Rafte & Company's Partners' Breakfast Roundtable 2008 Recap 

What a Year - Rafte & Company's Partners' Breakfast Roundtable 2008 Recap 

April – 2008: Retaining Women in the Legal Profession

Today’s advancing law firms are embracing women in the workplace. Typically, this translates to a more flexible work environment. So, how are firms going to meet this challenge?

Roundtable Highlights:

• Bottom line: Law firms continue to lose bright, capable female attorneys to the corporate legal world. While they would like to retain and promote female attorneys, smaller firms are often constrained both by their legacy compensation plans, and their inability to provide the required flexibility needed by female attorneys.
• Even though the percentage of women partners in law firms today is increasing, the ratio of female law firm partners is still substantially less than their male counterparts. The numbers become even more unbalanced when one considers the number of female partners with children versus male partners with children.
• The door to partnership in a law firm is closely tied to originations, billings, and collections – not gender. The fact that there are more male than female partners is more closely related to a woman’s choice of balance between work and family life rather than her ability to make partner.
• Law firms understand that attorneys, who are working mothers, represent a huge and very viable knowledge base – often relatively untapped. Accordingly, law firms are making a more conscientious decision to hire female attorneys to create a more balanced culture and client/attorney relationship fit. The ultimate challenge in creating this balance will be the firm’s ability to support alternative work arrangements and compensation plans going forward.

July – 2008: The Billable Hour: Is the Era Coming to an End?

Increased hourly rates, increased annual billable quotas, increased staff turnover. What will break first – attorney’s backs or the billable hour?

Roundtable Highlights:

• Bottom line: Law firms are hesitant to depart from the billable hour unless their clients demand that their billing structure change. However, change is enviable – especially with business drivers from this current economic period.
• Mitigating the risk of “rocking the boat” with a client was the most common reason provided for keeping the billable hour. Law firms know how to manage their business with the billable hour and most clients expect the billable hour. The number one driver between client and firm growth is “personal relationships”. These personal relationships are also driving the need to do business in the comfort zone. If the mix of billing structure and client expectations is met, than the billable hour will stay for a long period of time.
• The introduction of an alternative billing structure may be directly related to the internal stresses that the client is experiencing. For several years, corporate legal departments have been under a great deal of pressure to manage and minimize the cost of legal services for the corporation. The Corporate General Counsel is being required to scrutinize these legal costs, and as a result, law firms are being asked to submit reliable case budgets and alternative billing structures.
• By being proactive and offering an accurate budget for a case, some litigation practices are seizing this opportunity to differentiate their firms. Referring to years of data, these firms are analyzing the type of case and providing a budget representation.
• In firms with less than 200 attorneys, the perception is that no “real legal work” is being outsourced. The types of tasks outsourced are more likely to be in the arena of litigation support-related document production reviews or possibly patent processing documents.
• There are some law firms that are choosing to migrate away from litigation.  Litigation is being referred to smaller or boutique firms. The primary reason is that litigation is expensive, lower-margin, and longer return. However, the smaller firms are very happy to pick up this work.
• Also, clients want the law firm to take a position of shared risk on a case or matter. In many cases, firms are very reticent to share risk as they have difficulty in forecasting what a case will cost the client. More importantly, many firms are unable to access the required historical data from which they would base these projections.

October – 2008: Client Succession – Planning for Tomorrow

How do you successfully transition your client’s trust to another member of the firm? What steps should you take to make sure that your firm’s long-term relationship with the client is not compromised? Just as you plan for the future management succession of your firm, it is equally important to plan for the succession of your valued clients.

Roundtable Highlights:

• Bottom line: There was almost a clean 50/50 split of firms that practice a “Team Approach” to client/firm relationship building and those firms that have no client succession plan, allowing the originating attorney to keep and manage the client relationship.
• The Team Approach needs to begin at the inception of the client-firm relationship. It is a style of doing business within the firm, and needs to be aligned with the firm’s compensation plan. Traditional client relationship plans that heavily compensate for individual origination do not facilitate the Team Approach to client management.
• There was a general consensus that if a Team Approach to client management was non-existent, the risk of losing a client is very high, if the originating attorney leaves the firm.
• A few recommendations were made:
  • Identify the primary lawyer for each client.
  • Determine the backup lawyer, if the primary lawyer becomes ill or leaves the firm.
  • If a backup lawyer has not been assigned, assign one.
  • Build a “client team” with multiple levels of staff participation.
  • Follow up with clients on a regular basis to build a loyal client relationship.

