Ever
felt daunted by the swift and aggressive pace of change in legal practice
lately, especially if you are based in a small firm? Have
you been faced with doubts over your choice of livelihood at a time when
everything around you seems to be on a fast-track into the unknown? N
Sreenivasan addresses this concern by reminding us of our essential role as
lawyers and provides timely and prudent suggestions for the survival of small
practices in the existing climate.
The
practice of law has become increasingly hectic. We often hear the lament that
our fellow lawyers are too difficult, that clients are too demanding and that
the courts are moving too fast. Information technology and changes in the Rules
of Court have placed increased burdens on litigators. Undercutting and
discounting, together with low volume and low prices, have hit the conveyancers
hard. This will get worse if the scale is freed. Even large blue ribbon
corporate firms have anxieties — what will happen when the joint ventures take
off and move aggressively into the market. ‘If I could start again, I
wouldn’t be a lawyer’ was a thought that crossed many minds, including mine.
‘There
is nothing to fear but fear itself’ were Roosevelt’s inspirational words in
the midst of the Great Depression. Fear of change, fear of the unknown and fear
of the new are fears that people in every day and age have faced. It is possible
to overcome this fear and the adrenalin generated by this fear can be put to
good use by using it as an impetus to focused efforts to change.
Remembering
the Essentials
We
are service providers
The
essentials have not changed. As lawyers, we provide services to our clients. In
a society governed by law and where transactions are enforced by law, we act as
the representative of the client; we do for them what they would have done but
cannot do for themselves. We are limited only by our duties as officers of the
court and rules of ethical behaviour.
We
do not handle cases or matters as if they have a life of their own; it is the
client’s interest that we have to advance. The key step, therefore, is to
understand the client’s objective, his constraints and his perception of the
matter. This would then have to be translated into a course of action for the
client to take, bearing in mind the facts and the applicable law. Finally, there
is implementation or execution of the course of action, with review and
reassessment along the way.
As
lawyers, we are no longer viewed with awe. Clients understand why we do things
and what we do, even if not how we do them. They expect explanations and having
taken fees, we are obliged to give these explanations.
The
Americans call their lawyers ‘counsellor’; even the Mafia calls them ‘consigliori’.
This encapsulates the essence of our work, be it in litigation, corporate law or
conveyancing.
Information
technology is here to stay
IT
advances are so rapid that many of us are tempted to throw our hands up in
despair. It is necessary to identify which areas of IT can be categorised as
‘need to know areas’ and which areas are ‘nice to have’. By being
discriminating about the knowledge and hardware and software to be acquired, the
little time that we have can be put to good use. Use of the Legal Workbench and
the Electronic Filing System (‘EFS’) are areas which we need to know; it is
nice to have knowledge of setting up your own web site.
IT
is a tool, not an end in itself. IT should therefore be seen as one of the means
to render our services more effectively. Acquisition of IT assets and knowledge
should be carried out based on the nature and type of the respective practices.
Marketing
Getting
clients and new work is the lifeblood of any practice, be it large or small. In
the small practice, we look forward to having a steady flow of work. Smaller
firms which have experienced steady growth and those who have achieved a stable
balance have one thing in common, namely, that the ‘80-20’ rule is at work.
The 80-20 rule is that 80% of new work comes from existing clients or referrals
by them. Sadly, most of us spend 80% of our time courting new clients.
Increasing
costs
When
we look at decreasing profits and income, the first thought that comes to mind
is reducing expenditure and overheads. We must accept that IT costs money, that
legal associates expect more pay (and readily move when it is offered elsewhere)
and that even our old, faithful staff expect annual salary increases. This means
that costs will increase as the practice gets older and bigger.
When
my firm consisted of 4 lawyers in 900 square feet, partners took home 67 cents
on every dollar of gross revenue. With 12 lawyers today, the partners are
fortunate to take home 45 cents on every dollar. Partners in large firms deem
earning 35 cents on every dollar as efficient.
Whither
the Small Practice
Get
personal
The
personal nature of the services that lawyers provide gives smaller firms an
edge. There is no point in trying to compete with the giants in terms of posh
meeting rooms and the sheer firepower of teams of briefcase-carrying associates.
What we can offer is the hands-on commitment of relatively senior practitioners,
who know the client’s fears and concerns and can address them. This is
particularly so as clients are becoming increasingly conscious that it is the
lawyer, and not the firm, that counts.
Support
staff play a key role. They should be briefed on the ongoing matters in detail.
When the lawyer is not available, the client often speaks to secretaries and
clerks. When the support staff are knowledgeable and helpful, the client knows
that the firm is behind him.
Refer
work to other lawyers if it is outside your area or if you are too busy. This
helps you to keep the client and tells the client that his interest is
paramount. Keeping track of the matter is also important as the client will
still call you. You can also help the other lawyer, with your knowledge of the
client and his affairs. The alternative is for the client to find another lawyer
on his own; if he finds the wrong one, it is to his detriment, if he finds the
right one, you may lose your client for good.
Get
IT savvy
As
stated earlier, IT is a tool. The first step is to identify the areas where IT
can help a firm to work better or faster. Before identifying the tool, the job
to be done should be ascertained. Areas which are time consuming or where rapid
retrieval is essential include legal research, maintenance of client data,
creation and maintenance of precedents and document preparation. There are
also areas like E-stamping and EFS, where the use of IT is mandated.
One
possible solution for smaller firms is a simple office network, with a server.
