Profitable law practice

Here are some good tips from Attorney Paul Sullivan, vice chair of the ISBA Committee on Law Office Management and Economics, regarding the management of a law practice. He notes five essential components or RULES: Realization, Utilization, Leverage, Expense Control, and Speed of Billing and Collection.

Realization - the amount of dollars that are actually collected as a percentage of the dollar value of time billed. Low realization typically occurs from billable time being written off or bills being written off because the client didn't pay. This should be analyzed from various perspectives such as by client, by individual matter, and by attorney.

Utilization - simply the productivity of each timekeeper relative to the amount of hours each can bill in a particular period.

Leverage - the ratio of non-owner timekeepers to owner timekeepers. All timekeepers should be making contributions to overhead in excess of their direct costs.

Expense Control - the exercise of monitoring expenses and then taking necessary action...budgeting in short.

Speed of Billing and Collection of accounts receivable.

How's everyone doing? As a sole practitioner I feal like realization and utilization are my current challenges due to heavy administrative duties currently. As I head into 2006 one of my main resolutions is to add another employee and move more and more non-legal work off my plate.

Holiday business (and pleasure)...

The last couple of days have been a great mix of typical attorney work bolstered by various holiday and bar related events. It really magnifies to me my continued effort to transition to business owner from former worker bee.

The events the last half week included a nice Chicago Bar presentation by a gentleman who recently started a practice and attracted a nice crowd of like-minded people such as myself, a Winona State University holiday gala at Harry Carey's (my undgergraduate alma mater), my induction into the Des Plaines Rotary Club, the Illinois Bar annual meeting and the Southern Illinois University School holiday gala as part of the annual meeting.

I met a ton of new contacts both attorneys and non-attorneys alike. I have another 10 plus attorneys now who I can exchange ideas with and mutually help one another with coverage and stuff. And I have a bunch of new non-attorney friends...potential business partners all.

My moral of the story: I need to just get myself out there more and more. I've always been pretty social but to me the key transition is getting out of that workaholic bury myself in work frame of mind because as a business owner, I need to build relationships FIRST!!

Chicago holiday stuff

Anyone going to the following:

Chicago Bar Association young lawyer section

The weather outside may be frightful, but the YLS holiday social is sure to be delightful! It's never too early to start celebrating the holidays. Join us on Dec. 7th from 5:30 p.m.--7:30 p.m., at the law offices of Holland & Knight. With a great view of Chicago, food, spirits, and mingling with friends and colleagues, this social is sure to be a great way to kick off the holiday season!
Please RSVP to the YLS Hotline at 312/554-2032 or yls@chicagobar.org to confirm your attendance.

Illinois State Bar Association

I can't find the link on this but ISBA is having their mentor/mentee reception from 4:30 - 6:30pm at the Sheraton main ballroom, 301 E. North Water Street as part of the ISBA mid-year meeting.

I hope to make the CBA event. I actually have a college holiday party that conflicts with the ISBA event and I'll be over at the ISBA annual meeting for the Elder Law Section Council meeting on December 9th anyways.

Worker bees versus business owner?

Greatest American Lawyer has an effective post regarding the set-up of law firms and the natural roles that develop therefrom. Here's a snippet:

Making it rain takes time, energy and commitment which have nothing to do with billing hours and driving the immediate need for revenue. I would suggest that many big firms are set up to discourage large numbers of attorneys from making it rain. After all, if large law firms allowed everyone to meet potential clients for breakfast, lunch and dinner, and spend the time with those clients that is necessary in order to land their business, there would be no one back at the office billing hours. Large law firms are structured in part around the different roles that make the business go. Many (but not all) of the top rain makers of a firm simply don't spend as much time billing hours day to day. Those rain makers need the so called worker bees to bill the clients they bring through the door. The issue is not that the worker bees can't make it rain (although certainly some do not have the social skills necessary to accomplish that goal). The issue is that they are not provided the resources and tool sets, or the time, to do so. Nor are they encouraged to do so. In some instances they are effectively precluded from doing so (I should know seeing as I worked in at least two such firms).

That's one of the main items that irked me about associate life. I questioned how was being an associate attorney helping me develop into a business owner (legal or otherwise)? That and the limited opportunities for leadership were at the core of why I had to start The Olson Law Firm, LLC.