenty years. A description of the manual is: Present a clear accurate statement of who you are. Outlined in the manual is a Resume and mission statement. When completed, it provides your firm s history, a description of its practice, and the reasons for its existence. The statement helps those inside--office lawyers and support staff--to better understand the firm and give more consistent responses to questions from those outside-clients, potential clients, and other audiences. Customize personnel guidelines: The Manual helps you focus on scheduling problems unique to small firms- -work hours, lunch breaks and vacations, telephone and reception coverage and workloads. Also included: general policies and procedures for salary, merit raises, sick leave, termination and holidays. Ensure confidentiality and the ethical conduct of employees: The Model Rules of Professional Conduct, in Rule 5.3, impose on lawyers who supervise nonlegal staff responsibility for ensuring the ethical conduct of their subordinates. That s why regulations regarding the confidential nature of the firms work and the confidentiality of client information are clearly spelled out in the Manual for your employees to understand and follow. Establish financial record keeping: Like any service business, a law firm s time is its money. From trust account and billing protocols to petty cash and payroll taxes/ records--and every related procedure in between-- the Manual presents a thorough approach to tracking services rendered and related costs incurred for clients, the Firm or otherwise. Maintain your firm s identity and quality standards: Your image--how you look to others--is important. In order to assure that your identity is consistent and quality driven, the Manual encourages you to include samples of all of your office documents-letters, pleadings, memoranda, invoices, wills and trusts, and contracts--and to include format specifications and rules of style. Install efficient systems: Procedures for the office docket control system and the office filing system, the 4

13 heart of your operations, are clearly delineated in the Manual. The office docket control system documents all incoming and outgoing information and calendars deadlines, courtroom appearances, client meetings and other important dates; the filing system keeps the information in an organized manner so that it is easily found. Implement standard forms and consistent reporting: Presented in the Manual are a variety of forms essential to operations. These include: Periodic Time Report, Outgoing Fax Log, Telephone Log, Cost Account/Petty Cash Report, Client Data Sheet, Federal Express Form, and many more. Use them according to your needs or replace them with those you are already using as a part of your office procedures. An additional resource is the Law Office Policy and Procedures Manual by Robert C. Wert and Howard I Hatoff. This is a best selling manual that has been completed, updated and expanded. This manual includes malpractice, marketing, child care, stress management, code of personal and professional conduct, family medical leave act, diversity, AIDS/HIV policies, ADA compliance, sexual harassment, and substance abuse. Both of these books are available in looseleaf and diskettes. It is important to include your staff, personnel, in the writing and updating of your policies and procedures manual. The staff can meet, think about all the steps necessary for handling the daily mail, communicating with clients, scheduling depositions, subpoenaing witnesses, propounding, responding and objecting to pretrial discovery. Staff will probably have some pretty good ideas about how to revise or augment the policies that are currently in place in your office that will save everyone time and make your office more efficient and profitable. IV. OPERATIONS Law office operations consists of all the various systems on which each of you rely daily. Everything from computers with their servers and networks to the telephones, from docket control and calendaring and tickling deadlines to weekly meetings on all of your cases. Operations includes establishing and maintaining a conflict of interest system as well as a filing system for the office. A. Computers How do you know what you need in the way of computers for your firm? The world of office automation is constantly expanding. It would be senseless to think that anyone could make an effective decision regarding technology, without a carefully thought out analysis of need. Following is a list of questions to ask yourself in the process of determining what fits your practice needs best. 1. Checklist Which functions are automated now--which additional functions do we wish to automate? Are existing pieces of equipment mutually compatible? Does everyone in the office use the same software? Are our word processing procedures standardized? Is our billing system interfaced with accounting? Are the accounts payable checks computer generated--or prepared manually? Are we keeping track of client expenses, i.e. copies, fax, long distance, postage, etc.? Are we getting telephone messages delivered timely and accurately? Does the office get flooded with interoffice memoranda? Is the payroll prepared in house? Manually? Do the attorneys carry boxes to the court house? Do the paralegals spend hours preparing manual document index systems? How do we check for conflicts of interest? What type of calendering system do we use for docket control purposes? 