Year-end planning: Collect Data about Your Clients

Year-end planning: Focus on current clientsFocus on your current clients

Part 2: Tips for year-end planning 

Year-end planning tips. Now is a good time to focus on what needs to be done to wrap up the business year and get a head start on 2017. As an attorney and business owner, year-end can become the most stressful time of year. To help you out, we put together this list of four areas on which to focus between now and year-end, while your business may be slower than normal. Area #2 – focus on current clients.

The last weeks of the year tend to be slow for getting new cases, so use this time to focus on your current clients – your source of income for the first part of 2017.

  • Pick out your 5-10 best clients from 2016. First, define what a best client looks like:
    • Maybe these are the clients that always paid on time.
    • Maybe they always provided you with and returned documents on time.
    • Maybe they referred you other good clients.
    • Maybe they were just genuinely nice people to work with.

Look through your client list and start rating your clients from 2016.

Tip: You need a way to capture this client rating system in your database so you can develop reports on your rated clients. Your law practice management software should have the ability to setup custom fields. These are a great tool for capturing this data. When you produce the report and are able to separate where your revenue for 2016 came from, you will probably see that 80% of your revenue came from these best clients. But without capturing this data – you will never know.

After looking at your list of “A” rated clients, pick up the phone and call them. Let them know they were/are one of your best clients and you enjoyed working with them. If appropriate, offer to take them out to breakfast in January and set up your first business development meeting for 2017. Also, keep this list in a place where you can review it every week and continually ask yourself “How can I get more clients like these?”

Current Clients are a Potential Source of Income for 2017

For your current clients, who are your source of income for the next few months, do something memorable when sending out their December invoice. Prepare a case summary, outlining and highlighting tasks completed, milestones reached and any upcoming dates and deadlines. This is a way to remind them of the work you have done on their behalf and may make paying the bill a bit easier.

Tip: For estate planning clients, the holidays are the time of year when children are getting engaged and they will have the need to update their estate planning documents. Using your nicely organized client database, run a list of estate planning clients who have children around the age of getting married. In their letters, include a note about your services for young couples.

Is your database not that well organized? Well then, you have a new goal for 2017: start capturing more data about your clients so you can make better strategic decisions. CPN Legal can help you set up processes to capture more data. Give us a call if you’d like to discuss this and prepare for a great start in 2017 for your business.


 

Peggy and Chris Gruenke are co-owners of CPN Legal, a company whose mission is to help solo and small-firm lawyers build better businesses. Peggy is active in the ABA GPSolo Division, where she heads the technology committee and is vice-chair of the national conference committee. Follow her on Twitter @PeggyGruenke.

Year-end planning for lawyers: Your cases

Focus on successPeggy Gruenke | September 2016 | Law Practice Management for Solos

Getting Ready For Year-End: Review Your cases

It’s September and year-end is quickly approaching. All of those good intentions you had in January to organize your law firm will now be put to the test. Before your schedule is consumed with holiday activities and last-minute travel plans, now is a good time to focus on what needs to be done to wrap up the business year and get a head start on 2017. As an attorney and business owner, year-end can become the most stressful time of year. To help you out, we put together this list of four areas on which to focus between now and year-end, while your business may be slower than normal.

  1. Your cases
  2. Your clients
  3. Your finances
  4. Yourself

Your Cases

Like other small businesses, many law firms don’t evaluate their business situation in real time. Either they review their results after they’ve occurred or not at all. Being able to evaluate your cases implies you were collecting data along the way, whether in your law practice management software, using Excel spreadsheets or if you even still use paper. So in our first area of reviewing your cases, here are some questions to get you started:

  • How many new cases have you gotten in 2016, by practice area?
  • What cases were more profitable?
  • Did you hit any home runs – have that one big case?
  • What cases did you enjoy working on the most?
  • What case was your biggest headache?
  • Who referred you the most and best cases?

Asking yourself these questions will help you look back and reveal the some strengths and weaknesses in your business and what may need to be put in place for 2017. Continue reading

Implementing project management in your firm: A few tips to guide you

Project Management Flow ChartMarch 2, 2015 | Peggy Gruenke | Practice Management Consultant | ABA Legal TechShow Speaker 2015

Project Management = Matter Management

Project Management is quite the buzzword these days. The ABA recently published a new book, The Power of Legal Project Management, which has resulted in a number of articles and new CLE programs related to this topic. Legal Project Management is a very broad and deep topic, (the book has 517 pages!), the focus of this article is to create the mindset that legal project management is nothing more that matter management. I’ll explain the basic components of matter management and how it can bring a competitive advantage to your firm.

