The LexFactor

In this episode, Lauren Hoffmann and special co-host Sarah Ruttan-Bates talk with guest Wendy Merrill, Executive Vice President of Growth Strategy & Branding at DRI, the largest civil defense bar association in the country.

The trio discuss the idea of “new law”, the changing legal space and how the status quo is continuously being disrupted. COVID-19 may have forced law firms to embrace innovation and adapt with technology, so DRI and Lexicon worked together and surveyed DRI members on how they feel the legal market has changed since the pandemic began.

Tune into the episode to hear Wendy and The LeXfactor hosts explore how work-life balance has improved, the struggles firms face with converting billable hours, and more.

Learn more about DRI by visiting DRI.org and find out how you can become a Lexicon partner by visiting LexiconServices.com/partner-program.

Lauren Hoffmann: Hey, everybody. Welcome to another episode of the LexFactor. It’s your host Lauren here. We have some special guests today. Not only do we have a special co-host – you guys know Sarah Ruttan-Bates, she’s our Director of Legal Operations and Training. Welcome back, Sarah.

Sarah Ruttan-Bates: It’s a mouthful, right? Hey, everyone. Excited to be back.

LH: And we we’re actually doing something fun today. It’s a special partner podcast. So you guys remember Wendy Merrill. She’s with DRI. She visited the show months back and she’s back with us today. So welcome back, Wendy.

Wendy Merrill: Hi, thanks for having me. This is exciting.

LH: Yeah, definitely. I’m really excited to dig in today’s topic because obviously it’s very relevant. We’re kind of digging into new law, but it’s also based off some data that we worked with your members to gather. So we did a survey and we put together a whitepaper and we really want to dig into it today. But before we do that, Wendy, I would love if you could just kind of remind everybody who you are, what you do. What gets you going every day and what you guys are doing over at DRI with your members.

WM: Sure. So I’m Wendy Merrill, as you mentioned, and I am the Executive Vice President of Growth Strategy and Branding at DRI. So DRI is the largest civil defense bar association in the country. We also have international members and so we serve civil defense, and we also have a lot of in-house counsel folks as members as well.

I oversee marketing and sales and communications and publications. So I’m very much in tune with what our members are looking for, working closely with membership and programming to make sure that we are always providing value to our members and education is a really big part of DRI always has been so we’re always looking for ways to share ideas and help our member firms to be more innovative.

LH: We love the education over here.

SRB: Big fan. Big fan, Wendy.

LH: And before we dig in, Wendy, give us a little background on you. How did you get to the legal space?

WM: I’ve been with DRI, formerly as an executive, for a little over a year and a half. Before that I worked with as a consultant. I had a consulting business for about nine years, before I joined DRI, that focused on helping lawyers and law firms to position themselves for the future. So working in particular with growth strategy and also helping firms to prepare their younger lawyers to steward the firms into the future. So I’m not a lawyer, but I spend lots and lots and lots and lots of time with lawyers. I feel like I’m kind of a member of the club without having to go to law school fortunately. Save me a little money, but I just love working with attorneys. I find they face a lot of pressures. It can be a pretty stressful gig. And I enjoy helping them to be more successful, figuring out better ways to do things, and also changing the legal space for the better. So that’s a little bit about me, I’m very passionate about this. And DRI has given me a wonderful opportunity to really dig in and try to help our members to be more successful and therefore also helping their clients to be more successful.

LH: And that’s why we are a partner with you guys. Because we’re on the same page. We’re all about that education. How can we help? I think we all know the legal industry is a little slow to adapt, especially when it comes to technology, new operations or culture, everything. So kind of working towards that same end goal.

SRB: I feel like I want to be Wendy when I grow up. Everything you just said that you do and just working with attorneys and just getting them to see the end, the advancements, really within the industry. In my time I call them the baby attorneys, or the green attorneys. I don’t know. I think I might just love you, though. That’s amazing. I love everything that you just said.

WM: I think it’s a very exciting time to be in the legal space because of all of these changes, which I know is scary for the status quo. But I think that there’s a big push for more diversity and work-life balance, whatever that happens to be and just embracing technology and providing more value to clients and all these kinds of exciting things that, strangely, one of the weird silver linings I think of COVID, is it forced I think everyone to think differently, but particularly the legal space to really embrace innovation because they had to. So I think that there were some good things that have come out of COVID. One of which is technology and firms focusing more on how they can be more efficient and be more supportive even of their staff.

LH: Yeah, totally agree. Now Sarah, do you, do you love me as well? Because I feel like Wendy got all the love and I’m just sitting here.

SRB: Yes, you’re great.

LH: That’s a perfect segue into the survey. As Wendy just said, we worked with the DRI community with their members and we actually sent a survey out to learn more about basically how their lives have changed since COVID. And like you said, unfortunately COVID has been this terrible thing, but it has brought some silver linings to some business operations, law firms specifically. And that’s kind of what we want to dig into today. So what we really want to talk about is how the legal market has adapted and really changed since COVID took place. And so we reached out to I think about 150 DRI members and got some information from them basically around what are their thoughts on the future of practicing law? And so there’s a few key takeaways that we’re really going to focus on today. One, folks have actually achieved a better work-life balance through COVID, which is interesting, and it really has a lot to do with the investments in technology that have been made and all the advancements that actually came from those investments as well.

We’re going to talk a little bit about going back to the office, whether it’s a hybrid approach or being completely remote. And the fact that firms really still struggle with converting expended hours into billable hours. I think we saw a lot of efficiencies over the past two years, but unfortunately, billable hours is one of those biggest struggles that are out there. So how can we really address that and what other adaptations, whether it’s technology or this idea of new law, which we’re going to dig into, can help you bring back those billable hours?

So digging into the survey a little bit, we found that 83% of people actually feel like they have a good work-life balance, which is interesting. It’s gone up from previous years. So I wanted to kind of pick your brains, Wendy, Sarah, what are your thoughts on that work-life balance? I know on our end, Sarah is very in deep with the day-to-day operations of our actual law firm clients. So I’m kind of interested to hear what you’ve seen, Sarah, on that ground level in regards to that work-life balance.

Listen: Recognizing the Current State of the Law Firm Model

SRB: I’ve got to say for me, the 83%, though happy to see it in this particular survey, it struck me as high. It really struck me as high. And again, maybe I’m just thinking back to a couple of years ago before COVID, you know, standing in a room, speaking with attorneys and staff and in pulling just different data points myself to kind of drive this point that you really got to have this work-life balance. And it was, I mean, I want to say around 33%. Don’t quote me on that, ladies, but it was pretty low in comparison. But yeah, Lauren’s right. This is something that I really, really, kind of scream from the rooftops that I think the importance of work-life balance, what law firms need to really consider is that if you are not giving that consideration to, may it be an attorney or even legal staff for that matter, in the market right now, they’re going to go find a firm that will. People want to feel like they can come in and do a really great job representing their clients, billing those hours, providing a great level of legal representation, but still get to go home at the end of the night. And if it’s have dinner with your family, walk your dog before the sun goes down, you catch up on, I don’t know what TV shows are out there, CSI.

People want to have that because if they don’t have it, they burn out. They really burn out. But that’s been, my experience personally is it’s been a long-standing struggle that in the legal community and in this environment people feel as if they have to work, you know, 60- 70-plus hours, give up their weekends, give up their free time, and then they look back and go, “Where did my personal life go?” I don’t know, Wendy, what about you?

LH: Yeah, you’re, you’re on the ground floor. These are your members. What kind of feedback are you hearing from them?

WM: That did, did strike me as high. I guess we got a pretty happy-go-lucky group that you surveyed. Listen, I’ll take any positive news in this department. I joked earlier about this, I think that the statement work-life balance is a tricky one because it means something different to everybody. I think that, on one hand, the, the remote work environment has been good and that we can all wear sweatpants. We can look professional on top and sweatpants on the bottom. I’m not going to tell you if I’m wearing those or not. But at the same time, I happen to be a remote employee myself and we work longer. I don’t want to say we work harder, but we really do work hard because there’s no commute to the office.

LH: You don’t take an hour lunch. That’s weird. You’re sitting at home. Why do you need an hour lunch?

WM: Lunch? I don’t know what lunch is. So I think firms still have to be careful and they may think that they’re being very flexible because we’re saying, “Oh, you can work from home.” But at the same time, I still think that staff of all levels would benefit from some sort of structure from their firms saying, “Here’s what our expectations are. We also expect you to take some time off.” The billable hours thing is just, in my personal opinion, I’m not a fan of it. Listen, our folks are litigators, so it’s really hard to get away from that. But I think for a lot of other attorneys, it’s tough, right? Because it’s kind of like everything for the almighty billable hour, and that has caused so much stress, particularly for the younger generation, newer associates, etc.

So I think that firms are definitely more aware. Now, I do think that they are thinking about culture. It’s one thing to talk about it. It’s another thing to actually walk the talk. But as you mentioned earlier, in today’s labor market, there is literally a war for associates happening right now. And firms need to understand that it’s not just about throwing more money at people. That’s not how you get them to stay. It’s how you get them to. But they won’t stay for that. The way you get them to stay is to build culture, make them feel appreciated, recognized, and also make sure that they received the support, whatever that looks like, from their firm that they need.

LH: Definitely. Because, at the end of the day, that salary that you’re looking for, it’s ultimately setting you up for your future. So you can find an employer, a firm that has that culture that you’re looking for, but say, “Hey, I was making this much at my last job, you need to obviously beat that.”

SRB: Something else that I’ve heard just from speaking with recruiters again in the legal field, the money is actually not top priority. A lot of them are saying, again, to the point that we’re discussing right now, the flexibility, the balance, Wendy, to your point, there have been a number of candidates who have turned down offers because they say, “You know what? I could actually make that or even a little less, but have a smaller or lower billing requirement.” You’re right. It’s the whole big picture, right? It’s all these little pieces that really make up truly that bigger picture and that culture. Another thing I’ll just note is what is the investment in the employee from a training state, an educational standpoint, things of that nature. It’s a lot of little things that make the big complete package for these individuals.

WM: I want to make a comment about what you said about training. Before I joined DRI, my focus was on professional development and leadership training, etc., for associates junior partners. And the challenge that I ran into for many years was that firms were reluctant to invest in their people. They were scared, frankly, of throwing too much money and time and energy into training their people for fear that they would grab the clients and ride. Well, that was short-sighted because as we now know, had they made some of the investments in their people, they actually would have retained some of these folks as opposed to losing them.

So while I completely understand, because there are no non-competes in the legal world, that people are afraid of losing clients, at the same time, to your point, if your most promising rising leaders feel valued and feel that the firm shares their values and feel like they belong somewhere and they’re appreciated and they’re seen, they will stay and they will join the leadership queue and they will be your future partners and managing partners. And that’s what you want.

LH: And I think a lot of people fail to make that connection that if you have happy clients or happy employees at your firm that actually translates to happy clients. If your law firm attorneys, paralegals, admins, whoever, if they’re happy, if they answer the phone with a chipper voice, if they’re excited to give service to their clients every day, because they’re in turn happy at what they do, that client is going to be more happy. They’re going to have a better experience. They’re more willing to review you online. They’re probably more likely to pay in full and pay in a timely manner. And so there’s a lot of that connection that people don’t realize just because you have a happy culture, it doesn’t just stay within the firm. It translates externally to your clients as well.

And I think going back to the fact we mentioned 83% of attorneys in this survey said that they have a good work-life balance. This is really telling, too. So the next fact that kind of supports that number is that 81% of those same respondents actually said that they currently work between 40 and 60 hours. So the funny thing is, if I’m wrong, correct me, but 40 hours is your traditional work week. So the fact that they are working between 40 and 60 hours, but are still saying that they have that good work-life balance, I think that’s very interesting as well. So maybe they’re working those long hours, but maybe they’re happier. Maybe they can work from home and in the middle of the day they can go and pick their child up from school, take them out to lunch and come work again. So maybe it’s not the fact that they’re working less hours, but the way that they’re working is allowing them to incorporate their personal life a little more.

