Transforming Practice Areas into Profit Centers

Transforming Practice Area Management

Managing partners in many firms have historically relegated the practice of law to individual partners and have been reluctant to impose their judgments on how individual client matters were being performed. This resulted from the belief that lawyer management should not have to follow up on partners responsible for performing client work or for managing substantive practice areas.

The extent to which a firm's laissez faire management can be transformed into active practice area management depends on lawyers' personalities and abilities, and partners' attitudes toward 'being managed' ' in particular, their willingness to relinquish professional and personal autonomy.

Often practice management and firm management start to interact more closely, however, when revenues decline ' and with them net profit per partner. As partners feel the economic pinch, there is greater willingness to view practice areas and individual attorneys as profit centers. Lawyer management now needs to review all factors contributing to profitability and to address the following questions:

1) How profitable are our practice areas?

2) Should the firm continue to practice in these areas or redirect its efforts to other areas?

3) Can certain partners and associates be reassigned to other more profitable practice areas? If so, what training will be required to bring these attorneys up to speed in these areas? If not, what should be done with these attorneys?

4) Should certain partners be assigned accountability for managing particular practice areas?

5) What should be the role, responsibility, and level of accountability of the heads of practice areas?

Coordinative Roles in Practice Area Management

The generic functions performed by each coordinating partner should be determined by the managing partner for the major areas of the office's work in terms of managing problems in work assignment, coordinating staffing, setting objectives and reviewing data to appraise results, ensuring ethics and quality control, and cooperating with the executive committee. Each coordinator should be encouraged to develop his or her own style in accomplishing these objectives within the general guidelines of the office.

Quality and Cost Management of Work in Progress

Generally, under plans and policies established by the managing partner, each practice area's coordinating partner is charged with planning, organizing, and overseeing work in the practice area. Central to this activity is the assignment of work to associates or other partners, based on their fields of law, availability, and levels of expertise.

Each coordinating partner should be responsible for implementing the firm's policies on quality control and cost effectiveness of work performed in the practice area. For example, he or she should ensure implementation of the firm's policies on retention and indexing of legal forms, memoranda, opinion letters, and other important legal efforts.

As required, each coordinating partner should meet briefly with partners and associates working on matters within the practice area to discuss individual workloads, problems in producing work in a timely manner, schedule conflicts, etc. To facilitate this review, each coordinator should access the calendars and dockets for statute of limitations dates, other key filing dates, status reports, and other records kept for each matter by its handling attorneys.

If the coordinator has doubts about the ability of an originating attorney to perform specific work (within the coordinator's practice area), whether due to lack of expertise or work overload, the coordinator should discuss the matter with the originating attorney. The practice coordinator should also review lawyer production reports monthly, or more frequently as required, to determine the extent to which lawyers are maintaining work schedules and quality. Following this review, the coordinator may assign or suggest reassignment of work to other attorneys who are not being utilized effectively.

In pursuing cost effectiveness, the coordinating partner should also be available to discuss fees, and should oversee attorney billing and collection activities (as requested, within the framework established by the managing partner). It is especially helpful for the coordinator to review the reasons and justifications for write-downs and write-offs (of time and accounts receivable, beyond certain dollar limits); if billing attorneys are writing off too much time, it should be questioned.

Questions between the practice coordinator and the originating attorney that cannot be resolved by the coordinator should be referred to the managing partner.

Business Development and New Business Approval

The coordinating partner may also be responsible for the area's business development planning and for systematic sharing of client relations within the practice area.

On a weekly basis, coordinating partners should receive a written notice from the office administrator describing every new matter within the practice area that has been accepted during that week. These reports will advise the coordinator of the existence of new matters within their jurisdiction, along with the identity of the originating partner.

When the practice area considers accepting new business that is out of the ordinary, the coordinator should have an advisory role in assessing conflicts of interest, ethics, merit and strength of the case, time required, ability of lawyers to handle the work, economics of the case, and its value to the office. If uncertain whether to accept a case, the coordinator should consult the managing partner.

Lawyer Training and Performance Reviews

The coordinating partner also should be consulted on, and should direct as may be required, continuing legal education efforts for the work under his or her jurisdiction. Each coordinating partner should communicate with the executive committee about the quality, client service, and economics of professional services rendered by the attorneys within the practice area, and recommend needed improvements of such services.

Conclusion

Midsize law offices have been showing increased interest in strengthening practice area management to ensure partner coordination, control, and accountability over their fields of law, areas of practice, and client matters. In doing so, the needs of attorneys for professional and personal independence must be balanced with the firm's need to maintain effective organizational patterns and policies. A firm's reward for effectively striking this balance is access to powerful new organizational methods for enhancing profitability.

