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Practice Performance Indicators

Hello everyone, today’s post centers on a Practice Performance Indicators (PPI’s) that we believe, reveals significant portions of the overall financial health for both large and small law firms. At GMS Business Consulting, Inc. we constantly monitor and evaluate specific PPI’s on an a regular basis to measure our client’s adherence to their TAP (Tactical Action Plan) and their profitability objectives. We recently reviewed a Legal Trends Report produced by Clio (the legal industry software platform focused on Matter Management and Time & Billings).

While this report predominantly focuses a majority of its attention on AI’s adoption and utilization within law firm operations (which we’ll address in our next post), one section in particular caught our attention. This section is located on Page 63 of the report, titled “Key Performance Indicators.” These same indicators are among the same ones we track within our TAP solution for our clients. See the chart below:

(Clio – Legal Trends Report, pg. 63)

Three Performance Indicators

These three specific indicators are identified as the “Utilization Rate“, “Realization Rate“, and the “Collection Rate“, and are expressed as a percentage of an 8-hour workday. These indicators breakdown the hourly revenue efficiencies or inefficiencies for each individual lawyer and for the law firm as a whole, to measure their overall earnings performance, effectiveness, and financial health. Project these numbers over a weekly, monthly, and annual basis without addressing the issues behind the numbers can be destructive to your practice line and to the firm. The results that Clio published, are very consistent with our experience over the years working with law firms. The question for the lawyers reading this post is, “Do these numbers reflective my situation?“

How We Can Help

The good news is.. that each of these three indicators can be corrected. If your chargeability Utilization, Realization or Collection rates are below 90%, then we can help you with our TAP solution. This situation is VERY common in the legal industry. However, it can be fixed if properly addressed, monitored, and evaluated with the appropriate tools and coaching. We can provide that support…

If your chargeability Utilization, Realization or Collection rates are at the 90% or above threshold, we commend you! That said, even if all three indicator rates are above 90%, we are still very confident there are other areas within your law practice that can be optimized to improve your effectiveness, efficiency, and profitability through our TAP solution. Click HERE to learn more about our TAP solution…

We hope you find this post to be thought provoking, insightful, and helpful to you and your law practice. Contact Us if we can be of service or if you simply have any questions. We wish you a very happy, healthy, and prosperous New Year.

About Us

GMS BUSINESS CONSULTING, INC. – Provides lawyers/law firms, for-profit & non-profit organizations, and business professionals with Value-Accounting Services, Business Management & Development Services (utilizing our TAP Solution), Business Optimization Services, and Digital Marketing Services. We help business professionals strategically manage and tactically grow their businesses with a high return on investment and do so with peace of mind.  (We do NOT provide investment advice.)  Contact Us if you would like to learn more about our services, especially TAP, our high-level Tactical Action Plan Solution, designed to help you strategically and tactically optimize your business.  We would welcome the opportunity to speak with you.

info@gmsbusinessconsulting.com

707-218-3135

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Business During the CV Pandemic

Conducting business during the CV pandemic (COVID-19) will not be business as usual (obviously), but it is not only possible it’s doable! However given the right planning, preparation utilizing technology, and with measured and thoughtful precautions in place, business can proceed forward (and it must!). Most of what we’re presenting below is very basic, yet sometimes we need to revisit some of those basic principles before strategically planning ahead. Many, many business we initially interacted with were not as “up to date” on virtual working conditions nor did they have the appropriate plans in place to work through business interruptions like this current situation. Please understand, we’re not holding ourselves as experts in the coronavirus, however we do have experience and expertise in business operations, planning and optimization. Conducting business during the CV pandemic is possible! Let’s take a brief look at a few basic business interruption recommendations and precautions that might be helpful to you or someone else you may know who needs some guidance:

BUSINESS OPERATIONS:

