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Michigan’s legal community was shocked by the low pass rate on the July 2012 bar examination results which were released on October 26, 2012.  Overall, only 55% of the test takers passed.  First time takers did marginally better; but not as well as they had in previous years.  What happened this term that is different from previous years?

1. The Board of Law Examiners (BLE) stopped scaling scores.  Scaling (i.e. curving) was a method designed to equalize scores over a period of time.  The experience the BLE had led them to see that it was still essentially subsidizing low essay scores in order to promote pass rates in the state.  In 2009, the BLE eliminated the automatic pass at 150 points on the MBE.  Previous to that time, a bar examinee would take the bar exam, and if scoring above 150 points on the MBE, would have their essay scores review for effort, but not formally graded.  This guaranteed a pass for those who did well on the multiple choice test.  This was eliminated so that the examinees would be tested on their writing skills as well as their knowledge of Michigan law.  The scaling of the essays was designed to build predictability into the scoring and have it even out over time.

What happened instead is that the problem that elimination of the automatic MBE pass of 150 points shifted the writing problem onto the essay scoring.  In other words, the essay scores were subsidized by the scaling and that increased par passage to the scores seen over the last five years.  This fall, the Board decided the quality of writing and knowledge of MI law was not being given enough emphasis.  Thus, the BLE’s decision

2.         The quality of writing has decreased.  The bar examiners found that once they had began to grade this year’s tests, the answers we not being responded to in a meaningful and productive way.  My office reviewed approximately 75 tests results and found that the scores were representative of what the bar examiners were presented from the applicants.  On questions where there was some ambiguity, my office found a number of scores were graded upward in light of that ambiguity.  In other words, applicants received the benefit of doubt in close call questions.  Some of this year’s questions were difficult, such as the evidence question, constitutional law question and the criminal procedure question.  However, those issues have been tested in the past and could have been reviewed as part of any applicant’s study program.  It appears that applicants did not review older tests where the same or similar issues had been tested.

3.         The quality of the answers seemed to have suffered for a lack of ability to analyze the facts based upon the law of the question.  The core measure of any law student/attorney to be is the ability of the applicant to analyze the facts of the question.  The MBE tests that in a finite manner.  It gives you the facts and and possible analyses.  The skill set tested is the ability to know the rule and identify the correct analysis that best matches the facts from the question.  In an essay exam, the skill set is expressing the analysis in concrete written terms.  This is a rather dry, technical form of writing which requires the applicant to be somewhat repetitive at times.  However, this is the only way to have certainty that the applicant knows the law and can apply it.  Time pressure forces the applicant to manage his or her time while taking the test and to bring a high degree of focus to a 2 to 3 hour period of time during the morning and afternoon sessions.  Under this pressure, some applicants present conclusory answers failing to analyze the facts.  The analysis part of the question is usually where the most points are awarded.

I do not believe the applicants are any less prepared than they were in previous years.  The only problem that I could cite the BLE for is not communicating their expectations more clearly to the applicants.  I do not believe there was unfair testing involved or a concerted effort to limit the number of lawyers practicing in this state.  Rather it was a combination of a change in grading systems coupled with expectations that simply were not met.

Tim Dinan runs a solo practice focusing on Criminal and Civil Litigation. The firm also specializes in matters applications to the Michigan State Bar and character and fitness hearings. Mr. Dinan has successfully represented over 100 clients now licensed to practice law in Michigan.

There’s a common disease that plagues many of today’s law firms, it’s referred to as the Fatal Fascination of the Familiar (FFF). The signs of the disease are:  inability to grow the practice, practices more interested in exploring  possible exceptions rather than focusing on being exceptional, each attorney acting as its own law firm (silo-ite- is),  minimal use of technology, lack of strategy, focus on the billable hour vs. focusing on effective and realization rates.

The inability to accept or embrace change is the root cause of the FFF.  The FFF becomes a barrier to dialogue; it creates walls between the older and younger attorneys in a firm.  It generates power through individual agendas vs. firm objectives. It prohibits efficiency and effectiveness and it can ultimately cause the death of a practice.

