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Shape Up! Practice Management Tips for 2010

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FINE-TUNING HUMAN RESOURCES: TOP TIPS FOR FRUGAL LAW FIRMS

We all want to do more with less—or at least get more from what we have. Frugality is the name of the game here. And since human resources costs are typically a law firm’s single biggest expense, what better way for a frugal law firm to shape up its bottom line than to maximize its return on its HR investment?

Getting the most from your investment in HR starts with taking a step back and reviewing your current procedures. Your aim is to identify areas where you can standardize and streamline your HR practices, from hiring and retaining excellent people on through to how you handle employee resignations and more. Here are some practical ideas to help steer your thinking.

Cornerstones of a Successful Hiring Process
The critical first step in hiring the right people is writing an accurate and detailed description of the position to be filled. Only then can you successfully draft job postings, develop appropriate interview questions and testing, outline expectations for candidates, and define training for the new hire.

Use the job description as the basis for drafting two types of job ads—a brief one to be published on the appropriate Internet venues and in print publications, such as local newspapers and bar association newsletters, and a lengthier one to be e-mailed to business and personal contacts and posted on your Web site. The brief job ad should include a link to your site where the longer job ad is posted.

You also need to refer to the job description to develop a standardized process to be used for every candidate who is interviewed. To help develop your list of questions for the interviews, you can find many sample questions on the Web based on the type of position you want to fill—although be sure to adapt the questions and create others that reflect your firm’s culture and that will elicit the information you need to determine whether a candidate is suitable or not.

And for lawyer candidates in particular, here’s an additional idea for you: During initial interviews at our firm, we present candidates with various scenarios and related questions that are designed to reveal whether a candidate might be a good fit to handle the types of challenges faced in the firm. These scenarios reflect unusual but real-life situations experienced with the firm’s clients. Candidates’ responses to these scenarios can be quite revealing. (Samples of interview questions and scenarios for a lawyer candidate are provided in the sidebar.)

Armed with well-crafted questions, the interviewers are ready to meet the candidates. A good approach is to conduct interviews with two team members in attendance—one to ask questions and the other to take notes. If you are a solo practitioner and the candidate will be your only employee, consider asking a supportive peer, friend or family member to sit in on interviews and take notes while you ask the questions. Having another’s perspective can be very helpful when determining who should be short-listed.

Short-listed candidates at our firm are asked to take a test that we have designed. For example, an attorney candidate is expected to review the facts of a fictitious case, analyze the relevant law (provided by the firm), and write an opinion letter to the fictitious client. Such test results allow a firm to eliminate an otherwise promising candidate whose legal analysis and writing skills fall far short of its standards.

Of course, making a successful hire always requires another to-do: Check the candidate’s references. However, since candidates usually provide references who will speak highly of them, be aware of what is not being said by references, too. Reluctance to answer a particular question may indicate an area of concern.

As an added check, social networking tools like Facebook and LinkedIn may also provide clues as to the personality of a candidate. Google a candidate’s name to see what comes up. Be cautious, though, in verifying that the Web-based information you have found is really about the person that you have interviewed. It is surprising how many apparently unusual names are not as unique as one might think.

Pointers on Training and Retaining Great People
Firms invest a great deal in hiring people, so it only makes sense to get the most from that investment by providing the type of training and work environment that will make great people want to stay with your firm.

Start all new hires off on the right foot. Develop procedures to train them as efficiently and quickly as possible. Consider how you can incorporate technology into the process to reduce costs and streamline the training process, too. For example, in our office, policies and procedures are documented using TWiki, an open source Linux-based knowledge management system and collaboration tool. (See http://twiki.org to learn more about it.) All team members are encouraged to update and add information to Twiki, to help ensure that we capture “corporate knowledge” as it develops, saving time and increasing the quality and consistency of our work. We demonstrate the use of TWiki on a new employee’s first day. Most FAQs about our processes and policies are available by searching in Twiki, so team members needn’t be distracted to answer newer employees’ questions.

Of course, skills development opportunities are valued by people at nearly every phase of their careers, so firms should strive to provide affordable training for their people on an ongoing basis as well. Because it will convey to them that the firm values them and recognizes their ability to grow within the firm, it will be a valuable retention tool—and, again, it will contribute to the quality of the firm’s work and provide yet more payback in the bottom line.

There are a number of other factors that motivate people and enhance retention efforts as much as, if not more than, money. For a woman juggling family responsibilities and a career, for example, flexible work arrangements usually rank high. And remember, flexibility encompasses not just the number of hours worked, but also where and when the work is done. By setting up a home-based employee with the necessary equipment and a secure connection to the office, you can retain an experienced and valuable person who continues to contribute to the success of the firm. As another benefit, you can reduce some office overhead costs with these arrangements as well.