  1. Business Interruption Plan – The first point of defense and offence is having a Business Interruption Plan (BIP). If you haven’t established and implemented a BIP by now…do so now (we can help you with this). This plan will not only be helpful now, but it will serve you well with ANY business interruption that may come along in the future including: natural disasters/ physical office location interruptions etc. (We include a Business Interruption Plan in our M.A.P. solution). BIP become the command and control center for managing and operating your business during a business interruption. If you don’t have a BIP in place, hopefully the following recommendations will provide some initial guidance and food for thought.
  2. Work Remotely – Minimize the staff necessary to be on your site location. For most service providers, online access to office/client work-product should have already been established through online/cloud access to all apps/data/communication. If that has been implemented, then those not required to be “on-site” should work remotely. For those who must remain on-site (for production purposes and tech. support), make sure to implement protective measures to keep others as safe as possible from infection.
  3. Daily Debriefs – Morning and evening business debriefs hosted by management should focus on essential business operations such as: client service & communication/ supply-chain/service providers/ contracted services status etc. Also, make sure the business leader (President/CEO/Managing Partner etc.) personally hosts a daily debrief with all staff. Staff needs to see/hear status and direction from the person in charge. This can be easily accomplished via ZOOM or other online meeting software etc.
  4. Client Communication – All staff involved in client interaction and work-product responsibilities should coordinate, prioritize and communicate with each designated client. The objective should be to keep clients informed on the status of work production that directly affects them. Clients NEED to hear from their service providers (just as we would like to hear from our contracted service providers) in situations like this. However this should be conducted on a more regular basis than is normally customary! Just a simple text/ email/ video-call/ direct phone call letting clients know you’re thinking of them, and providing them with updates regarding their work-product is very meaningful to them. DO NOT underestimate this! Over the years this has been the #1 complaint of clients with their prior service providers. This simple task can be easily accomplished via the technology tools we have at our fingertips today.
  5. Supply Chain & Service Provider Communication – Management should already have business interruption measures in place (via the Business Interruption Plan), but in case they don’t, calls must take place so that your organization’s staff can be prepared to work with any disruptions that may impact their client’s work product. Once the status and expectations with suppliers/service providers is understood, then any material information that could affect client work-product, should be communicated to the responsible staff and then directly to clients.
  6. Strategic Planning – Use business interruption situations to better understand and address your organizational weaknesses. Then you can effectively begin to strategically plan your next objectives. Host online meetings with management AND staff to brainstorm and strategize how to best resolve current business challenges internally, and how you can help clients do the same. This is a golden opportunity to add value to existing clients and new clients. Become a valued resource to help clients resolve their problems during a business interruption. Not that you need to have all the answers, but that you become a valued “resource” to help them resolve their challenges. You can do this either by providing the solution or by introducing them to other sources that can help resolve their specific challenges or opportunities. Provide value to your clients by becoming a thought leader…a problem solver other than the work you normally provide. Again, conducting business during the CV pandemic is not only possible it is doable!

PRECAUTIONS:

  1. Pre-Screening – Those employees only deemed “necessary” to work on-site during this particular crisis, should be monitored daily for any possible infection as best as possible. If any of the aforementioned on-site staff are not feeling well or have been exposed to others who are ill, they should be required to work remotely…no exceptions.
  2. Office Location Precautions – Implement the basics…mandatory use of hand sanitizers (when available), mandatory frequent hand washing, mandatory use of disposable gloves etc. Again, only those employees deemed critical to business operational support should be working on-site.
  3. Employee Support & Incentives – Consider offering “Additional Paid-Sick-Time-Off” for ALL your employees. If they’re ill or get ill, then they’ll be covered by YOU…their employer! For those fortunate enough to not get ill from COVID-19, then let this “additional” paid sick-time-off be added to their vacation time. Either way, now would be the time to step-up to the plate and let your employees know you care about them and their livelihood. The additional benefit will come back to you in the form of employee retention.

We hope these basics will be of help to you or someone you know and that you can be reassured that conducting business during the CV pandemic is doable! If you would like to discuss your particular situation further please feel free to Contact Us. Be well, stay safe, and may the Lord protect us.