There’s not one thing that can cure the FFF.  Recovery takes commitment, planning and patience.  The first step is one of a reality check, and it starts by asking the following questions: What’s the makeup of your firm?  Is there a gap between the older and younger generation of attorneys?  Has the firm committed to growth but has been unable to do so? Are practice meetings more about who can deliver the best argument vs. discussing solutions or best practice?  Is there an over arching strategic plan that encompasses business and marketing plans for the firm or are the plans specific only to the individual attorneys?  Does the firm abide by certain standards?  What does the firm measure in order to determine if it is successful?

Consider the following treatment:

• Confirm you firm’s mission and vision
• Create time to discuss strategy, make sure the discussion includes a blended group of attorneys; various specialties and age.
• Have the assigned managing partner or managing committee determine what measureables the firm should focus on, make sure they connect with the firms mission, vision and strategic plan.
• Look for ways to market the firm as one – website, newsletters, community outreach, events, etc.
• Create a technology committee and assign them with establishing small ways of incorporating IT into the firm.
• Create a finance committee to evaluate the revenue cycle of the firm, remember cash is king.

These are merely ideas on potentially cure FFF.  Don’t let the past get in the way of your future.

A long time ago I learned that in order to be successful in a service business such as law you need to focus on the three “ilities”; affability, accessibility and ability.   At first I thought it was more complicated than one’s ability, affability or accessibility, but really it’s not.

Ability – are you a good attorney?  Do you spend time learning, perfecting, listening, questioning and exploring ways to be the best attorney you can possibly be?  Do you possess the ability your clients expect and deserve?  Your ability and willingness to improve is critical to your success as an attorney, it makes you credible and marketable.

Affability – How well do you relate to others?  Are you approachable, empathetic, authentic and genuine?  Do you understand the importance of establishing and maintaining relationships?  Isn’t it important for you as an attorney to connect with your peers, clients, partners, associates and community? Being affable creates trust and support, which are two key components in building and maintaining a successful law practice.

Accessibility – Are you accessible and responsive? If your client needed you immediately, what could they expect? What do your clients, peers, partners and associates consider acceptable access or responsiveness? As an attorney, your attitude should be, “I’m here for you when you need me”.  Many times a crisis is unpredictable, but a client’s attorney shouldn’t be.   The first step towards accessibility is informing your clients, peers, partners and associates exactly how they can best reach you for emergencies and non emergencies, and when they can expect a response.    Help your clients, peers, partners and associates avoid frustration by eliminating barriers to your accessibility.

By focusing on the “ilities” you should experience a successful long lasting legal practice.

Tim Buursma has more than 20 years of both management and marketing/sales experience. His focus has been on operational excellence, service to clients/customers and business growth and development. Tim received his degree from Hope College in Holland, MI and is trained in Six Sigma. He has developed proven systems to capture business performance measures on a timely basis which allow managers and marketing departments to make informed strategic business decisions.

Managing email can quickly turn into a full time job and decimate your billable hours.  When I started practicing law in 1994, keeping on top of email was, to say the least, not a problem but each year the number of emails we receive on a daily basis seems to grow.  We can easily spend our day jumping from one email to another in a disjointed fashion only to find ourselves wondering at the end of the day what we did for the last eight to ten hours.  For lawyers, the tools we use to manage email must allow us to process email efficiently and do so in a way that fits into how we practice.  Small efficiencies when used multiple times over the course of a day can significantly improve productivity.  Here are a few ideas to help you increase efficiency.

1. Process email by client.  For better or worse, many of us still live in the world of billable hours.  Erratically addressing and responding to email usually causes inefficiency, frustration, stress and, ultimately, a loss of billable hours.  Improve your practice and mental clarity by prioritizing your client load for the day then addressing all emails from each client in turn.  This allows for greater continuity and clarity of thought, and fosters more meaningful time entries for billing purposes.  Try a mixture of (i) sorting by subject or sender and (ii) using key word searches to help you isolate groups of email by client and topic and to make sure that no relevant emails are missed if your inbox is already too large.  When you are finished addressing all emails from one client, move on to the next client.  You may also find that this makes it easier to bill your time as you work.

2. Keep Your Inbox Empty and Use Folders.  Set up client folders in Outlook and file emails as you address them. Outlook offers a variety of features and tools for keeping organized.  I use the “Move to Folder” button found in the Actions pane at the top of each email and find it to be faster than dragging and dropping emails from my Inbox to individual client folders.  Dragging and dropping works best for moving multiple emails all at once.  Try limiting your Inbox to only those emails that require further attention, moving all other emails as soon as they have been addressed.  Keeping your Inbox tidy promotes better organization and reduces the likelihood that a task will be overlooked.