This allows intra-office emails and retrieval of documents. Precedents can be
centrally stored and made accessible to all. Drafts can be amended or
circulated. Less IT savvy lawyers can have specific settings in their personal
computer, to make their own document preparation ‘idiot proof’. At a
minimum, manpower requirements can be reduced.
A
client database allows tracking of who the clients are, what their cases are
about and their payment record. It allows tracking of the location of files, for
example, whether closed, and whether warehoused. At its simplest, Christmas and
New Year card address labels can be generated.
A
stand alone terminal may be best for on-line uses, such as the Legal Workbench,
EFS and E-stamping. This ensures control, while retaining convenience and
minimising costs.
With
the Legal Workbench, there is immediate access to all local cases; in one fell
swoop, the solo practitioner becomes as effective as a team of young associates
working until 10pm.
For
the criminal practitioner, the latest version of a statute, with its history of
amendments, is available. Reports such as the All England Reports and the Weekly
Law Reports are available on CDs. This makes research much easier (by
catchwords) and allows access without having to mantain a large library.
The
costs are not prohibitive. The hardware for using the EFS, E-stamping and the
Legal Workbench is the same. A cheap but sufficient set-up can be procured for
$8,655 (assuming that all your equipment is new). The learning curve for the
lawyer may be somewhat more painful, but once he embarks thereon, it is not all
that daunting.
Get
in touch
Using
the 80-20 rule, the greatest efforts should be directed at existing clients.
They know you and you know them; there is no need to buy expensive lunches or
have nights out on the town.
Keeping
contact with clients is important bearing in mind the old adage: out of sight,
out of mind. All of us have had the experience of losing contact with an old
client and running into him on Orchard Road. Within a week or two, he gives new
business or refers someone. This is not coincidental; having just met you again,
you are fresh in his mind. The idea must therefore be to remain fresh in your
client’s mind, rather than rely on chance encounters.
'Mind
your database, mine your database’. This means that your client database
should be maintained, with up to date changes in telephone numbers, job title
changes or changes in employer and changes of addresses. Recently, I sent a
greeting card to a client’s old address; the client had bought a new home, we
had acted in the conveyance, but did not change the address in the database upon
completion. Simple errors such as this, when compounded, would mean an out of
date and, therefore, ineffectual database.
Regular,
planned contacts with selected clients is essential. As the clients of smaller
firms grow, they become the target of marketing efforts of larger firms. Keeping
in contact, with subtle reminders of who their friends are, is helpful.
Clients
should also be kept informed of changes in the firm. New partners, new areas of
practice, associations with other firms to provide a wider scope of service and
an ability to refer work to appropriate lawyers are things that remind the
client that his smaller firm practitioner is able to support and service him.
Updating clients on changes in the areas of law which are of interest to him
reinforces this. With the widespread use of email, this is not very difficult,
assuming that one’s database has been properly maintained and contains
clients’ updated email addresses.
Get
productive
Salaries
form the largest overheads for most firms. Large firms now employ fresh lawyers
on starting salaries of between $3,800 and $4,000. This has put pressure on the
starting pay of smaller firms, which has increased to between $2,500 and $3,000.
This, in turn, necessitates an increase in the pay of existing legal assistants.
In addition to lawyers’ salaries, staff salaries slowly but steadily increase.
To put it bluntly, nothing can be done about this. The people in the firm create
revenue, and cutting lawyers and staff would probably make matters worse.
The
objective then must be to increase revenue, without increasing manpower, that
is, to become more productive. The increase in revenue can be obtained through
better contact with clients. Avoiding a corresponding increase in overheads can
be achieved in several ways.
Use
experienced staff and paralegals effectively. Routine documentation in areas
like debt collection can be handled by non-lawyers, under the supervision of
lawyers. Training which focuses on helping staff to understand the various
stages of the litigation process can reduce mistakes and increase efficiency.
Chartered company secretaries can handle corporate secretarial work. Good
conveyancing clerks not only prepare the documentation, but can alert lawyers
early to potential hitches. While good staff does not come cheap, they do not
expect the high annual increases that lawyers invariably seek.
Lawyers
are often taken for a ride by clients because we often work first and take money
later. Helping needy clients in a good cause is one thing, but being taken
advantage of is quite another. Pro bono cases should be identified and treated
as such; all other cases should be treated commercially. This means taking
initial deposits, interim billing and final invoicing commensurate with the time
and expertise applied. Lower bills for valued clients makes sense; lowering
bills for troublesome clients only encourages them.
Using
discounting and waivers as means of attracting business serve no purpose. While
there is an increase in volume in the short term, the firm does not receive
value for its efforts. In the long term, clients get unrealistic expectations
and force further reductions in fees, to the detriment of all. Lowering fees, as
opposed to maintaining or improving the quality of professional services, is not
in keeping with maintaining an honourable profession.
Continuing
professional development is necessary for productivity. At a basic level, it
helps to avoid mistakes, which cost time and money to rectify. Being up to date
increases the quality, and hence value, of the services provided to clients.
Widening one’s knowledge allows greater scope in the services that we provide.
Conclusion
The
original title of this article was ‘The little train that could’, having
been inspired by a bedtime story I recently read to my 4-year-old son. Faced
with a daunting hill, the little train chugged and chugged on, tooting to itself
‘I think I can, I think I can, I think I can, I will’. It could. And so can
we.
N
Sreenivasan
Derrick
Ravi Partnership