Finance Corner:

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    Managing Operations & Cash Flow: Blog Post #4

    Managing a Multi-layer Law Firm Effectively

    Posted by Joseph Kasouf, Esq. | General Counsel on 16, Sep 2019
    Joseph Kasouf, Esq. | General Counsel

    GroupInConferenceManaging a law firm—whether a small operation or a full service firm with varying levels of management or multiple practice groups—can be difficult. Often, to be successful, it takes a leader who is willing and able to focus on the business side of the firm and take the reigns over non-legal matters, such as defining processes and procedures, and enhancing employee relations.

    While in theory this may sound relatively simple, the reality is that managing a law firm comes fraught with day-to-day obstacles even the best attorneys may struggle to overcome or to face head-on because they’re juggling their own caseloads.

    Here are 3 quick tips to help you conquer this challenge and create an operation that runs as a well-oiled machine:

    1. Choose Your Managing Partner Wisely

    Selecting a leader is a natural first step in this process of trying to better manage your firm. It may be you, or it may be someone you’ve deemed fit to be a “managing” partner to the firm. This person should not only have business acumen and excellent interpersonal skills, but also must “accept” the position and want to lead your team.

    It’s no secret that becoming a managing partner takes serious consideration. You (or the person you select) may have to step away from the day-to-day practice of law and become actively involved in other aspects of the business—finance, marketing, human resources, etc. The position shouldn’t be delegated to someone who lacks interest in the job or has limited experience in management.

    It’s also essential that the person who is ultimately chosen as your managing partner is trusted and respected by the rest of your team—and vice versa. If not, they’ll face an uphill battle because the firm as a whole may find it hard to accept their guidance and direction.

    1. Define Your Departments

    Knowing what different functions exist within your firm is important, so you can determine who in the organization is best suited to lead each of those subsets or “departments.”

    a. Law Practice

    A firm may participate in several areas of practice (think: personal injury, mass torts, medical malpractice and so on).

    By giving authority to one individual leader within each legal practice area, you’ll have someone that can actively manage and precisely report back to you on assignments and activities for that segment. So, while you may be less involved personally, you’re knowledge of that legal practice’s operations will nevertheless be enhanced.

    You may even find it helpful to assign a dedicated sub-leader to each part of the department: intake group, paralegals, pre-litigation and litigation teams.

    b. Human Resources

    This is a key responsibility for today’s law firms, especially if your firm has a large pool of employees. A single leader who focuses solely on human resource management can be essential. There are a plethora of functions this person will serve, including but certainly not limited to:

    • Proficiency in employment laws and regulations
    • Benefit administration
    • Managing diversity
    • Handling employee issues and inquiries that may arise

    Although certification in human resources is not always necessary, it certainly can signify professional expertise and credibility. For example, hiring someone with certification/designations such as Professional in Human Resources (PHR) and Senior Professional in Human Resources (SPHR) can help allow a managing partner to give full autonomy to his or her HR leader with minimal oversight on a day-to-day basis.

    c. Accounting & Finance

    A critical aspect of any business is accounting and finance. The head of this segment of your firm should be hired or selected based upon his or her ability to manage large budgets and compare expected results against firm expenditures. This person will take on tasks such as:

    • Budgeting
    • Managing cash flow
    • Abating financial issues prior to their occurrence
    • Monitoring fixed expenses for firm operations
    • Making proactive recommendations based upon financial data
    d. Marketing

    In order to obtain cases, you’ll need a marketing plan—and someone to execute the plan. You need clients and the head of your marketing department must know where and how to obtain them.

    This person should also be sensitive to finance and the impact marketing decisions will have on the bottom line. What is the cost for advertising? What media channels will yield the best results for your firm: TV, radio, contracting with a lead generation company?

    Tracking is another essential function for the marketing head. This way, future initiatives can be tailored to match what has proven successful during past campaigns.

    e. Operations

    Designating someone in the role of Chief Operating Officer can help your firm stay profitable and organized. This person oversees the routine administrative and operational aspects of your business and ensures that your firm has the proper processes, procedures and controls in place to function smoothly.

    1. Monitor the “big picture”

    Once you’ve put the right people in place to lead, the managing partner will have to, for lack of a better term, “manage the managers.”

    Monthly meetings with expected deliverables are a great place to start. Some items that each department head should come prepared with include:

    a. Management Reports

    For example, a financial manager should create a report that clearly states:

    1. New cases acquired (with source noted)
    2. Settled cases
    3. Case expenses
    4. Overall expenses
    5. Marketing/Advertising
    6. Budget variances

    b. Benchmarks

    Key indicators should be established and both current and historical data will aid in this process. Understanding the benchmarks will help to clarify how best to work toward goals and objectives. They allow a leader to know where they are, in order to get where they intend.

    Managing a legal practice takes work, diligence and the right person and team in place to meet your businesses goals and objectives. Following some well-defined management techniques, like those set forth above, will make the process flow more smoothly.

    Categories: Managing Operations & Cash Flow

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