3. Use Rules in Outlook.  Found under the Tools menu in Outlook, Rules can be a powerful tool for assisting with email organization.  A few examples illustrate the versatility of Rules.  For many lawyers the emails they send out with agreements, draft documents, memos, briefs or other attachments will account for the vast majority of sent emails that they will later need to retrieve for reference purposes.  Setting up a Rule that automatically files emails sent to a client with attachments in the client’s folder is a very effective means of improving organization.  Many of us get regular reports and other recurring emails from a variety of sources both within and outside our firms.  Often this information does not require immediate attention.  A Rule that automatically files regularly recurring email in the appropriate folder is a hands-free way to manager your Inbox.  Be careful though.  Rules are a very powerful feature and can lead to unintended consequences if not set up properly.  Automatically filing emails from your brother into a personal folder may sound great but if you are assisting him with his estate plan, he might not appreciate your lack of response when you don’t see his email for a week. Someone who is not technically adept would be well advised to seek assistance from an expert before setting up too many Rules.

4. Use What Works for You.  Technology gives us so many tools.  But not every tool works well for every lawyer.  Tasks in Outlook are a great tool and I have tried them several times but I have never successfully integrated them into the way I practice.  They didn’t work for me.  That is okay.  Try a variety of the tools Outlook offers and pick those that work best for you.  A few small changes may just restore your sanity, for a little while at least!

Doug Poland is a Principal with ProLegal and specializes in real estate law and currently serves on his firm’s Technology Committees. With a B.S degree in Computer Science from Michigan State University and as a visionary in the use of technology to improve the quality and efficiency of the practice of law, Doug brings a unique set of skills to the ProLegal Systems team. Doug graduated cum laude from Wayne State Law School in Detroit Michigan. He is currently involved in various non-profit organizations and real estate industry organizations. Doug has previously served on his firm’s management committee and is a current member of the Management Core Group and the Technology Core Group of the Law Practice Management Section of the American Bar Association.

Most attorneys might have a general idea of what an income statement is, however do you know how to interpret what each number on the page can tell you about how you’re running your firm?  So you had income this period of $100,000, your supplies expense was $4,000, or your net profit was $10,000.  Are those numbers good?  What do they really mean?

The most important thing to remember about an income statement is that it can really only talk to you in a meaningful way when it is being compared to something else.  This can be a cash projection or a previous period’s income statement.  When using an income statement as a tool, the first thing that should be done is to make sure that you put it in a comparative format.  This means that you display every line item as a percentage of sales in addition to showing the actually dollar amounts.  This way you can evaluate trends over time and make meaningful projections into the future.

$10,000 in net profit may be great for a firm that is bringing in $100,000 in annual revenue, or a 10% profit margin; however that doesn’t look nearly as good on an income statement where the annual revenue, is $1,000,000 for a 1% profit margin.  The numbers themselves don’t hold nearly as much value as the percentages.

Comparing income statements from different time periods (in percentages) is one of the easiest ways to identify potential red flags within your business.  Recognizing a change in the percentage of any line item and asking the simple questions of “why did this happen?” and “does this change make sense?” can go a long way.

Creating or reviewing an income statement doesn’t need to simply be a chore, it can be a meaningful decision making tool for your firm.

What I mean by this is what’s preventing you from achieving your goals as an attorney?  What’s holding you back?  Is it a person, process, structure, culture….what is it?  Is it you?

The first step in moving forward is defining exactly where you are, what is the reality of the situation?  Is there a person within the firm that is not working at their full potential or are they not being properly utilized or managed?  Is there redundancy and overlap, thus creating ineffectiveness or inefficiency?   Does the structure of the firm restrict growth and change?  Is the culture of the firm one of “silos” vs. collaboration?  Is the culture of the firm without standards or guiding principles?

Or could it be that you are getting in the way of achieving your own success?  Do you spend more time arguing with yourself about matters vs. just going out and getting it done?  Do you choose to be passive when it comes to cultivating new clients or matters?   So what is it, what’s holding you back?  Is it one thing or multiple things?  Do you have the ability to influence the outcome?

