A firm establishes lawyer management and employs law office administrators to aid in its successful operation. If a law firm's management and administration are to achieve excellence, lawyers and administrators need to understand conceptually what the firm must accomplish. These concepts are:

1. A law firm must develop, maintain or enlarge client business. It needs to produce a quality legal service, promptly and impressively to the clients.
2. This legal service must be provided at an appropriate fee in terms of current economics, which includes a reasonable profit.
3. A law firm must recruit the caliber person required at all levels to produce the quality service desired. The firm cannot optimize the efforts of the most capable lawyer if it employs mediocre paralegals, secretaries and file clerks.
4. The law firm needs good facilities in terms of physical plant, library and equipment. It needs excellent systems and controls.
5. The law firm needs an excellent compensation program and a good climate, and a career development program to motivate and retain high caliber employees, and superior partners as well. It needs to compare its programs with those of others, but not necessarily to copy what they have. Transplants work with some, but the bodies of others may reject a similar operation.
6. All law firms have the same problems in financial management, as do most other businesses.
   The office cannot meet a payroll if lawyers don't put in a certain number of hours, or transactions, at an appropriate fee, and then bill and collect the fees and costs. If overhead is built-in, the firm must have a practice of sufficient volume and profitability to pay for it and for the partners' reasonable income expectation.
7. The law firm cannot expect its lawyers to achieve financial objectives, if it does not give the producing members of the firm budget targets for income as well as costs. If lawyers have a good concept of the gross expected, and of the net income they would like to anticipate, the producing forces will tend to work for the carrot, rather than respond to the stick.

All these concepts are bound up with the business side of law practice. Leadership and organization of the firm help them to move successfully.

The Law Office Administrator

Administrators for law firms come in various packages. The need for such a person may have become apparent as the firm grew in size and complexity, and the attorneys saw the need to conserve much more highly paid lawyer time which was increasingly devoted to administration.

In a smaller office, the administrator's functions may be carried out or directed by a senior partner. Or the administrator's position may be a part-time post filled by a senior secretary, bookkeeper, retired person or paralegal.

In somewhat larger offices, a professional is sought who may or may not have a background in law office management. The individual more likely is not an attorney. As an alternative, the firm could use an "administrative partner." In terms of economic value, an administrative partner, usually at the middle level, would lose perhaps $60,000 to $90,000 or more billable time (plus the cost of a full-time lesser management person than a top-flight professional administrator).

In very large firms, the administrator is generally a non-lawyer professional supported by other staff and supervisory personnel. However, in light of today's economic conditions, the firm in its wisdom may conclude that for its purpose and history, the post should be held by an attorney, perhaps one of its own under-utilized partners.

The Administrator's Functions and Relationships

General direction over the various functions of the office administrator is usually provided by a senior partner, a management committee, or a managing partner, and also by the other committees of the firm with which the administrator maintains liaison.

The administrator usually has overall responsibility for implementing the day-to-day administrative, personnel and fiscal functions as agreed upon with the firm's lawyer management.

The authority and responsibilities of the administrator may be classified into broad areas of work, namely:

1. Financial controls;
2. Automation of processes for firm administration and substantive practice areas;
3. Overseeing the operations of nonlegal personnel and their support of the lawyer service;
4. Human resources; and
5. Marketing and Practice Development, and
6. General administration.

In some firms, the administrator may be a lawyer or nonlawyer or exceptional capability, operating in an atmosphere of great acceptance by the partners. In such situations, the authority and responsibility of the administrator can be greatly extended.

The administrator should possess the sensitivity and the ability to communicate with and for lawyer management, be a voice for the business side of the law practice and be capable of carrying out the administrative policies of the firm.

An administrator operating at a high level will have a beneficial impact on: retained income, with related contributions to gross income, cash flow, and billings; cost of personnel, logistical support for practice development activities, space, automation and supplies; use of legal assistants (paralegals), secretaries and clericals.

There should also be evidence of a good application of cost-effectiveness concepts; such as: organization planning; managing automation; aiding committees; oral or written communications which support lawyers and are not excessive; providing and interpreting data; good employment, safety and other personnel practices; purchasing policies; and knowledge of the best law office practices.

The administrator can set objectives at the start of each year for areas in which accomplishment can be expected during the coming year, and be judged by performance on these objectives by year-end.

One of the problems for a new nonlawyer administrator of professional caliber or potential is to gain acceptance among the lawyers, and even entrenched non-lawyers.