SRB: It kind of leads into your next point here. And I don’t want to steal the thunder for it, but it makes you question, though, what technology are they using? I think back to many, many, many years ago when I was in the law firm, billable hours were tracked with your handwritten notes on a piece of paper. So you were jotting down everything that you were doing, and then allocating your time that you just track to the tasks that you just performed. Can you imagine how much extra time that manual process adds?

LH: Could you track time for the time it took to track time at that point?

SRB: That is non-billable. Lord. It makes me think, OK, so what other things are making this easier for them and making it more accommodating to still work those 40 to 60 hours, but they feel like they have that balance and it’s got to be more than just the flexibility. It has to be. So let’s talk technology.

LH: I think what we learned, and I don’t have the number handy, but I think around 76% of firms have, and this is nationwide, not just looking at DRI members, are using some sort of technology at their firm, which is the majority. But if you think about it, that’s still almost a quarter that aren’t, which is still a pretty big number, regardless of the fact that it’s not the majority. So in the past year, we’ve really seen a lot leeway when it comes to document management, practice management software and legal research tools. So those are the key areas that people are really adopting technology. And if you think about it, with the majority of firms maybe not being in an office the past two years, those are really the things that are going to keep your business going. You have your practice management software, which is going to literally allow you to manage your clients in cases from anywhere. We all know firms are document heavy. So the fact that you can have something to support that collaboration and creation of documents, whether you’re at home, at Starbucks, or in the office is big. And then, obviously, legal research tools, because that is such a huge part of managing cases in itself. So that’s where we’ve really seen some headway over the past two years when it comes to adopting technology.

SRB: I think back to the days, and Wendy, maybe you even chime in from your experience, but I’m so used to law firms being, as Lauren said, paper-heavy, but those physical hard files. You think about kind of that work-life balance and everything going on with COVID, and I don’t know, in my head picture like a cartoon attorney walking out with a massive armful of file folders, piles of paper flying everywhere.

LH: Wendy, what are your thoughts with working with your members, I know you guys are so close to them, what kind of feedback have you gotten from them from a technology standpoint? Have you seen what is really working for them? Are there certain things that a lot of your members have adopted over the past couple of years? Or maybe even struggled with?

WM: One way they’re embracing technology, we’re a big CLE operation. So we provide a lot of virtual CLEs as well, especially during the pandemic. So firms are definitely investing in online, CLE training, more of that for their attorneys. It’s a space where we have a big presence, but it’s a very competitive space because there’s lots and lots of providers out there, but I think that’s where we would be closest, where we would see that, that our lawyers are attending. They’re doing online CLEs and they’re also attending our virtual seminars.

LH: It’s definitely made it a lot easier to get that education. And I’m really glad you glad you brought that up because we talk a lot about the efficiencies that technology can bring to law firms. But there is that other side, too. There are other things that are required when you’re a lawyer. It’s making sure that, as an attorney, you have an opportunity to get the education you need to keep practicing law and technology makes that easier, too. I think at this point, there’s no going back. Virtual CLEs are always going to have to be an option. It can’t always be in person. It’s become so easy for lawyers to get their credits.

SRB: Well you think about, as far as I know, just thinking back, in my 16 years there’s always been the here-and-there kind of online option, but it certainly wasn’t what it is today. But you think and again, this was another thing that was probably trending prior to COVID, but it was just really forced into it, if you are mandating in person, you were pulling that attorney away from their clients. Whereas, I understand from an engagement standpoint, potentially, it might be better for some to be in-person, but if you can still offer that information, that education and that knowledge, and the ability for them to get their bar required credits to keep their license current, it’s a win-win for everybody.  It really is. I think that the whole CLE component and the education is another big one and it’s staying. It’s absolutely staying.

I think legal research, to add to that real quick, legal research used to be publications. They were books, and they still are. They still exist. Don’t get me wrong. And that’s another one, a lot of attorneys like to physically have the book. And I’m going to be the first to tell you, I’m a physical book kind of person as well by books. When you have law firms, though, where you have multiple people needing to share the same publication to research and look up laws and whatnot, that’s challenging. Whereas now there are just so many platforms where they can do all of that research either free, or they can pay to have a deeper dive. But it’s all online and they can bookmark and they can print and they can pull it up on their iPads when they’re in court.

LH: That’s a great point, too. So technology, it’s just, it has made everything so much easier, whether it’s actually practicing law itself, educating yourself, staying in touch with your coworkers, even having a one-on-one zoom meeting and seeing your coworkers face as opposed to having to pick up a phone and call them. Across the board, technology has been amazing and a huge part of our growth over the past two years. Which kind of leads me into our next point, which is really interesting because I don’t at all want to downgrade the importance of technology because we know how far it has brought us over the past two years, but at the end of the day, it’s not everything. There are still inefficiencies that need to be solved in other ways, too. And I bring this up because through the survey with the DRI members, we found out that 78% of the respondents actually bill 75% or more of their time, but that’s versus 81% of just a few years ago. So at the end of the day, the amount of hours they’re billing has actually decreased over the past two years. So we’ve introduced all these efficiencies, but what else is there that’s missing? And that’s kind of how we move into this idea of new law, which is really leveraging technology, leveraging other service providers to provide those legal services in new and novel ways.

SRB: I just want to ask a follow-up question, and I don’t know if you ladies even have this answer. So is the takeaway there that the respondents are billing 75% or more of their time versus it was previously 81. Is it because they’re just getting so busy with all of these other tasks and responsibilities and getting pulled away? I like to call it leaving billable time on the table.

LH: And that’s something that I definitely feel strongly about. We know, and I hate to use this number because it sounds so fake, but literally over 99% of the firms in the U.S. are actually solo or small. And so you’re running the shop by yourself. Are you answering the phones? Are you sending out all your invoices? Are you spending time recruiting, writing, job descriptions, posting them interviewing? Are you doing the tasks that a paralegal would do? There are things that are pulling you away. You can have all the efficiencies in the world from technology, but there are still things that are pulling you away from doing your job, AKA bringing in those billable hours. That’s what I think. Wendy, what are your thoughts on that?

WM: Well, my question would be more around not necessarily billable hours, but whether or not what their realization rate is, because they may be billing, but it doesn’t mean they’re collecting. That is a huge, huge problem for law firms, and particularly for small to mid-firms. So I think that any technology or advisory services that can help firms to better realize a return on their investment of time and to be more profitable, that’s where lots of lawyers are struggling. So I think that, and I know my personal experience when I’ve had this conversation with the attorneys and asked them what their realization rate is, they kind of look at me blankly. They don’t really know what that is. And I’m like, well, if you don’t know what that is, we need to talk about it because you know how much of your time are you writing off and why are you writing? And by the way, how much of your associate’s time are you writing off and why?

LH: That’s a great point. I know we did a webinar on that before, but it, it amazed me when we were doing the research. Like you said, Wendy, how many people actually don’t know what that term is? And we do focus on billable hours all the time, but at the end of the day, you have to take it a step further and you actually have to collect on those dollars as well. So it’s great that you have more billable hours and you’re cutting back on the stuff that you can’t bill your client for, but if you’re not collecting on it, it doesn’t matter. So that being said, there are really a few things when it comes to adopting new law, that can help with the billable hours. It can help with really deciding what you should keep doing at your firm versus what can you outsource? So think about this, how important is the function to the firm itself? And then you think, what is the cost of the firm doing it versus actually outsourcing it? I think a good example is hiring someone to be your receptionist. Maybe you pay them $45,000 a year. They get benefits. They get PTO. Maybe they take on a few tasks here and there, but at the end of the day, you’re a solo firm and maybe you have 20 calls a day. All right. So you’re paying this person $45,000 to take 20 calls a day. Whereas you outsource a virtual receptionist, you don’t pay any of that. You literally only pay by the minute. So when a call comes in, you’re paying for however long that virtual receptionist is on the phone with your client. Other than that, you’re not paying salary. You’re not paying PTO. You’re not paying benefits. So that’s quite often an area that firms do look to outsource because the cost is obvious how much you’re saving in the long run for a position like that.

WM: I want to throw something else in there where there are savings, where there’s a benefit that’s not so obvious, which is most lawyers I know don’t really want to spend time managing people. They just don’t. I don’t think anybody does. It’s a struggle for them and it’s hard. And anytime you have an employee, whether it’s a receptionist an office manager, anybody, it requires time to manage that person, it requires HR. So if you’re in a small, mid-sized firm, it’s not just the actual cost savings, it’s also the time. And frankly, the, the potential frustration, on the other hand, not to say that people shouldn’t hire, because I don’t think outsourcing is the end all be all for everything. But I do think that for today’s and tomorrow’s law firm, it should not only be an option, it should be sort of just the norm.

LH: I totally agree. And I’m glad you brought that up. It kind of leads me into the next area of consideration. So how good are we as a firm at doing this? So not necessarily just how good are we, but do you like doing it? Do you want to manage people? But how good are you? If you need to write a job description, you’ve never done that in your life. This is your first hire. Is it worth the amount of time that you’re going to take to write a job description, do the research to understand what the salary should be, compensation, what the benefits should be interview people, learn how to interview people, if you’ve never done it before? Or, like Wendy said, maybe you just don’t like doing it. So maybe it’s something like that that you’re like, “Hey, this is another good area that I could outsource.”

SRB: It sounds like a lot of time on Google. And you think about it, if they’re spending that much time doing the research, trying to figure it out, because they’re not, let’s just say a subject matter expert there, they don’t like it, it doesn’t always mean they’re going to hit it out of the park. Because Google and all of your online research, it’s so flooded.

So real quick, if I could just circle back, you were talking about the virtual receptionist, which again, huge fan, there’s so much that they can, they can do for attorneys. Virtual paralegal, that’s another one, Wendy, when you were saying that so many attorneys just don’t like to manage people, that is just a fact. You are absolutely correct there. Virtual paralegals, another one though, because oftentimes, attorneys truly do need that support and they need that assistance. Maybe they don’t want to manage the individual or individuals. They maybe don’t want the overhead cost of the salary hitting their books, the benefits.

LH: That’s another great one that is project-based. Maybe you literally only need them for one major case that you’re taking on.

SRB: And that’s the perfect time to use them, really. Which again, the long-term, it’s there as well, but let’s just say you’ve got a big trial coming up. Not to get too specific, but things like the product liability industry, if you just need a medical paralegal to look at some medical records, things like that. It’s a very, very streamlined option for outsourcing.

LH: And what I like about what Wendy brought up earlier, it doesn’t always make sense. So outsourcing could literally be a saving grace for your firm, but also it depends on what you do as a firm and what your clients are like. For example, a firm that works with primarily more wealthy clients, they may prioritize actually having full-time staff in house because they want to deliver more of that white glove service. Whereas maybe you’re a solo firm and you’re just doing P.I., it’s a little bit more OK for you to be able to outsource everything because it’s a different clientele. You’ve got to think about that, too. So there is a lot to consider and really that last area to think about when you’re exploring the idea of new law is thinking about do we have the right people in those roles or could we use outside experts? So I think we talked a little bit about that already, but do you have someone in house who truly is the expert? They know how to do this and they know how to do it well. Maybe marketing is a great example. Are you going to buy a billboard and you think you can handle it all yourself, get a good message out there, get good creative, something that really resonates with your target market if you even know who that is? Do you have that person in house? Or if you’re going to spend as much money as a billboard costs, does it make sense just for you to outsource it and find someone who really knows what they’re doing?

SRB: Speaking of the whole marketing component. I think something that is still new to the legal industry is a social media.

