Law Firm Management—How to Think Big SOLO AND SMALL FIRM CONFERENCE—2011

SOLO AND SMALL FIRM CONFERENCE—2011
PAPER 2.1
Law Firm Management—How to Think Big
These materials were prepared by J. Robert Waterman, Director of Administration, Richards Buell Sutton LLP,
Vancouver, BC; Kim A. Karras, Brawn Karras & Sanderson, Surrey, BC; Colleen Chapman, Administrator, Brawn
Karras & Sanderson, Surrey, BC; David J. Bilinsky, Practice Management Advisor, Law Society of BC, Vancouver,
BC; and John B. Smiley, BCom, FCA, Wolrige Mahon LLP, Chartered Accountants, Vancouver, BC, for the
Continuing Legal Education Society of British Columbia, March 2011.
© J. Robert Waterman, Kim A. Karras, Colleen Chapman, David J. Bilinsky, and John D. Smiley, FCA
2.1.1
LAW FIRM MANAGEMENT—HOW TO THINK BIG
I.
Introduction—Law Firm Administration .....................................................................................................2
II.
When Do You Know It’s Time—What Are the Signs?.................................................................................3
III.
Why Hire a Legal Administrator/Office Manager .......................................................................................4
A. The Business Case: Management vs. Leadership............................................................................................................ 4
B. Reasons to Consider ....................................................................................................................................................................... 4
1. To Advance Your Practice............................................................................................................................................... 4
2. Autonomy—Why Micromanage?............................................................................................................................... 5
3. It’s Difficult to “Move Up” a Secretary...................................................................................................................... 5
4. The Wife, Spouse or Significant Other...................................................................................................................... 5
5. There Has to be a Balance on Both Sides …........................................................................................................... 5
6. Help Run Everything Smoothly..................................................................................................................................... 5
7. Staff Members are Taken Care Of ............................................................................................................................... 6
C. Other Considerations in Making the Decision ................................................................................................................ 6
1. Can I Trust my Administrator? ..................................................................................................................................... 6
2. Justifying the Cost ................................................................................................................................................................ 7
3. The Time to Evaluate the Alternatives..................................................................................................................... 7
4. Bring Problems Forward for Discussion ................................................................................................................... 7
5. Build Credibility with Staff............................................................................................................................................... 7
6. Get Done All Things Lawyers Have No Time To Do ......................................................................................... 7
D. Moving Towards the Decision to Hire.................................................................................................................................. 8
1. Prying the Managing Partner’s Fingers Off the Steering Wheel.................................................................. 8
2. Why Not Just a Contract Bookkeeper or Accountant? ................................................................................... 8
3. What Systems/Changes are Needed to Work with an Administrator?.................................................. 8
4. Writing Down What You Want ................................................................................................................................... 8
5. Help the Administration Understand—From Both Sides.............................................................................. 8
6. What You Need to See? When? and How?............................................................................................................. 8
7. Maintaining an Open Door Policy .............................................................................................................................. 9
8. You Can Always Hear the Good News—Hear the Bad News ...................................................................... 9
9. Good Working Relationships with Staff................................................................................................................... 9
IV.
How to Hire an Administrator........................................................................................................................9
V.
What Does a Legal Administrator Do? ........................................................................................................11
A. Human Resources ......................................................................................................................................................................... 11
B. Finance................................................................................................................................................................................................ 11
C. Facilities Management ............................................................................................................................................................... 12
D. Training and Education ............................................................................................................................................................. 12
E. Marketing.......................................................................................................................................................................................... 12
F. Technology ....................................................................................................................................................................................... 12