2. Conclusion: The answers to these questions need to be followed by an examination of reasons to automate. Just because there is some wonderful software package on the market does not mean that we have to toss out a perfectly good manual system! Therefore, a cost/benefits analysis will give greater insight to the extent of automation needed. An implementation schedule will be helpful to budget for this investment and can be set up to accommodate several phases of implementation. While going through this evaluation, think expansively! This article is only meant to begin the thought process of looking at your own practice. There may be additional issues and dynamics in your practice that must be taken into consideration in developing your needs analysis. The more time and effort you devote to properly planning your transition to an automated office, the greater the rewards. Having gone through this exercise will give you the confidence to proceed with the decision to plan for the future! 5

14 B. Internal Controls Your law firm will need to implement a good system of controls and procedures and policies. An internal control structure is a system of safeguarding your firm s resources. It provides a way to collect, organize, record and report information that is needed for the efficient operation of your practice. What requires internal controls? Among others, practice management, production, revenue, expenditures, and financial and management reporting. The Law Office Management program of the State Bar of Texas suggests the following extensive list when considering your internal controls. 1. Practice Management New clients and/or new matters will be approved by management before acceptance. Contingent fee work will be evaluated and approved by management. Pro bono work will be reviewed and approved by management Written procedures to reduce the risk of a claim in performing legal work will be communicated to all firm personnel. Billing rates and terms as well as client credit limits will be set by management and communicated to clients and staff. Non-standard rates or billing arrangements will be approved by management. Billing and collection problems will be addressed before they effect the firm's finances. Legal work as well as attorney and paralegal performance will be reviewed regularly. Write offs of accounts receivable or work in progress will be evaluated and approved by management. Maintenance procedures for a docket control system will be established. Background information for purposes of conflict checking will be established. 2. Production A log or some other tracking system will be maintained in a timely manner to record and report time. All recorded billable time will be charged to the correct client file. All non-billable time will be recorded in the appropriate accounts provided for such activities (i.e. CLE, pro-bono work, management, or administrative hours). 3. Revenue All recorded time will be billed regularly at the pre-approved rates. All bills will be mailed and posted to the clients' file. Client advances (third party billings) will be reviewed for pre-approved amounts. Direct billing will be initiated for costs in excess of approved advance amounts. All incoming funds are logged in and properly deposited. Any un-billed time and expenses will be reviewed regularly. Aged accounts receivable will be reviewed and followed up on. 4. Expenditures All disbursements All disbursements for operating or capital expenditures will be authorized by management. Purchasing of goods and services will be authorized by designated personnel only. Check writing and signing procedures will be established. All goods and services received will be verified against goods and services purchased and invoices and shipping documents will be attached to the check copy. Disbursement transactions will be properly classified and recorded for financial and management reporting. 5. Financial and Management Reporting Standard accounting policies and procedures will be established and approved by management. Information contained in financial and management reports will be verified for accuracy, it will be meaningful, understandable and reliable. Financial and management reports will be prepared and distributed regularly. An annual operating budget will be prepared and approved. Discrepancies between budgeted and actual results will be reviewed regularly. All tax returns and other reports will be filed regularly and timely. 6. Conclusion The written procedures and policies to achieve these goals will be more detailed and will clarify each 6

15 individual aspect of the control system. The users of such a system will realize that non-compliance with these policies will have a direct effect on the revenue potential of the firm. A crucial component of internal control is follow-up. The information contained in the financial and management reports is to be reviewed and compared with management's objectives. This process allows refinement of the operating cycle. Decisions will be made based on the reported information, therefore the integrity of the reporting system must be preserved and never viewed as a simple clerical exercise. C. Docket Control Every office must have a docket control system. Since this particular system involves every employee, it is essential that the docket control system be a written system. Denton, Texas attorney, Mike Gregory, suggests that the following procedures be utilized for a docket control system to avoid missing deadlines. 