Step two, once you’ve identified your reality you will need to determine the best strategy to resolve or fix the issue(s) that are holding you back.  If it’s a people problem, invest time in reviews and corrective action plans.   Allow the person to exceed or leave.  If it’s a process problem seek internal and external resources to help you develop systems that will provide you and your firm streamline results.  If you are up against a structure issue propose alternatives, it’s much easier to evaluate written proposals vs. verbal concepts and ideas.  If it’s the firms culture holding you hostage revaluate the firm’s mission and vision and make sure it aligns with your personal mission and vision.  If so, begin asking questions about methodology that contradicts the firm’s mission and vision.  Seeking clarity is a way for others to begin asking questions and ultimately create cultural change.  If the mission and vision of the firm is in conflict with your personal mission and vision it may be time for you to change, by changing firms.

If you’ve concluded that you are the obstacle to your own success, and we all are to some degree.  Then define and take action on what it is you need to change. Set priorities and begin making incremental change.  Remember none of this is easy and it takes time, but if you’re determined to achieve your goals and become successful it’s worth the investment.  Don’t fall victim to having someone or something dictate your future success.

It is vitally important to remember that a law firm is a business and like any business needs to make a profit to be sustainable.  Even the most talented lawyers can have trouble maintaining a profitable firm if they don’t understand cash flow and how a business works.  The following items are not extremely complex, however they can do wonders to improve on the business side of a law practice.

1.  Stay on top of your WIP

Every day that you delay getting your bills out the door decreases the likelihood that you will get paid.  Although having a regular billing date makes a lot of sense, it may be worthwhile to look at more progressive billing.  Clients will not respond negatively towards receiving a bill at significant milestones in the legal process.   Being clear about those milestones from the beginning increases the speed of payment and helps clients see the value that you are providing.

 2.  A receivable is not the same thing as cash

Getting a bill out the door is not the end of the collection process.  Although getting bills out in a timely manner significantly increase chances of getting paid, there are other measures that can be taken to improve realization.  Consider incentivizing early payment.  Similar to terms used in other industries, it can make sense to offer a small discount, maybe 2% for payment within 10 days.  Set up a system to allow clients to pay by credit card or EFT.  Lastly, it may be worthwhile to offer a one-time deep discount to severely overdue client receivables.  Finally, don’t lose contact with a client after a bill is sent.  Maintaining contact and sending reminders at regular intervals will help you turn those receivables from a number on the financial statement to real money.

3.  Hire part-time employees or consider outsourcing certain tasks

Hiring a full-time employee can be a large undertaking for any business; this is especially true if you’re a small firm.  Many people make the mistake of believing an employee costs what you pay them in salary, this is a long way from the truth.  In reality, you need to factor in the benefits package, their office space, payroll taxes, the equipment they will use, and the time you will need to spend managing this person.  In addition, you always need to be ensuring that you have enough work and income to justify having this person come to work each day.  It may not make sense in every circumstance, however there are many tasks where hiring part-time employees or outsourcing altogether can take a lot of these factors off the table and keep a lot more money in your pocket.

4.  Alternative fee arrangements

Competition among law firms and especially from on-line providers makes it necessary to rethink where and when alternative fee arrangements may make sense.  Flat fee arrangements don’t always make sense, but there are certainly instances when it does.  Cases where a process or type of case is very similar from client to client it can make a lot of sense to lay out clearly what the cost is and what the client will be receiving and then work to improve efficiency internally and therefore increase your margins.

5.  Understand your costs

This may sound like a common sense item, and it really is, however that does not mean that it is always done.  Periodically take the time to figure out where your money is going and whether that’s really where it needs to go.  Making a budget and comparing it with your actually expenses can go a long way towards controlling costs and reducing unnecessary expenses.  Figuring out which costs are recurring vs one-time or fixed vs variable is essential for any meaningful cash projection.

One of the questions that I’ve run into a lot lately has been, “what is the true cost of my staff?”  Also as a follow up the question I always ask is “what should you really be paying for with that staff member?”

