Financially Legal

This September I had the pleasure of speaking to the innovative lawyers, mediators and greater dispute resolution community members at the American Bar Association's Dispute Resolution Tech Expo. 

Note: This is the first in a series of posts on the what, why, and how of subscription legal services. We at Confido Legal recently launched a suite of tools that make offering subscription legal services easy. If you'd like to learn more, contact us here.  

We also have two episodes of our Financially Legal podcast on subscription legal services featuring lawyers who have built and are offering subscription legal services. Check out those episodes with Jon Tobin and Kimberly Bennett.

If you bill time on an hourly basis for long enough you begin to ask yourself some troubling questions: Should I DIY remodel my bathroom? Or are those 70 hours better spent billing clients at an exponentially higher rate of return, while I pay a plumber to screw the job up better than I ever could? Should I do my own laundry? Or should I bill another client? Should I walk the dog? Or should I set the dog adrift on an iceberg into the ocean, saving myself countless hours that could be used to bill clients in the future?

A couple of weeks back we worked with Tom Lenfestey from the Law Practice Exchange to develop a simple calculator to help legal professionals to estimate the value of their legal practice.  We launched the calculator in conjunction with an episode of our Financially Legal podcast in which I interviewed Tom and discussed the whys and hows of law practice valuation as well as buying and selling practices. 

Lawyers can usually think of lots of possible reasons why trying something new in their practice is “against the rules.” Megan Zavieh is a California state bar defense attorney (who lives in Georgia!) and she’s not messing around. Instead, she’s launching a subscription legal services offering, cheering regulatory changes related to non-lawyer ownership and breaking down the rules around shifting credit card processing fees to clients or selling your law practice. Megan’s got some great takes on all of this plus how to run an ethical, forward-looking firm in the time of COVID and beyond.

It’s common for dentists or doctors to sell their practices but far less common for lawyers to do so. And a Zillow-like marketplace for law practices? Forget about it. And yet, that’s just what Tom Lenfestey is doing. Tom has built his business, The Law Practice Exchange, to increase liquidity in a market for law practices and evangelize the buying and selling of law practices as a legitimate option for the development, growth, and conclusion of a lawyer’s professional efforts. Tom has some valuable tips to prepare your practice for sale, how to get the most out of a sale, how to find a buyer, and much more.

TLDR: Just skip the nonsense and give me a link to the law practice valuation calculator.

A few years ago I was trying to figure out what to do with my legal career.  I met with a friend and mentor for whose firm I'd worked during law school. Perhaps sensing my trepidation about the future this close-to-retirement lawyer said "I'll give you my practice." 

Our recent podcast on how lawyers talk to clients about money inspired Confido Legal’s own Emery Wager to think about how lawyers had talked to him about money. A client of many lawyers at Gravity Payments (our parent company), Emery came up with a list of five things he wishes lawyers would do when they talk to clients about money. We dig in on this mini-episode of Financially Legal.

Listeners and readers have been pretty interested in our recent podcast on how lawyers talk to clients about money and our recent blog post about how one client (and Confido Legal team member) wishes lawyers talked to them about money. So, we decided to ask the experts how lawyers should talk to clients about money.

This is a guest post by divorce attorney and firm owner, Russell Knight, of Chicago, Illinois.  

Almost all lawyers have a retainer or a large initial payment for legal services. Lawyers and clients enter into engagement agreements which specify how that retainer or payment is to be accounted for. Specifically, the money will be applied towards the lawyer’s hourly billing or specifically itemized tasks.

Greg Garman is a busy man. One of the founders of a 20 person law firm in Las Vegas, Greg is also the co-founder and CEO of LAWCLERK, an online marketplace for freelance legal help. In this episode, Greg shared some great insights on how and why he thinks right around 20 lawyers is the sweet spot for a small law firm.

I’ve put it off all week, but the time has come. I need to pay our law firm. They do great work and have helped protect our company during difficult times. But paying their bill is not a pleasurable experience.

Conventional wisdom is that there are really only two reasons that marriages end: sex and money. Sex with a client is frowned on and talking about it - except, perhaps as a part of the representation - is probably not a great idea. However, conversations with clients about money can be some of the most important conversations you have with them.

I've had the luxury of being a member of interview panels for many entry level positions and I absolutely love it. If you set the right tone, ask the right questions, and make sure everyone is comfortable, you end up partaking in a great discourse as opposed to just slamming someone with questions. Because these entry level candidates just want a chance to prove themselves, you end up speaking with a number of creative and clever people. Inevitably the same question pops up in some form or another; "What are you looking for in a hire?"

Jacqueline Horani is a lawyer engaged in integrative consulting and plain language law in New York City. Inspired by the integrative law movement, Jacqueline is building a practice around conscious contracting, which focuses on identifying and integrating the parties’ values directly into the contracting process.

Law firms are unique. They have unique processes and strange, sometimes archaic, rules governing the way to handle money. As a result, it's prudent for a law firm to ensure that any electronic payment processor understands and complies with these rules. Below are the most important items to check.

