5 Ways to Establish Penalties for Delinquent Payments

October 26, 2018 By Andrew McDermott Leave a Comment

“I’m not going to pay for that.”

It’s a trend that’s spreading rapidly. A research study by the Association of Corporate Counsel found more than 20 percent of respondents flat out refused to pay their bill.

Their rationale?

First and second year associates are essentially worthless. That’s ridiculous. Who in their right mind would say such a thing?

Clients have set a dangerous precedent, because we allow them to

At a 2010 conference, Chester Paul Beach stood in front of 75 law school deans and legal educators and made he a startling proclamation.

We don’t allow first or second year associates to work on any of our matters without special permission, because they’re worthless.

Here’s the thing.

Beach has a point. Hear me out on this. Beach was obnoxious about it but he has a point.

He’s an abused client.

The firm he hired promised world class attorneys but provided inexperienced junior associates instead. They billed these junior associates out at much higher rates.

Which is unfair.

This brings an important question into play.

Do clients have the right to decide which work they’ll pay for?

And what they won’t?

It all depends on your philosophy. It’s something you’ll need to determine for yourself ahead of time. Here’s why this matters. These circumstances are becoming routine.

Why?

There are three reasons a client decides against paying your invoice. The reasons are the same as they’ve always been.

They don’t have the money.
They’re unhappy with your work for some reason.
They want to use their money on something else (besides you).

They don’t have the money

If they don’t have the ability to pay your invoice, this is something you can work with. It’s obviously less than ideal but these clients aren’t trying to steal from you.

The usual advice works well here.

You can set up a payment arrangement, place future work on hold, negotiate for more favorable terms, etc. The key point with these clients is this.

The relationship can be restored.

They’re unhappy with your work for some reason

Again, these clients are reasonable.

Sure, it doesn’t seem that way at the moment but it’s true. Here’s why that’s actually the case. These clients have a concern they’re willing to discuss with you. Remember the outrageous comments made by Chester Paul Beach? That’s a great example.

These clients want justice.

They want a fair resolution to their problem. They’re using your invoice as leverage to resolve a pressing concern. Again, not really news here. This scenario is a cue.

Your client wants to negotiate.

They want to use their money on something else (besides you)

When we think of delinquent clients these are the folks who come to mind. The difficult ones that simply refuse to fulfill their obligations as promised.

Here’s the dilemma.

If you insult, threaten, bully or abuse your client, you’ll give them the justification they need to ignore you permanently. Your firm suffers financially as a result.

What do you do?

Remove the desirable, then add the undesirable

Most firms default to a late fee.

Which of course means this client is now less inclined to pay your invoice. This is rarely an effective motivator. Instead, begin removing the desirable and adding the undesirable. This could mean you:

Refuse to discuss the details of their case. You accept their calls but you don’t respond to questions about their case until you’re paid. There are no progress updates, no action items discussed until your concerns are resolved.
Place their matter on hold. This means you don’t touch their account. You don’t file paperwork, you stop all in-progress work. You discontinue work with 3rd parties on behalf of your client. Many attorneys make the mistake of continuing to perform for delinquent clients, giving them no incentive or reason to pay in the future.

This is more difficult to do in certain practice areas (e.g. family law) so excellent documentation and a compelling rationale are essential if you need to take this route.

Use accounts receivables factoring (ARF). With an ARF, you sell your invoice to a finance company. You get less cash but you’re able to get some money which is better than chasing clients around in court.

So if you sell a $20,000 invoice, you’d receive $15,000. The finance company receives the full $20,000 + any additional fees. At that point, the bill becomes their problem.

You can factor these costs into your fee arrangements so your practice remains profitable. This is a viable strategy for moderate to high risk practice areas and fee arrangements (e.g. contingency fee arrangements).

You’ll want to verify the legalities of this in your area.

Discontinue representation. You’ll want to make sure you follow the Rules of Professional Conduct, ensuring that you’re well within legal and ethical guidelines. It’s best to use this step only after negotiation/talks have broken down.
Finally, litigation. This should be your absolute last step as this takes your focus away from what matters most. Representing your clients appropriately.

Here’s an important detail to remember.

Don’t prevent natural consequences.

Allow the natural consequences as much as legally possible. Treat your clients like the adults they are. Allow them to face the consequences of their undesirable behavior.