October – 2008: [SPECIAL SESSION - LEGAL TECHNOLOGY ROUNDTABLE] Lessons Learned: Preparing and Recovering from a Hurricane

Hurricane Ike slams into Galveston and Houston on September 13, 2008. Four weeks later Rafte & Company hosted a roundtable among the legal technology thought leaders of Houston to reflect back and consider how they fared with regard to the storm. What the firm prepared? What plans did they put in place that worked brilliantly? What remains a challenge? What can be done now? Are there any new alternatives?

Roundtable Highlights:

• Bottom line: The participants survived Hurricane Ike by escaping little to no damage of records and continued business-as-usual by remotely operating from hotels or coffee shops, outside the Greater Houston Area.
• Most of the participants agreed that their primary “check list” was comprehensive and surprisingly similar firm-to-firm, and included considerations for people, paper, IT, telecom, mobile collaboration, and office building infrastructure. However, one critical factor was missing from the list: mission-critical business process and data infrastructure mapping, which resulted in poor remote collaboration with key staff.
• Who “owns” the responsibility of planning business continuity or DR for the law firm? The consensus was that this was viewed as an administrative and IT task. This presents a dichotomy between the corporate world and the business practices of law firms. While law firm partners focus on practicing law, legal administrators or IT leaders request visibility to business continuity or DR gaps, but these challenges are often put on the backburner to daily tasks because of limited time and resources. Corporations assign business continuity as a key corporate initiative and require an executive to take accountable responsibility. The participants of the roundtable are eager to see the same adoption of business continuity plans from the corporate world in their law firms.
• By the very fact that Hurricane Ike was a natural disaster with plenty of warning, did this situation produce a false sense of security? Thanks to the advancement of metrology, we received up to a five-day hurricane watch. But, what if the disaster or business interruption was not a natural disaster? What if it was an unexpected event, like a fire? Would we be as confident that we would experience the same level of success that we did with Hurricane Ike? Well, the response was a bit more concerning. Auto backup and restore of laptop data, scanned and indexed records from individual office files, and remote document collaboration were just a few of issues that were identified for improved planning.

December – 2008: Getting Paid for Services Rendered

So, you have done the work, entered your time, and have sent an invoice to your client. Now, how do you collect on the bill? Given this country’s financial crisis, law firm management must focus on implementing systems that will ultimately shorten the period from service delivery to service payment. This may translate to discounts for early payment, more aggressive bill collections procedures, charging interest and late fees on outstanding balances, and process billing.

Roundtable Highlights:

• Bottom line: Structured discipline is the key to managing on-time accounts receivable.
• The firm’s practice type many times dictates the timeliness of receiving payment for services rendered. For instance, litigation may be paid at the end of the year or when the case is settled; while transactional matters are billed and paid on a turnkey basis. The more complex the matter, the trend is more complex billing and payment schedules.
• Sometimes, a simple invoice submission method can facilitate on-time payment, such as the submission of an invoice in a PDF format via email directed to the client and the accounting contact. Or, asking the client if they have an electronic invoicing system that will allow the firm to submit invoices in a client-formatted structure for rapid payment.
• Another driver of timely payments is submitting internal time on a scheduled basis, and submitting invoices to the client in plenty of time to allow review of the invoice, prior to their check cutting date. This requires a disciplined effort on the firm’s behalf to collect timesheets by deadline. Some firms reinforce the importance of judicious timesheet submission by holding attorney compensation until timesheets are submitted.

Rafte & Company will be more than happy to assist you with your 2009 planning. From a quick question to helping you with your business planning retreats feel free to contact us at 713-993-9637 or drafte@rafte.com.

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For additional information on this Business Operations Consulting article, please contact:

Shannon Hampton
(713) 993-9637

Source: Dena Rafte

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