It’s time for our annual finance issue! Finance is crucial to the success of a law firm or an individual lawyer. We have once again gathered a set of expert authors, writing on a diverse set of topics related to finance—everything from retirement planning, responding to requests for proposals and trust accounting. We think there will be something to interest everyone in this issue.
This issue also marks a full year of the all-digital format of Law Practice. The decision to cease print publication of the magazine was largely fueled by finances—eliminating the cost of editing and laying out our content, and then printing and shipping the magazine, had a positive budgetary benefit. It also allowed the magazine to eliminate long lead times for our articles, ensuring our content is as timely and up to date as possible. We believe the changes have been positive, and hope you agree.
We begin with “Assembling Your Law Firm Avengers: Unleashing the Superpower of Support Staff Profitability,” by Cynthia Thomas. Support staff are essential to law firm success, enabling attorneys to deliver high-quality service and satisfy clients. More than ever, firms must optimize staff costs and performance, with a nuanced analysis of both the costs and the achievements of each team member, while protecting the firm’s ethical standards or client interests.
Next, Danielle Aymond also takes on ways to enhance revenue in “Don’t Forget to Make Money: Ensuring Attorneys Build in Profit Properly When Drafting Proposals for Legal Work.” Clients increasingly use requests for proposals, or RFPs, to select outside counsel for legal work. Attorneys responding to RFPs need to leverage fixed price, blended rate and/or individual hourly rate structures to ensure firm profitability. The article also addresses the importance of understanding profit margins by practice area, techniques to lower expenses instead of increasing rates and strategically selecting which RFPs to pursue.
Rho Thomas and Kate Ahern bring yet another perspective on money management in “Managing Your Money and Your Time Are Surprisingly Similar.” They identify five best practices for managing both your money and time: identifying your priorities, becoming aware of your current practices, making a plan, using the plan to make better decisions and identifying likely obstacles so you can address them as they arise. These techniques will help align your spending of money and time with what is truly important to you, so you can avoid wasting resources on things that don’t align with your priorities—allowing you to avoid overspending or overcommitting.
Finally, Robert Louis addresses an issue that is on the mind of many these days in “Knowing the Rules for Retirement Planning Is Important at Various Stages of a Lawyer’s Career.” He explores rules and tax benefits affecting retirement savings and strategies at all stages of an attorney’s career.
Next, Terrell Turner addresses firm trust accounts in “The Ostrich Versus Crow Trust Accounting Approach.” Taking an “ostrich approach” means avoiding the challenge of proper trust accounting, while the “crow approach” is making a methodical and well-executed plan. The article provides practical tips and best practices to take the crow approach, such as establishing a separate bank account for trust funds, keeping detailed records of trust transactions, performing routine process reviews, managing payment processing fees and charge-backs appropriately and conducting monthly three-way trust reconciliations.
Finally, Jeremy E. Poock focuses on finance from the perspective of revenue generation in “The Vanishing Rainmaker and How to Adjust in Today’s Digital Era.” In the digital era, rainmakers cannot rely solely on traditional word-of-mouth referrals. Instead, the most effective rainmakers will also leverage their digital value to benefit their clients, future clients and successor law firms.
The articles in this issue address many different aspects of law firm finance, and ways to maximize returns—hopefully, you will find ideas to spark growth and success! We are grateful to our issue team Jim Calloway, Rodney Dowell and Samuel Thomas, as well as the Division’s Law Firm Finance Committee, for their work on this issue.
Enjoy!