While Legal Project Management (LPM) has been adopted by most larger firms, a new trend is developing where smaller firms are looking to improve profitability, billing realizations and gain a competitive advantage by designing and using matter management tools. The practice areas best fit for project management are litigation cases and even larger transactional cases. Over the next 5 to 10 years, matter management tools will become a normal way of doing business just like today, how client intake and fee agreements are part of every current law firms’ tool bucket.

At the basic level, matter management involves defining, planning, executing and evaluating. The reason it is growing rapidly, is it can be a competitive advantage in the following areas:

  • Enhance current client relationships by showing them your proactive approach to handling their matters
  • It provides a better way to monitor fees and costs
  • Improve communication with clients and eliminate surprises
  • Deliver greater value to clients by reducing clients’ total legal costs
  • Reduce the average cost of certain types of cases through the development of processes
  • Manage and share the risk
  • Increase profitability and realization rates
  • Improves financial reporting because you are capturing more and better data – key metrics
  • Develop better internal business practices and increase efficiency
  • Build good processes to increase productivity
  • Gain a better understanding of how you are getting things done

Continue reading

Year-end planning for lawyers: Focus on your financial data

December 22, 2014 | Peggy Gruenke | Law Practice Management Consultant

Year-end planning: Focus on current clients

So what can you focus on in December to help evaluate your 2014 numbers and plan for a stronger 2015?

  1. Run the accounts receivable report and spend time on collections.

Looking at this past due invoice report, there may be another “oh crap” moment but also a sense of hope. This money, if collected, could be in your next paycheck before year-end and the holiday spending season.

December can be a tough month to do collections and you may be kicking yourself for not having been doing this all year or at least starting earlier. In December, clients are focused on the holidays and upcoming expenses related to gifts and parties. But it is also the time of year when companies give out bonuses. So your client may have an additional source of revenue in December to pay your invoice. Provide a small incentive and consider offering a discount if paid before year-end. If you represent businesses, they are usually looking to pay all their expenses before year-end, so do them a favor and send their bills frequently during December.

Tip: On active cases, bill every two weeks in December but include a letter explaining why the change in your billing process. You are a small business owner. They should understand and respect the fact that you are being proactive and working on your business’ year-end.

Here is an article that contains many more tips about year-end collections. (I can give you a link to an article I wrote about year end collections)

  1. Review what is in your Trust account.

This is a great time of year to make sure you have been diligent about moving money from your trust account to operating account as fees were earned. It also great time to make sure all of your client ledgers are in balance.

Run your Work in Progress (WIP) report and see if there is any time or expenses sitting out there that you can invoice and pay yourself, transferring Trust funds to operating before year-end.

If you have money in client ledgers, run their individual client ledger report and send them a copy so they have a current record of all the transactions during 2014. This is also a great opportunity to stay in touch with your current clients and show them you are on top of things. Continue reading

Clio Turns Tasks into Processes: Sample Settlement Process

Dec 9, 2014 By Peggy Gruenke, Certified Clio Consultant and Xero Certified

This year, Clio introduced a new way to do tasks which, coupled with the Gmail integration, has pretty much brought a whole new level of organization, efficiency and productivity to getting work done with Clio. Task management was an area Clio needed to give a facelift and the Clio team gave it more than just a facelift. Clio’s new smart, cascading tasks feature saves you a lot of time, knowing exactly what you need to do with each new matter or milestone within a matter instead of having to create the same tasks every time.

Now you can turn all those well-written processes you have in your firm manual into auto generated processes and tasks. Sounds a bit like project management. Here is a sample of setting up a settlement process using Clio’s cascading tasks,  managing how it gets done, when it gets done and who will be doing it. Managing the resources, the time and the workflow.

There are certain types of funds that require special handling. Settlement funds fall into this category. There are ethical duties a law firm must adhere to when handling such funds. Clio has great tools to help you manage client settlement funds. These tools ensure proper accounting procedures are followed and the transactions are correctly recorded in the client trust account.

When processing settlement transactions, there are usually many pieces of the puzzle that need to fit together in the right sequence and with the correct calculations. The more you can automate this process, the less chance for errors. This article will illustrate how to use Clio to correctly and efficiently process settlements using two Clio features:

  1. Document templates with custom fields
  2. Task Templates and Cascading Tasks

1. Creating a Settlement Worksheet Document Template

For complete details on how to create and upload an Excel document template, here is a link to a Clio support article.