GMS BUSINESS CONSULTING, INC. – provides lawyers/law firms, for-profit & non-profit organizations, and business professionals with Accounting Services, Business Development Services, Business Optimization Services, and Digital Marketing Services. We help business professionals strategically manage and tactically grow their businesses more effectively and efficiently.  We do NOT provide investment advice.  Contact Us  if you are interested in learning more about our services, and in particular about M.A.P. (our 3-phase business development & management solution), designed to help you strategically manage and tactically grow your business.  We would welcome the opportunity to speak with you.

info@gmsbusinessconsulting.com

707-218-3135

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The Coming Economic Crisis

Charles Schwab - Summer 2018 Issue - On Investing

Charles Schwab – Summer 2018 Issue – On Investing

Good morning everyone…this morning’s post is on how to prepare your practice for the coming economic crisis.  As the saying goes, a picture is worth a thousand words…  The chart above is taken from the Charles Schwab Summer issue of “On Investing” (pgs. 20-21).  While we don’t give clients personal investment advice, we do guide clients through their business planning, strategizing and implementation through various economic cycles.  We have been warning clients for quite some time that markets are over-valued, and when they are over-valued, there is inherent risk…both to their personal net worth and to their business.  We guide clients to better prepare and position their businesses for economic upturns and downturns, and in our opinion, there is a looming monumental shift in our economy and in the financial markets on the horizon…

As the above chart shows, the stock market has gone to stratosphere levels during a time when interest rates (until VERY recently) have been at historic lows, yet the amount of U.S. and global debt has more than tripled since the 2008-2009 economic crisis!  Does this sound like a healthy economy?  Or does this better describe a stock market and an economy that has been inflated by excessive debt?

The tides are beginning to change…interest rates have been slowly increasing, and perhaps may even invert (signifying a coming recession…or perhaps worse), and costly fuel prices have been on the rise.  In our opinion, the stock/bond/real estate markets are all at frothy states of dangerous optimism.  Our advice to clients, family members and friends willing to listen is to:

  1. Shore-up your business and personal cash reserves.
  2. Re-position your business/practice Strategy to take advantage of the soon coming economic downturn.
  3. Re-position your business/practice Operations both offensively and a defensively to position your practice to survive and thrive in the soon coming economic storm.  (by implementing our M.A.P. solution)
  4. Re-position your business/practice Business Development initiatives both offensively and a defensively to position your practice to survive and thrive in the soon coming economic storm.  (by implementing our M.A.P. solution)
  5. Re-assess your business Value-Proposition to help your clients navigate a successful course through the coming economic head-winds.
  6. Define your desired target market industries within your sphere of professional expertise and influence that you can assist and add value to, then deliberately and consistently communicate your perspectives and value-proposition to them.
  7. Implement a M.A.P. (your Master Action Plan) to guide you step-by-step through all the fore-mentioned strategies, processes and procedures to successfully meet your clients needs, and ultimately meet your business goals and objectives.

To better understand how our M.A.P. can help successfully guide you and your clients through the coming economic crisis, Contact Us.  We would welcome the opportunity to speak with you.

GMS Business Consulting – provides lawyers and business professionals with Accounting Services, Business Development Services, Business Optimization Services and Digital Marketing Services to help business professionals successfully organize, grow and operate their businesses more effectively and efficiently.  We do NOT provide investment advice.  Contact Us  if you are interested in learning more about our services, and in particular about M.A.P.(our 3-phase business development solution), designed to help you strategically focus and tactically grow your business.  We would welcome the opportunity to speak with you.

info@gmsbusinessconsulting.com

707-218-3135

John 14:15

GMS Business Consulting 1,289 Comments

Business Succession

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Hello Everyone!  Recently, we met with a few attorneys with small practices, in their late 60’s with no plans of retirement, nor thoughts of business succession.  That’s a concern we have for many business professionals today who know better to plan for events like this, yet they don’t.  Over the years, we’ve seen many business professionals own and operate very successful practices/businesses, however we’re still surprised to see how many have not planned for their business succession.

If there is a younger family member coming into the practice or business, then that is a natural business succession, and the business owner has a whole lot less to concern themselves with.  Conversely, if there is no family member or young associate interested in taking over the practice some day, then that leaves a potentially valuable asset foregone and left behind, and clients that will still need to be served. Read more