I run a small family law firm of two attorneys and a paralegal. We have enough work to hire more people, but hiring has been a big challenge. I am looking for resources on how to grow a firm. Looking for specific information on some of the following topics:
- How do I calculate the total amount of money necessary to pay a lawyer? There are so many ancillary charges that I am losing track. For example, hiring a new attorney requires additional office space, access to legal resources (Lexis/Westlaw), case management access, email accounts (G-Suite), malpractice insurance…etc, and I haven’t even gotten to salary, benefits, vacation time, bonus structure. Are there resources to help plan the financial aspect of hiring? If I want to offer $75,000 for the position, how much I need to take in to break even?
- What is the expected ROI for each additional lawyer that is brought into the firm?
- Is it better to hire a paralegal over a lawyer?
- Should I borrow the funds or wait until we have enough funds in the bank?
- What contracts do I need in place to ensure I can fire them if they don’t work out? Are there examples?
- How do I know if there is enough work to expand or hire more support staff?
I am sure there are areas of focus that I am not considering, but there are the ones that I struggle the most with. Are there books, blogs, YouTube channels, etc. that are available to help grow a law firm responsibly?
Consider that in this incredibly challenging job market, you might be better off trying to rent capacity in parts of your practice (through outsourcing) than you’ll be by trying to buy capacity in your legal delivery team (through hiring).
The Functional Org Chart
I suggest you start by making yourself an org chart, but make it a chart of roles that currently exist within your firm WITHOUT putting names of people on it (at least at first).
It should start at the top with “CEO” and have leaders for all of your core departments (functions) reporting to that CEO. The two you probably spend the most time are the “Director of Acquisition” (marketing, sales, intake) and “Director of Delivery” (getting the actual legal work out the door). You’ll also want director roles for Finance, Technology, Facilities, and People & Culture. That’s six departments.
Then, starting with Delivery, add the more granular functions that take place within that department: Client/Case Strategy Manager, Project Manager, Document Creation Manager, Quality Assurance Manager, Delivery Coordinator (e.g. document filing), Chief Negotiator, etc. Again, no names for now, just roles or functions.
Next, build out a few of the more granular functions for the other departments. Stuff like Bookkeeping, Billing, Trust Accounting, and Accounts Payable for Finance; Space Management, Maintenance, Transportation, and Security for Facilities, and so on.
Then, once you’ve captured all of the roles that already exist within your firm, go back and pencil in the names of the people you currently have who occupy each role. For people who occupy more than one role–and I suspect you’ll be putting your name in a whole lot of places–you should also guesstimate how many hours/week (or what percentage of time in a month) that person spends in each role.
Now take a step back, realize that your personal capacity is finite, and figure out what are the roles where you can replace yourself. That might be shifting responsibilities to an existing team member, making a new hire (possibly, but not necessarily, in the delivery team), or with a 3rd party like an IT management service or a good bookkeeper. If there are others on your team wearing a lot of different hats, do the same for them.
By doing that, you’ll free up your personal capacity to focus it on the core revenue pipeline of your practice: Getting work > Delivering work > Getting paid. I think you’ll find that there are several opportunities to re-allocate your existing resources in ways that allow you to effectively capture, and deliver services for, more of the demand you’re seeing.
You should also start to see opportunities to re-think your assumptions about the work you do so that you can better utilize your existing capacity. For example, should you move your practice to more of a niche where you can charge higher rates? Should you productize some of your services to de-couple your revenues from your hours? There are plenty of ways to grow and scale that don’t involve adding staff.
Recommended Small Business Books
To answer your actual questions, here are a few books I recommend. All are about small business in general, not law firms (and that’s a good thing):
Recommended Legal Ops Coaches
Finally, It sounds like you’re in a place where you’d benefit from a coach / consultant on law firm operations. That’s what I do for a living, but let me suggest a few of my competitors who I think are excellent:
Hope that helps and good luck!