The settlement worksheet includes defining matter custom level fields and creating a matter custom field set. From the Settings/Custom Fields, add the following matter level custom fields:

  • Settlement Offer Amount (Type = Money)
  • % of Settlement for Attorney Fees (Type = Integer)
  • Settlement Check Amount (Type = Money)
  • Settlement Check # (Type = One Line Text)

Then create a custom field set called Settlement Fields and include the above fields in this custom set.

custom fields settlement 1

Create the template with Clio form field names and upload the Excel template to the Clio Documents/Template. The template will look like this; note the color-coded key regarding fields.

custom fields settlement 2

 

Continue reading

Back to Basics: 20 Tips to empower your practice

Back to basicsBy Peggy Gruenke and Alan Klevan

There is so much talk about technology in law firms, Alan and I  thought we’d take a step back and focus on some basics skills to improve your practice. Your turbocharged office should NOT be solely turbocharged with technology. So here you go.

Write a simple business plan – for you, not the bank or a potential business partner.

The goal is for you as a business owner to see the big picture and understand exactly who you are, why you’re unique, and who you are equipped to serve. Creating it will help you answer questions like “Do I have a profitable business?” or “Am I making money?” or “Am I spending too much?” or “How can I get more clients?”

Build a budget.

Without a budget you are flying blind. Create some basic financial spreadsheets that help you keep an eye on where you are spending money and how much money is coming in. If clients are paying but bank account remains low, it may be a sign to look more closely at your monthly expenses and cash flow. (Link to my article Mid Year Financial Checkup) Don’t get bogged down in details. It is paralyzing. Starting today, add a column for current month and start entering your expenses and money received. This document will evolve over the months, but at least you now have a place to keep an eye on your business.

Know how much money you need to make each month in order to keep the doors open.

You should know this number by heart. If you don’t know this number, go back to #2 and build your budget. It should be written down where you can see it every day. Put it on your wall or on your computer screen. Put a picture of your family or next vacation spot next to it. Then, everyday write down how much money came in and keep a running total so you can see how close you are to reaching your monthly “need to collect” number. This number is your “monthly nut.” Any amount over that number is your money to take home. Continue reading

Lawyers, do you have a game plan for your business?

Nicole at NAL

 

 

 

 

 

 

We have a daughter that for the last 16 years has been in the equestrian world of show jumping. My husband and I have great respect for her ability to enter the show ring always having a plan for how she will ride the course. In show jumping, your goal is to complete the designed course, which consists of a number of jumps or obstacles, in the fastest time, staying on course and without knocking down any rails. It requires a clear vision, a plan, and a strategy with the ability to execute and adjust when things go awry and still complete the course. Before she goes into the ring to compete, she has evaluated the competition, the course and the best path to ride. Simply put: she and her horse have a game plan.

So how well are you doing with your plan to grow and manage your law practice?

Whether a solo, an associate or a partner within a firm, you have to always have that mindset of being a business owner. A partner today may be a solo tomorrow. To grow your business, you have to focus on how to get business, deliver services, get paid and make money. This focus leads to developing clarity around what you do and how you ride the course.

While most lawyers want to have more business and grow, it is amazing how many I talk to that have not taken the time to develop even a simple business plan. As a result, the business is without a focused direction or clear strategy. And businesses without clarity about what they do, will not be as successful as a business with a game plan. Just like a rider going into the show ring without a vision and strategy will most likely fail at completing the course.

So, much like our daughter preparing for the show ring, the answer to questions like “How can I get more clients?” or “How can I find better clients?” or “Am I profitable?” begin with having a game plan. In the business world, these components are cleverly disguised as a business plan. Do you have one? A great business plan is not some pie-in-the-sky document full of impressive prose. A business plan can be as simple as a one-page document outlining the actions you will take to be successful. The key is does it provide clarity and serve as a guide for future actions and decisions.

You see, the trouble with most business plans and the reason people don’t want to create one is they are often written for someone else – a banker, an investor, or a potential partner. Instead, I say write it for yourself. It’s your chance to think through the challenges you are facing and commit to a plan of action. Form doesn’t matter.

This short article is not here to tell you how to write a business plan, but instead, to get you thinking about how clear or unclear your own business strategy may be. Maybe the end result will be that you decide to develop a game plan to help guide your business on a course for growth.

Whether just starting out or if you have been practicing for a few years, why write down your game plan? Continue reading

Focus on managing processes, not managing time

October, 2014 By: Peggy Gruenke | Law Firm Practice Management Specialist | Gold Level Clio Certified

Recently, I participated in an interview with the folks from The Form Tool on “How can the Legal Industry Improve Efficiency?” The discussion took me down the path of looking closer at the concept of time management verse productivity.

