The Difference Between Solo Practitioners and Independent Practitioners
2007.01.04
My Firm has expanded beyond the point of no return. I have a Virtual Case Manager, Virtual Lawyer, Several Virtual Law Clerks, three internal Practice Assistants/Paralegals and we cannot handle the work that is coming through the door. To suggest that our two-year experiment with innovative approaches to the practice of law has succeeded would be an understatement. Practicing in a state where over forty percent of the practitioners reported a decline in business in 2006, with most of those thinking that things will be worse in 2007, our firm has grown steadily.
There will be two new lawyers joining the firm in 2007. The first is a Virtual Law Clerk who has been with me since the very beginning. He has shunned big law in favor of our innovative billing model. We will be paying him a salary higher than any other new lawyer in our region of the state.
I have also extended an offer to another attorney who has almost 20 years experience across a variety of practice areas. It is my hope that he will accept our offer and join the firm in the next month or two.
Does the addition of more lawyers mean that I am no longer an independent practitioner? Will our firm suffer the same fate as all the other firms who have too many cooks in the kitchen? Will innovation give way to compromise and mediocrity?
I don't think that we will lose a step with the additions we are making to our lawyer staff. Why? Because we are setting up our firm with all the right incentives. We are pooling our resources but we will continue to reward innovation and efficiency. The lawyers who are joining us are doing so because they have already bought into the business model and commitment to innovation.
Over the next few weeks, we will be working on a formula, which identifies all of the most important metrics, which we believe will drive our firm forward. In most firms, the single metric is billable hours. You might add "origination" to the important metrics in a traditional law firm. I will be posting about this more in the future, but I am anticipating in excess of fifty separate metrics by which we will measure ourselves. These metrics will create all the right incentives. Most of the metrics will encourage activity beyond sitting in your chair and billing the client.
Stay tuned. We are about to create a new "partnership formula."
GAL - So, I'm excited to hear your new formula. But, I have to share with you my gut reaction. 50 different metrics for rewarding and incentivizing workers??!?? My mind is numb just thinking about it.
Let me play out the way my mind works as a law firm owner (which is admittedly simplistic) and maybe you can help me see the error of my thinking. Point 1 - I think a basic through-line of law firm management is that administrative tasks that inhibit a lawyer's time to bring in money for the firm (stretch that definition as thin as you like) are inherently inefficient. And mind you, I'm not saying that billing at an hourly rate is the only way to bring money in. Even if you've successfully gotten clients to pay you on value (for efficiency, for work product), if you're spending time on administrative tasks, that's time that you're not out doing or finding more work (however you get paid for it). Now, there are some things that you can't (or shouldn't) get others to do and those are necessary tasks. But tracking and facilitating 50 metrics for your workers as a means for fair compensation sounds like a substantial drain on resources.
Point Two - 50 metrics, by virture of how all-encompassing and well-thought-through they are, may be an extremely fair way of rewarding and incentivizing your works, but I don't know how effective it can be. If I, as an employee, am watching and calculating how I'm impacting these 50 or so metrics, could I possibly be enjoying myself? Am I being as efficient as possible with my time? Can I get motivated about 50 different things? I guess, in short, how can effective can a 50-point metric be as a motivator?
Let me know what you think - I am honestly excited to hear your response - VJM
Posted by: Victor Medina | 2007.01.04 at 17:52
Victor. You are right that it does seem a little overwhelming. The point wouldn’t be to have some strict formula related to the metrics. The point would be to let lawyers know that we value a variety of different things at the firm. Perhaps 50 is too many!
There are so many aspects to the business of law that need to be encouraged. Perhaps I am just reacting to the reality that most law firms operate on a two level analysis. They are both directly related to each other. However, the first is hourly billing. The second is origination. The loss of professionalism in our profession and the pain that most lawyers feel when they wake up each and every morning to go to work is a direct result of this two metric system.
Perhaps the answer is to simply sit down and do what’s fair at the end of the year. My proposal is really just that. But at the same time, you want lawyers to know what things the firm does believe are important. Hopefully, lawyers won’t think about trying to impact 50 metrics. They will find the metrics that they believe they can contribute on the most and focus on those metrics. Perhaps we ought to think of it as an a la carte menu. You don’t have to eat the whole buffet table. But neither are we limiting you to the three meal options that you get when you go to a local bar event, fish, pork, or steak.
Thanks for your insight. You’ve got me thinking about these metrics. I realize now that we need to ensure that lawyers know they don’t need to meet all 50 metrics. They can pick or choose the ones which they want to focus on. Perhaps we would have a grouping method by which the five most important metrics are in group one. A lawyer would certainly want to focus a good amount of activities on one or more of these metrics. There would be a second group of metrics which would be equal in value but offer a wide variety of options for lawyers to direct their talents.
All the best. GAL
Posted by: GAL | 2007.01.08 at 17:01
Isn't it just going to be added stress to have to perform in fifty different ways and to be measured on fifty different criteria? In traditional firms associates enjoy the luxury of not having to worry about much else if they do their 2000 hours and don't drive away clients.
Posted by: rob | 2007.01.18 at 18:37
It is all about incentives. If you have a systems with a single incentive (or two as you have described - hourly billing and don't drive away clients) you will spit out a business model which caters only to those incentives. Good luck driving client service in your proposed model. It isn't supposed to be 'easy'.. If you are looking for a brain numbing business model which causes not to have to think, then your model is perfect. But if you want to innovate, and reward [any number of metrics which every law firm should be thinking about], then you better figure out how that will happen.
p.s. Capitalism for me is pure joy ....I eat stress for dinner. :-)
Posted by: GAL | 2007.01.18 at 20:20
It is all about incentives. If you have a systems with a single incentive (or two as you have described - hourly billing and don't drive away clients) you will spit out a business model which caters only to those incentives. Good luck driving client service in your proposed model. It isn't supposed to be 'easy'.. If you are looking for a brain numbing business model which causes not to have to think, then your model is perfect. But if you want to innovate, and reward [any number of metrics which every law firm should be thinking about], then you better figure out how that will happen.
p.s. Capitalism for me is pure joy ....I eat stress for dinner. :-)
Posted by: GAL | 2007.01.18 at 20:20
I'm really playing devil's advocate here (as well as on my biglaw job :-)), but I think fifty might be overdoing it.
By the way, I KNOW WHO YOU ARE!!
Posted by: rob | 2007.01.18 at 22:24
Rob: I know. I was feeling feisty last night. Both your guys are making me think hard about the complexity. You are both right. But damn, there are so many attributes which make a great lawyer and law firm. maybe the metrics are really 5-10 categories of bundled but related activities. Maybe something like:
1. Client Service: (I can think of lots that would go here including the hard work which would naturally spit out revenue).
2. Visibility: (ie marketing, networking and web presence).
3. Internal Relationships: (A happy firm is a healthy firm).
4. Administrative: (Yes, a business still has to be 'run').
5. Innovation: (This would run throughout the other categories but somehow also seems important enough to stand on its own).
6. Profitability: (Yes, lawyers should be rewarded for generating revenue and profitability).
Posted by: GAL | 2007.01.19 at 08:58