States | 4 min
August 24, 2020
Ryan Groff, Practice Management and Product Advisor
Attorneys in Maine, New Hampshire, and Vermont are approaching retirement faster than other jurisdictions. In the best of times, succession planning is a moving target, but even more so during times of economic upheaval and uncertainty.
Seasoned attorneys are worth every penny of their hourly rate, but succession means their value is leaving the firm. Any remaining value will be directly connected to the firm’s structural resilience. Has it been managed well? Is information accessible from anywhere? Is the firm efficient?
Since organized firms are worth more than disorganized firms, efficient time and case management make firms valuable to successors. Retiring owners will also receive the added benefit of enjoying cleaner operations in the final months and years of their own distinguished careers.
Small law firm owners in Maine, New Hampshire, and Vermont strengthen succession plans and take control of their future with improved legal operations.
When it’s time to retire, small law firm owners face limited options. Other small or closely-held businesses are sold to family members, long-time suppliers, or loyal customers. Not so with small law firms. Strict codes of professional legal conduct prohibit reliance on these professional relationships. Owners of small law firms may only sell to other law firms or attorneys. So how do small law firms end well?
Even when closing, law firms should prioritize their success. The American Bar Association agrees, suggesting that closures “serve a broader business goal.” Big law firms with large corporate or government contracts may be rewarded for inefficiency, which means they achieve their goals through expansion into new practice or geographic areas. Goal-oriented succession planning for small law firms is very different.
Successful small law firms understand this. They know their very survival depends upon efficiency. Discerning purchasers of small law firms will purchase firms with effective legal operations.
Legal operations include client services, information and knowledge management, financial management, and strategic planning. Whereas big law firms devote entire departments to each of these areas, small law firms must rely on legal technology. But effective legal operations does not begin with technology.
Before purchasing tools, small law firm owners will be careful students of their own internal systems, processes, and workflows. They will know the purpose of every position in their firm. They will have chosen metrics for assessing productivity and ensuring consistent, quality work product. They will remain curious when facing roadblocks and humbly solicit feedback.
The right technology cannot be chosen or successfully deployed in small law firms without this kind of watchful self-understanding. Nobody is better situated than experienced small law firm owners to improve firm legal operations.
Small law firm owners achieve trusted reputations by spending decades focused on their clients’ important legal issues. Their clients are neighbors, friends, and family. Post succession, small law firms retain value when the firm is organized and the transition is seamless. State rules of professional responsibility require no less.
To do this, small law firm owners choose and deploy tools accessible from everywhere with efficient document management from one, secure, cloud database.
Attorneys and paralegals at small law firms have joined the mobile workforce. They need to communicate with clients, record time, and access cases remotely from computers, web browsers, Apple and Android mobile devices, or an iWatch. Microsoft Teams and Zoom video conference management must be built-in, and attorneys must be able to create email templates from within their client’s matters.
Similarly, clients need 24/7 flexibility for intake, scheduling, and document retrieval. Electronic billing and invoicing avoid the costs, delays, and security concerns of mailed invoices and deposited checks. Online payments increase cash flow when clients can review and pay bills from anywhere on any device.
When small law firms and their clients have access from anywhere, the firm’s work is organized and successors pick up right where retiring owners leave off. Clients experience the continuity of services they deserve.
Efficient document management and document retrieval is the primary concern of small law firms. Standardization reduces confusion to save time and money because everyone at the firm is on the same page. A secure document management solution improves collaboration by allowing law firms to easily create, store, and share documents, correspondence, and forms from a central location. In addition, small law firms can quickly draft client documents with templates and hundreds of state-specific automated legal forms.
An efficient document management system keeps a firm organized, and brings value to a successor. Not only will successors purchase a well-run firm, but they will also acquire world-class tools for future success.
A law firm’s accessibility tools and efficient document management will be meaningless without a secure, cloud database. Information at many small law firms is stored physically according to unspoken office customs and personalized filing conventions. This approach may work for small teams with low attrition, but it is not the foundation of a strong succession plan.
A successor law firm cannot serve your clients if information is not stored in one, secure database. Transitioning to a cloud database has the added benefit of avoiding costly on-premise server maintenance and replacement costs which may strike at any time. A five-figure server bill would be disastrous weeks or even days before retirement and succession. Maine, New Hampshire, and Vermont rules also expect better planning.
When client information is secured in a cloud-based system, it is maintained according to global data security best practices alongside data from the world’s largest corporations. Do not miss this point. When a small law firm stores its information with a globally recognized cloud database like Amazon Web Services (AWS), the value of its data is aligned with that of trillion-dollar companies. This is an enormous benefit for small firms practicing law at this time.
A secure cloud database also means small law firms will have an integrated cloud-based accounting and billing system. Prior to retirement, attorneys will be able to track and record time from anywhere, export financial reports, and manage IOLTA-compliant trust accounts. When a successor steps in, they will be able to track client financials on day one to comply with important legal accounting requirements.
Do you have questions about preparing for retirement? Does your succession plan need accessible tools, efficient document management, and a secure, cloud database?
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