Some ways that this is accomplished are to:

1. Provide a reporting relationship that signifies the level of the position. For example, reporting to the chairman of the executive committee of the firm is different from reporting to an administrative committee which then reports to the executive committee.
2. Have the administrator act as administrative secretary; for example, to the partners' meeting, to the recruitment committee, to the executive committee.
3. Gain acceptance in administrative areas where high priced lawyers are used and the administrator can do the job, such as investing money, screening resumes of lawyers, arranging recruitment schedules, writing position description and hiring paralegals, and in some cases secretaries (this may be delegated in a large firm), even though the lawyer to whom the person is to be assigned may approve of the person before hiring.

The administrator who knows how to test the waters will find greater acceptance. The time to test the waters is preferably before anything is directed or reduced to writing. Once a decision is made, or a draft is submitted, by or to the administrator, the author is ready to defend his reasoning.

Even after the decision is made, an open door for further discussion or interpretation, or "a seven-day rule" (a device whereby any executive decision (other than emergencies) was communicated to all the partners who were given the opportunity of raising objections within that period of time) may aid in the acceptance of decisions. Some policies and procedures take a long time before general acceptance and some may need modification or change if they cannot stand the test of time.

Income Distribution

The administrator should be familiar with the data system and methodology of the income distribution system. The professional administrator can help to insure an orderly compilation, analysis and presentation of important data. By participating in the preparation or written plans, the administrator will often make a valuable contribution to lawyer management.

Each lawyer controls for the client and his or her firm the management and economics of the cases for which he or she is responsible. As an originator or maintainer of client work, a lawyer needs to be responsive to the business development and income distribution policies of the office. It is the response of the individual lawyer, in support of a professional management approach, that enables the law office to provide a prompt, effective and profitable service.

One creative contribution, such as the development of a new area of law or the establishment of a very important branch office, may be of unusual long-range importance. It is the cooperation of the team in support of an innovative management that brings the total, well-rounded result. The law office must consider and utilize ways to examine the development of new clients or client areas, and further development and retention of current clients. It needs to review its receipts from specific fields of practice and analyze the pattern of continuing clients. Each lawyer needs to be aware of his or her own market area, including specialty needs, and the population, industry or other growth contraction that may affect their practice. He or she should find ways of determining client reaction and opinion to their work product and economics. The administrator can help prepare and analyze these trends.

Effectiveness, in terms of a quality professional service, and a satisfactory income at appropriate costs, is the main objective. Efficiency is subordinate to effectiveness.

For example, a lawyer who is a brilliant litigator may be unable to use automated equipment. His or her work may not emerge in time from the typing center, thereby causing emotional disturbance during an important case, because of an imposed system, which may be tremendously costly to the firm. Another litigator may be better at drafting and more conscious of informing the administrator of his or her priorities. This attorney delights in the fact that automated typing retrieves and produces hard copy in a matter of minutes. The administrator should have a continuing role in how automation, system and personnel should be managed to aid in the effectiveness of the individual producers of income.

Cost-Effective Management is becoming a more frequently used term in law office management, both in private practice or in corporate law developments. The administrator should be utilized to evaluate an individual's performance in aiding cost-effectiveness.

Every private practice firms needs to provide economically justifiable billings both for its clients and its own profitability. To do this, the firm must evaluate its operations. Among the factors to be considered are:

1. Total fees must derive from a well-managed, cost-effective prompt service, thereby holding the line on bills of the firm for a given level of skill and performance.
2. Changes in associates' and partners' compensation should be related to useful data on performance even within the same general peer group, thereby aiding career development and assuring a time dollar or other value in consonance with levels of performance.
3. Organization of the firm, future planning, specialties, reputation and client impression must receive increased attention.
4. Analysis and interpretation of the firm's results in terms of its own practice. The analysis can be provided by a good management information system. The interpretation of the information will show the difference between a record-keeper and a professional. Comparison with other firms of like nature is important.

And the firm's management has to evaluate the administrator. More law firm are using the following factors for such an evaluation:

• Ability to interpret the needs of the firm and contributions to cost-effectiveness.
• Ability to organize work, establish priorities, follow progress and report back on problems.
• Anticipation of problems and planning for the future.
• Ability to handle complex management, financial or human relations problems.
• Supervisory and leadership skills.
• Quality and accuracy of work.
• Prompt delivery of service.
• Availability, including extra hours when needed.
• Effectiveness of space and equipment management.
• Interpersonal relations ability with management committee, partners, associates and staff.
• Unique creative contributions and innovations.

Good Management Needed More Than Ever

The managers of today, in any enterprise, are operating in a period where all concepts and values are being questioned, where change is more rapid. Social, technological and human relationships require a heightened sensitivity. We are in a period when people don't like to feel managed, but perhaps, for that reason, good management is needed more than ever, if the law firm is to be both responsive and achieving.