Technology has conspired with traditional attitudes to make many lawyers believe they truly can go it alone.
The flexibility offered by word processing and billing software, voicemail, email and other electronic tools is real, but it can become dangerous when combined with an “I can manage 100 cases by myself” mentality. These statements define the problem:
- “If I do it myself, it will get done right.”
- “I always know what needs to be done.”
- “I do everything anyway, so I don’t need help.”
The end result of such attitudes is often an overwhelmed practice that risks everything from inadequate client service to insolvency.
The successful legal practice truly requires a team – even if that is just you and an assistant to whom you can delegate work that doesn’t require your skill and personal attention.
The Essence of Delegation
The most important principle is to delegate “down” to the lowest level of competence you can. That allows you to do the work that only you can do – doing legal work for your existing clients and marketing your practice to potential new ones.
Yes, this does cost something. But, realistically, you are leveraging skills of others at a cost of $X and charging that work out at your $Y billable rate. The profit to you is substantial ($Y-$X) as you build your pipeline of future work.
Delegation is the principle by which a successful practice thrives. Lawyers who delegate can focus more on the work they like to do – whether it’s meeting with clients or writing briefs.
The issue of cash outflow in terms of paying for help is important. But, with more time to market for new business, you usually can get clients (with their higher cash inflow) before or soon after you have to pay for the work you delegate.
The delegation of work to others outside the firm, whether to virtual assistants at the staff or paralegal level or to contract lawyers, is a topic that we recently examined at length. This look at delegation will focus within the firm and cover three basic levels:
- individual staff help from an administrative assistant or a paralegal;
- help from a general administrator who oversees all firm operations; and,
- a associate who does billable work.
Staff Delegation
The starting point for delegation to staff is defining what you need, by asking yourself what you do now that could effectively be delegated, and to whom you could delegate it. Then list the characteristics of your ideal candidate. If it’s a secretary, you should have precise standards for document and file management, technology and software literacy, communication skills and professionalism. If it’s a paralegal you should define the precise areas to be handled (intakes, pleadings, research, deposition summaries) and the skills required to handle them. Knowing what your needs are and what it takes to meet them is essential to finding the ideal employee.
Having a comprehensive job description for every staff position in the law office is essential to delegation.The absence of such descriptions promotes inconsistency and threatens objectivity in job evaluation.
Descriptions should include the specific, significant tasks of each position and the performance standards by which the accomplishment of these tasks is judged.When employees understand what they should be doing and how they are evaluated, their performance is more likely to be positive – and to accomplish your objective in delegating to their position.
Administrative Delegation
Lawyers are traditionally reluctant to delegate responsibility in their practices. In successfully managed law firms, lawyers allow administrators to administer, so that the lawyers can focus on the work that only they can do – serving existing clients and marketing the practice to potential new ones. You need the right person to do the work – someone with the right congruency of skill, work ethic and values – and you need to compensate that person appropriately.
Delegation gives professional administrators the opportunity to do what they do better than lawyers can: manage the resources of the firm, especially human resources.
Years ago, when I was a Chief Operating Officer of a mid-sized firm, I was approached by several partners who said that the woman that we had on the switchboard was very bright, talented, and needed to be advanced. Their idea of advancement was taking the receptionist and putting her into the data processing department. Aside from the fact that I thought that was a demotion, not a promotion, I reminded the lawyers that the receptionist was the firm’s first point of contact with the outside world and that we should not risk replacing her with someone who might not be so good. What we needed to do instead was recognize her, reinforce her value, and increase her responsibility in her existing position. Smart lawyers leave decisions like this to their administrators, and the entire firm benefits as a result.
In most firms the administrators who are responsible for accounting, human resources and similar functions will report to a senior lawyer in the firm – such as the CEO or the Managing Partner – but the reporting relationship is less than ideal.