Ensuring that each employee’s work environment is efficient, comfortable and safe also contributes to successful retention. Encourage employees to voice concerns about your firm’s work environment, and actively check that there is adequate lighting, properly adjusted furniture, minimal noise, and up-to-date technology as well as hardware and software support to meet their needs.

In addition, we all like to be recognized for a job well done. However, good work is too often taken for granted while slip-ups are noticed and commented on. It is important to publicly recognize good work and appropriate team-centered behavior. Inadequate work or inappropriate behavior, on the other hand, needs to be addressed with the individual in a private, one-on-one setting.

Taking the Right Steps When an Employee Leaves
When an employee fails to live up to expectations despite everyone’s best efforts, you should end the relationship promptly in a professional, ethical manner. Doing otherwise wastes valuable resources while prolonging the agony for all concerned.

Unless your expertise is employment law, obtain legal advice in advance and educate yourself about what’s necessary to avoid a wrongful dismissal lawsuit, what severance pay may be required and the time period within which it must be paid. (For a useful list of things to consider, check out Business.com’s “Streetwise Tips on Firing Employees” at tinyurl.com/or95gc.) Also, be sure that you secure the firm’s assets before you terminate the employee. (For a detailed checklist, see PracticePRO’s “Employee Departure Checklist” at tinyurl.com/okb9tw.)

Now, with that said, some words of wisdom from personal experience: The best way to avoid having to fire someone is not to hire the person in the first place. So, to add to the earlier list of hiring procedures, if you feel uneasy about a potential employee during the hiring process, proceed cautiously, watch for warning signs and listen to your intuition. Be cognizant of the fact that hiring is relatively easy—but firing, not so much!

Then, too, there are invariably times when you must accept a valued employee’s resignation or retirement notice. This may not be as difficult as letting someone go, but the impact on the firm can be quite significant, particularly if the person is uniquely knowledgeable or has had a lengthy tenure with the firm. You want to learn whatever you can from such people before they go out the door.

Ask the retiring or resigning employee to provide you with open, honest opinions and recommendations for improvements and gather knowledge about his or her area of responsibility—not just a status report on client matters but a summary of essential knowledge that may not be recorded anywhere. (Sample exit interview questions are included in the sidebar. More can be found on the Internet, such as those published by Mftrou.com at tinyurl.com/okey5t.)

Alternatives to Hiring Permanent Employees
If your firm’s workload is cyclical or uncertain, you might consider using a temp agency, contractor or virtual assistant (VA), for certain types of work. Although hourly rates may be higher, you can reduce the effort and expense required for hiring and training, as well as the costs of employee benefits and office overhead. Plus, if a temp or contractor doesn’t work out or if workload suddenly decreases, ending the relationship is simple, unlike letting a firm employee go.

Traditional temp agencies are competing for market share with VAs, who work from their own offsite offices and usually offer services at lower rates. For as little as $7 per hour, an offshore VA can perform administrative tasks that require nothing more than a phone, fax, computer and Internet access, such as booking appointments, arranging travel and the like. Hourly rates for U.S.-based VAs typically range from $25 to $75, depending on the complexity of the work. Naturally, if sensitive client data will be involved in the work, ensure that any temp, contractor or VA understands and signs a confidentiality agreement.

Firms of all sizes are also reducing back-office costs by using offsite service providers for functions such as payroll. A payroll service provider can be a huge time-saver and well worth the reasonable charges levied. Among other things, such providers can keep on top of employment regulations and tax compliance issues, track payroll deductions, and issue appropriate tax slips to employees for you. (Examples of two such companies are ADP, www.adp.com/solutions, and Ceridian, www.ceridian.com.)

Review, Revise and Streamline
There are numerous ways that you can shape up your HR practices and achieve cost-savings in the bargain. In fact, there’s a treasure trove of information on the subject, including many excellent resources on the Internet. Tap into some of them for additional ideas on hiring, training, retaining and more. (The resources list on this page will give you some great starting points.) Then review your current procedures, determine which ones need revising, and create new, more streamlined ones that take the best advantage of available technologies. You want to do all you can to maximize the profitability of your biggest expense.

About the Author

Donna Neff practices law in Ottawa, ON, in the areas of wills and trusts, estate planning and administration, powers of attorney, succession planning for small businesses, and real estate. The author gratefully acknowledges the assistance of Natalie Sanna in the preparation of this article.

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