Your client needs to be invested.

The desirables, undesirables and consequences should be something that matters to clients. Losing something they value or want is an effective motivator. An unpleasant outcome or consequence is an excellent form of error correction.

Your clients don’t need you to punish them

Yes, clients have set a precedent.

They’ve decided what they will and won’t pay for. But only because we’ve allowed it. That’s a serious problem if they’ve decided against paying your invoice. As we’ve seen, clients aren’t created equal.

Most clients want to negotiate.

Others prefer to spend the money they owe you on something else. They simply refuse to fulfill their obligations as promised. Threaten, insult or bully your client and you earn an enemy.

There’s a simpler way to get paid.

If a client’s already decided against paying, there’s not much you can do to change their mind. Late fees don’t work as well as they used to. But this doesn’t have to be the case for you.

With desire, consequences and leverage you have all the tools you need to accelerate client payments.

4 Strategies To Avoid and Prevent a Billing Dispute

October 23, 2018 By Andrew McDermott 3 Comments

It’s the worst part of billing.

You worked hard for your clients. You consistently produced exceptional results. You delivered miracles, saved them from disaster. They were incredibly happy and thankful for your help.

Until they received your invoice.

Their whole demeanor changed at that point. They were no longer the happy and thankful clients from before. They suddenly rejected your invoice.

What happened?

How did your client relationship sour so quickly?

Something you did triggered a billing dispute

What was it?

Was it your approach? Perhaps your fee was too high or the work wasn’t delivered as expected? Whatever the cause, it’s significant. Your clients are refusing to pay.

Firm revenue is at stake.

How do you turn this difficult situation around? How do you resolve these billing issues decisively and prevent future disputes? There’s a single word that encapsulates your ideal solution.

Communication.

The vast majority of billing issues can be narrowed down to communication. Here are four strategies you can use to avoid and prevent a billing dispute.

Strategy #1: Create a map of expectations

Your clients have billing guidelines. When we receive these guidelines they’re often a jumbled mess. Even more frustrating, they’re incomplete. Client “guidelines” are often missing rules. If you follow billing guidelines to the letter your invoice may still be rejected.

Why?

Your clients (e.g. decision-makers, billing department, etc.) have a set of implicit rules. Rules they assume you already know and can’t be bothered to explain. These hidden rules should become explicit rules.

How?

Reach out to select members of the billing department (or your point of contact) ahead of time. Introduce yourself, then ask them how to make their jobs easier.

You’ll want to identify:

What’s required/permissible
What requires approval by the client
What’s forbidden/unacceptable
Stop words and hidden rules that immediately flag your invoices for review

Take notes, then create a summarized set of billing guidelines. Then, once you’ve learned the rules, the billing guidelines your clients expect you to follow, obey them.

Strategy #2: Automate with helpful if-then statements

Automation is key.

If-then statements enable you to automate or semi-automate key tasks in your process.

If A, then B.

If billing guidelines are received, then they’re immediately forwarded to [name]. If an action item is mentioned in a meeting, then [name] is notified. [Name] will create and upload the appropriate content to the firm’s document management system. All relevant parties will receive access.

Did you catch that?

The strategy provides a simple and straightforward process you can use to automate/semi-automate the work that needs to be done. Whenever possible, use technology to do the heavy lifting (e.g. use software to verify that time entries are appropriately recorded).

Why?

Good software completes requested tasks. Great software completes, teaches and corrects staff simultaneously.

If-then statements create consistency.

They create a procedural approach that’s easy for clients to adapt to. The added bonus here is that each of your invoices appears to been written by the same hand. This tells clients you’re reliable. You’ve adopted consistent, firm-wide billing practices.

Strategy #3: Treat your timesheets like the precious cargo they are

Your time entries are like gold.

You want to treat your timesheets like treasure or precious cargo. Your line items like important inventory in your store. You’ll want to do this because that’s what they are.

Each line item is a unit of revenue.

Every improvement you make to the quality of your timesheets/invoices increases the acceptance and collection realization rates for your firm.

This is the problem.