1. Docket Control System The following procedures shall be utilized for docket control purposes and to avoid missing deadlines: a. When cases are set for trial or for hearing and when cases have discovery deadlines, answer dates or other critical dates, the deadlines and 7 and 14 day advance warning notice dates shall be posted on at least two separate computer calendars on the specific dates under the events and to do sections, and the attorney s status list shall be updated with the deadlines indicated. The separate calendars shall be the calendars of the attorney and the legal assistant assigned to the case. b. The calendars shall be checked for deadlines and response dates daily for the events of each particular day and also for one week in advance. c. Items shall be placed on the calendars as the critical dates are received. d. Each day mail is received, the receptionist stamps the mail with a Received date in the upper right hand corner of the document. Any client related mail is copied by the receptionist and paper clipped to the original. The mail is then routed to the legal assistants for review, who then route the appropriate mail to the attorney responsible for that mail. The legal assistants (or legal secretary) will forward all client related mail to the client. The legal assistant will point out any urgent matters to the attorney, insure that the attorney is aware of the mail and that a response is made to urgent matters in a timely manner. Unless the correspondence has come from a client, a copy of the correspondence is always sent to the client. When one of the legal assistants is out of the office, the other legal assistant shall assume the responsibilities of the absent legal assistant. Critical dates received through the mail shall be calculated and placed on calendars upon the date of receipt. Clients shall be notified by mail of the critical dates within 24 hours of receipt of same. e. Each legal assistant shall maintain a case status list of the files assigned to that legal assistant, reflecting the current status of each file and the outstanding matters needing to be addressed in relation to each file. The legal assistants shall have a minimum of two conferences per month with the attorneys, with calendars in hand, as well as their to do list, to discuss work to be done and deadlines to be met. Following each meeting, the legal assistant is to update the status list and print a copy of same for each attorney. f. Maintain a File Status Checklist of critical dates within the file as follows: 2. File Status Checklist Petition filed Date: 60 days up Date: Answer Due Date: Date: Temporary Orders signed Date: Our Inventory & Appraisement due Date: Their Inventory & Appraisement due Date: Last Date to Amend I&A s Date: (treat as an amended pleading, at least 8 days prior to trial, must have 7 full days between filing and trial date) QDROs: Retirement Authorization sent to our client for signature Date: Retirement Authorization signed by our client Date: Retirement Authorization sent to opposing attorney/party for signature Date: Retirement Authorization signed by opposing party Date: Request for Retirement Authorization sent to Plan Administrator Date: Reminder date for receipt of information from Plan Administrator Date: 7

16 Date retirement info. Received by us Date: Draft of QDRO prepared on Date: Reminder date-has QDRO draft been pre-approved Date: If yes, the final draft by Date: If no, determine why not and get pre-approved Date Judge signed decree Date: Deadline for Judge to sign QDRO (within 30 days decree signed) Trial Date Discovery Discovery Period ends 30 days before trial date Rule 194 Request Sent: Date served: Due Interrogatories Sent: Date served: Due Request for Production Sent: Date served: Due Request for Admissions Sent: Date served: Due Rule 194 Request received Rule 194 Request sent to Client Rule 194 Request due back from client Actual due date for filing Rule 194 Request Last date to supplement Rule 194 Request Due Interrogatories received Interrogatories sent to client Answers to Interrogatories due back from client Actual due date for filing Interrogatories (objections to Interrogatories must be filed by the due date) Last date to supplement Answer to Interrogatories Request for Production of documents received Request for Production sent to client Request for Production due back from client Due Actual due date for filing production of documents Due (Objections to Request for Production must be filed by the due date) Last date to supplement Request for Production Request for Admissions Received Request for Admissions sent to client Request for Admissions due back from client Due Actual due date for filing production of documents Due Last date to supplement Admissions Designation of Experts (TRCP 195.2) Last day for our client to designate testifying experts Last day for our client to designate all other experts Last day for opposing party to designate testifying experts Last day for opposing party to designate all other experts Date: Depositions Date client s deposition received from court reporter Date deposition sent to our client Date we gave client to get deposition back Reminder Actual date for corrections to be made and filed Pleadings, Business Records, Affidavits Last date to amend pleadings Date: (At least 8 days prior to trial, must have full 7 days between date amended pldg filed and date of trial) Last due date for filing of Business Records Affidavit (Business Records Affidavit - TRE 902(10) for selfauthentication must be filed with clerk and notice given to other party at least 14 days prior to date trial begins.) All pre-trial discovery, interrogatories, production of documents, request for admissions, Rule 194 requests, must be served no later than 30 days before the end of the 8