Transforming Practice Area Management

Managing partners in many firms have historically relegated the practice of law to individual partners and have been reluctant to impose their judgments on how individual client matters were being performed. This resulted from the belief that lawyer management should not have to follow up on partners responsible for performing client work or for managing substantive practice areas.

The extent to which a firm's laissez faire management can be transformed into active practice area management depends on lawyers' personalities and abilities, and partners' attitudes toward 'being managed' ' in particular, their willingness to relinquish professional and personal autonomy.

Often practice management and firm management start to interact more closely, however, when revenues decline ' and with them net profit per partner. As partners feel the economic pinch, there is greater willingness to view practice areas and individual attorneys as profit centers. Lawyer management now needs to review all factors contributing to profitability and to address the following questions:

1) How profitable are our practice areas?

2) Should the firm continue to practice in these areas or redirect its efforts to other areas?

3) Can certain partners and associates be reassigned to other more profitable practice areas? If so, what training will be required to bring these attorneys up to speed in these areas? If not, what should be done with these attorneys?

4) Should certain partners be assigned accountability for managing particular practice areas?

5) What should be the role, responsibility, and level of accountability of the heads of practice areas?

Coordinative Roles in Practice Area Management

The generic functions performed by each coordinating partner should be determined by the managing partner for the major areas of the office's work in terms of managing problems in work assignment, coordinating staffing, setting objectives and reviewing data to appraise results, ensuring ethics and quality control, and cooperating with the executive committee. Each coordinator should be encouraged to develop his or her own style in accomplishing these objectives within the general guidelines of the office.

Quality and Cost Management of Work in Progress

Generally, under plans and policies established by the managing partner, each practice area's coordinating partner is charged with planning, organizing, and overseeing work in the practice area. Central to this activity is the assignment of work to associates or other partners, based on their fields of law, availability, and levels of expertise.

Each coordinating partner should be responsible for implementing the firm's policies on quality control and cost effectiveness of work performed in the practice area. For example, he or she should ensure implementation of the firm's policies on retention and indexing of legal forms, memoranda, opinion letters, and other important legal efforts.

As required, each coordinating partner should meet briefly with partners and associates working on matters within the practice area to discuss individual workloads, problems in producing work in a timely manner, schedule conflicts, etc. To facilitate this review, each coordinator should access the calendars and dockets for statute of limitations dates, other key filing dates, status reports, and other records kept for each matter by its handling attorneys.

If the coordinator has doubts about the ability of an originating attorney to perform specific work (within the coordinator's practice area), whether due to lack of expertise or work overload, the coordinator should discuss the matter with the originating attorney. The practice coordinator should also review lawyer production reports monthly, or more frequently as required, to determine the extent to which lawyers are maintaining work schedules and quality. Following this review, the coordinator may assign or suggest reassignment of work to other attorneys who are not being utilized effectively.

In pursuing cost effectiveness, the coordinating partner should also be available to discuss fees, and should oversee attorney billing and collection activities (as requested, within the framework established by the managing partner). It is especially helpful for the coordinator to review the reasons and justifications for write-downs and write-offs (of time and accounts receivable, beyond certain dollar limits); if billing attorneys are writing off too much time, it should be questioned.

Questions between the practice coordinator and the originating attorney that cannot be resolved by the coordinator should be referred to the managing partner.

Business Development and New Business Approval

The coordinating partner may also be responsible for the area's business development planning and for systematic sharing of client relations within the practice area.

On a weekly basis, coordinating partners should receive a written notice from the office administrator describing every new matter within the practice area that has been accepted during that week. These reports will advise the coordinator of the existence of new matters within their jurisdiction, along with the identity of the originating partner.

When the practice area considers accepting new business that is out of the ordinary, the coordinator should have an advisory role in assessing conflicts of interest, ethics, merit and strength of the case, time required, ability of lawyers to handle the work, economics of the case, and its value to the office. If uncertain whether to accept a case, the coordinator should consult the managing partner.

Lawyer Training and Performance Reviews

The coordinating partner also should be consulted on, and should direct as may be required, continuing legal education efforts for the work under his or her jurisdiction. Each coordinating partner should communicate with the executive committee about the quality, client service, and economics of professional services rendered by the attorneys within the practice area, and recommend needed improvements of such services.

Conclusion

Midsize law offices have been showing increased interest in strengthening practice area management to ensure partner coordination, control, and accountability over their fields of law, areas of practice, and client matters. In doing so, the needs of attorneys for professional and personal independence must be balanced with the firm's need to maintain effective organizational patterns and policies. A firm's reward for effectively striking this balance is access to powerful new organizational methods for enhancing profitability.