G. Other Functions............................................................................................................................................................................. 13
VI.
Benefits of Hiring a Legal Administrator ....................................................................................................13
2.1.2
VII.
What’s Life Like on the Other Side ...............................................................................................................14
VIII.
Appendix I—Financial Comparison of Firms: Key Performance Indicators.........................................15
IX.
Appendix II—Resources .................................................................................................................................16
I.
Introduction—Law Firm Administration
There are two sides to every law firm: the professional side, that is, the actual practice of law, and the business
side, let’s call it the business of the delivery of the practice of law. For a law firm to be successful, one side cannot
exist without the other. The challenge facing most solo and small firms is that running the business side of the
firm requires specific and multifaceted talents that most practicing lawyers do not possess. Managing the
business side of a law firm is not what lawyers went to law school for and unfortunately good lawyers often
perform miserably as business managers. At worst, they get into serious trouble due to a lack of knowledge, for
example, of financial and trust accounting rules. At the least, they waste an enormous amount of time trying to
manage the business side of the practice, valuable time that could otherwise be applied to the practice of law and
the generating of revenue. Time is one thing that successful lawyers with full workloads lack and it must be used
carefully both to ensure the success of the firm and the balance of work and life away from the practice.
The “right” individual to run or assist in running the business side of the firm must possess skills and knowledge
in a vast and varied number of areas including financial management and accounting, trust accounting rules,
technology and systems, facilities and equipment management, marketing, legal industry trends, codes of
professional conduct, human resources, and employment law. Yes, individual lawyers may possess such skills;
however, spending time on administrative tasks takes away from the billable hours attending to the needs of
clients which is critical to the development and maintenance of a successful law practice. Lawyers should
concentrate on what they are trained for—the practice of law.
Experts in the area of law firm management and administration agree that “lawyers should not be spending their
time on administrative management tasks which can be delegated to others who are better trained and more
capable of carrying out those assignments.”1 “The primary role of each attorney in any size firm is to generate
new client work; manage the legal work internally so as to meet the expectation of the client both in quality,
quantity and timely response; and create a work environment where employees are reasonably comfortable and
content, while earning a reasonable profit … None of that valuable time should be used to ensnare the lawyer in
time consuming and sometimes frustrating administrative tasks that can be assigned to the firm administrator.
This individual is both better qualified and better suited temperamentally for the handling of administrative
issues.”2
For years larger firms have been turning to non-lawyer professionals to handle more and more of their
management and administration functions. The trend is now becoming apparent in small firms. “It’s trickling
down and the reason is that lawyers are realizing they’re not very good at management tasks
1
John P. Weil & Company, “The Role of the Senior Administrator: Does Law firm Size Make a Difference ?”
retrieved February 6, 2011 <http://weilandco.com/new/article8.html>
2
Ibid.
2.1.3
and they really don’t want to do them … If they do the math on how many billable hours they lost, it’s easy to
figure out that someone else can pay for themselves pretty quickly.”3 “What’s happening is that as law firms
have become more sophisticated and partners realize that they have to spend more time generating more
business or paying attention to their current business, they don’t have the time to take care of their day-to-day
activities.”4
All five contributors to this paper are advocates of the professional business management of law firms and
have firsthand knowledge and experience of the benefits and success of “moving from the beneficial despot
model to a professional administrator,”5 the despot being a ruler who holds absolute power and governs in
accordance with his or her own personal wishes, accountable to no one but him or herself. In contrast, the
legal administrator (hired by the partners who retain the ultimate power), is responsible for the firm’s overall
day-to-day operations and does so in accordance with the vision and policies set by the partners, ensuring the
delivery of legal services under the direction of a partner, the managing partner or an executive committee.
The goal of our paper is to provide information and insights which we hope will assist you in making the
decision to move to the next stage in law firm management and administration; to help you “think big.” Given
the collaborative writing of our paper, sections may overlap and repeat, but nonetheless, we hope the message
delivered is clear.
II.
When Do You Know It’s Time—What Are the Signs?
You have a successful practice but are staying late at night doing administrative tasks that you do not enjoy
and were not trained for. You know other firms that have hired professional administrators and you are
wondering whether it is time for you to do this as well.
The first step is to review where your hours are spent. This can be done by reviewing your time records and
comparing billable hours to non-billable hours. Let us assume that your target hours are 1,800 per year (48
weeks x 5 days x 7.5 hours per day). If you have 1,000 billable hours at the end of the year, a reasonable
conclusion is that you are spending about 45% of your time on administrative activities (having taken 4 weeks
holidays). The key issue is how do you increase your billable hours to allow you to hire professional
management? [Reasonable answer?—spend less time on administrative activities—200 hours @ $250/hour is
$50,000.]
You will also need to review your outside contract costs to determine whether a salaried professional
administrator on staff could take care of the administrative/accounting activities which are otherwise
contracted out to third parties. Some of these costs include:

Accounting/bookkeeping

IT outsourcing

HR recruitment

Lease negotiation and move costs
3
Dick Dahl, quoting Bruce MacEwen, law firm management consultant New York City, “Smaller law firms turning
management functions over to non-lawyer professions,” October 2007, retrieved February 6, 2011
<www.allbusiness.com/legal/legal-services-law>
4
Dick Dahl, quoting Joel Rose of Joel A. Rose Associates, Law Firm Consultants, “Smaller law firms turning
management functions over to non-lawyer professions,” October 2007, retrieved February 6, 2011
<www.allbusiness.com/legal/legal-services-law>
5
Tag line in course brochure, CLE Solo and Small Firms Conference, March 11, 2011.
2.1.4
Financial indicators that will help you make the decision to hire a legal administrator/office manager include:

receiving timely financial statements (3 weeks after month end);

maintaining timely trust account reconciliations;

work in process and disbursements not billed timely;

receivables not followed up promptly;

staying on top of payroll, HST and statutory remittances’

inability to find time for networking.
In Section V of our paper you will see the myriad of duties that a legal administrator will perform. At some
point, paying an individual to fulfil and deliver on these duties is extremely good value for money—you just
have to know when. Attached as Appendix I is a summary of key performance indicators which compares
small firms to large firms. This information has been extracted from the BCLMA economic survey of law firms.
The conclusion that is easily reached is that increasing billable hours (by spending less time on administrative
duties) will allow you to perform more legal work and pay for professional management at the same time.
III.
A.
Why Hire a Legal Administrator/Office Manager
The Business Case: Management vs. Leadership
Lawyers often assume that their role is to “run the firm,” which seems to translate into acting in a management
role. But in actuality, their role is to set the direction for the firm and set the systems into place that allow
someone else to do the day-to-day running of the firm. The lawyer’s role is to act as a leader of the firm—
deciding what kinds of business the firm will pursue, how many and who will be the lawyers in the firm, where
the firm will be located, how the firm will be financed, and similar types of strategic questions. The day-to-day
operations (in military terms called tactics) are delegated to others (the administrators and administrative staff
of the firm).
In other words, the role of the lawyer is planning, deciding, and setting strategy. You are directing your troops as
to what goals to pursue and how these business goals will be achieved. Your generals (your office administrator
and staff) set the tactics—the manner in which your strategy is translated into action. If you are trying to perform
both roles, then you will leave yourself little time to fit in the practice of law. On the premise that it is oftentimes
better to do one job well rather than three badly, we will look at the reasons why a firm would consider
transitioning to professional law firm management.
B.
Reasons to Consider
1.
To Advance Your Practice
In the authors’ view, lawyers will eventually hit a ceiling if they try to both practice law and run the firm. There
is a very good reason for this—all of us have only so much time that we can put into work—whether it is 1,200
billable hours/year, 1,500 or 2,500. Our ‘time pie’ is only so large and at some point we simply run out of time
when we start to slice it into too many different tasks. Many studies have been done on billable time logged by
associates and by partners at different sized firms. Two trends are quite clear:
1.
Billable time by partners on average is higher than that of associates, and
2.
Billable hours by partners in larger firms is higher than that of partners in smaller firms.
2.1.5
If you have a financial interest in the firm, you put in more time. If you are a partner in a bigger firm, you spend
more of your time on billable work. Why? Because someone else is looking after minding the store! This alone
should give pause to those firms that have not yet brought in an administrator—you will be able to spend
more of your ‘time pie’ on actual billable work!
2.
Autonomy—Why Micromanage?
Lawyers like to micromanage. They are, for the most part, detail types that have been trained not to leave any
matters to chance. Accordingly, I think it is especially difficult for these Type-A personalities to give up a
degree of control. As a result, lawyers tend to fall into the ‘micromanaging’ role of running a firm. In order to
bring in professional management, you must move from a control mindset to one of knowing your strengths
and weaknesses. In order to find an administrator that has the skills, knowledge and personality that matches
your firm’s needs and is a good fit, you must know what results you want from a good administrator, and you
have to be able to know how you will work together. I think most firms find it difficult to move to hiring an
administrator as they don’t want—or are unable—to trust enough to give up the micromanagement role.
3.
It’s Difficult to “Move Up” a Secretary
Many firms want to move up a senior secretary or paralegal into an administrative position. Many times, this is
not a particularly good idea. The secretary or paralegal may have allegiances to certain lawyers in the firm or
alternatively, may have personality issues with others in the firm that are largely hidden in their role as
secretary. Elevating someone to an administrator position can result in personal difficulties within the firm as
this upsets the power hierarchy. In the writer’s experience, it is far better to bring in someone new who doesn’t
have any prior relationship to the firm or its lawyers and who can start out on the same level with everyone.
4.
The Wife, Spouse or Significant Other
The writers have seen many firms that have brought in a spouse or significant other (“SO”) as the
administrator, manager or bookkeeper of the firm. While well-intentioned, this can be a particularly
problematic move! The spouse or SO is most definitely aligned with one of the partners in the firm and if the
partners and/or associates disagree with his or her decisions, it can start to poison the firm atmosphere. Staff
may find it difficult to raise issues with the administrator, knowing that whatever they say, it may and most
probably will not be kept confidential.
5.
There Has to be a Balance on Both Sides …
One of the unspoken major roles of the administrator is to run interference between the staff and the lawyers.
Lawyering is highly stressful and feelings (and egos) can be rubbed the wrong way at times—particularly during
high-stress periods. Accordingly, it is vitally important that the administrator is seen as being tough but fair.
Having an administrator aligned with any particular group in the firm will reduce their ability to act in this
capacity.
6.
Help Run Everything Smoothly
In any law office, there are myriad little things that come up that are either put off until ‘there is time’ or
someone has to drop what he or she is otherwise being paid to do to put out the latest brush fire. This is not a
great use of anyone’s time. An administrator can be tasked with these “fire fighter” duties, allowing everyone
else to get on with the tasks at hand.
2.1.6
7.
Staff Members are Taken Care Of
The one role that is oftentimes most neglected in a smaller firm is that of the management of human
resources. An administrator can not only ensure that all the right forms and filings are made to the
government and other regulators (such as WorkSafe BC), but they can take over the task of looking after
vacations, sick day administration, leave policies, hours of work, payroll and the like. Moreover, they can take
over the details of celebrations (birthdays, births, etc.), condolences, and all the other aspects of working with
staff and caring about them and what happens in their lives outside of the law office. Ensuring that the staff
are not only properly looked after, but feeling valued and appreciated goes a long way towards creating a
positive work culture and work environment. It also reduces the costs of excessive staff turnover.
C.
Other Considerations in Making the Decision
1.
Can I Trust my Administrator?
The old adage “trust but verify” is very apt here. In order to start placing greater and greater responsibilities on
an administrator, you must first be satisfied that they are performing their existing duties to standard. You
must put into place systems that allow you to monitor the tasks that have been delegated and ensure yourself
that they have been done well. This builds trust in them and allows you to delegate further tasks and
responsibilities.
In fact, the real hurdle in bringing in an office administrator for the first time is having the law firm move from
a beneficial despot model to a collaborative model of management. The administrator, if you have done your
selection and recruitment properly, has the skills to do the job—since in the vast majority of cases, you are
bringing in someone with experience. The entity that doesn’t have experience in working with an administrator
is the law firm; particularly the partners. That is really where the learning and adjustment must happen.
The components of trust building in a manager are not much different in trust building in any professional
relationship. The important elements are:

Communication: Have open and frequent conversations about expectations, time periods,
results (good and bad) as well as ongoing discussions on progress updates.

Giving Trust: People respond according to the cues that they are given. If people do not feel
trusted, they will be secretive, defensive and uncommunicative. If they feel trusted, they will
be open, inviting and willing to discuss matters. Ensure that you start out on the right foot.

Be Honest: If one of the partners in the firm is a bear, don’t sugar coat this. An administrator
who is blindsided by something in the first days of their new job will be wondering what other
traps are out there just waiting for them. You will be expecting the new administrator to be
honest and up front with you; at the very least you owe the same to them.

Ethics: We all know that strong ethics underlie every positive relationship. You want to
ensure that your manager reflects the strong ethics in your firm and in turn, ensures that all
staff members uphold the same standard.

Keep Promises: All of us make promises every day with the best of intentions. However, life,
as we know, tends to mess things up somewhat. Try to keep all promises made and if timing
becomes a problem, at least let people know the new schedule and expectations to let them
know that your intent is still strong despite the constant inflow of interruptions.
2.1.7
2.

Maintain Confidences: Your manager will be coming to you with matters that must be
handled with discretion. Honour the confidences that they impart to you and allow them to
keep you informed while they handle the situation.

Build Teams: Allow lots of opportunities for everyone in the firm to get to know each other
and the new manager. Social events will help build bonds between different people in the
firm that may not typically have much contact in the business day, thereby strengthening the
team.
Justifying the Cost
Interestingly enough, the firms that have made the transition to professional administration would say “How
could you afford to practice without an administrator?” But to think of this in terms of economic benefits and
opportunity costs, track (or estimate) the time that you (and your colleagues) spend on office administrative
tasks in a month. Multiply that time by their billable hourly rate and total all these amounts. Now multiply
this by 12 to arrive at an annual estimate of the time that you could be billing if you used this time for client
matters rather than on administration. If this lost billings total is approximately equal to or greater than the
cost of an administrator, you are losing money by not having an administrator. You are also losing out on the
workflow benefits that come about from having someone making sure all the parts of the firm are running
properly.
3.
The Time to Evaluate the Alternatives
Law firms must use supplies, services and equipment to keep the engine running. An administrator can ensure
that there is a due and proper examination of alternatives before any purchase decision is made. They can also
ensure that you periodically have discussions with your major suppliers on discounts and such to ensure that
you are getting the most of your purchase dollars.
4.
Bring Problems Forward for Discussion
Administrators must keep their ear to the ground and pick up on small problems before they become major
problems. They must have the authority to solve the small problems and the judgment to bring bigger ones to
you for discussion and to explore solutions.
5.
Build Credibility with Staff
The staff will appreciate the fact that they can raise issues with someone who is tasked with the role of
listening to staff and their concerns. This helps them be comfortable with the team approach to the running
of the firm.
6.
Get Done All Things Lawyers Have No Time To Do
Lawyers are typically busy people. They may resent—if not outwardly perhaps just inwardly—that they must
take time away from their client work to do non-billable ‘stuff.’ Having an administrator whose job it is to do
all the things that lawyers don’t have time to do (or shouldn’t be doing) will ensure that the firm is running on
all cylinders at all times.
2.1.8
D.
Moving Towards the Decision to Hire
1.
Prying the Managing Partner’s Fingers Off the Steering Wheel
Lawyers are not trained in administration or in accounting. In many cases they do not have a
commerce/business background. So making a reasoned argument that people who are skilled, trained and
have experience in running a law firm can do a better job than an untrained lawyer should be a straightforward
one. This paper lists all the tasks that can be expected of a good administrator. Simply asking a lawyer if they
would want to do these tasks on a continual basis vs. having someone do them for them should be the
clincher.
2.
Why Not Just a Contract Bookkeeper or Accountant?
In many cases, bringing in a part-time bookkeeper and/or accountant is a great idea as a first step towards a
full-time administrator. However, at some point you may realize that there are many more tasks that could be
delegated if you had someone there full-time. That may open up the opportunity to move towards a full-time
administrator and bookkeeper as the next step.
3.
What Systems/Changes are Needed to Work with an Administrator?
Start with a list of the must-do things that you would want an administrator to do. Then draw a list of the
things that you would like an administrator to do if they had time. Next decide how you would delegate these
tasks and how you would like them to report back to you on their progress. At this point I would let the new