17 discovery period. The discovery period ends 30 days prior to the trial date. TRCP 190.3(b)(1)(A). 3. Amended Pleadings Amended pleadings cannot be filed within 7 days of the trial date without leave of court. TRCP. Therefore, due date to amend pleadings must be at least 8 days prior to trial date. 4. Trial Court Loses Plenary Jurisdiction 1. Trial court loses plenary jurisdiction 30 days after the date judgment is signed if a no Motion for New Trial or Findings of Fact are filed. 2. Trial court loses plenary jurisdiction 120 days after the date that judgment is signed if a Motion for New Trial is filed or a Findings of Fact is requested. 3. Day 1 of the 30 days starts on the day after the day the judge signs the judgment. 5. Designation of Experts TRCP Unless otherwise ordered by the court, a party must designate experts--that is, furnish information requested under Rule 194.2(f)--by the later of the following two dates: 30 days after the request is served, or - (a) (b) with regard to all experts testifying for a party seeking affirmative relief, 90 days before the end of the discovery period; with regard to all other experts, 60 days before the end of the discovery period. D. Conflict of Interest System Every person in the office must know about your conflict of interest system and how to operate it. The essential elements of a conflict of interest system consist of a master list of clients and a master list of contacts. Everyone in the office must be able to readily access the master lists before they ever set an appointment for someone and before any staff person or lawyer goes into detail with a prospective client on the telephone. So as not to reinvent the wheel, again I turn to Mike Gregory and his excellent conflict of interest system for your consideration. Conflict of Interest System: For each potential new client that calls in and requests an appointment, complete the attached Conflict Memo by writing down the full present and prior names of both parties in the suit. Before setting the initial consultation, you must then: scan the Master Conflict List file in the forms/interofc directory scan the alphabetical listing of retired client files under forms/interofc/retired.lis; and, check the alphabetical expandable file for miscellaneous contacts for conflicts, (until said items are incorporated into the Master Conflict List). If the potential name or potential spouse s name does appear as a conflict: determine whether the party or opposing party contacted the office; determine whether or not appointment was kept or canceled; if any doubt or concern about making an appointment, ask the attorney to advise whether or not appointment should be scheduled; and, advise caller that a conflict exists (do NOT give details), state that an appointment cannot be made, and refer them to other family lawyers (2-3 names) in their vicinity. If the potential name or potential spouse s name does not appear on the conflict list or in the expandable file, the initial appointment may be scheduled on the respective attorney s calendar. At the initial appointment, each potential client is given a Client Questionnaire form to complete. Upon receipt of the completed questionnaire at the time of the initial conference and prior to forwarding the intake document to the attorney, the receptionist shall: add the names to the Master Conflict List file, including the potential client s name, name of opposing party, month and year of contact. Mike s Conflict Memo is attached as appendix A so that you can copy and utilize it in your own offices. V. PROFITABILITY None of us is practicing law for our health! We intend to work hard and give our clients good, solid legal services and we expect to be paid well for our efforts. I ve always heard it said that the client who makes the statement Money is no object truly means that. In other words, they don t intend to pay you at all because it s not important to them! Consequently, my mantra in our office is If I m not going to be making any money today, I would rather be on the beach than in Court working for you. Profitability begins with a good, solid business plan. The purpose of business planning is to establish a common focus for action. This is done by: 9

18 Clarifying goals Establishing measures of results Assessing resource distribution needs Unifying the firm to commit to a course of action. The following are the most important steps to take in preparing to write your business plan: A. Get the Process Organized Why do it What is it Who will do what Evaluation of the planning process B. Evaluate your Competitiveness Who are our existing clients What is our fee history Are we using outside services Are we recognizing opportunities for crossselling How much do we really collect What are we capable of What are our internal resources Who are our competitors What is our market Why are they our competitors (experience, price, speed, etc.) How do they affect our clients What do we do for their clients What is our technology situation What type of systems do we use What can we use our systems for Do we need to upgrade Are there any trends developing which may affect our clients - changing laws, economy, etc. Are there any developments affecting current