I think there has been a shift away from the phrase “time management” to a focus on productivity and processes. If you look at time as something to be managed, it can become a productivity constraint. You are always looking for the next new way to file and label things to help you get it all done. The truth is you can’t get it all done. You are a limited resource. There will always be more to do, more tasks to add to your list. And as a lawyer, building a business, you hope that the tasks never run out because that would be a bad sign.

Get more strategic and intentional

Being able to recognize you can’t get it all done can be very empowering because it demands you become more strategic and intentional about what you are going to do and how you are going to do it. The focus shifts from managing your time towards examining the “why” and “how” things will get done.

  • Why are you doing the task: is it something only you can do and will it add value?
  • How will you do it: do you have an efficient process in place?

This shift forces you to look at your to-do-list with the intention of prioritizing and taking action. Out of the desire to get more done, your actions will lead to developing and creating efficient processes.

As you identify activities that have the highest value and are the best use of your time and then build good processes, you will be more productive not because you managed your time better, but because you chose better and acted with purpose.

Your ability, everyday, to determine and act upon your most important tasks and get them done quickly, because you have have good processes in place, will have more of an impact on your productivity and success than trying to manage your time.

Peggy Gruenke | Clio Certified Consultant | Law Practice Management

The Evolving Role of a Paralegal in Today’s Law Firm Landscape

Paralegal

October 9, 2014 By: Peggy Gruenke, Law Practice Management Specialist

Like so many areas of the legal industry, the role of the paralegal has changed dramatically in recent years. Paralegals have always taken on tasks that do not require an attorney’s hand for completion, such as drafting complaints, motions, and responses. These tasks are the basic skill set that any trained paralegal should know how to complete. This skill set is not extraordinary. It’s the norm.

So where are the opportunities for paralegals to become more integral and successful? There are countless ways to add value to your firm beyond the basics. In this article, I’ll focus on basic client communication skills to help ensure a great client experience that will lead to future services or referrals and thus a more profitable practice for your lawyer.

Here are some tips to help you take it to the next level and become a real asset to your attorney’s practice.

Your role in client selection and engagement:

Client selection is so important to laying the foundation for a successful and profitable engagement. You can assist your attorney with process by working with him/her to create and implement some of the following:

  • Design a client-screening questionnaire that asks basic questions of prospects. The purpose of this form is to identify any red flags before your attorney wastes time with a free consultation. For example, asking for a prospect’s phone number and full address. If they balk at giving this information then ask yourself, “Why should my attorney give away 1 hour of his time if they are not willing to give this information to you?”
  • Consider creating a new client welcome packet
  • Create editable client intake forms using Adobe and setup these forms based on practice area. Each type of practice area has different key information that needs to be captured during the initial client meeting.
  • Create open file checklists so with every new case you are consistently completing tasks.
  • Try your hand at creating a fee agreement template form in Word so for each new case you are starting with a fresh document instead of cutting and pasting, which can lead to errors.

Your role in managing cases:

I call this understanding the economics of a law firm. This is where the you can become an asset to your attorney by helping in the following areas:

  • Understand how client’s fees are set and how expenses are billed.
  • Understand the billing cycle – from the time hours are entered, to client being billed and money actually collected.
  • Understand the importance of retainers and encourage your lawyer to request and get them. Also, learn as much as you can about trust accounting and the rules for you state. A bonus skill!
  • Understand that for each billable hour, the amount actually collected is determined by how much actually got put on the bill and how much actually got collected. This is referred to as billing realization rates and collection realization rates.
  • Understand the role you can play in making sure all billable time is captured, properly reviewed and discounts are minimized.

Your role in risk management

  • Adopt and use good calendaring and task management processes and be the gatekeeper so appointments, deadlines, court-filing dates, statute of limitations are not missed.
  • Create a system for assuring fee agreements are sent and signed copies are received and saved, along with retainers requested.
  • Notice when a client relationship is headed south and be proactive in talking to your lawyer about things you are noticing.

Your role in understanding and using technology

Here lies the greatest opportunity for paralegals to add value to a law firm. This can become your competitive advantage. I think it is a save bet to say that legal technology is the most talked and written about area in the legal industry. And it can also be the topic for a whole separate article. So for this article, I want to leave you with a list of resources you can use to increase your knowledge in this area and really make a difference.

The following list of websites and blogs is a nice place to start for learning about technology in the law firm:

Thanks for reading and learn more by following me on Twitter @PeggyGruenke andsign up to receive my newsletter.