administrator then start doing what you are paying them to do—getting on with the job of running the firm
and reporting back to you on their progress. After all, you are trusting them to run the firm now—aren’t you?
So you don’t make the changes—they do.
4.
Writing Down What You Want
Expectation management is key to working with a client. It is no less so when working with an administrator.
Write down the tasks that you want the administrator to do in order that you—and the administrator—clearly
understand each other’s roles and responsibilities. If a task is in the administrator’s side of the ledger, then they
have every expectation that he or she will be left alone to do it. If a task is either on the lawyer’s (or managing
partner’s side) of the ledger, or a shared task, then you can expect that the administrator is brought into the
dialogue to ensure that the rest of the firm is onside and working as a team with the lawyer or managing
partner.
5.
Help the Administration Understand—From Both Sides
It is to be expected that a new manager/administrator will have the skills, aptitudes and ability to perform his
or her new role. What that individual may not have is an understanding of the culture and the peculiarities of
the firm. Working with the administrator to understand the culture of the firm (good and bad) and why the
best parts should be preserved (while improving the other parts) will only benefit them and the firm.
“Communication is the problem to the answer” as someone once said.
6.
What You Need to See? When? and How?
The administrator needs to report to the managing partner or lawyers of the firm on his or her progress on
achieving stated goals. Some firms like results communicated orally; others like written reports and some
prefer a bit of both. Decide what are the key performance measures (“KPMs”) that you need on a regular basis
(and when you need to see them) and how you want to receive this
2.1.9
information from the administrator. Once the reporting methods and styles are decided, then the lawyers can
get on with their jobs as well as the administrator. You will also need some business process around setting
and monitoring actions to be undertaken as a result of seeing the KPMs.
7.
Maintaining an Open Door Policy
Lawyers tend to get engrossed in their files. In contrast, an administrator can maintain an open door policy
that allows anyone in the firm to come to them to raise a problem, discuss a situation or assist them with a
task. This is an underappreciated benefit of having good administration.
8.
You Can Always Hear the Good News—Hear the Bad News
You can expect to hear good news—that oftentimes travels at the speed of light through a firm. But to be fair,
not all news is good. An administrator should raise bad news early with the firm in order that everyone can
adjust to it and hopefully, help deal with and improve the situation. An administrator should have the tact
and people skills to be able to raise bad news without laying blame and without causing a crisis.
9.
Good Working Relationships with Staff
A primary duty of any good administrator is to get—and keep—good staff. Many studies have shown that the
cost to replace a staff member can be up to 2.5 times their annual salary. Continually losing good staff causes a
direct hit to the bottom line. Your administrator should have the emotional intelligence and people skills to
smooth out problems and create a positive work environment and culture in the firm. They should also be
able to raise issues with the firm where a lawyer may be unduly causing friction in the firm.
IV. How to Hire an Administrator
Congratulations! You have made the decision to hire an administrator. So where do you get one and how do
you go about getting the right one for you and your firm? Before you even try to answer this question, you
need to define, in writing, what you expect from your administrator; you have to take stock before embarking
on a recruitment process. As part of that process, you must develop a detailed written job description that
includes the tasks, responsibilities and requirements for your star candidate. Not only is this necessary to be
able to identify the key attributes that you need for your firm, but it is necessary to enable you to adjust to the
fact that you will be delegating these tasks and responsibilities to someone. Oftentimes the hardest part of
hiring your first administrator is learning to peel your fingers off the steering wheel and let someone else drive
the firm.
There are several, excellent online references you can use, provided by credible and reputable organizations,
such as:

British Columbia Legal Management Association (“BCLMA”) http://www.bclma.org

Association of Legal Administrators (“ALA”) http://www.alanet.org.
There are numerous consultants as well that have material on their websites and you can find these by doing a
Google search. I strongly recommend that you start by reading the material on the ALA Website,
http://www.alanet.org/jobs/whoindex.aspx. Although this is primarily an American organization, most of the
information is applicable in Canada.
Start by listing the administrative task(s) that currently detract you and your partners from practicing law.
These are the tasks you are willing to truly delegate to the administrator and upon whom you will provide the
authority to carry them out. (If you are not willing to let go and intend to continue
2.1.10
managing these tasks on your own, reconsider your approach. You will not save yourself any time or energy,
and you will not keep any administrator in the position for long.)
The management of your firm can be defined within these basic areas:

Financial Management

Human Resources Management

Facilities Management

Knowledge Management

Marketing

Information Technology Management - Equipment and Systems

General Office Management
You may already be outsourcing some of these tasks, at a cost to the firm. These tasks can be handled by your
administrator and will help justify the hiring costs.
We will review details of each of these management areas in the next section. The most important aspect of
getting the right administrator, which is not outlined in any of these references, is “fit” with the firm. Lawyers
come with different experience, skill sets and personalities; this is also true of an administrator. If there is no
genuine fit, then the other skill sets will not matter. You must always check references personally; never rely on
reference letters only. Wherever possible, speak to somebody you know. Ask the ‘personality’ questions as well
as the experience and skill set questions.
Now that you have created a detailed job description, make sure your partners are fully on board with the
proposed new scheme. Accept their feedback and adjust accordingly before you begin your search.
You may have somebody within your firm who could be considered. Before you make that promotion, there
are a number of things you should consider. Moving an individual from a support staff position to a
management position takes a special person. Does this person have the education and experience? Can you
delegate and pass on the authority to this person? Can you trust them with the new level of confidential
information you will expose them to? Will this person be able to separate himself/herself from the staff who
are no longer considered his/her peers? As the firm grows will this person be able to provide the expertise?
I discourage hiring a spouse, significant other, a close friend or a blood relative for the position, even if they have
the qualifications. This has to be an arm’s- length business relationship. Situations may occur that become
difficult to deal with at the business level. You may discover after you hire the person that they do not have the
right qualifications, they take advantage of the situation by not being there full-time or they want to be paid
more than market value, based on their connection to you or the firm or both. Personal relationships can cloud
the issue when an administrator has to deal with tough issues.
You can conduct the search on your own by advertising in local newspapers and publications. This method
will save you paying a finder’s fee, which can be substantial. The down side with this approach is you will have
to do all the leg work yourself, check the references, go through all the applications, conduct the interviews
and make the offer (as well as contact the unsuccessful candidates, assuming you receive several applications).
This method will limit your search to only those candidates that seek employment from newspaper
advertisements.
You can also hire through professional search agency. This method has all the opposite pros and cons outlined
above. Several reputable search agencies in Vancouver specialize in the recruitment of law-firm administrators.
Consider approaching the accounting firm who does your financial statements. Professional accountants can
make great candidates. Meet face-to-face with the agency, present your job description and make sure there is a
clear understanding of the type of a person you are looking for, and need.
2.1.11
V.
What Does a Legal Administrator Do?
The importance of a good administrator/manager and/or bookkeeper/accountant (or any combination) is
that they run the day-to-day operations of the firm on behalf of the partners. The following outlines many of
the functions that may or should be performed by an administrator to enable the partners and lawyers of the
firm provide their core services by practicing law and bringing in revenue for the firm; the partners can
delegate business requests for the administrator to carry out and to meet with them to report on the
outcomes.
An administrator’s role covers various areas of the day-to-day operations. These include:
A.
B.
Human Resources
1.
Supervision of administrative staff (may or may not include legal assistants or associates);
2.
Manage support staff coverage (especially switchboard) for lawyers, including unplanned
absences such as sickness, snow days/transportation;
3.
Advertising for new staff, interviewing, hiring, firing, reviews, benefits, administrating
health/dental, RRSP’s, disability, and insurance;
4.
Payroll (whether in-house or outsourced), maintaining employee/staffing records (vacation,
sick time, overtime, leaves, and coverage of positions);
5.
Writing or updating employee/staff employment and procedure manual/s and facilitating the
implementation of same;
6.
Conducting staff meetings;
7.
Planning team-building or appreciation events for staff and client functions.
Finance
1.
Day-to-day accounting, management and reconciliation of general and trust accounts,
preparation of month- and year-end financials and the supervision of accounting staff.
2.
Maintaining, reporting and/or paying various government agencies (GST/HST, PST, payroll
deductions).
3.
Law Society compliance—TAF, Identification/Verification, either self trust or outside
accountant trust report at year-end, dues and liability insurance.
4.
Reconciliation of bank statements for review by partners/managing partner.
5
Preparation and review of budgets and monitoring cash flow.
6.
Working with the lawyers to ensure billings, accounts and collections are attended to on a
regular basis.
7
Assuring firm and client payables are processed.
8.
Preparation of reports and doing variance analysis for partners keeping partners/managing
partner apprised regularly on current finances of the firm.
9.
Establishing a relationship with the firm's banking contacts to establish and monitor lines
communication, credit facilities as required, capital loans, leasehold and equipment loans.
10.
Monitoring, attending to and/or supervision of accounts receivables and firm collections.
2.1.12
C.
D.
E.
F.
Facilities Management
1.