LH: A lot of industries, you know, it’s been around for what, 15 years now, but it changes so frequently. It’s not easy to understand.

SRB: But building your platform out there on social media, which takes time, right. You have to have a presence and somebody managing all of that, but that ties back into your marketing. So again, having potentially an expert in that area, because I just don’t have time to sit down and just build a social media platform. I don’t have time to build my own. I just share other people’s stuff. I’m like, just turn this off. I can’t maintain.

LH: But, you know, I think at the end of the day, I know we’re, we’re getting close to the end here, but take time to understand what works for your firm and what doesn’t work for your firm. There may be some key areas that it just makes sense to have someone else do it. It’s going to help you drive those efficiencies internally, save some money most likely, and focus on your clients in those billable hours and ultimately those realization rates. Technology, services, what can you adapt internally? What can you do different internally, but where are areas that you can outsource too? And it’s OK to do that nowadays. It’s becoming so frequent that if you don’t start having these conversations internally, you’re already behind. I think my No. 1 takeaway today is really just start having these conversations at your firm. Are there things that you can do differently? Is there a technology that would make your life easier? I know it’s a hard conversation sometimes if you’re fully staffed, but are there areas that you can maybe outsource and save some money and do a little better?

SRB: I think my takeaway is very similar to yours, just some different wording. Don’t be afraid of change, which is hard in this industry. It is. I truly say that and I’m coming from a really good place. Don’t be afraid of it. In my opinion, the firms that are out there and they’re willing to take those leaps and try something new, and it doesn’t mean you’re always successful, but you’re willing to try and grow and expand. Those are probably the firms that are going to be more cutting edge and potentially see the long haul, if you will.

LH: Wendy, what are your closing thoughts here?

WM: I think you said don’t be afraid of change. I love that idea. I think I’m in the minority that I actually welcome and embrace change. I don’t know. It’s exciting to me. But lawyers, generally, don’t like change. We have realized this. It’s been difficult to navigate a membership organization throughout COVID. Because it’s certainly forced a lot of changes and our members have encountered a lot of changes in terms of just how we do things and it’s a delicate balance and I think change is inevitable. But I also think that it’s essential to make sure that change is communicated well. That’s what we’ve learned about our members. And I think what you’re talking about is if Lexicon is in a position to help attorneys, whether it’s your technology or consulting or what have you, I think the communication is critical and understanding your audience and understanding that they may not be super tech savvy, or they may not be used to outsourcing services and doing a little handholding, it goes a long way.

LH: That’s a great point. Change is obviously very important and I think start small, find one little area you can consider and see how it impacts your operations. But like Wendy said, don’t forget to communicate it. You can’t just implement a new software platform and things are golden. You have to make sure that your staff understands it, that they understand the benefits, they know how to use it and they love using it and they see that benefit at the end as well. So don’t forget to communicate.

The post Partner Podcast: Diving into New Law with DRI – The LeXFactor appeared first on Lexicon.

In this installment of The LeXFactor Briefs, our podcast hosts Lauren and Brad dive into an article from Law.com and the importance of having a solid cybersecurity plan in place at your law firm.

Law firms must have a solid answer for clients when it comes to cybersecurity, and in the modern client-attorney relationship, that is not always the case. If attorneys want to retain clients, the client must feel their information is being protected, so lawyers have to be capable of telling their clients exactly how their data is kept safe and secure. It is a misconception that a small head count at your law firm means you are safe from large data breaches – quite the contrary. The good news is that cybersecurity strategy is becoming more widespread, and lawyers are continuing to put more thought behind how they store client data.

Subscribe to The LeXFactor on your favorite podcast platform and if your law firm needs help with cybersecurity, learn what Lexicon’s IT team can do for you by visiting LexiconServices.com/Information-Technology.

LH: Hey, everybody. Welcome to another episode of the LexFactor Briefs. It’s your host Lauren.

BP: And Brad. I love the Briefs. I love the intro.

LH: Because they’re brief, and we get to go eat lunch afterwards?

BP: It is an incentive to get through the Brief. I can’t lie.

LH: I don’t think we ever told people how we record these right before lunch.

BP:  Yes, we do.

LH: I wonder if Justin ever has to edit out like a grumbling stomach?

BP: I would count it because I know many a time, my stomach growls.

LH: Or if I get angry, that’s why, just blame it on the hunger.

So today’s article, we found, clients aren’t asking solos, small firms, about their cybersecurity, and that’s a problem.

BP: And I’m going to switch it up a little bit because obviously you first think about the clients, but the clients really aren’t listening to the podcast here. It’s more attorneys that are listening to the podcast. So we have to make sure that law firms have a solid answer to this question when clients do ask.

LH:  That’s a great point.

BP: Because it is important. More and more people are concerned with cybersecurity. It’s not just attorneys or law firms that clients are asking, but it’s asking when you go to purchase your insurance, when you go to apply for credit cards, when you do any purchase online. They ask, what is your cyber plan? How is my information being secured? Is it safe? And we have to have attorneys capable of answering that question.

LH: It even comes down to signing up for emails these days. Like there’s so much fine print, you have to read and you’re like, “Who are you going to sell my information to?” And I think one thing before we dive in, just a reminder that the legal industry is one of the most sought after industries for hackers or cyber criminals to target. … Because of the type of information you have on your clients – it could even be social security, numbers, maiden names, pictures – the legal industry is constantly targeted, you a lot more than other industries. This has got to be top of mind for you.

BP: So ask yourself first, if you were asked by a client, “What are your cybersecurity practices? How is my information being kept safe? How sure are you that it’s safe?” How are you going to answer.

LH: That that is a hard one. I can honestly say a lot of people probably have no clue.

BP: And that’s why a cybersecurity platform, an answer, a response, a policy has to be drafted and has to be ready for you to be able to answer that question or partner with a company that can do that for you.

LH: So let’s role play. I’m going to flip it back and ask you the same question and you’re going to give our listeners ideas of how they can answer. Obviously, you said work with a partner, put together some sort of guide. Yes, you definitely do need to do that, but what are some quick tips? So Brad, I’m a client of yours. What type of cybersecurity protocols do you have in place at this firm?

BP: I feel like we’re in counseling. What I hear you saying is that you want me to be secure.

LH: Are you listening? You hear me, but do you listen?

BP: Yes. I think some of the things that people should say are, “Yes, your information is secure because we have the following practices in place. We protect the information through encryption. We protect the information through our employees are all set up for multi-factor authentication. We make sure that none of the information leaves this specific area. The information is backed up. We’re protected for ransomware via these methods — X, Y, and Z.” And the X, Y, and Z could just be the precautions that you’re putting in place that can stop those things from occurring. And there’s actually several articles that we have posted just recently that cover things that you can do to protect that. So check those out as well.

Listen: Why Cybersecurity Insurance is Vital for Law Firm Risk Management

LH: And I think too, if you guys are using any sort of software at your company, at your firm, whether it’s practice management software or something else, you probably have a rep at that company and you can ask them. Because like I said before, if you’re using practice management software obviously everything about that client and that case is in that software platform. So all you have to do is reach out to your provider and ask them, “Hey, how do you protect this data?” Or honestly, it’s probably on their website, you could just search for it and have those answers right then and there. I think the other thing you could keep in mind, like here in the office, we have door codes. It comes down to physical security too. Like how easily do you let other people in your offices? Because in all honesty, there’s probably a good chance that you may have some paper files laying around as well. So like here, we have door codes.

BP: Are your systems password protected? I mean, is it wide open?

LH: Is your password 1-2-3-4-5-6? Do you have unique passwords? What are some good password tips? I know you guys sent out a comms. internally a couple of months ago with password ideas.

BP: So my favorite is always phrases. People don’t think about phrases. They think about words when they do passwords. Don’t. Think about phrases. Think about things that are unique, that others wouldn’t guess off the top of their head.

LH: “Take my dog for a walk,” but the “A” could be like an ampersand.

BP: It’s important to do phrases — just random. You know, there are a lot of password systems out there that can randomly generate a password for you and you can keep it in password collection systems. Microsoft produces ones. There are several out there. So just phrases, randomness, those things are what’s key. You don’t want something very simple, 1-2-3, the year, the name of your kids, things that people can actually pick up just by searching your name or information out there on your social media.

The post Keeping Client Data Safe Using Cybersecurity – The LeXFactor Briefs appeared first on Lexicon.

The LexFactor hosts Lauren and Brad welcome back Sarah Ruttan-Bates, Lexicon Director of Legal Operations & Training, to discuss areas of legal operations that law firms tend to overlook, and to give a sneak preview of Sarah’s new podcast series with Lexicon CEO Dan Cuneo.

In Sarah and Dan’s new podcast The Entrepreneurial Lawyer, the duo will explore growing law firms and focusing on streamlining internal processes to drive your law firm’s revenue. The podcast will launch soon and the pair look forward to showing attorneys how they can change their day-to-day operations to build and improve efficiencies.

Listen and subscribe to The LeXFactor by visiting LexiconServices.com or finding us on your preferred podcast platform. Watch out for the first episode of The Entrepreneurial Lawyer soon!

Lauren Hoffmann: Hey, everybody. Welcome to another episode of the LeXFactor. It’s Lauren here.

Brad Paubel: And your co-host, Brad.

We have a great guest today. It’s a long-time listener and a returning guest

LH: And subscriber.

BP: It’s my friend and yours, Sarah.

LH: Sarah? Sarah who?

BP: You don’t know? Sarah, why don’t you introduce yourself?

Sarah Ruttan-Bates: I’m just trying to think of something really clever. …

LH: It’s funny because we just had Sarah on the show, but we’re actually bringing her back today because she’s got some pretty exciting news.

BP: Yes. Why don’t you tell us what that exciting news is, Sarah?

SRB: So here is the thing.

BP: Should we do a drum roll?

SRB: Maybe, but I’m not there yet. I have to really give this backstory. Ever since the LeXFactor was launched, I’ve been just envious. Envious, truly. And I’ve wanted to be you, Brad.

BP: No.

LH: Hello, I’m here.

SRB: Lauren, I’m getting there. Give me a moment, OK? I just really wanted to be a co-host, you know? Just getting to sit with somebody else and feel that energy, talk about topics that you live, you breathe. I mean, you’ve probably been through it yourself. I’ve just been saying, “Gosh, what can I do to get to Brad’s level?”

LH: You don’t have to go far.

BP: Rough crowd.

SRB: The opportunity has now presented itself. Insert Dan Cuneo, right? Lexicon’s CEO. The great thing about Dan, as we all know, is that he’s an attorney. So he definitely gets it from the attorney aspect. And what I mean by gets it, is what it means to be an attorney, to drive revenue, to bring in clients, that business aspect of things.

And so Dan approached me and he said, “Hey, how would you feel about teaming up and being my co-host?”

BP: He was like, “I want to be like Lauren. You want to be like Brad. I have the perfect solve.”

SRB: That’s right. We’re copycats of you guys and we’re super stoked about it. So Dan and I are launching our very own podcast.

BP: And what is that podcast called, Sarah?

SRB: It is going to be called The Entrepreneurial Lawyer.

BP: That’s right.

LH: I love it.

BP: I feel like we just hit the champagne bottle on the ship.

LH: What if we switched it up and Brad and Dan hosted together and the name could be Two Bald Guys.

SRB: Oh, would be amazing.

BP: Wow. Just wow.

SRB: But I’m sure people are like, “Well, what does that mean?” What are we going to talk about? How do we differentiate from what you guys are doing? Because what you guys are doing and what you’re talking about in your guest and your topics, I love all of them. It’s such amazing information for people out there in the legal community. Our focus is going to be more streamlined to actually building your own law firm and driving revenue. It’s more about, I always say that I’m building a firm and driving revenue falls under an umbrella, but it’s a lot of little things that get you there.