 

Would You Pass a Trust Account Audit?

By Peggy Gruenke, Owner LegalBizSuccess | On Twitter

ChecklistRecently, there was an article in Attorney-at-Work regarding random trust account audits. We all know mismanaging a trust (IOLTA) account can have terrible consequences. However, while it seems to be discussed in theory, most attorneys receive little or no training on how to manage a trust account before opening one of their own. Law schools don’t address this in enough detail based on the blank look I get when I mention trust accounting to new grads. Only the enlightened the bar associations conduct a hands-on, mud up to your elbows, trust accounting class for all new lawyers. (I think they need to turn it up a notch and get a little muddier.) All of which begs the question, “Are your trust accounting practices sufficient?”

If you are in doubt as to whether you are at risk for disciplinary action regarding mishandling of client funds, here is a mini checklist and items you can start implementing today:

Do you maintain separate client ledger for each client’s money held in trust?

You better. Ethics rules require keeping an individual ledger for each client so specific funds can be identified. So make sure you have the ability to do this – even if it is a simple spreadsheet. If you are not good at accounting and QuickBooks, there are great practice management software packages available today to help you manage these funds and stay in ethical compliance.

Does your invoice include an accounting summary of your client’s trust funds?

This is simple and your practice management system should have this feature available. You have a duty to notify your client how and when you used their funds and keep detailed and accurate records. Below is a sample of what you should be including on an invoice where client trust funds were used.

  1. Invoice detail of work performed (time entries)
  2. Total amount due (new charges)
  3. Amount applied to pay the invoice (payment)
  4. Remaining client trust balance

If your invoicing software does not allow you to create a custom invoice template (like above), then you can include with the invoice a report called “client trust ledger report” which is basically a spreadsheet showing all deposits and withdraws and current trust balance.

Best practice tip: After applying the trust funds to the invoice, send the client an updated invoice, which includes the amount of retainer applied and the balance remaining in trust. If the balance is zero or approaching zero, you should also include a letter requesting additional retainer money be deposited (if you are anticipating more work to be done.)

Trust Accounting Statement Clio

Do you accept credit card payments for retainers deposited into your IOLTA account? And if so, how do you account for the credit card fees?

Does your credit card company allow for credit card fees to be deducted from your operating account? If not, are you keeping a reserve in your IOLTA account to cover these fees and then properly recording them when entering the deposit? (Side note: This is the one exception to the rule regarding lawyers depositing their own funds into IOLTA accounts: it is acceptable for a lawyer to deposit their own funds into the IOLTA account to cover the payment of bank fees, including credit card fees.)

Do you know what a 3-way trust account reconciliation is and how to do one?

A 3-Way Reconciliation means that your IOLTA Bank Balance matches your Checkbook Trust Balance and they both match the Sum of all Individual Client Ledger Balances. Most accountants do not understand 3-way reconciliations. That’s no excuse for your lack of understanding. You have fiduciary responsibilities and you cannot delegate this responsibility. Here is a simple spreadsheet to use for a 3-way reconciliation.

Where do you deposit flat fee payments? Not all flat fees are created equal.

This fee may be deposited in the trust account until earned or, upon full disclosure and client consent (in your fee agreement), may be treated as earned upon receipt and deposited in the operating account. This is a common practice for criminal cases. In some states, even litigation tasks billed as flat fee tasks and clearly communicated in your fee agreement can be earned upon receipt. Check you individual state ethics rules.

Best practice tip: Upon receipt of the money, create a flat fee invoice, apply the payment and provide the client with a copy of the invoice.

If your flat fee is for work that involves multiple steps, like bankruptcy filings, then it is better to deposit the flat fee into a client’s trust account and withdraw when reaching specific events or milestones. Again, as outlined in your fee agreement.

One last tip, something that actually came from an attorney who suffered through the Katrina disaster.

On each check you receive that will be deposited into your IOLTA account, write on the memo line of the check: Client Name and Matter. May seem obvious to you now, but if a disaster struck and you had to re-create your IOLTA accounting records, there is no way you will have remembered this information.

Thanks for reading and happy reconciling!

With over 30 years experience in the legal environment, as an entrepreneur/business owner and an IT consultant, Peggy has combined her experiences to bring results and a competitive advantage to law firms assisting solo and small firm attorneys in building their businesses. Peggy focuses on the solo/small firm lawyers with the delivery of practice operations services, including practice management, technology, marketing, financial services and business development.  Peggy is an avid cyclist for JDRF, Gold Certified Clio Consultant and Xero Certified. She serves on various industry associations.