To answer the first question, I’ll begin by simply looking at dollars out of pocket.  As a general rule of thumb, you should add a minimum of 10% on top of a full-time employees pay to let you know what you’re truly paying once you add in payroll taxes, unemployment, worker’s comp, benefits, etc.  Depending on how generous your benefits package might be, that number can easily work its way up to the 15% range.

So if you have a full time paralegal and you’re paying him or her $45,000/year, you’re really looking at the $50,000 – $52,000 as the true out of pocket cost for that employee.

It’s important to know the true cost of an employee; however it’s as important to know what that money should be getting you.  Like anything else, cheaper can be better, but it’s not always better.  For example, when evaluating a paralegal you should look at whether he and she can perform the duties reasonably expected from that position and also look at what type of attorney/support staff ratio that money is getting you.

Have an idea of what type of capacity that person should have.  A paralegal that costs $55,000 and has the efficiency to support 3 attorneys is a much better value than one that costs $40,000 and can only handle the work load of 1.

A law firm, like any other business can find economies of scale and optimum efficiencies.  It’s important to learn what these are and work to make your firm a size that can properly use those efficiencies.

Most every law has the desire to grow and become larger.  Traditionally as a firm grows it requires more staff to handle the additional tasks that need to be done.  As the owner of a law firm an interesting thing can happen, you become less of an attorney and more of a manager.

Even though theoretically more support staff should mean more time for you as an attorney to practice law, often times it can mean just the opposite.  You become bogged down in administrative and human resources issues and are required to wear the manager hat more and more.  As a result your production begins to slow.

So what’s the solution?

Traditionally this has been the point at which a firm will hire a COO and just say here you handle them all.  This certainly can be a viable option, however a COO does not reduce staff and it can easily add 6 digits to your firm’s overhead.

There is another option.  Outsourcing.  You can cut down on staff and overhead by outsourcing the administrative functions of your firm.  Let someone else worry about setting up clients, sending out invoices, paying bills, and generating payroll.  And don’t break the bank and give yourself another staff member to manage in the process.

I know that this is a fairly new option for law firms, but it’s available and it works.  Today’s technology allows seamless connection your software from virtually anywhere.  I can print off a check in your office while sitting 300 miles away without any difficulty.

It takes some getting used to, however I’m sure that more time, more money, and less hassles will make that a whole lot easier to swallow.

Regardless of profession you can identify common traits that link all the most successful leaders. No matter what your personal management style, if you’re a good leader, you share habits with other successful leaders and managers.  Be willing to take a look at yourself and determine where your areas are for self-improvement.  Again, as an attorney investing in yourself is one of the most important things you can do.

1. Be self-disciplined — The best managers lead not only through instruction, but also by example. You set the standard as the role model and your staff follows your lead. Don’t be a hypocrite and tell others to do as you say, not as you do. Exercise self-discipline and set a good example for your team.
2. Know what you can and can’t achieve — One of the most important but often overlooked traits of good managers is knowing your limits. Good managers realize they don’t know everything and delegate accordingly. Don’t be afraid to ask for help if you need it, there are alternatives to trying to do it all yourself.
3. Value your employees — Employees who feel that their contributions are noticed and appreciated are much more likely to feel satisfied and rewarded by their work. As a manager, you need to recognize how your actions and policies affect your employees and make sure that they feel valued at all times.
4. Be decisive — Effective managers aren’t wafflers. They make decisions and stick with them. And if these decisions turn out to be wrong in the future, they admit their mistakes and make another decision on how to get things back on track. Good leaders are sure of themselves, even to the point of faking it when they have to.
5. Communicate clearly — Poor communication is the number one problem most people face at work. Good managers don’t leave things open to misinterpretation and confusion. They communicate clearly and effectively the first time, making sure everyone understands their roles and expectations.
6. Be responsive — A good manager is available for his or her team. He or she will listen to employees’ problems and respond in a manner that helps them solve the issue. Don’t ignore demands or requests from your team; address them immediately. That way you’re sure to get better results.
7. Welcome criticism — No one is perfect. No matter how good you may be, there is always room for improvement, and this is especially true of managers. Don’t be afraid to seek constructive criticism from your team. It will help make you a better overall leader.
8. Be enthusiastic — If you’re not looking forward to coming into work each morning, how can you expect your employees to be? Find the positives in your workplace and keep enthusiasm and motivation high. Your team is sure to follow.