So high level, and we’re intentionally keeping it super high level because we want you to tune into our podcast. So we are starting our recording next week. We’re going to really talk to two attorneys who own their own law firms. How do you really build? how do you grow? We’ll be focusing on a lot of different areas. First and foremost, you need to be looking at your internal processes. That boils down to things such as your fee agreement. What’s covered? What are you charging people? How often are you billing? I’ve heard from a lot of attorneys that they don’t have a standard bill cycle, so maybe every 30 days, every 45. My thought on that one, again without giving a lot away, is if you wait that 30 or 45 days and you send that invoice, it’s probably a higher invoice and people are probably more reluctant to pay it versus if you’re kind of setting those more standard bills cycles. So smaller increments, smaller amounts.

LH: And we all know people play late so you’re just adding even more time on top of that.

SRB: Yeah, exactly. We’re going to be talking about what do you have payment plans? What is your collection process look like? Are you billing in real time and capturing the time? Are you leaving time on the table? We’ll be talking about auditing hourly rates, being competitive in your market, how to properly utilize your legal staff versus your attorneys who bill at a higher rate. We’ll be talking about different aspects about bringing in new revenue from marketing standpoints.

Marketing I think is important in the legal field, but you guys tell me what you’re used to seeing. I’m used to seeing more of that presence on a bus stop or a billboard.

LH: It’s definitely more traditional in the legal industry, but the world isn’t traditional nowadays.

SRB: It is not. Exactly. So point being that the legal community, the legal world is just going through a lot of changes. And so we’re going to talk a lot about embracing those changes and how you could be looking at just your day-to-day operational practices differently moving forward to really help grow your firm and generate revenue.

BP: I love it. You’re going to have to keep us in the know of your topic so we can make sure to preview them here.

LH: Oh, good call. And I feel like I’m going to have to listen because this is good education for me too. I didn’t come out of the legal field so I could always use it.

BP: Right, us co-hosts have to stick together. We have to form a bond and be strong.

LH: A co-alliance?

BP: Well, we have to, because the hosts just crush us all the time.

SRB: They always get all the fame and glory.

BP: I do think this new podcast is going to be amazing. I think it’s going to be exactly what people want, especially those attorneys that are starting out. They want to know how to build that business, how to grow, how to make sure to increase the bottom line. So it’s, it’s going to be awesome. I’m excited for you.

LH: There’s so much that comes to running your own firm. So much that you don’t know until you’re in there doing it or trying to do it, or you didn’t do it and realize you dropped the ball and need to figure out how to handle it moving forward. I’m excited about it.

SRB: And I, I think sometimes for all of us, change is hard. It is. And I just reiterate the point that law firm operations, they’re just really, really changing. They’re advancing. I mean, Lauren, you nailed, when we were talking about it just kind of is like old school. So if people want to stay ahead of the game, if they want to keep growing, they want to keep being successful, we’re incredibly hopeful that we can provide, recommendations, tips, and tricks. And again, it’s coming from people who we live it, we breathe it. Dan, like I said, himself currently in this CEO role for Lexicon being an attorney, I like to say I’m a retired paralegal myself. So I have a lot of that aspect from the legal staff side of things and how to grow and utilize them for your revenue purposes.

So we’re super, super excited about it. We cannot wait to get in the recording studio and start pushing our episodes.

BP: Are you going to have guests?

SRB: Yes, absolutely. I mean, damn, I don’t have all the answers. Even if I did that would be incredibly boring just to constantly hear Dan and Sarah talking to each other. I mean, we’re hilarious. Don’t get me wrong.

BP: Maybe one day I could be a guest.

SRB: I think that would be amazing.

LH: Oh, Brad. You’re here.

SRB: He likes to wear different hats sometimes.

BP: I like being a guest. They could ask me questions.

SRB:  He’s going to wear his bangs hat.

LH: I haven’t seen that in ages. I actually do have a tip for Sarah. When you’re in the and wearing a bun, you have to be careful about bun placement. Sometimes you can only put the headphones in front of or behind the bun. You have to be careful where you place it. And if you put it behind the bun, a lot of times it won’t stay up or the headphones won’t stay up.

BP: The struggle is real, people.

SRB: I’ll just wear my hair down.

LH: The bun needs to be more towards the back of your head and not on the crown of your head.

SRB: The problem you get with that is if you go too far back and you’re trying to like drive or sit in a chair.

BP: I have nothing to contribute to this topic.

SRB: Yes, Brad, we’re going to have guests, and yes, we can absolutely make sure that you get on that list. I won’t give names, but we have some amazing law firms on board and some attorneys locally so far who own their own law firms who have been incredibly successful some of which who have been in practice and in business for well over 20, 25 years. Those are great people to be speaking with and leading on, right? They’ve been through a lot of it. And a couple of those individuals that we’re going to be teeing up are not only going to talk about how they have been successful, but how they’ve had to really adjust and change as client needs change. Demands change, the demands of even their associate attorneys and their employees. We want to talk to as many people as possible and provide as much knowledge and information as we can.

BP: I’m so excited to hear the podcast. I cannot wait to subscribe. And please, it will be posted on everything like ours, right? Subscribe, like it, everything.

LH: Share it. And with the LeXFactor, too. Subscribe, like, share. If you want to be a guest, reach out, let us know. We’d love to have you on either show.

The post Sneak Peek: The Entrepreneurial Lawyer – The LeXFactor appeared first on Lexicon.

This quick hit episode of The LeXFactor features Sarah Ruttan-Bates, Lexicon Director of Legal Operations and Training. Our podcast hosts chat with her about client management and how fast the entire legal industry is changing – and how lawyers need to keep up.

Investing in your firm and your firm’s reputation toward your clients is key – and can be improved for free. Sarah suggests everything from being present with your client’s case and showing them they have your full attention to being mindful of your billable rates and how much your clients are paying you. Try finding tasks that your legal staff can take care of so the billable rate is lower – It’s all about defining expectations and proving to your client just how much you care about them as their attorney.

Remember to listen next time and subscribe to The LeXFactor on Spotify, Apple Podcasts, or your favorite podcast platform.

Lauren Hoffmann: Hey, everybody. Welcome to another episode of the LeXFactor. It’s your host Lauren here, and I’m actually with Director of Legal Operations and Training Sarah Ruttan-Bates. You guys probably haven’t heard that name in a while, right?

Sarah Ruttan-Bates: It’s new to everyone. Lauren’s better co-host.

LH: Ouch. Well now we’ll find out if Brad actually listens to the episodes or not. If he doesn’t say anything he’s not even a fan.

SRB: We just like to compete.

LH: I know, right? That being said too, before we dig in today, make sure you guys like and subscribe to the episodes so you can keep up with whether or not Brad heard this or not. Most importantly. Not so you learn but so you know if Brad finds out if we’re talking about him.

SRB: This is good. This is really good. How do we track this?

LH: We’ll work on that. And today I just wanted to have you on to do a quick hit. What is something that we can talk about, we can throw out some facts real quick and listeners can take five minutes of their day and be done with it? And I was thinking client management. Let’s talk through some easy ways that you can manage your client relationships better.

Listen: Building Better Attorney-Client Relationships

SRB: Let’s think about this, right? Here’s where my mind immediately goes. Everything in the legal industry right now is basically changing. A lot of those changes I’m sure attorneys are seeing dollar signs, dollar signs, dollar signs. We talk about technology, and potentially outsourcing, legal management systems, marketing – this is all an investment, but where and how can you invest in your firm, your reputation, if you will, the services that you provide and it’s ultimately free?

LH: I like it. Tell me more.

SRB: Here’s where my head’s at. I’m thinking, managing those client relationships, how can you improve them? How can you make them better? These are some really quick, easy fixes, and this maybe sounds super direct, but be present. Seriously, be present in your client’s case. It is very common that a legal assistant or a paralegal is the primary individual in contact with clients. I can tell you, many moons ago for me, clients would get very confused and mistakenly referred to me as their attorney. No, no. Ethically, you have to correct that.

LH: you have to pay me more for that, right?

SRB: I am not your attorney. I’m your paralegal assigned to your case. Your attorney is insert name. And the response was, “Well, I’ve never heard from them.” Or, “They don’t call me back. You’re the only person I speak with.” Which is great. Have that strong relationship with the legal staff but be present. Connect with your clients. If they’re reaching out to you directly it’s because they want to hear from you. Now with that, know when to delegate to your staff, right? Don’t get me wrong, the billable hours are important, the money, or really collecting the money, is important. But if there is a task or responsibility that needs to be completed, that can in fact be completed by legal staff at a lower billable rate, do that. You almost look at it, not only is it potentially something an attorney probably doesn’t want to do, but it probably feels good for your client as well to not always see that higher billable rate when it really is something somebody at half or three-fourths of that hourly rate could have completed.

LH: Great point.

SRB: I said be present, but return phone calls, emails, check in.

LH: And if you’re having a face-to-face, pay attention, right?

SRB: Exactly. Don’t be on your phone, don’t be looking at your iPad. It really does tie back to that first point, which is just breathe. Be present. These individuals are paying you, they retain your services. Make them feel as if they made the right choice. Again, that doesn’t mean you’re committing to anything or making any promises about the outcome of their case, but you are committing to and making the promise that you are going to treat them with the respect and the attention that they deserve.

I think it’s really important to define expectations.

LH: On both sides.

SRB: Absolutely. It’s just so important so a client knows what to expect from you. Again, I am not saying outcome of the case. I’m saying from you as their attorney. Attorney on record, what can they expect? “You can expect that I’m going to call you back within 24 hours. You can expect that I’m going to be notifying you every time that I hear from co-counsel or I receive something from the courts. You can expect that we’re going to send you an email when this, this, and this happens, or we’ll be meeting at this point and that point in your case.” Whatever that looks like for you. I’m just saying, define those expectations so they know that you are engaged and that you are committed and they’re not out there going, “I haven’t heard from you. I don’t know what’s going on. I don’t know what to expect. I’ve seen nothing.”

LH: If I can jump in real quick, it’s the entire journey of your relationship with that client. It’s the entire journey of the case. So you have that initial consultation, you’re not just setting expectations for how you’re going to kick off the process with that client or what billing is going to look like. Make sure you’re thinking about the entire journey with that client, even what are expectations they can have once you wrap up the work with them.

SRB: Yeah. I absolutely agree with that. When defining expectations, another thing to be really clear about is your fees.

LH: Definitely anything that comes to money be clear.

SRB: I kid you not, I have sadly, sadly witnessed a few too many times, legal staff being put in a position to review contracts and fee agreements with, I guess at the time, potential clients. In my opinion, probably not the best idea. Most certainly if it’s a more complex fee agreement. But I think it’s really important for attorneys to be present. Again, I keep saying that word, but be present in that one. Talk through that fee agreement. What does that look like? Be clear on your expenses. Are you charging for copies? Are you charging them for mail, for postage?

LH: Like when you get the hospital bill for a box of tissues and you’re like, “What the hell is this?”

SRB: Right. Disbursements, that’s a huge one. What does that look like? If you’re contingent base, explain, “We take care of this all upfront and we don’t get paid until you get paid.” If you’re not contingent, let’s say you’re hourly or fixed-fee, however, you operate, you have fees and expenses, right? Talk about what that looks like. What are those expectations? What can the client expect? What does that billing process look like when that time comes again? It just eliminates the unknown. Most of the time, the practice of law, it’s very reactive, right? You just don’t know, you have to be prepared for everything. So manage those client relationships and manage those client expectations. And typically, you’re going to have a better professional working relationship with that client because they feel like you’ve been upfront and you’ve been responsive, you’re engaged.

LH: I love it. So there we have it. Five quick tips for better managing client relationships. Let’s go through them one last time. 1. Be present.

