Practice News

Asked and Answered By John W. Olmstead, MBA, Ph.D, CMC Q. We are a 12 attorney firm located in the midwest. We are concerned about the impact that the economy is having on our practice and the current business environment. Our business is down and we are unsure what we should be doing financially to evaluate and improve performance - and survive. A. Management of cash flow is critical. Here are our suggestions of how to examine where you are based upon receipts and your pipeline of future collections: Monthly Billings Are you budgeting your fee billings? Are your billing and collections on track? Are your individual attorneys and other producers meeting their revenue goals? Why not? Collections and Receipts Are your collections in alignment with your cash requirements for firm expenses, client advances, loan repayments and attorney draws? Remember - the total expenses listed on the income statement does not represent all of your cash requirements. Balance sheet accounts such as partner draws, client advances, purchase of assets (equipment), and payments on loans also involve uses of cash and must be taken into consideration. Typically, there is a lag of three months between the time you incur expenses and do work for a client and receive payment. Be aware of potential cash deficits. Costs How are your actual expenses/costs tracking against your budget? Are you within your budget? If not - why? Investigate reasons. If over budget, should you cut costs or is there a way to increase revenue? Sometimes you have to spend money in order to make money. Which costs should be cut - and which should not? Be careful cutting marketing/client development investments. Accounts Receivable Are they increasing or decreasing? What percent are they of your annual billings? Fifteen percent is high - five percent is within the range of acceptability. Uncollected accounts can sink the firm - stay on top of them with an effective management system. Deal with collection problems early - formulate a client acceptance/credit policy - get retainers up front - reject problem clients from the onset.

Important changes are on the horizon for the Illinois Power of Attorney Act, a statute that touches the lives of many (most?) clients and their lawyers. The good news -- assuming the governor signs HB 6477, its effective date is July 1, 2011, giving lawyers, banks and others plenty of time to adjust. According to Mary Cascino in the latest ISBA Trusts and Estates newsletter, "Some of the revisions make the statutory forms more user-friendly, such as revising the Notice to the principal, while other revisions, such as the Notice to Agent in the Property Power of Attorney, are intended to visibly inform the agent about his or her duties under the Act." Read her brief, helpful summary.

The Administrative Office of the Illinois Courts announced today that the Ninth Judicial Circuit judges voted to select Raymond A. Cavanaugh as an associate judge of the Ninth Judicial Circuit. Mr. Cavanaugh received his undergraduate degree in 1986 from Loras College, Dubuque, Iowa, and his Juris Doctor in 1990 from John Marshall Law, Chicago. Mr. Cavanaugh is currently affiliated with the Henderson County State’s Attorney’s Office in Oquawka.

By Shamla Naidoo You’ve heard about the issues with metadata—lawyers can inadvertently share privileged information, even with opposing counsel. You may also have reviewed the ethics rules on how to react when opposing counsel accidentally sends us a document containing metadata. Wouldn’t it be better to avoid sending the metadata in the first place? Lawyers review the content of legal documents before sharing them. However, metadata is part of the content of the electronic document - but it is not obvious, not on the face of the document - and may be easily overlooked. Careful review of metadata reduces the ethics burden created for other lawyers; increases client confidence in how sensitive matters are handled; and demonstrates competence to operate in the electronic age. There are expensive tools and services to help you manage your metadata; however, you can simply use the available features of your existing word processing software to do this for free.  I use Office 2007 so the metadata management discussed here is limited to Word 2007 before converting them to PDF. First, you should clear any existing metadata from new documents since these may include default information. If you use templates or reuse documents, the name of the author of the template or source document may be embedded within your work product. To clear this information, click on the Office button (in the top-left corner of the Word window), select “Prepare”, select “Inspect Document”, and press the “Inspect” button. In the next screen, Word will display all locations where metadata was detected, including document properties, headers, footers, watermarks, etc.