Coordinating with landlords regarding leases of the premises, organizing the set up of an
office (renovations, designs, and moves) and working with contractors, janitorial and moving
companies.
2.
Working with suppliers regarding purchase or lease of equipment for the office (copiers, fax
machines, printers, phone systems, postage machines, dictation, video equipment and other
media), and maintenance/service contracts for the equipment.
3.
Purchasing and maintaining of office furniture and fixtures, ordering/purchasing of general
stationary supplies, toner products, kitchen supplies.
4.
Setting up and maintain the offsite storage facility or if outsourced, monitoring for quality of
service.
5.
Liaising with suppliers for such items as paper shredding companies, housekeeping and
cleaning services, building maintenance.
6.
Setting up a disaster-preparedness plan in case of an emergency so that any loss of
information and downtime of production is minimal (i.e., natural disaster, terrorist attack.
Training and Education
1.
Supervision, administration, maintenance and monitoring of all aspects of the firm’s library
(purchasing books/updates, filing or delegating the same), purchasing and maintaining online
services and search software, organization of library.
2.
Training, recommending and attending to registration of staff/lawyers/partners participation
in continuing education of ethics, law, technology, marketing, (in house, webinars, or live
courses).
3.
Maintaining memberships of the various organizations for the staff/lawyers.
4.
Monitoring and assistance in reporting on PD requirements for practicing lawyers.
Marketing
1.
Working with partners and/or third-party dedicated experts to develop, design, and maintain
the firm’s branding, logo, website (within the guidelines of the Law Society).
2.
Assisting with advertising the firm in Yellow Pages (online or in book form), with local
newspapers, applicable industry journals or charitable/community interests/organizations.
3.
Choosing and assessing applicable sponsorship opportunities.
4.
Maintaining and monitoring client referrals.
5.
Assisting and encouraging lawyers to attend community functions, writing articles and doing
various types of educational seminars in the community.
Technology
1.
Working in-house or with outsource experts to purchase/lease and maintain computers,
programs, servers, offsite backups, cell phones, or any other equipment in the use of running
the firm efficiently and confidentially.
2.
Schedule service and upgrades to equipment and programs.
2.1.13
G.
3.
Dealing with any crisis that may arise (power outage, corrupt programs, lost of information,
death of lawyer/staff member.
4.
Training staff and lawyers on the equipment and of the programs.
5.
Monitoring staff/lawyers for abuse of internet.
Other Functions
A qualified administrator may cover include whatever tasks the partners require to assist in the smooth
operations of the firm. These may include:
1.
Monitoring partners’ output so that they do not burn out.
2.
Arranging meetings for the partners, dealing with salespeople, facilitating change by having
the staff/lawyers “buy in.”
3.
Addressing insurance issues, mergers, partner/firm splits, new partners, death and succession
(note that an administrator who has been in the profession for a number of years has
probably dealt with some or all of these issues).
4.
Understanding the Law Society rules with the ability to guide and ensure the staff/lawyers to
compliance.
5.
Implement, monitor, and maintain protocols for confidentiality, harassment, professional
standards, internal or external frauds/thefts.
6.
Meeting with the partners or managing partners (either formally or informally) regularly to
discuss all issues relating to the firm, providing the monthly lawyer/financials reports for
review, staffing, marketing, technology, and facilities.
7.
participating in surveys of the legal community.
Two very important things you must always remember:
1.
This is your firm and you are ultimately responsible. You do not have to do all the work
related above yourself; however it is critical that you maintain an open-door policy with your
administrator; meet regularly on all issues, review or have assistance from your outside
accountants to review your financials.
2.
Make sure your administrator belongs to supportive associations dedicated to the
professional development and success of law-firm administrators, accountants, human
resources and marketing specialists. In this way your firm will on an ongoing basis contacts
and resources and you will not have to constantly reinvent the wheel.
VI. Benefits of Hiring a Legal Administrator
The overriding benefit to you is that you will have more time to do billable legal work. Delegation is good! You
may very well have some administration skills, but first and foremost, you are a lawyer and practicing law is
what pays the bills.
What is the first question asked … you guessed it: “What will an administrator cost me?” The real question you
should ask is: “How much will an administrator save me?” Making good and correct decisions for the firm takes
time, whether it is purchasing a photocopier, making sure you have the best liability insurance in place, hiring
the right staff or keeping on top of your receivables. Fixing something after a quick decision takes more time
than doing the job right in the first place.
An administrator will make sure staff and lawyers are properly trained and that you have backups in place.
New emergency situations that were not contemplated can be addressed by an experienced administrator so
that you are not detracted from your legal practice. One of the biggest headaches in a
2.1.14
firm is staffing issues. Your employees need to be trained and upgraded, helped with overload issues and
helped with personal issues. Your employees need to be evaluated and paid at a market rate. You need to have
benefits in place if you want to compete in the market; evaluating, selecting and administrating benefits is very
time-consuming. It needs to be done right.
At the end of the day, the administrator is there to protect the lawyer and the firm. This includes obtaining