SRB: Be present. I mean, you be present, be present, be present. 2. Know when to use your legal staff. Again, that doesn’t mean sub them in as pseudo attorney. Return phone calls, emails. Set those expectations of when and how a client is going to hear from you. Define expectations. That’s a lot of different walks of life there but be upfront about what they can expect from you and be very, very clear about fees and expenses.

LH: That’s awesome. We should do this more often.

SRB: Words to live by.

LH: You guys drive to work and you got five tips that you can put into place today, and you didn’t use any more of your time. Perfect. Thanks, Sarah. Thanks for joining us.

The post Client Management Tips: Showing Your Client You Care – The LeXFactor appeared first on Lexicon.

In this episode of The LeXFactor, our hosts Lauren and Brad invite Lexicon Director of Human Resources Jes Coffey to the studio to talk about the past two years in the recruitment world. Long story short, Jes emphasizes that it’s an unprecedented market.

The trio talks about what kinds of benefits are currently pushing workers to prefer working from home over working in the office, and how culture has become the key point of discussion in candidate negotiations. They also explore how understanding the current market and the future of the employment market is vital for law firms and attorneys to pull in the people they want on their teams.

Learn more about Lexicon’s recruitment services by visiting LexiconServices.com/HR-Recruiting and make sure to subscribe to The LeXFactor today.

Lauren Hoffmann: Hey, everybody. Welcome to another episode of the LeXFactor. It’s your host Lauren here

Brad Paubel: And your co-host Brad. Do you know what we have today?

LH: What do we have?

BP: An actual in-house guest.

LH: Are you serious?

BP: Oh yes, I am. It’s been forever. We haven’t had somebody in the room with us to record in such a long time.

LH: Do you want to introduce her? I don’t know.

LH: Everybody’s just eager to find out now.

BP: Jes Coffey is with us today. Why don’t you tell us a little bit about you?

Jes Coffey: Sure. So I am Jes Coffey. I am the Director of HR here at Lexicon. I’ve been in the HR realm for 12 or more years. I’m old. In a lot of areas from compliance to recruiting to strategy. So just kind of all across the board.

BP: Wow, that’s a hot topic nowadays for sure.

LH: It is, and that’s why we had her on, because literally, regardless of the industry, recruiting is like the hot button out there right now. I can’t tell you how many firms we’ve talked to that are just struggling, regardless of industry, no one can find talent.

People for the past year, we’re going on two years now, people were getting paid more on the COVID benefits and they were at work. So why bother going into work? And I don’t think we fully recovered. So what are your thoughts just in general, on the past two years, like what the heck has happened in the recruiting world and why are we still struggling to find talent, regardless of industry?

JC:  I wish I had an answer to that. but in all fairness, it is an unprecedented market for sure. It is something that we’ve never seen before. The talent pool is very small. Competition is beyond high. People are staying where they’re at or jumping ship for sometimes double the salary.

So when it comes to those pieces, the market is beyond intense and something that is needing to be pivoted quickly, as far as those approaches and really figuring out what works for each industry.

BP: Do you think salary, or do you think it’s also benefits, working from home?

JC: I think it’s all of it, right? I think salary plays a role in. I think folks got comfy in their yoga pants. And so it’s hard now.

LH: My real pants don’t fit anymore.

JC: It’s hard to come back and be in an office when you were at home for a couple of years. So I think it goes to the benefits. I think it goes to that work-life balance. And most importantly, I think it always comes down to culture.

BP: Culture is so important. That is always a topic for us here.

LH: You mentioned that a lot of people are jumping ship because they’re seeing double salaries out there or these amazing benefits. What are some of those benefits that you could actually put into play at your own firm to keep people from jumping ship, knowing that the there’s so many golden eggs out there attracting them?

JC: I think really it depends on what’s important to that culture, right? Every culture is a little bit different and I think it’s important to get to know what’s important to your staff. What do they value? What’s impacting their day to day? If you do an analysis and you have a high medical use or a high mental health use, putting in place employee-assistance programs and resources whether it’s really negotiating those medical costs and what that looks like and impacting employees there. We’ve seen a lot of people go to mental health days. So benefits for me are really across the board, not necessarily just your traditional medical, dental vision, but just really that overall employment experience.

Are we ordering virtual lunches for folks when we do meetings? What does that overall benefit package look like? But that employee-assistance program is something that is coming in hot and heavy, for sure.

LH: I just realized, I forgot to order my lunch.

BP: And that’s what you take away from that.

LH: And today’s takeaway is order your lunch before your two-hour meeting.

BP: I want to jump around a little bit. You had mentioned negotiating or that entire package. What do I do if I’m looking for somebody and they’re coming in and they’re asking for double the salary? How do I negotiate with them? Because of course, money doesn’t grow on trees. I don’t just have a ton of it so what do I do?

JC: You use your recruiters who are fabulous at negotiations, and really through that wine-and-dine stage of a candidate as they come through it. It is their expertise to get to know what’s important to that candidate. A lot of times they’ll toss out money, but it’s really deep diving looking at benefits. What does that total comp look like? Could someplace else pay you a little bit more, but do we allow you to work from home and is that a vital thing for you? So really just getting to know that candidate and allowing those recruiters to do those negotiations and finding that balance between the salary and that benefit package, I think is super important.

LH: And some firms don’t have recruiters. I think a lot of the firms we work with right now are on the smaller side, and they’ve always struggled with recruiting because they’re doing everything themselves as it is. And now we throw in this weirdness of post-COVID recruiting where recruiting gets even more difficult because you have people asking for such what two years ago were pretty crazy benefits, but they’re pretty normal now. Whether you don’t have recruiters on staff or it’s just you running the ship, that’s kind of where we come in. This is not a sales pitch, but I do want you to explain what exactly we offer from a recruiting standpoint, because like I said, there’s people out there that don’t have those resources internally, so there are sources that can help.

JC: So we offer that full package recruiting. So anything from that culture analysis to that job development piece of it, developing those job descriptions through the screening process – all of that stuff takes so much time to sort through applications, resumes, to call people, to figure out what is important to them and what’s driving them, that market analysis of what do the local comps look like. Every market’s a little bit different and down to the actual interviewing, down to those negotiations. No one wants to negotiate with someone and go through those ups and downs and then work right alongside with them. Sometimes it gets folks started off on the wrong foot. Our recruiters’ jobs, in any role, is to sugarcoat that, right? To say, “Hey, we got it done at package signed, sealed, delivered. Here you go. Here’s your candidate. We got you what you wanted.” But we offer that full analysis and that’s any recruiter’s role is to really get in there and allow people to do what they do well and our job is to get the staff on board.

BP: I think an important thing to remember is that the employee-life cycle starts at that very first call before they’re an employee. You have to, like you said, I think it’s so important, for that recruiter or the individual doing it, to be able to listen to them, to understand what’s important to them so that you can build up that aspect of the package that you’re offering. It’s so critical.

JC: It starts from that first contact, whether it’s a call, an email reach-out and then that relationship is built from there. In all of my recruiting experience, in that first year of employment staff are far more likely to come back to the recruiter if they have a question than they are to even go to their manager or HR in general, just because they built that rapport. They knew that person came to the rescue on Friday evening or Saturday morning when they had a weird question they just wanted to get answered. Switching jobs, that’s scary. You’re leaving a comfort level to go to something new. So it is for sure the recruiter’s job to build that rapport, make it an easy transition and build that relationship quick and fast.

Listen: Young Attorneys on Remote Recruiting and Onboarding

LH: I agree. It’s funny you say that because when I started working here, it’s been about two years, Lexicon was definitely something I had never considered. I had never worked in the legal space, in the software space, nothing like that. And I had always worked at like really large established companies. So I was coming from a place that I absolutely hated. I could not get out soon enough. And I remember when I had my phone interview with Lexicon, the recruiter that I worked with was so optimistic and happy and very compelling. And it’s like, “Oh, my god. I want to be your friend.” This was a great first experience to have someone that was just so chipper. And it’s funny you said that because during my first year I would always go to her when I had questions because we had built that rapport. And so when you said that, it’s totally true. And I obviously didn’t want to make the same mistake as I had with the previous job, because I was so miserable wanting to get out. I wanted to have that good experience and she put on a great face for the company. It was perfect. And now I’m here hosting podcasts.

So Jes, going back to before this podcast actually started, we were having a conversation in the room, and you mentioned an employment brand. What is an employment brand?

JC: Employment brands are really branding your culture, right? Being that employer of choice, setting the standard in the industry or the field to say, “Why do you want to come here? What does this firm mean? What does our culture say?” But really packaging it up so it is presentable to candidates as they come in the door to say, “We’re your employer of choice and this is why.” A lot of that comes from feedback from employees. A lot of that comes from culture building, but it is really branding that out there so that folks know what you stand for, why employees are important and having that employee-first focus and what that means in that company. It really brings people all in on the same page. It gives that vision. It knows, your employees are your biggest ambassadors. They’re out talking, recruiting people themselves. Referrals are amazing. All of that stems from having a strong employment brand.

LH: How hard is it to create that brand? How do you even go about that? I know you mentioned it comes down to how you treat your employees, but how do you even start that?

JC: How do you build an employment brand? You start with a lot of times surveying your staff. You start with seeing what’s important, taking those exit interviews, taking onboarding surveys, what went well, asking your staff what’s important, what do they love about where they work, why do they come to work every day? Really taking those words and building your mission around them, building your purpose around them, and then rolling in a strategic fashion to say that every time we do this engagement activity, this is why this is what we’re doing, but it’s under a constant evaluation to say, could we do it better? Is this real, right? Culture shifts. COVID happens. Life happens. Businesses change. It is really just getting it out there and building it from the staff, seeing what’s important to them and why they stay and who they bring on board speaks volumes to a culture.

BP:  You mentioned exit interviews. I always have questions about that. It’s something that’s come up in articles that we’ve looked at, things like that. How much weight do you put in an exit interview?

JC: A lot.

LH:  I always wondered that. You wonder if they just file them away.

JC: No, exit interviews are super important. It allows folks who you wish would have spoken up at the time a voice that they now feel like they can be super candid about, and it’s an opportunity to learn and grow. Those exit interviews, you’re going to have an employee who leaves and who was satisfied and just maybe relocated, or there’s not a purposeful reason that we could have improved on, that exits. They’re going to maybe tell five people what a great place their previous employer was. But man, if you have someone who feels unheard and exited poorly, that’s going to go to 50 people, right? So I think that exit is just as important, if not, maybe a little bit more important than the onboarding, but that feedback super vital. How do we grow? How do we change? How do we give those managers that feedback? That’s a growing opportunity for sure.

BP: So the cycle starts from that very first call to the very last. You mentioned surveying the employees and understanding and asking the question, “Why are you here? Why do you like working here?” Once you collect that information back, do you then translate that into your brand and culture and emphasize it? What is your next step after that?

JC: We don’t tuck it away in the HR files for sure. We want to get it out there. We want people to feel that their opinions were heard and valued. I always say, “We asked, you answered, and here’s our plan.” So that we can say, “Here’s the feedback we got. Here’s what we’re doing with it. Here’s the action items that came out of it.” And then it’s important to have those surveys over and over – a little differently, right? Different targets, but it’s important to be as transparent as you can because that’s what’s going to build that morale to say, “Man, my opinion really mattered,” Or, “Yeah, I tossed it out there. My idea wasn’t taken this time, but look, my co-worker’s was,” and that’s super exciting. So building that strategy backwards off of they’re putting together, you know, it’s not a fast and furious. It’s, it’s truly an 18-to-24-month plan, especially if you’re starting at ground zero to put it out there to create activities around it, to create those functions around those surveys, those questions, those activities, make sure there’s actionable items.

