Law Firm Operations

If you’ve been following along, this is the third part of our blog series where I’m trying to help you answer the question that I asked myself for years in building a firm: What are all of the areas of the business that I should be touching regularly (daily/weekly/monthly) to give myself the best chance of building a successful firm?   

What does that mean?  Well, it all starts with the fact that a law firm is a business, and just like any other business, to be successful, you have build-out Operations, Finance, Practice Management, Marketing, IT, Recruiting and Benefits.  Once you do that, you have to tie them all together into a set of marching orders for you and your team – aka, a strategic plan.    

Today, we are going to tackle Operations. If you find this blog TLDR (I get it), no offence taken here.  The upshot:  Operations is made up of hundreds of small tasks that must be completed daily/weekly/monthly to keep the business running profitably and smoothly.  Your challenge is to figure out how to efficiently ensure that those hundreds of small tasks are completed on time.

Operations looks different as you grow your firm.  In the beginning, you are probably running operations. Once you start to hire attorneys and staff, you might delegate some of that work to an Office Manager that may not have deep business experience but can juggle many of the operations tasks. You are still very involved by providing input, oversight and direction. At some point (depending on the practice, around 7-10 attorneys), it’s time to invest in a person that has deeper business experience (allowing for more autonomy) and hire a Director of Operations. Because this person brings experience, you’ll pay more for a Director of Operations than you would pay an Office Manager, and the return for you is that he or she will become your partner in running the business and lead operations, reporting out to you instead of taking direction from you (utilizing significantly less of your time, which you can then use to do client work).
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Regardless of whether it’s an Office Manager or a Director of Operations, Operations generally consists of the following:
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1. Administrative Management – Oversee the legal administrative staff, ensure efficient scheduling, assisting with client communication, coordination of the entire team, and implementing technology to streamline these tasks.  

2. Financial Oversight – Manage billing, collections, trust accounting, and bookkeeping.  Co-create a budget and projections, and then oversee and report out the comparison of the budgeted numbers to the actual numbers throughout the year.  Oversee and support tax preparations for the firm.

3. Human Resources – Lead and administer recruiting, onboarding, training, performance evaluations, employee issues, benefits administration, and foster the firm’s culture.  

4. Compliance – Oversee adherence to regulations and ethical standards, and regularly update policies to comply with changes in law.  This typically includes insurance administration (malpractice, worker’s compensation, general liability, renter’s insurance (if applicable), cyber-security insurance, etc.).

5. Marketing – Coordinate the strategies chosen to attract and maintain client relationships. The tactics should include website creation and maintenance, digital marketing, social media marketing, google ads, maintaining the firm’s CRM, email marketing, mass communications with existing firm clients, and firm events.

6. Technology – Implement and oversee technology for the firm (practice management, document storage and retention, legal research, etc.), computer set up, help desk support, and information security,  
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For each of the above areas of operations, you need people to execute on those tasks.  In the beginning, when it’s just you, you’re wearing all of these hats!  It’s a lot on top of practicing law and bringing in new clients.  When you hire an Office Manager or Director of Operations, that person’s job is NOT to perform all of those tasks.  That person’s job is to manage and interface with the employees/vendors that perform all of those tasks in an effort to move the business towards achieving the goals outlined in your strategic plan.  

The toughest question for you is:  How to you structure operations to minimize expenses?  Hiring comes with a cost to find and onboard a new employee, salaries, benefits, taxes, etc.  Turnover then has its own set of costs, including a loss of institutional knowledge if not codified somewhere. Not to sound self-serving, but this is why outsourcing is a great solution.  It’s actually the genesis of why LBO was created in the first place.  

Thanks for reading along on this journey with me.  As we publish these blogs, I would love your feedback, thoughts and questions!  You can reach me at sstock@legalbackoffice.com or set up a time to meet with me by clicking: https://www.legalbackoffice.com/contact.  I look forward to hearing from you!