Most lawyers/law firms as employers act on the premise that all non-lawyer administrators, including such senior managers as the Executive Director or COO, are servants to the law, and that diminishes the senior administrator’s effectiveness. There should be two prerequisites defining the senior administrator’s role in order for the firm to get the most benefits:
- A written statement defining the administrator’s lines of reporting and communication, and the method for evaluating the administrator’s effectiveness. If there are organizational criteria for success (profits per partner, revenue growth, number of clients), it must be clear which ones are considered to be within the administrator’s control, and which ones are not.
- A clear understanding of organizational roles and responsibilities.Typically this should mean that the senior administrator is responsible for profits, organization and efficiency, while senior lawyers – the individual Managing Partner or CEO, or the collective Executive or Management Committee – are responsible for the strategy and future growth of the firm.
Associate Delegation
To sustain and improve their financial performance, law firms typically leverage lower paid associates so that their rates will blend with higher partner rates to create a more cost-effective billing structure for the client.
Leverage is often thought of as applying only to larger firms, but even solo practices must think through the concept. Several years ago I counseled a sole practitioner on devising a growth plan. This lawyer had built a successful practice in just three years, but felt that it was growing so rapidly that she needed to add an associate to keep up. Together we assessed her practice and determined that although the practice’s revenues were growing rapidly, they were still two to three times below the level that could support a full-time associate. The lawyer needed to adjust her rates upward, not delegate to an associate.
The simple fact is that hiring associates to receive delegated work from the partners is not a decision to be made lightly. Associates should not be added to a firm unless it is profitable for the firm to keep them on an ongoing basis. While the new associates may not earn more than they cost the firm in the beginning, at some point that situation must change. In fact, large-firm managing partners agree that it takes, on average, from three to five years to break even on the investment in a new lawyer.
Justifying associates ultimately requires a simple mathematical exercise that too few firms undertake:
Calculate how many hours the firm billed out for them, deduct both direct expenses (bonus, benefits, clerical help, technology, office space) and indirect expenses (the percentage of overhead carried by the firm in items such as rent, insurance, utilities, entertainment, education, etc.). If the bottom line of billings minus costs is not positive, you cannot afford delegating to an associate.
Hours billed - direct/indirect expenses = bottom line. (+ you can afford, - you can't)
The Importance of the Team
In discussing the levels of delegation to staff, administrators and associates, we cannot forget that these people operate at their level of responsibility under the supervision of firm partners, and for the good of the entire firm.
The official commentary to Chapter XVII of the CBA’s Code of Professional Conduct reminds us that, “The lawyer must assume complete professional
Responsibility for all business entrusted to the lawyer, maintaining direct supervision over staff and assistants,” and adds this important caution: “The burden rests on the lawyer who employs a legal assistant to educate the latter about the duties to which the legal assistant may be assigned and also to supervise on a continuing basis the way in which the legal assistant carries them out so that the work of the legal assistant will be shaped by the lawyer’s judgment.”
However you delegate, you must always see the larger picture of teaching everyone in your office – including staff and associates -- those skills (whatever they may be) to enable them to provide better service and enhanced skills to your clients. Once you delegate to others, all of them should be taking hours of education programs each year on how best to serve clients. That is the only way to ensure that their work will be sufficient to meet client needs.
Building a team is inseparable from teaching everyone in your office – including staff and associates – the skills to provide better service and enhanced performance to your clients. Clients ultimately get their understanding of your firm by the way in which you AND your staff conduct yourselves. You should be a team that creates quality service and work product for the benefit of your clients.
Ensuring the client service skills of everyone to whom you delegate work in your office involves them in the financial and organizational life of the firm so that they understand and appreciate their role and look forward to the future.The result will be a better firm both in terms of quality service delivered and financial benefits.
Edward Poll (edpoll@lawbiz.com) is a certified management consultant and coach in Los Angeles who coaches attorneys and law firms on how to deliver their services more profitably. He is the author of Attorney and Law Firm Guide to the Business of Law: Planning and Operating for Survival and Growth, 2nd ed. (ABA, 2002), Collecting Your Fee: Getting Paid from Intake to Invoice (ABA, 2003) and, most recently, Selling Your Law Practice: The Profitable Exit Strategy (LawBiz, 2005).