BP: I think it’ll surprise you. We had a guest on about, I guess, two or three podcasts ago that said the reason their employees stay is because of the flexible hours and not salary. They really wanted that flexibility because they just had a baby and both male and female wanted to be able to be with the family more. And she didn’t allow overtime work unless there was some kind of emergency. And that value was so much greater than going into the city and getting a higher paid job. They were also closer to home. And so those benefits are kind of what she structured her law firm after. And so I think it might surprise you what the employees will say. It could be anything, it doesn’t have to be salary. It could be the benefits package. It could be the flexibility. It could be their boss. It could be so many different things.

JC: To kind of piggyback off what you’re saying, Brad, as far as figuring out what’s motivating the staff, you’ll have jobs where their job is what’s motivating. Millennials, right? They want to be part of the bigger picture. They want to understand what that is, and they want to know how their job fits into that. For them, that’s motivating and engaging. It might not be the benefit package because they still might be on their mom and dad’s. So it’s finding those motivational factors and bringing those altogether for all different age groups of workers and moving that forward in your culture. Somewhere I was at before, their staff was motivated by the work that they did. They supported people and they were wholeheartedly motivated by seeing their impact and knowing what difference that made in the community. And so I think it’s different in every culture, every employer.

LH: That’s a good point. That’s nice. You rarely find people who are actually that excited about what they do these days because so many people are (excited about) great benefits, great money, and the idea of actually finding a place that you truly love is pretty cool, but you don’t hear it a lot.

BP: That’s true, but I did read an article, I guess it was a couple days ago that there is a trend for people, even long-time careers, to just stop and become a painter or do something that they just love and be OK with the pay cut and just reduce their life with it. There’s a big move towards that. This same article also said there’s a big move towards more men staying at home and more women entering the workplace. It’s just such an interesting time with all of the transitions. You have to support people chasing their dreams.

LH: Yeah, absolutely. If you could quit today and do the thing that you absolutely love what would you do?

JC: I know my answer.

LH: She’s ready to go.

JC: I would flip homes. My husband could flip them and I would be the interior designer.

BP: In kindergarten, I’m going way back now, I was asked this question and you had to draw a picture of your, your job and mine was the man on the back of the garbage truck. I thought, “How fun would it be to hang on the back of a truck, work outside, you just stop every now and then pick up garbage and throw it in a truck. It sounds kind of fun. So that was my dream for a long, long time. I know, great aspirations for myself.

What other advice would you give somebody that’s just lost in the whole HR realm, but they have to hire? What’s the fundamental thing you’d give them?

JC: Put the right people on the right seats on the bus. Really knowing what your workforce needs, who you have, and what you need to move forward. That’s a hard thing to do. It’s a hard thing to look internally and figure out what that looks like for you. But I think that is the most important thing. Again, people are going to leave their supervisor, they’re not going to leave their job, and they’re also going to leave if they don’t feel like their work is purposeful. Making sure that you have the right people in the right seats on the bus is super important. So knowing what you’re heading out looking for, knowing what characteristics, what job functions you need, is that first stepping block so that you’re not just out there trying to swim through a pool full of unqualified folks.

BP: One more question. Just curious. Jes has such insightful wisdom that I want to pull from her out into the audience. Would you think that the people entering the workforce now, are they more in tune with, “This is my job. Don’t let me deviate from it. My scope is very narrow.” Or do you think people, just in general, more like an open scope for their job, doing multiple different roles. Which do you feel is more common now with the younger generation entering the workforce?

JC: My personal opinion, I have no facts behind this, my personal opinion is they really, truly are trying to be the Jack of all trades. I think they’re trying to get out there and get their hands in everything. See what clicks. When I was a kid, you had jobs, right? When you were growing up, so you got to try different things, see what you liked. That’s not as common anymore. So those first jobs, a lot of times are folks’ first couple experiences in the workforce. And so they kind of take it as they want to take it all on. They want to learn. They want to see what’s out there. They want to dabble in all kinds of things and see what clicks, see what drives them. And so I think it’s a shift because it used to be you just came in and you did accounts payable. You start, you finish and you’re done. I think it’s a much more gray area when it comes to those duties. People want to jump into a vareity things and try stuff out.

BP: I think so too, but I think it’s a positive shift, frankly, because good ideas can come from anybody. And having somebody that may not have had the experience or not Really giving a try and giving suggestions, I think it’s just positive. It allows you to take in newer thoughts. I think it’s a positive shift, frankly, and you’re not stuck in a day in day out, same old, same old.

JC: I think that comes with structure behind and guidance to know when it’s appropriate, where to jump. … I think there has to be some structure behind it. There’s got to be some understanding in how that drives your culture and that open-door policy so that it doesn’t have the reverse effect because other times people would feel unvalued if they are constantly tossing their opinion out and it’s not getting heard. So I think it’s important to have that structure behind it.

The post Legal Recruiting in an Unprecedented Market – The LeXFactor appeared first on Lexicon.

In this episode of The LeXFactor Briefs, our hosts Lauren Hoffmann and Brad Paubel take a look into a Law.com article that reflects on where law firms have been putting their focus while returning to the office and adapting to hybrid work.

Lauren and Brad discuss their thoughts on this provocative article that says law firms today shouldn’t concern themselves so much with remote work vs. in person work, but rather focus on client service innovation and succession planning above all else.

Listen and subscribe now to The LeXFactor Briefs to hear more about trending legal industry topics from our hosts.

Lauren Hoffman: Hey, everybody. Welcome to another episode of the LeXFactor Briefs. It’s your host Lauren here.

Brad Paubel: And your co-host Brad.

LH: Was that too much?

BP: It was not. I liked it. It was just energetic. It was good.

LH: Let’s get this show on the road. Brad, how are you?

BP: I’m doing well.

LH: Yeah, anything exciting?

BP: Some very exciting things are going on. Our new event space is open here at Lexicon. For your holiday parties. Maybe just a business meeting.

LH: Mock trials. There’s two courtrooms in there.

BP: You know what else is also available? Recording podcasts. It can be done at any time. So just give us a call.

LH: They could be us.

BP: They could be. Anyone could be us. Sitting right here at this table, our table, that we have autographed.

LH: Was this too much? Shameless plug. It was fine. We’re just doing our jobs, guys. And as a reminder, listen, subscribe, you can find us on all the podcasts channels.

BP: Like us. Yeah.

LH: Easy plug again. Anywho, let’s get to some content.

BP: OK, what are we talking about today?

LH: So today we’re talking about an article from law.com titled, “Law Firms Are Focused On Office Returns and Hybrid Work But They’re Missing the Point.”

BP: What point are they missing?

LH: So we all know there’s a bigger issue in the legal industry and it’s really about the business side of law. It’s about culture, operations, client centricity, things like that.

BP: That’s a big word there. I was proud of you on that one.

LH: Thank you, I didn’t mess it up. So here’s the thing, I disagree with the article somewhat because I do think that hybrid work is very important. It’s very relevant, but it’s also somewhat forced the legal industry into more of a modern world, which we know, unfortunately, this industry is trailing a little bit. So I do think there is still some importance around that hybrid work experience. You know, we’ve helped firms adapt new technology, new operations, new culture, new practices, which has forced them to grow, and I think bring in better talent. And serve their clients in a different way.

So that’s where I do disagree with this article. But what I do really like about this article and the whole point of it, obviously, is that law firms have some serious holes to patch. And if they don’t start worrying about the right problems like client service, innovation, succession planning, inclusive hiring, and just in general, joining the 21st century there is going to be some problems. And regardless of where you work at home or in the office, that’s pointless if you’re not patching your other holes.

BP: Exactly. I really like your last point. I think that is so critical, especially with the way that the world is today with people wanting that hybrid environment. It’s not just that though. We talk a lot about that hybrid environment, but it’s also benefits, flexibility their own hours. I mean, it’s a whole new world. There are articles out there constantly about even getting away from the five-day workweek to the four-day or three days.

LH: I support that. I’ll start with four. We don’t have to be excessive.

BP: But a lot of that is out there and the legal industry is a little bit hard to shift and hard to change and they just have to get on board with, as you say, plugging those gaps.

LH: And what I really liked about this article is that they actually gave you some first steps. How do you take that step as a firm? And what they called out is that this redesign of your firm’s culture operations should really start with your client list. So how can clients be properly served holistically? So think about what investments in technology will best serve those priority clients. What demands from a culture standpoint are these clients seeking and really what are those clients short- and long-term goals? And all decisions can really be made from looking at your clients and starting with that client-centric starting point.

BP: It’s sort of meet them where they are. That’s what I took from it. I was talking to a couple of friends this last weekend about their attorneys. Obviously some of them were speeding tickets, things like that. They’re like, “Can I not just text them and be done with it? I don’t want to talk to anybody.”

LH: I texted my doctor this morning.

BP: That’s a good point.

I do know, know about the attorneys that they use. And, uh, obviously some of them were speeding. Tickets, things like that in there. Doctors – texting, video, right? You’re having your checkups.

LH: You at least have your patient portal. If you can’t text your doctor, you have that easy one-on-one communication with them and the world expects it. And to go back to that hybrid work experience that we’re quote unquote, not talking about here, the last, two years at this point, unfortunately, have caused some expectations of clients. Clients need you to be accessible in a way that works for them, especially with how much has changed in the past two years over the pandemic. So at the end of the day, if you don’t have your clients, and if you’re not meeting them in the middle, as Brad said, you have nothing. Without your clients, you don’t have money coming in.

BP: Exactly. It is so interesting because this article covers very much one side of the story, but also there’s that other side that you had brought up as well. It’s both meeting the client where they need to be, looking at that client list, but it’s also your employees too.

I mentioned the four-day workweek. They want more flexibility. People are quitting just to take time off and finding jobs later. So you have kind of this big dynamic between changing a whole environment both from an employee perspective and a client perspective. It’s really big change that we’re in right now for the industry. And it’s not just legal. It’s across the board.

LH: And I think, you know, at the end of the day, if you don’t really know where to start, or you don’t have the resources to understand more about your client base, talk to them next time they come in for a meeting consultation, get some feedback from them.

What would they like to see you do differently as a firm? Even if you can’t send out a survey via email, just ask them in person. And there’s a start right there.

The post Should Lawyers Focus on Reopening the Office or Reinventing the Wheel? – The LeXFactor Briefs appeared first on Lexicon.

In this episode, Brooke Lively, Founder of Cathedral Capital, virtually visited the Lexicon studio and chatted with hosts Lauren Hoffmann and Brad Paubel about improving law firm collection rates and the strategy behind cash flow forecasting. The trio dives into the average collection rate for US firms, the five pieces of the accounts receivable puzzle and the key components of cash flow from financing activities.

Cathedral Capital is a team of CFOs and profitability strategists who help entrepreneurs turn their businesses into profitable companies.

Make sure to listen and subscribe to The LeXFactor on your favorite podcast platform today. Plus, Brooke is offering her five pieces in the A/R puzzle as a thank you for listening to the episode – just enter your email here to get the info right in your inbox.

Lauren Hoffmann: Hey, everybody. Welcome to another episode of the LeXFactor. It’s your host, Lauren.

Brad Paubel: Co-host, Brad right here.

LH: We have a guest today and you guys may have recognized her voice because she’s been here before. So we have a two-timer on today. I don’t know if you guys remember Brooke Lively from Cathedral Capital, but welcome back. We remember you obviously.

Listen: What’s Your Capacity for Profitability? – The LeXFactor

Brooke Lively: Thanks, guys. I know, I have to say, you guys asked me back for a second time and I was super excited because I think you guys are the most fun podcast I’ve ever done.

LH: We need a quote her on that. Justin, pull that one out. Brooke, just in case our listeners didn’t hear you last time, give us a little bit of information about yourself. Give us some background, what you do, what makes you tick, what keeps you going.