Most firms believe they make their money when they send out an invoice or bill for their time. But you actually make your money before that point. Your firm makes money when you: (a.) Map/identify the obvious and hidden rules in your billing guidelines (b.) You verify that all time entries are real-time compliant and automatically recorded as-it-happens and (c.) every time entry, every line item, is specific, detailed and precise outlining the who, what and why of a particular task.

This creates structure.

This structure eliminates the invoice rejection/review process, automatically increasing collection realization rates. Your client is happy. Your staff is happy. Revenue skyrockets automatically so your partners are happy.

Strategy #4: Deliver unexpected news preemptively

Don’t ignore a significant variance.

Have you deviated significantly from a pre-established budget? Are you planning on adding an unexpected item, expense or fee to your invoice?

Communicate.

Pick up the phone and reach out to your point of contact. Reach out to the billing department. Let them know what’s going on. Explain the who, what and why of the situation. Then add that explanation to the invoice. Let decision-makers, your point of contact and the billing department know what’s coming ahead of time.

If they disagree? Negotiate.

Whether it’s good news or bad news reach out to clients. If it’s bad news explain why it happened and how you plan to address the problem. If it’s good news spell out the benefits. Show them how you can replicate this windfall with future projects.

You can avoid and prevent billing disputes

It starts with communication.

Your clients are looking for clarity. Clarity on their invoices. On each line item. In each statement. They expect you to keep them informed. A billing dispute means your clients are attempting to pump the brakes.

It’s a request for more information.

When unhappy clients go cold it is not always an attempt to dodge or avoid their obligations. Billing disputes are unpleasant, especially when you’ve done amazing work. Give clients the clear, consistent communication they need and you’ll find you’ve eliminated the worst parts of billing.

How To Develop a Dependable, Compliant Relationship with the Accounting Department

October 19, 2018 By Andrew McDermott Leave a Comment

The accounting department. They’re the gatekeepers.

They approve, negotiate and process your invoices. They ensure that you’re paid on time for your hard work. Become their ally and your collection realization rates climb. Alienate them and realization rates drop.

The accounting department is treated as an afterthought

Are you making this mistake?

If you’re one of the few who doesn’t you’re part of a rare breed. As I mentioned in my previous article, many firms aren’t fully on board with compliance.

This is surprising as collection realization rates continue to decline.

It’s true, there are a variety of reasons for this problem. But compliance is a frequently neglected issue for two reasons. Attorneys are either…

Not using legal codes as outlined by governing bodies or
They’re using them incorrectly

Yes, there are a variety of compliance requirements that firms may have to manage (i.e. ISO 27001) as they grow. Many of these requirements can be managed by working with accredited and compliant third parties.

For now, we’re focused on one thing.

Revenue.

Specifically compliant timekeeping as it relates to accounting departments. Why does this matter? Developing a dependable and compliant relationship with accounting departments is an easy way to immediately boost collection realization rates.

Take care of accounting and they’ll take care of you

Accountants want specific things. They want you to meet corporate and compliance requirements. These details are typically discussed at the start of the relationship.

Are you complying with attorney/client conflict checks?
Are invoices in line with budget requirements?
Are expense categories e.g. meals, experts, out of town travel, approved?
Are the partners/associates listed on this invoice authorized to work on this case?
Do expense percentages comply with their rules?

Here’s why details like these are so important.

Accountants have completely different goals.

As an attorney, you’re expected to attend primarily to your client’s needs. Accountants, on the other hand, are typically required to put the public interest first when they perform an audit or attestation. Accountants aren’t allowed to withhold or ignore negative information.

They’re expected to find it.

A comparative analysis backs this up. If you’re not aware of this mindset you can find yourself at odds with client accounting departments. It’s simply a different way of looking at things. Approach accountants with the wrong mindset and you create resistance.

Go above and beyond to eliminate resistance

Show accountants you’re willing to give them what they need and then some. If you’re expected to provide a certain amount of data, offer more. If it’s timekeeping and you’d like to earn your accountant’s goodwill you could:

Track your time daily, as-it-happens.
Verify changes to your timesheets are accurate and precise
Record both billable and non-billable hours
Provide a project breakdown using the appropriate legal/project codes
Be ready to provide accountants with a complete digital audit trail of trust accounts
When required, provide a detailed breakdown of 3rd party disbursements
Verify compliance with ABA code set and relevant standards (e.g. LEDES 98B and insurance provider formats)

Not really an excessive ask, is it?