Collection rate is defined as the revenue you actually collect into your operating bank account divided by the total amount invoiced. Typical collection rates for law firms are around 85%, but they vary markedly by firm. Increasing your collection rate is a great way to earn more without actually doing any additional work. 

In times like these we tend to turn to philosophers, poets, musicians, writers and artists for comfort and direction - wise minds that always have an answer for the trickiest of situations and the most uncertain of times. More specifically, Bob Dylan's "The Time They Are A-Changin'" seems more relevant now than ever.

Your old road is rapidly agin'

Please get out of the new one

If you can't lend your hand

For the times they are a-changin'

We at Confido Legal, while in full support of racial equity and civil rights, have taken a moment to reflect on what we could do to make a meaningful impact. We feel that stating our support accomplishes far less than action. Epictetus stated, "Don't explain your philosophy. Embody it." 

Geri Green and Cynthia Chandler have been fighting for marginalized individuals both in and out of courts for decades. In this episode of Financially Legal we talk about how and why, according to the 2019 Clio Trends report, civil rights attorneys bill for so little of their work (20% - the lowest of any practice area) and collect so little of what they bill (80% - third lowest). 

Dan Lear was recently interviewed by Mark Homer of legal marketing firm GNGF. Dan and Mark dove into many different topics including: 

• Company culture
• A $70,000 minimum wage
• The Confido Legal platform
• Law firm finance
• Alternative fee structures
• Expectations of the modern consumer of legal services

This week Dan Lear and Emery Wager joined Erin Levine of Hello Divorce and Liam Moriarty of Lawgood to talk the future Legal Tech. 

Seth Bloom is the Sr. Director of Attorney Services at Levelset. If you’re not familiar with Levelset, it’s a company that helps all kinds of contractors, but particularly those in the construction space get paid and focus on what they like to do. It’s most relevant for legal professionals because those contractors often file, manage, and – when things go south - litigate liens. Enter Seth and the network of attorneys he’s building to help those construction professionals sort all of that out; but Seth's story doesn’t start there.

Erin Giglia is the Co-Owner of Montage Legal Group. As you’ll hear, Montage was founded more than a decade ago to exploit a “gap in the marketplace between freelancers and law firms.” Since then the model that Erin and her co-founder Laurie established has been emulated, adapted and admired by firms and freelance legal business across the legal sector.

Written By Devon Thurtle Anderson, CEO of Financial Consulting Firm, Skepsis

When I first left my law practice to become a law firm bookkeeper and financial strategist, I was shocked to discover how many law firms struggle with cashflow.  Even more surprising was that this struggle isn’t just limited to a few seemingly rag-tag solo general practice firms.  To the contrary, when I had a chance to look under the hood at dozens of law firms’ books and financial records – including law firms I had always seen as hugely successful – I learned that almost every law firm has a cashflow problem within any given 12-month period.  So, as part of my bookkeeping and consulting services, I set out to change that.

Back in March I shared three things that I learned from the Small Law Firm Coronavirus Growth Symposium put on by How to Manage a Small Law Firm. At that time, when uncertainty and fear about our current predicament were at its peak, the content of the Growth Symposium offered a powerful reminder to stay positive and focused.

As the country begins, at least in some quarters, to open back up the good people from How To Manage a Small Law Firm are back with another program titled (in a very on-brand way) How to Not Screw Up Your Law Office’s Re-Entry.

Kim Bennett got burned by hourly billing. She lost a bunch of money and, having come up as a young lawyer in a corporate, in-house role, the model didn’t make sense to her. One day she pitched a client on a recurring monthly fee and, to her surprise, they accepted. That’s right, we’re talking subscriptions again. But where the guest from our last subscription-based law practice, Jon Tobin, uses subscriptions in more of a "one-to-many" way, helping lots of clients with a specific set of offerings, Kim has fewer what she calls “premium” subscriptions and they include more comprehensive, regular work with the clients.

Credit cards are a great way to get paid more quickly. The Clio trends report shows that firms who accept credit cards get paid 39% faster than those that don't. 

But credit cards are expensive. For invoice or trust payments where the client enters the card, rather than swiping or dipping, the cost generally hovers around 3%. Furthermore, credit cards are not the only way to provide a high-quality online payment experience.  

Shopping around for better rates can save you a few tenths of a percent, but here are two changes you can make to drastically reduce card fees while still getting the benefit of speedy payments. 

I know you didn’t go to law school to manage financials or be an accountant, but it turns out that your ability to successfully support and represent your clients is contingent upon running a sound business. And Chelsea Williams, founder and head of Core Solutions Group, is dropping some wisdom about how to manage your firm’s finances so that you can worry less about money and more about your clients. 

Managing accounts receivable is important when times are good. But when times are tough, how effectively firms turn accounts receivable into cash can be the difference between going under and thriving.

Expert law firm financial consultant, Chelsea Williams of Core Solutions Group has an excellent video outlining four tips for effective accounts receivable management. Below is a summary, but we highly recommend checking out the video.