BL: Wow, so many roads with that, but I’ll go down the appropriate one. So I own Cathedral Capital – we call it Cath Cap. We make law firms more profitable by serving as their outsource CFO.

I do this because I was running my father’s law firm. After grad school I had like worked at a hedge fund. And my father likes to shed his law partners every seven to 10 years. And he had shed his law partners because he had lost his firm manager that had been with him for like 30 years. And so he’s like, “Can you help me do this?” I’m like, “Sure.”

So, you know, in less than two years, probably 18 months we had started, grown, and scaled it to a seven-figure business. And at one point I hired a consultant to help with sales and marketing and his clients started coming to me and saying, “Can you do for us what you do for your family?”

And that was when I really realized it wasn’t just my father and brother that weren’t numbers driven. It was all attorneys. That’s why we’re here. And that it’s so much easier and so much more efficient to make decisions based on data. Because you only make that decision once.

LH: And most people don’t use data, especially in this industry, unfortunately.

BL: They don’t. And what happens is you make the decision. You’re taking a deposition at four in the afternoon, and really what’s going through your head is “Was that the right thing to do?” And then you go home to dinner and you’re having dinner with your family thinking, “Well, maybe I should have taken option C,” and then you wake up at 2 a.m., “Wait, wait, wait, maybe option B.” You keep making the same decision over and over and over again, and that’s not productive. Or you make the decision just to get past it. Have you ever seen someone do that? They just get it over with. Pick something and move on.

LH: When that I chose my co-host, that’s how I chose my co-host. I was sick of the process, and I was like, “Just go with Brad and let’s get moving.”

BL: Brad, she’s got it out for you. And then the other way that attorneys make decisions is they just don’t. “Let’s think about that. Let’s get a little more information.”

LH: And eventually everybody forgets about it and you move on to a different project.

BL: Yeah, and then it blows up and you have to make a decision and you just choose anyone to get past it. It’s a horrid circle to be caught in. And if you’re using data, you see the decision coming, you can look at your options. Just like you do with a case, you can say, “OK, what’s going on? What are the options? What do I think will have the best outcome?” And when I talk about people’s law firms, I’m like, doesn’t it deserve the same care that you give your clients’ cases?

LH: And when you have the data you can validate. There’s no questioning. You’re like, “I use this data to make my answer and I now see that it worked because I have the data.”

BP: Absolutely. It turns the horrid circle into a great circle.

LH: All right, so you’ve ventured off on your own. That’s how we got to where we are today. Obviously you’re doing awesome because you’re getting podcasts gigs, right?

BL: I love doing podcasts. What I love is helping attorneys. It just kills me that there are so many attorneys that, you know, have no business experience. And law school is not preparing them to own a business and they get out of school and they think all they have to do is practice law. And all of a sudden, they’re either on a partnership track to run a law firm or they go out and they start their own. And they’re just so ill-equipped, and they don’t know where to turn. And they go to bar functions and everybody’s, like, beating their chest, “Oh, I’ve got this awesome firm.” And they’re not telling the truth, so nobody else feels like they can say, “I’m really struggling.” So they end up struggling in isolation. So anyway, that I can get my message out and really talk to them and say, “Look not your fault. You’re not alone. I’ve seen worse, because I promise you I have seen worse. And here’s some ways that it can be better. I’m just so passionate about that.

LH: And you’re great at what you do.

BL: It’s fun.

LH: So today, that being said, we’re going to dig into collection rates, which I think is a really cool thing because it’s probably something that everybody could use a little help in. We’ve talked about this a little bit before, too, and it opened my eyes because I’m fairly new to the legal industry. It’s been two years now, but there is literally so much that can be done to improve your collection rates. And there’s so much that’s not even hard to do. It’s easy, simple things that you can do to improve your collection rates. So let’s dig into that a little bit. Let’s talk through it, Brooke. What are some ideas that you have that you’ve talked to your clients about to improve their collection rates?

BP: We should tell everybody to get some pen and paper out. Take notes. This is the meat right here.

LH: And we have some stats to start with, some data.

BL: Data-driven decisions over here. While you’re getting your pen, I’ll tell you, Clio does a state of the legal report every year called the Legal Trends Report, and in 2020 they said the average collection rate for a U.S. law firm was 86%. And for a year, I have been trying to figure out how they got to that number because that’s not my experience.

LH: Lower or higher?

BL: I’ve talked to other people that are in the industry that do things that are similar to mine. We think the average collection rate is really closer to 75%. And the firms we see are collecting 75. If they’re collecting 80, they’re doing pretty well. From our experience. But that really frustrates me. That is the equivalent of a car dealership giving every fourth person that walks on the lot a free car.

LH: That would be nice. Don’t you want to be with that dealership? But that is really good perspective. That is a great analogy.

BL: And here’s another one. If you collect 80%, that’s like hauling your team in and having them work Monday through Thursday for a reason. And then basically hauling them in on Friday for no reason, because you’re not going to collect the money they bill that day. So wasting everybody’s time.

BP: So really what we’re saying here is we need to stop working Fridays. Is that what you’re saying? No, I’m just joking. That’s what I’m taking from this.

BL: I promise you your team would rather have a three-day weekend than find out they’re working and you’re not bothering to collect it. You don’t have the things in place to collect. So what we do with our clients is what we call the five pieces of the AR puzzle. And when we implement these, the collection rates go from 75% to 92. Ninety-two is our bottom-level goal. And I was talking to a client about this. I’m like, “Yeah, 92 is our goal.” He’s like, “Why aren’t you setting that goal so low?” He’s like, “We’re closer to 98%.” I was like, “OK, Sam. Yes, you are.” I think Sam would be perfectly happy if everybody knew he was collecting 98%. He’s like, “Why are you setting people’s expectations so low?” I’m like, “Well, if I go on a podcast and say our clients all collect at 98%+, no one is going to believe me.

LH: But why 92? That’s an interesting number.

BL: Because we can easily get all of our clients to 92. So that’s really kind of our bare minimum. Once we get it to 92, we quit hammering on it quite so hard. You want to know how we get people to 92?

LH: Why do you think you’re here today? Tell me more

BL: So there are five things. The first thing is get an initial retainer. And I see all kinds of people that are like, “Yeah, I get an initial retainer. I get $500.” And I’m like, “How long is that $500 going to last, Mr. I bill at $350 an hour? I’m like, “OK, so you can do an hour and 15 minutes’ worth of work.” That’s not going to get you anywhere. You need to have three months — the first three months in that retainer account and you need to do that before you start working. People always ask me why three months? Here’s why. Because you got a client on October 1, you bill all the month of October, and you send the bill out on November 1st. I don’t care what your bill says. It can say due upon receipt, it can say due in 10 days, your client thinks they have 30 days. They think they don’t have to pay until the end of November. We can’t change that. We have taught clients this. So you’ve worked all of October. You work all of November. On December 1 you send out the second bill. Your client at this point is like sitting up and taking notice that the first bill is probably due. There’s another one so I probably need to pay the last one. So it’s now the end of November. It’s December 1st, the client thinks, “OK, I’ve gotten the second bill. I need to pay the first one.” Or the client may be a deadbeat. But December 1 is when you really start trying to collect. So you collect all the month of December and by the end of December, you know if you’ve got a deadbeat client or not. And if you have the first three months in the initial retainer, then you’re golden and you can get out of this case and really all you’ll be out is the time of withdrawing. So that’s why I always say three months.

LH: Do you ever come across the instance with their clients that maybe their clients are a little turned off by that heftier amount upfront and in turn take their business elsewhere?

BL: Yeah, and that’s OK. Because if you have a client who doesn’t want to pay you, wouldn’t you rather find that out at the outset, than three, four, five, six months in? Clients are interviewing you to see if you’re going to be a good attorney, let’s interview the client and see if they’re going to be a good client and let’s get rid of them before they get in your system.

LH: You don’t have to take every client.

BL: You really don’t.

BL: If you turn off one in five clients because they don’t want to pay your initial retainer, do you know what will happen? Your collection rate will go from 80% to 100%. You will make the same exact amount of money you were making before.

LH: True and doing less work.

BL: And doing 20% less work. So where’s the losing on that?

LH: And that is only step No. 1 in your puzzle.

BP: I know, like, do we need four more? I don’t even know what’s going to happen next. I’m already collecting at 100% now. What’s next?

BL: So the second part is have an evergreen retainer. If you look at most cases – not all, but most cases are really kind of work-heavy in the first few months. Especially if it’s litigation, you’ve got to answer, there’s all kinds of steps. Step No. 2 is have an evergreen retainer and your evergreen retainer should be equal to the average three months of billing. People kind of look at me funny when I say this. Think about this, in most new cases there’s more work done in the first three months, especially if it’s litigation, right? And then the workload kind of falls off and evens out a little bit. So let’s do an average three months and we do an evergreen retainer and I get pushback because people are like, “Hello, Brooke. My client has already proved they’re going to pay.” But a client will quit paying at any time for any reason and it rarely has anything to do with you.

LH: Like when you have an interview or your first month at a new job. You go all out and put on this big shiny show and then you show your true colors a couple months in.

BL: But think about what happens in your clients’ lives. They could get divorced. They could have a child go to college. They can have a child get married. Those are all cash-intensive activities. It doesn’t have anything to do with you.

Here’s the next thing. No. 3. Have a stop-work policy. I had a client that came to me and in her fee agreement it said, “If you can’t pay me, we will put a lien on your property, blah, blah, blah, blah, blah, blah, blah.” I’m like, “I’m sorry. Did you just tell your client that they don’t have to pay you and that nothing will happen?” She’s like, “Oh, don’t think about it like that.” She was like, “Everything we have paid you was worth it for that one piece right here.” But you want to have a stop-work policy. And you want your clients to know what it is and you want to enforce it. And this does not have to be something that’s difficult. One of my favorite ones is an attorney out of the Pacific Northwest. She went to Office Depot and for like $2.50 she bought a giant box of big, huge red, rubber bands. And when a client quit paying, she put a red rubber band on the file. And if you went into the file room and the file had a red rubber band, you weren’t supposed to touch it. I liked that. And if someone was walking through the office and there was a file with a red rubber band on somebody’s desk, or even just the red rubber band. They got called on it. Simple, easy, cheap. These days with everybody using all the great software that’s out there that’s cloud-based, you can lock a file. So it can be simple. It can be easy. It can be a red rubber band but be sure you communicate it not only to your staff but to your clients and then you enforce it.

LH: I like that. I’m very much a visual person. like when I have a to-do list, I’ll write it down and cross stuff off. And so I’m envisioning that red rubber banner on the file folder and I’m like, “Yes. I like that.”

BL: No. 4. So this one’s a big one and I alluded to it earlier where the client thinks they have 30 days to pay their bill. You need to control the timing of the payment. Do not let clients do that. I was at my best friend’s house … and she lives in Pennsylvania, and I was up there visiting, and we walked in the house on a Sunday night, she opened a drawer, and she took out this big stack of mail. She could hardly get the drawer open. So we’re chatting and she’s opening mail and most of it is going in the trash I’m like, “Martha, what is that?” “It’s my mail.” I’m like, “How much mail is that?” She’s like, “Oh, I don’t know, probably six weeks’ worth.” And I’m like, “What about your bills?” She said, “All of our regular bills are on auto pay. Every now and then I go through this and I find the one-off bills.” So sure enough, when I decided I was going to go to bed, she was down to a small stack of one-off bills and she said, “OK, I’m going to bed too.” I’m like, “Are we going to pay these bills?” as she’s putting them back in the drawer. She’s like, “No, I’ve done enough work on this tonight.” Attorneys, this is what is happening to your bills. Your one-off bills. They are sitting in that kitchen drawer for six weeks. And before you go and say, “Whoa, wait a minute. I have business clients.” It’s about that much better for you. Because I don’t care what your bill says, they think they have until the end of the month to pay it and most businesses write checks twice a month. So that first check run comes through and, “Hey, bill’s not due.” And then the second check run, they’re going to add up all the bills that they have and see how much cash they have and you may or may not get paid because history has taught them, but most attorneys do not have a stop-work policy, so nothing’s going to happen.