It essentially boils down to good habits. If you provide accountants with the data they need in the formats they need it, it’s easier for them to pay you.

If you’re dependable, they’ll be dependable

Probably.

Give your accountants what they need and they’re more likely to work with you on the details you need.

Wait a minute. That’s the problem.

What you do everything right and realization rates still aren’t where they need to be?

You still win.

How? You gain clarity.

If you’re exceeding expectations and you’re compliant with client requirements you know it’s not due to failure on your part. Excellence gives you a chance to negotiate with clients on equal footing. You’re able to discuss a failure on their part.

You’re able to hunt for the real problem.

Your excellence means they (a.) can’t hide behind a smokescreen e.g. you’re not compliant or you’ve failed to deliver in some way. (b.) they’ll need to give a clear answer on their failure to perform which then means (c.) you’re able to identify the underlying problem.

Excellence exposes their excuses.

Accounting departments expect excellence

Are you thoughtful, compliant and dependable? When you work with accounting, do you treat them like the indispensable professionals they are?

If so, you’re part of a wise minority.

These accountants approve, negotiate and process your invoices. They ensure that you’re paid on time for your hard work. Become their ally and your realization rates will climb. Alienate them and your realization rates will fall.

How do you become an ally?

Create good habits. Provide accounting departments with the precious data they need. Give these gatekeepers the data they need in the formats they need it. Take care of your accountants and you’ll find it’s easier for your firm to receive payment.

How Stringent Compliance with Local and State Rules Impact Your Firm’s Bottom Line

October 18, 2018 By Andrew McDermott Leave a Comment

It’s such a hassle, why bother?

Compliance requires more time; it increases your workload. It creates unnecessary stress and anxiety. It’s certainly helpful for your business but it probably won’t improve your bottom-line much.

Is this true?

Is compliance the dreary time sink so many believe it to be? Or is it a tool top performers use to outclass their stubborn peers?

Stringent Compliance: Your firm’s unseen protector

Protector?

That sounds a bit exaggerated, doesn’t it? The truth is a bit surprising. Not only is this claim not an exaggeration, it’s an issue for a majority of law firms.

But why?

Why is compliance such an essential part of your firm’s bottom-line?

It’s all about avoiding loss.

Depending on your federal/state guidelines, clients and practice area, you may have a significant amount of compliance requirements to deal with. These billing and ethical mandates require that you approach billing in a disciplined way.

Many don’t.

It’s common for firms to ignore these billing guidelines. What’s the harm after all? Maybe these compliance requirements are a case of rules that are technically required but rarely enforced.

It’s a gamble to ignore.The main reason attorneys are expected to maintain compliance is to avoid a violation in the first place. But there are additional motivators, consequences a conscientious firm would prefer to avoid. What are they?

Risk of litigation. It goes without saying that non-compliance, especially the kind that affects employees and clients negatively, would provide injured parties with the impetus they need to take legal action.
Damaged reputation. Any direct/indirect consequences that stem from non-compliance will affect your firms ability to attract new business. Once public, new clients will be motivated to take their business elsewhere. Severely hampering your ability to win new clients, maintain profitability or keep rainmakers.
The most egregious cases may result in stiff penalties. Initially, this isn’t as damaging for firms with deep pockets. The consequences increase over time as firms struggle to stay afloat and maintain good standing.

What about the carrot?

A disciplined, self-policing firm is far more likely to receive grace and leniency than the firms showing a willful disregard of local and state rules. Making a serious attempt to maintain compliance may also be used to fight punitive damages in the event of a serious violation.

It’s the worst case scenario.

Your clients have compliance requirements too

Here’s a typical scenario.

You + client negotiate terms. You outline the dos and don’ts, the expectations, deliverables, procedures and requirements. Once this is complete, you’re able to get to work.
Next, you add time entries. Your associates and support teams fill out time sheets, carefully tracking their time for each matter.
Receive payment. You send your invoices to clients at the appropriate time. They’re satisfied with your work. They pay your invoices promptly and on time, right?

Wrong.

Your clients have their own set of compliance requirements. If your invoice/statements don’t meet these requirements they refuse to pay. This means you’re forced to…

Fix prebills and invoices
Resubmit your prebill or invoice
Deal with yet another rejected prebill or invoice
Fix and resubmit

Over and over again.