structure of our firm C. Internal Strengths and Weaknesses Consider the following: What is our professional reputation How do we deliver legal services What kind of staff do we want in our firm and how do we train them What type of office environment (physical location, appearance, etc.) do we want What is our culture How do we manage our practice Who are the firm leaders and why What kind of support services do we have What are the firm's finances D. Reassess Your Strategy Define primary mission Set goals Review your strategy E. Evaluate Your Resources Objectively Office organization and structure What kind of leadership and management skills do we have What kind of tools are we using - i.e. technology, support systems, standardized forms, etc. How do we identify the skills we need to recruit, how do we allocate the work among attorneys, paralegals, etc. How are we doing financially, do we collect everything we bill, do we need additional capital F. Business Projection What kind of revenue and volume of business do we project - to work at capacity What is our payroll expense now and what will it be in the future How much space do we need What type of technology do we need What kind of transactional expenses are we expecting What are our projected expenses relating to office relocation, computer conversion, etc. What is our capital projection (capital sources less capital needs = net income) G. Prepare Your Financial Plan Balance Sheet Income Statement Cash Flow Statement Policies for financial management Financing plan H. Prepare Your Business Plan Document Executive Summary Business and Revenue Forecast Professional Staffing Plan Support Staff Requirements Technology Forecast Space Requirements 10

19 Organization and Management Plan Financial Plan - Operations and Capital I. How to Successfully Implement "The Plan" Establish a common will and consensus to the plan Keep focused on the goals Recognize established leadership of the organization Make the commitment to proper resource allocation Expect to give and receive accountability for results Reward motivation Overcome inertia and avoid complacency Measure and evaluate results and - if necessary, readjust the plan to coincide with new developments There are numerous books on writing your business plan, but the above information taken from the State Bar of Texas Law Office Management program should suffice. Many thanks to the State Bar of Texas Law Office Management Program for allowing us to utilize some of their excellent resources in this paper. J. Documenting Client Expenses and Attorney s Fees In order to accurately account to your client, you should keep track of client expenditures, your fees charged and fees paid. There are very few, if any, courses in law school that teach you to keep track of time and client expenses. Gathering information for billing purposes is, however, important to the survival of a law firm. It is imperative that effective systems are in place to make sure that all expenses and fees are documented. 1. Time Keeping Tips Everyone in the firm should be taught to keep time and time records should be kept consistently. It is helpful to have a written timekeeping policy. Your policy should standardize timekeeping methods, let your staff know what is expected of them and what repercussions will result for noncompliance with the policy. It is important that you have a way to track each client and case. You should assign each client a number that is uniformly used by every timekeeper to designate all time spent on a specific client's case and all expenses associated with that same case. If you have several cases for different clients, you can assign each a client number and a case number. With a two number system you can differentiate fees and expenses between the different cases for the same client. Document all your time. If you want to give a discount, give it after you have seen your real time investment. This will help you make an informed decision about discounting clients' bills. Document time as you perform the work. Do not wait until the end of the month to reconstruct your work schedule. You will lose time & money! 2. Time Keeping Methods a. Manual System If your firm is not automated, or does not have the technology available to track the costs related to each client, then you may choose to: Have a client progress sheet placed in the front of all client files. Make certain all time and expenses are logged onto the progress sheet. Have all staff members keep a daily record of any incoming or outgoing telephone calls performed on a particular client/case file. This would also include the length of time spent on the telephone call. A daily record will assist in an accurate reflection of expenses and fees. b. Automated System If your firm is automated, there are numerous software programs available that can track your client's fees and expenses for you. This can be very cost and time effective in managing your cases, especially in a small firm. The savings in time can enable your staff to spend time on other tasks. Calendaring, tickler systems, case management, timekeeping and billing functions can sometimes be found in one software program. 3. Tracking Client Expenses You can track client expenses manually by writing down each time you incur an expense. You can create your own log (log - document that lists certain information) that associates the date, client name, client number and/or case number with client expenses. You can use one log to track copy expenses, one log to track postage expenses, one log to track facsimile transmissions and one log to track long distance expenses. You can also track client expenses using add on devices that attach to office equipment (i.e. copiers). Such a device will not allow you to use the equipment until you enter a client number. You can track long distance calls by using a manually kept log or a "forced account code" system that is offered by long distance companies. You can use the client number and/or case number as the account number. You cannot make a long distance call without entering an account code. Make sure your client number and/or case number can be accommodated by the long distance carrier's system (i.e. your client number is 9 numbers and the long distance carrier's system allows for at least a 9 number code). 11