LH: And honestly, if they’re another two weeks late, it’s not the end of the world. It’s fine.

BL: Yeah, no big deal. So you need to take payment timing out of the client’s hand and you do this by accepting credit cards. And by having every client sign an authorization form that says, “I will get the bill. I will have 10 days to dispute it. If I do not dispute it, you are authorized to charge my card.” And then you’re in control. I mean for heaven sakes, you know that if you send bills out on the first that on the 11th, you get to charge and you’re going to collect almost everything.

LH: And that’s honestly pretty common. You’re not asking something that isn’t OK or doesn’t happen in other areas. Like you go to a hotel, you need a credit card on file.

BL: And clients love it, frankly. For two reasons, one, they’re getting more points, more miles, more whatever they do. And the second reason is it’s one less bill I have to deal with.

LH: I literally despise paying bills. I have the majority of my, my reoccurring ones on autopay, but not all of them. And there’s one I have to log in every month and they have the worst website. Every month I have to type in my account number. The way the fields are built, they don’t auto-populate so it doesn’t remember anything. If I started typing in “Lauren,” it doesn’t finish it for me. I have to put in my routing number every time. And it’s all it’s on me because I haven’t set up autopay. So I will honestly put it off. I’m like, “It’s not due today. I’m going to wait and pay it later.” Because I’m too lazy to do it.

BL: And how did you feel about that vendor? Are they your favorite vendor?

LH: No, it pisses me off. I’m like, “Get with the 21st century! Get it together!”

BL: And here’s the thing, you don’t want to jeopardize your relationship with your client over something as annoying as them paying your bill.

I’m going to go into the fifth part, and the fifth is how we get all of this done. And we do it through a fee agreement. The state wants you to have a fee agreement. You might as well have one that benefits you and it’s in the conversation where they’re signing the fee agreement that you set expectations.

The expectation is I am going to be paid every month on time. And this is how we’re going to do it. And these are the consequences if we don’t. So draft a fee agreement that works for you.

LH: It needs to work for you. Don’t just draft something because this is how it should be done, this is a norm. There’s options.

BL: Fee agreement is No. 5. Yeah, that’s right.

BP: The five pieces, they come together.

LH: Do you ever do promo items for your company? You should get an actual puzzle.

BP: Five pieces and it comes together and forms a big dollar and that could be like, and it comes together and it forms a big dollar sign for collection.

BL: I’ll tell you what I do have, which I’m happy to give all your listeners … I do have a whole thing on the five pieces of the AR hustle that includes some language for your fee agreement and all kinds of stuff. Do you think your listeners would like that?

LH: Definitely.

BL: All right, so why don’t we do that.

LH: I will say that’s the one place on our website on our end that gets the most traction is our knowledge base. Like people just love reading and tips and education. So that would be awesome.

BL: I’ll tell you what, if everybody who wants to goes to https://www.cathcap.com/lexfactorar then they can get all that information.

So here’s what I love about the five pieces of the AR puzzle. When you get that in place, all of a sudden, you’re now in control of when and how you get money, which makes forecasting your cashflow so easy. You send the bill out on the first, you get paid on the 10th. And I think we all know that cash is important. Cash is king. Cash is like oxygen to your business, right? And we talk all the time about having a cashflow forecast and knowing when your cash is going to come in is awesome. But it never, ever, ever matches up when your cash goes out. Think about it, even in this firm that we’re building, where you get all your cash in on the 11th, while by the time it’s deposited from the credit cards it’s probably the 13 You’ve got the first week of the month, which is payroll and rent, which is probably your most expensive week of the month. Backed up really quickly by week three. So you’ve got to make sure that you’ve got the cash you need and we do this through having a cashflow forecast. And we look six to eight weeks ahead.

LH: Why six to eight weeks?

BL: Well, you want to know how much you’re going to have at the end of every week for the reasons we just discussed and you want it far enough ahead that you can make a decision and that you can take action. So we had a client named Dan and he’s out in the Pacific Northwest, and I sat down with him on one of his regular CFO calls. I’m like, “OK, Dan. There’s red on your cashflow forecast.” And there was a little bit of [panic]. So we looked at it and said, “OK, let’s problem solve this. It’s seven weeks out. What are we going to do?” So we look to see, can we move rent? His landlord’s pretty understanding if it went out a week. Nope, that wasn’t going to do it. We couldn’t move bills. We had to do something big. And we kind of brainstorm some ideas and then we came back together a week later and I look at his cashflow forecast and there’s no red. Damn. What happened?

He said, “Oh, you remember that blue binder project we’ve been talking about?” By the way, it was named the blue binder project because it literally was being housed in a blue binder in there. We’re really creative with names. So he said, “We built that out and started selling it.” Because it had kind of been out there. He’s a DUI attorney and this was a program that he was developing in conjunction with a therapist. And what it does is it puts people who get a DUI through this program and they take their certificate of completion to their sentencing and it is literally changing the way people are being sentenced in Oregon now. Like isn’t that an awesome thing?

BP: But he wouldn’t have been able to do that if he wasn’t looking ahead, like you said, at the cashflow. Oh, I stole your thunder. I’m sorry. I’m sorry, here. Wait, wait. But how was he able to do that and get it in place so far ahead?

BL: I mean, that’s the thing. You’re looking at it and you have time to deal with it. This was something that was already sort of in process and he didn’t sell everything he needed to sell in one week. But he knew how many he could sell and put that into his cashflow forecast and got rid of the red.

LH: And we get so used to just looking at where we are, you get so busy, you have your head down, you don’t get a chance to look ahead, but obviously there’s some major problems that can happen if you don’t do so.

BL: If you’re not looking ahead, you find out that you’re having a cash crunch maybe seven days, probably closer to seven hours.

LH: And then you’re reactive before you hit it.

BL: And there is no option. There is no bank that is going to start and fund a line of credit in seven hours.

LH: You’re reactive. You’re desperate. You don’t think through your decisions, you don’t use that data that we talked about to make the right decision. You’re like, “Crap, what can I do real quick?”

BL: I just want to go over really quickly what’s in a cashflow forecast. This is not your P&L. This is not a big, huge 42-, 52-line, 400-line spreadsheet. It has just a few lines. When are we getting cash? We do actually put this on a couple of lines sometimes because we’ll have the cash that comes in from your trust account. We’ll have the cash that comes in when we charge clients’ credit cards. And then most firms do have a little bit of AR. So we leave a line for AR for if someone gets behind or their credit card gets stolen.

That’s the first one. Then we go into cash that goes out, right? You’ve got a line for recurring bills. You know what bills are going to hit when. You just key them into the appropriate week.

Then we all have extraordinary expenses. Things that we don’t expect. Mary needs a new computer. I have an opportunity to be on a podcast and they’re going to charge me $50,000.

Then there are a couple of other things, as the owner of the firm you should take a draw. You should get paid for the time, effort and risk you’re putting into this firm. So put that on a line. If you have any debt and you’ve got to make debt payments, put  that on a line.

Then if you want to move money into savings, that’s another line and you just add it up. And the amount of money you have at the end of one week becomes the beginning balance for the next week. It’s that easy, but it lets you see, it lets you look forward and it just gives you a lot more confidence in what you’re doing.

LH:  I like that you make everything so easy too. There are not 40 steps that you have to take and it’s nothing hard. It’s nothing that lawyers don’t know how to do. You’re not asking them to get too much out of their comfort zone. And so that’s why I appreciate having you on. Everything is so insightful that you do, but you make it simple.

BL: I want it to be easy. I want to use the language that attorneys use. I’m not here to make things difficult. I’m here to make things easier.

That client, Dan, out in the Pacific Northwest was so funny, he’s like, “Can you make everything a binary decision?” I’m like, “Yeah, it is a, or it is B. If you choose B, the next question, is, ‘Is it B or is it C?’” We’re just going to go through, because none of this is rocket science. It’s just stuff that, that, that attorneys aren’t used to seeing,

LH: Or they don’t have time to look ahead and consider it all.

BL: So let’s break it down into small chunks and make it easy to consume.

LH: If only everything could be that way.

Brooke, as usual, we loved having you on today. Today’s episode was extra fun I would say. We missed you. Am I allowed to invite someone back a third time?

BP: That’s when they become a regular.

LH: The LeXFactor with Simply Insightful Brooke Lively.

BP: And then after our 7,000th episode she’ll be coming in on our reunion tour.

LH: On that note, Brooke, thank you again. It was a pleasure. We loved having you.

BL: My pleasure. I love hanging out with you guys. You all are so much fun.

LH: And again, remind our listeners before we close out today’s episode, what is the website they can go to for the five tips?

BL: So https://www.cathcap.com/lexfactorar.

LH: All right everybody. Thanks for tuning into another episode of the LexFactor. Make sure you like our episode, subscribe, download, it’s on multiple platforms as you know, wherever you prefer to listen, you can find us there.

BP: It really does help.

LH: It does. Thanks for tuning in and we’ll talk to you next time.

The post Improving Your Firm’s Collection Rates – The LeXFactor appeared first on Lexicon.

Managing Attorney Jessica Markham is the founder of Markham Law Firm in Bethesda, Maryland, and joins The LeXFactor hosts in this episode to talk about the culture of law firm work environments. Jessica dives in to how she has successfully created a happy, fulfilling workplace for her team, and her journey to make her dreams for a work environment a reality.

During this episode, Jessica also discusses how she began Markham Law Firm and why she decided to make happiness the goal, instead of an unanticipated benefit of working at her firm. After starting her firm in 2015, Jessica explains how focusing on what’s important to the attorneys at her firm helps to deliver an ideal work environment that makes people want to stay. Jessica and our hosts go over the thought process behind what it takes to make attorneys feel comfortable at their job and valued while they practice.

Make sure to listen and subscribe today to learn more.

The post Creating Happy Law Firm Work Environments – The LeXFactor appeared first on Lexicon.

In this episode of The LexFactor, our hosts explore women’s role in law firm culture with Megan Elizabeth Gray, an attorney at Condé Nast in London.

For many law firms, hiring women is already well established in their recruitment strategy. Retaining female attorneys, as well as promoting them to partner level, however, is where the issue often starts. Megan and our podcast hosts look at some of the causes of this pattern as well as how this affects women and their career paths.

Tune in to this episode to hear examples from Megan of women fighting to progress their career trajectories and her tips for what law firms can do to develop their relationships with female employees.

The post Women’s Role in Law Firm Culture – The LeXFactor appeared first on Lexicon.

In this episode of The LeXFactor, a lawfully good podcast, Lexicon Brand Manager Lauren Hoffman and special co-host Sr. PR Manager Randy Schorfheide are joined by Brooke Lively, CEO and Founder of Cathedral Capital – a team of CFO’s and profitability strategists who help lawyers turn their practices into profitable law firms.

No matter if you’re a lawyer in solo practice or the CEO of a nationwide multi-office law firm, ask yourself this question: do you know how to calculate the capacity of your law firm? Also, do you know how to set billing goals for every attorney in your firm and how to go about improving their individual production?

Download and tune-in now to hear Brooke’s comments and listen to her expertise in growth management, creative problem solving and profitability strategy. Additionally, learn how you can gain access to Cathedral Capital’s resources such as the “From Panic to Profit: How 6 Key Numbers Can Make A 6 Figure Difference in Your Law Firm” series and “Greater Profits in 4 Simple Steps” – a 4-part video series guiding you to increase your firm’s profitability.

The post What’s Your Capacity for Profitability? – The LeXFactor appeared first on Lexicon.