You’re continually losing money.

Dealing with a rejected invoice you’re now required to correct? You lose money
Forced to recreate a draft bill you lose money
Required to edit a time sheet or time entry? You lose money
Adjustments made to a non-compliant line item? You lose money

If your invoice acceptance rate is less than 100 percent you’re losing money.

This seems to be completely unrealistic; 100 percent acceptance doesn’t leave you with a margin of safety. It’s the goal you’re striving for, a 70 to 90 percent acceptance rate isn’t unreasonable.

Hmm… Seems impossible.

It is impossible, if you’re missing the tools and resources you need to perform. That’s precisely the problems many firms find themselves in.

Failure is inevitable, if you don’t know the rules

Here’s the challenge with billing guidelines. When it comes to timekeeping, many firms aren’t aware of the rules. Many clients have “billing guidelines,” a set of expectations that governs your relationship with them from a billing and timekeeping prospective.

It’s all about the rules.

Explicit requirements	Implicit requirements
Block billing is forbidden	Won’t pay for “excessive” work
Will not “pay for others to learn”	Won’t pay for research/clerical work
No junior associates on client matters	Unclear line items will be rejected
Time in tenth of an hour increments	Staff continuity
Approved fees and disbursements only	Won’t pay for firm overhead

See it?

The list of spoken and unspoken expectations?

This is key.

It’s incredibly common for firms to bill the same way, for every client. The assumption here is this – most guidelines are similar so every bill will be correct/compliant.

Which is a false assumption.

It’s a prudent idea to maintain a copy of all of your client’s billing guidelines. These would ideally be stored in your document management system. A better idea? Create a concise summary that includes relevant notes and details. Your summary should cover:

Timekeeping requirements
Fee requirements
Expenses (approved/forbidden)
Invoicing procedures
Auditing (metrics and key performance indicators)

There’s more.

Brian Brown and Paul D. Larimore share important billing guidelines in their thoughtful primer, Pay Day Get Your Legal Bill Approved and Paid Quickly.

Here’s a short summary.

Follow the rules. Be sure to follow state, local and client guidelines. Work to make compliance an easy, simple and straightforward process in your firm. If it’s easy to do and easy to maintain its more likely to be done.
Be specific. Entries like “phone call with client” and “file review” are much too vague. Give your clients the specificity they need. If you’d like to be paid for your work outline what you did, who you did it with and why. Specificity shows your clients what they’re paying for. What does this mean? They’re far more likely to pay for your work.
Be distinct. What’s wrong with this line item? “Travel to court, attend hearing, meet with counsel, letter to client, 3.0 hours.” It’s incredibly unclear. How long was the hearing? How much of the time was spent traveling? Did it take 2.5 hours to draft a letter? This line item should be broken down further. Each task should be distinct.
Use the minimum billable unit. Most billing guidelines set the minimum unit for billing at one tenth of an hour. It’s fairly standard as many review/receipt activities take less than six minutes. Here’s a caveat. You want to make sure the minimum billing unit isn’t overused or underused. Overuse is known as “malicious compliance” and may often be viewed as unethical. With contemporaneous (as-it-happens) timekeeping, it’s easy to maintain compliance. Reconstructive timekeeping, for a variety of reasons, makes this process difficult, complicated and messy. It’s less accurate and it consumes more billable time. It decreases client trust, increasing the likelihood of under billing or overbilling.
Bill support functions appropriately. If you’re unsure a simple question provides clarity. Is legal training or skill necessary to complete the task? If the answer is yes, the task is billable. If the answer is no, the task is considered overhead and no professional should bill for it.
Bill attorney functions appropriately. Your invoice should contain every item that is both reasonable and necessary. However, you want to avoid billing for multiple attendances (e.g. more than one biller at an event). Interoffice conferences and “getting other associates up to speed.”
Review your bill before sending it. This is an obvious but neglected piece of advice. You want to review your bill carefully, working to spot: grammatical mistakes, double billing, noncompliance and line items in need of clarification (via preemptive phone call).

These best practices should be your defaults. What if you already have great habits? What if you’re already using timekeeping software that enables you to “manage” time entries?