and keeping good support staff, making sure you have adequate insurance coverage, making sure all law
society rules are being followed, making sure billings and collections are monitored, making sure that all
financial transactions are being properly recorded, taxes are being submitted, and more. The list is long and
varied.
Frequently, things go wrong that have to be dealt with quickly. Staffing issues, for example, need prompt
attention and usually cannot be resolved quickly and easily. If you are trying to hire new support staff, you have
to be available to conduct a proper interview. You need to hire the right person that will not only be qualified,
but will fit into the culture of the firm. That takes time. Staffing issues need to be dealt with on a consistent
basis. This includes pay scales, job expectations, hours of work, benefits administration, etc. Employees know
how their peers are being treated and compensated (they talk, you know!) so without consistency, you can lose
good staff.
The administrator will also assure consistency of the operations of the firm. Computer backups and offsite
storage, equipment maintenance, equipment and software reviews, assure bank reconciliations are done
monthly, payroll and benefits processing, staffing when an employee is sick or on vacation and, of course,
looking after firm social events.
As you can see, there is no shortage of tasks and duties you can assign to an administrator. Having a strong
individual in this role will benefit your firm and its functionality. Do not underestimate the need for a qualified
and enthusiastic professional in this important role. Good luck!
VII. What’s Life Like on the Other Side
Life is good !
As managing partner of Brawn Karras & Sanderson, I have no hesitation saying, and I strongly believe, that a
contributing factor to the success of the practice (established in 1975) is having a full time administrator, along
with an administration staff of 1 to 2 individuals. The firm is a small firm; for the last five years a firm consisting
of two partners, two associate lawyers, and 15 support staff. What a good administrative staff has allowed us
to do is practice law, participate actively in both our local community and the legal community, and
successfully meet the needs of our clients, all of which directly contributes to the continued growth and
success of the firm.
The business side of the firm runs smoothly, allowing the lawyers and legal assistants/secretaries to devote
their time serving the firm’s clients. It is the delivery of service that results in the retention and return of
clients and ongoing referrals of new clients; without clients, there is no practice.
Being able to devote time in the community, as well as the legal community, provides a basis for marketing,
ongoing learning, education and continued renewal of practice standards. Being able to rely on your
administrator who, under your direction, takes care of the day-to-day operations of the practice: the
accounting, the trust rules, the reporting, the equipment, the supplies, the systems, the staffing, the facilities, the
maternity leaves, the hiring, the firing, the insurance, the libraries, the computers, the equipment failures, the
reporting services, the accountants, the year ends, the monthly financial reports, the staff events, the registrations,
the petty cash, the lunch rooms, the telephones, the payables, the receivables, the holiday schedules, the sick
leaves, the firm benefit packages, the advertising, the cell phones … affords me the opportunity to spend my
valuable time servicing my clients, attacking the never-ending workload on my desk, marketing, working in the
community, learning and expanding my knowledge and expertise in the areas in which I practice, and to enjoy
a good life outside of the practice of law!
2.1.15
VIII. Appendix I—Financial Comparison of Firms:
Key Performance Indicators
Firms
Under
20 Lawyers
20-39
Lawyers
Over 40
Lawyers
822
947
1,158
1,179
1,455
1,436
288
258
298
277
219
148
Hours
Partners
All Lawyers
Total Expenses
Per Lawyer
Receivables, work in process,
unbilled disbursements
lockup (days)
Chargeable hours in small firms are 200-400 hours or average lower than larger firms,
Total expenses are generally comparable except that larger firms have cost of professional management
included.
Lock up (#days, receivables, work in process & disbursements) as a % of fee revenue is substantially higher in
smaller firms.
2.1.16
IX. Appendix II—Resources
British Columbia Legal Management Association
Founded in 1972, the British Columbia Legal Management Association (“BCLMA”) is a non-profit organization
with more than 80 representatives and almost 200 affiliates representing over 100 law firms from across the
province. The goal of the BCLMA is to provide individuals with opportunities for skills development,
networking and mentoring, all of which benefit the BC legal profession.
The Job Bank notifies everyone of employment opportunities and our Discussion Board allows everyone to get
answers and advice quickly from other legal management professionals who may have been presented with
and overcome similar challenges
BCLMA’s newsletter “Topics” is a quarterly e-newsletter that gets distributed online
http://bclma.org/resources/newsletters/topics/index.cfm to more than 450 individuals, the majority of whom
work in the legal industry. (If you would like to receive this electronic newsletter please contact the managing
editor, Bob Waterman [email protected])
Members are law firms or other companies with legal departments who have enrolled in the BCLMA with
individual full-time employees engaged in the management of legal organizations.
The Administrator/Office Manager will normally direct and supervise the activities of others, or may be a
functional specialist not responsible for the activities of others but who has influence over them, directly or
indirectly.
Other Legal Management Organizations
Association of Legal Administrators: http://www.alanet.org.
Legal Marketing Association: http://legalmarketing.ca/
International Legal Technology Association: http://www.iltanet.org/