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Materials Prepared by Cheryl Betten Presented by Carol L. Schlein Newark NJ February 22, 2013.

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Presentation on theme: "Materials Prepared by Cheryl Betten Presented by Carol L. Schlein Newark NJ February 22, 2013."— Presentation transcript:

1 Materials Prepared by Cheryl Betten Presented by Carol L. Schlein Newark NJ February 22, 2013

2 Managing Legal Costs Attorney Compensation Direct Expenses (Staff Compensation) Indirect Expenses such as Rent and Utilities Office Supplies Information Systems Professional Fees Research and Subscriptions

3 Carol L. Schlein, Esq. President, Law Office Systems, Inc. Montclair NJ Founding Member Lawtopia LLC National partnership of legal technology consultants Former chair Computer Division, ABA Law Practice Management Section Former columnist, New Jersey Law Journal

4 Identify Costs ‘’’ Budget Your Revenue & Expenses Calculate estimated revenue Estimated Revenue = Billable Hours * Rate * # of Timekeepers Make sure all lawyers are meeting baseline expectations

5 Track Your Expenses Negotiate better rates Streamline processes Use Firm Admin to manage finances instead of practicing attorneys

6 Identify Money Makers Benchmarking- compare your firm to other firms with goal of improving your own business practices Negotiate with your vendors for the best deals Shop around for services Put systems in place to track costs and bill them out where appropriate Automate where possible

7 Eliminate Money Wasters Don’t waste money on bad advertising or a bad marketing plan Make sure your marketing plan is focused Turnover – “there are plenty more where that one came from” is a bad HR strategy and will cost your firm Don’t sign long term leases. Technology changes too fast.

8 Maximize 80/20 Rule 20% of your clients are responsible for majority of your revenue – make sure they are happy 20% of your employees are billing 80% of the hours – make sure they are rewarded Learn from both Find more lucrative clients Find ways to motivate employees

9 Case Budgeting Conferring with your Client Budgets for cases often happen when lawyer least familiar with facts and players Communicate with client when budget changes

10 Be Audit-Minded Work with a CPA or Accounting Firm to ensure compliance with payroll taxes, income taxes, trust funds Audit-minded professionals will create audit trail and ensure reliable financial reporting Avoid problems with random audits Have system of checks and balances

11 Billing and Collections Fee/ Engagement Agreements Outlines services your firm will perform Details Fee arrangement Hourly/ Flat/ Contingent Retainer required? Frequency of billing Interest or late fees? Detail of billing (itemize) Types and costs for services charged Rates for each timekeeper level No “air-tight” fee agreement but can prevent disputes

12 Tracking Work and Time Spent Factors to Consider in Selecting How many timekeepers in the firm? Will they enter their own time? Do you want the system to also track accounting? Standalone or network? What’s your budget? What other programs share similar data?

13 Popular Timekeeping/ Billing Programs Timeslips PCLaw Time Matters/ Billing Matters Tabs3 Clio RocketMatter

14 Strategies for Pursuing Fees Owed Be Proactive Start with Written fee agreement Adhere to the agreed terms Follow up within 30 days Determine if firm will or can sever relationship Use systematic process to demand payment Follow collection laws Fee Arbitration process

15 Considerations to Sue a Client Can your firm handle claim through the courts? Will number of suits impact your malpractice coverage? How much is owed? What is the risk of a retaliation law suit? Will judgment be collectable if obtained?

16 Outsource Your Collections Consider using third-party vendor Do your homework about vendor before proceeding Negotiate the fee with collection vendor Ask for trial period Compare pricing Understand difference between agency and collection law firm Ask for detailed list of process flow Choose a company or firm that understands your business

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