News
Law Practice
Feb. 21, 2002
Outsource, Realign Tasks for Profitability
Dicta Column - By Barbara Lewis and Dan Otto - As a law firm grows, it requires more people with specialized skills. The sole practitioner can survive with an assistant writing a few checks each month for bills. However, as a firm obtains more employees, equipment and work, these tasks grow in complexity. The assistant who wrote a few checks a month may soon be inundated with bookkeeping tasks as the firm grows.
Dicta Column
By Barbara Lewis and Dan Otto
As a law firm grows, it requires more people with specialized skills. The sole practitioner can survive with an assistant writing a few checks each month for bills. However, as a firm obtains more employees, equipment and work, these tasks grow in complexity. The assistant who wrote a few checks a month may soon be inundated with bookkeeping tasks as the firm grows.
Although this assistant may not mind continuing to handle the bookkeeper function, he or she may not be trained in bookkeeping. Yet there may not be enough work for a full-time bookkeeper. So what should a firm do when it needs specialized skills but is not certain it needs to hire a specialist?
This is a common question today as firms that laid off people last year are seeing work pick up again. One of the best ways to determine if you need a full- or part-time person is to have employees keep time sheets for four weeks. Advise employees about the importance of accurately tracking their time, and that the goal is to realign tasks, possibly, and hire additional people. At the end of the month, analyze the time sheets and organize the tasks by function. If the assistant spends three hours or more a week on bookkeeping tasks, consider hiring a part-time bookkeeper or outsourcing the three hours of work.
Time sheets also can help discover other problems in delegation of tasks. In a recent time sheet analysis, we discovered that 30 percent of a partner's work was secretarial in nature and 20 percent of a secretary's work was clerical. This indicates a lack of proper delegation and incorrect alignment of tasks, which affects the profits of the firm. Moreover, approximately five hours a week were devoted to bookkeeping functions, which justifies outsourcing the bookkeeping work.
Other areas where outsourcing is viable include collection, marketing, payroll, computer maintenance and photocopying. Legal work can be outsourced as well. Contract attorneys and appearance attorneys are staples in many law firms.
Contract attorneys can be used as firms begin to obtain additional work. These are often attorneys who were laid off from firms that did not have enough work for them. Others may be permanent contract attorneys such as mothers who don't want to work full time or people who have lifestyles that preclude permanent positions, such as those who actively pursue hobbies.
Firms benefit from contract lawyers because they are paying only for those hours that the contract attorney bills. With a 100 percent to 400 percent mark-up between the fee paid to the contact attorney and the amount that can be billed to the client, the contract attorney is extremely profitable. And there are no benefits to pay.
A number of firms find it less expensive to use appearance attorney services for representation on routine matters in both local and remote courtrooms. Appearance lawyers save the firm's lawyers from having to wait in traffic and then wait until the case is called for local appearances, and from spending the day traveling to and from remote appearances.
Barbara Lewis and Dan Otto are co-founders of Centurion Consulting Group in Los Angeles, which assists firms with business planning, finance, operations and marketing. They can be reached at www.centurionconsultinglaw.com.
By Barbara Lewis and Dan Otto
As a law firm grows, it requires more people with specialized skills. The sole practitioner can survive with an assistant writing a few checks each month for bills. However, as a firm obtains more employees, equipment and work, these tasks grow in complexity. The assistant who wrote a few checks a month may soon be inundated with bookkeeping tasks as the firm grows.
Although this assistant may not mind continuing to handle the bookkeeper function, he or she may not be trained in bookkeeping. Yet there may not be enough work for a full-time bookkeeper. So what should a firm do when it needs specialized skills but is not certain it needs to hire a specialist?
This is a common question today as firms that laid off people last year are seeing work pick up again. One of the best ways to determine if you need a full- or part-time person is to have employees keep time sheets for four weeks. Advise employees about the importance of accurately tracking their time, and that the goal is to realign tasks, possibly, and hire additional people. At the end of the month, analyze the time sheets and organize the tasks by function. If the assistant spends three hours or more a week on bookkeeping tasks, consider hiring a part-time bookkeeper or outsourcing the three hours of work.
Time sheets also can help discover other problems in delegation of tasks. In a recent time sheet analysis, we discovered that 30 percent of a partner's work was secretarial in nature and 20 percent of a secretary's work was clerical. This indicates a lack of proper delegation and incorrect alignment of tasks, which affects the profits of the firm. Moreover, approximately five hours a week were devoted to bookkeeping functions, which justifies outsourcing the bookkeeping work.
Other areas where outsourcing is viable include collection, marketing, payroll, computer maintenance and photocopying. Legal work can be outsourced as well. Contract attorneys and appearance attorneys are staples in many law firms.
Contract attorneys can be used as firms begin to obtain additional work. These are often attorneys who were laid off from firms that did not have enough work for them. Others may be permanent contract attorneys such as mothers who don't want to work full time or people who have lifestyles that preclude permanent positions, such as those who actively pursue hobbies.
Firms benefit from contract lawyers because they are paying only for those hours that the contract attorney bills. With a 100 percent to 400 percent mark-up between the fee paid to the contact attorney and the amount that can be billed to the client, the contract attorney is extremely profitable. And there are no benefits to pay.
A number of firms find it less expensive to use appearance attorney services for representation on routine matters in both local and remote courtrooms. Appearance lawyers save the firm's lawyers from having to wait in traffic and then wait until the case is called for local appearances, and from spending the day traveling to and from remote appearances.
Barbara Lewis and Dan Otto are co-founders of Centurion Consulting Group in Los Angeles, which assists firms with business planning, finance, operations and marketing. They can be reached at www.centurionconsultinglaw.com.
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