20 4. Document Checklist New matters should always be assigned a Client Number and/or Case Number. This number should be utilized by all staff members when any work is done on the case. Create a case progress sheet for each case and keep it attached to the file. The case progress sheet should have the date of any activity done on the case, a description of the activity, and the staff member's initials. Implement a system where all members of your staff keep time records for their time spent on each case. a. Copying Expense In the event your copier does not have a system that automatically records the client number and/or case number with the number of copies made, provide a "copy log" at the copier where the following information can be logged: date, client number and/or case number, number of copies and staff member's initials. b. Facsimile Expense This is usually determined per page, however, if your facsimile machine does not have a system that automatically records the client number and/or case number with the number of facsimile pages sent, provide a "fax log" where the following information can be logged: date, client number and/or case number, long distance facsimile number, number of pages and staff member's initials. c. Courier Expense Keep a log of courier expenses available for the following information to be logged: date service requested, when envelope/package was picked up, client number and/or case number and staff member's initials. d. Postage Expenses Keep a "postage log" centrally located in your office where the following information can be logged: date envelope/package sent, client number and/or case number, amount of postage and staff member's initials. e. Overnight Charges (Federal Express, Airborne, UPS) Placing the client number and/or case number on the air bill for your reference is important. At the end of the month you can accurately factor in these expenses to individual matters. 5. Conclusion Regardless of how your firm is setup, you should implement a method of tracking client expenses and have the ability to charge appropriately. Several methods have been suggested to help you set up a fees and expenses tracking method. Be reminded that, even if your cases are contingency fee based, the Courts may require an accounting and/or justification of client costs and attorney's fees. Whatever method you choose, you need a detailed accounting of what your client expenses are and how your attorney s fees have been formulated. Do all of us in our profession a favor and charge what you are worth. Sure, you will have your pro-bono cases as we all will and should, but on our paying clients demand payment and withdraw from representation if you re ethically allowed to do so when the client won t pay for your services. To amplify this point, you merely need to count in your head the tens of thousands of dollars uncollected for work you performed this past year! VI. LAW Yes, we practice law. In order to do so, we must stay on the top of our game and that means attending continuing legal education programs. Not only the lawyer, but the paralegals and legal assistants need to have regular CLE activities. Take your office to your local bar associations monthly luncheons or rent an audio or video of current interesting topics and have an afternoon of CLE in your office. It is a great way to bond with the staff and to conduct quality, inexpensive continuing legal education. A. Client Goals: In your management of the law within your office, you must likewise manage your client s goals. You must have a working understanding of what it is a client expects to achieve from his or her case. Begin your representation with your client by asking the client to write down his or her goals that he or she seeks to accomplish with the litigation. Publish that list to the lawyers and staff who will be working on that client s case. Remind the client periodically about his or her goals and inquire as to whether they are the same or whether such goals are a moving target. The client will be far more satisfied with your representation if they re reminded routinely of the goals for which you have been hired and it will make your job of achieving those goals much easier. B. Client Expectations: Clients almost always have an unrealistic expectation of what the lawyer can accomplish for the client. The client lets you know about his or her unrealistic expectations in comments they make, s they inundate you with, and comments made to their family and friends outside the courtroom. It is important to always take the opportunity to address the client s expectations. Any time the client makes it known to you or your staff that there particular 12