Asked and Answered
By John W. Olmstead
Q. I am sole owner of an 8 attorney firm. Two other attorneys are income partners - no equity - and the other five attorneys are associates. I am just turning 50 and am beginning to think about future retirement. What questions/issues should I be thinking about?
A. Fifty seems to be the point at which attorneys being thinking about their retirement and their future. Some even consider and in fact make complete career changes at this point in their lives. Here are a few questions to begin thinking about:
1. Have you decided when you want to retire and leave your firm? Or do you want
to work forever?
2. What amount of cash or annual cash flow do you need when you exit?
3. Do you presently have a retirement plan and how much income to you project that
it will provide at different exit times?
4. To whom do you want to transfer your interest? Family members in law school,
other attorneys in the firm, another firm, etc?
5. Based on future cash flow, do you know how much the firm is worth today?
6. Do you know how to best maximize the income stream generated by the firm - in
the years ahead while you are still with the firm and after you leave the firm?
7. Have you been able to institutionalize the firm - or is it uniquely you?
8. Is the firm even marketable?
9. Do you have a succession/exit plan?
10. Do you have a plan for your business if the unexpected happens to you?
11. Have you taken steps to protect your family's wealth?
John W.
Best Practice Tips
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November 18, 2009 |
Practice News
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November 11, 2009 |
Practice News
Asked and Answered By John Olmstead Q. I am a solo attorney in private practice. I have been practicing for two years. The bulk of my practice is in the wills, trusts and estates area. I occasionally handle real estate transactions as well. I work from a home in office and meet clients in their homes at night. I have given thought about moving to an office outside the home, but even if I did I think I would still end up meeting clients in their homes at night. My clients seem to really appreciate this and as a result I have yet to walk away from a potential client's home without a signed retainer agreement. What are your thoughts on home offices? A. Sounds like working from home has worked well for your practice and it has caused you to deliver personal attention to your clients which is so necessary in your practice area. I opened my consulting practice 25 years ago and had the overhead of an office and staff from day one. So much has changed since then. Now I have both - a small office in St. Louis and home offices that the rest of us work from remotely - less staff - and less space. We have downsized our office dramatically over the years and now primarily use it for client meetings/presentations when needed. Our infrastructure - phone systems, files, copiers, file servers, and people are primarily housed out of remote home offices. More and more of our work is being delivered remotely/virtually using GoToMeeting and other such tools. Take a hard look at your purpose and cost for the office and then go from there. Also, consider that sometimes we have to spend money to make money. Does the increased visibility that the office may give you generate more revenue than its cost?
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November 4, 2009 |
Practice News
Asked and Answered Q. We recently completed an informal client survey and were surprised at some of the feedback. Our scores were lower than anticipated. Clients believe that our services took longer than expected and fees were also higher than expected. We work as diligently as we can for our clients and I don't see how we can improve turnaround or reduce legal fees. Suggestions? A. Based upon client surveys that we do for law firms we find that one of the biggest problems is that the attorneys are doing a poor job of managing client expectations. The key is to under promise and over deliver. I suspect that upon the initial client meeting you are under estimating the timeline and low balling the fee range. Increase the promise - timeline and fee range and then shoot to deliver under that range. This will do wonders for improving the client relationship. By John W. Olmstead, MBA, Ph.D, CMC Click here to learn more about John