**The hidden risk with “flexible” timekeeping software**

It seems to be an innovative and valuable feature. You’re allowed to update or edit records in your timekeeping software. This flexibility is key when you’re looking for a way to correct minor mistakes.

But it’s also dangerous.

Your timekeeping software shouldn’t be flexible. Is inflexibility an attempt to stifle innovation? No. On the contrary, it’s an attempt to protect your firm.

Flexible software encourages manipulation.

Flexible timekeeping software provides employers with the access they need to manipulate time entries and timesheets. To set up default rules that shave hours from employee paychecks, disguise edits to records of hours and wages.

This flexibility increases liability dramatically.

It helps to legitimize theft, from both clients and employees. This becomes an immediate compliance nightmare for the unsuspecting law firm.

How?

There are, at least, two regulatory regimes that exercise authority over timekeeping.

The S. Department of Labor’s (DOL) recordkeeping regulations and the…
S. Department of Defense (DOD) audit guidelines, as described in the DOD’s Defense Contract Audit Agency (DCAA) Manual.

These agencies are focused on wage/labor law. Here’s what researchers have to say about “flexible” timekeeping.

The use, misuse, and functionality of timekeeping software primarily affects employees paid on an hourly basis because their wages are a function of the number of hours worked. Hourly employees represented 58.5% of workers in the United States as of 2015.

Many of their employers are covered by the FLSA, which regulates any employer engaged in interstate commerce with two or more employees and annual sales of at least $500,000. Those not covered by the FLSA are frequently covered by state laws, which often cover substantially all employers in the state.

Researchers went on to discuss the specific features that undermine wage/hour laws.

Broadly, the software features observed among Category A programs that can facilitate non-compliance include those that: (i) present situational cues that encourage supervisors to make unlawful edits to workers’ raw time and attendance data; (ii) flag certain types of time entry for further scrutiny, and perhaps unlawful editing, by supervisors; and (iii) implement employers’ own wage and hour rules, such as automatic break deductions.

While these features can be used in a manner that complies with federal and state wage and hour laws, they also permit noncompliant use. We contrast these features with Category B software, whose functionality tends to restrict non-compliant use.

Here’s the problem.

Flexible software makes simple adjustments (i.e. cheating) easier. In their study, Category A software provided a significant amount of innovation and flexibility increasing fraud as a result.

See the major problem area?

It’s reconstructive time entries. Tracking hours on a contemporaneous (as-it-happens) basis makes it easier to maintain compliance. Instead of relying on memory or recollection your team is required to add their time appropriately.

The benefits are obvious.

This largely eliminates: (a.) under billing, which impacts firm revenue negatively, (b.) overbilling which destroys client trust and increases liability and (c.) violations due to overly flexible software that encourages “creative edits.”

This is sobering.

The convenience offered by “flexible software” dramatically increases costly legal risk for firms. In this context, convenience produces a major liability.

What does this mean?

Playing by the rules is crucial. You’re most likely aware of the rules and regulations your firm needs to follow. You know compliance is important. What you may not know is this: your timekeeping software may undermine compliance with federal, state and local rules.

Stringent Compliance: The hidden protector your firm needs

At first glance it’s a hassle.

A chore that increases your workload and demands more of your time. At times, compliance feels like it’s something done to you, rather than something done for you. Initially it creates fear, stress and anxiety.

“Flexible software” isn’t always the answer.

Stringent compliance is the answer. Your firm needs a compliant timekeeper. An-easy-to-use tool that marries time tracking and compliance. An automatic timekeeper that follows the rules.

Do you have that now?

It’s at your fingertips. With the right tools and procedures your associates and accountants will have everything they need to maintain compliance.

3 Benefits and 3 Drawbacks to Hiring a Virtual Assistant

October 11, 2018 By Andrew McDermott 2 Comments

Hiring a virtual assistant will be a godsend, but can you trust them?

They can be an invaluable part of your support team. But only if you choose the right ones. Choose well and you receive an incredible amount of free time and revenue. Choose poorly and you may lose business, clients and your firm.

What are you getting into really?

Are virtual assistants worth your time and effort?

They are if you’re aware of the risks and rewards.

Smart firms know they’ll need a good idea of the benefits and drawbacks involved. They search for this information ahead of time, well before they need help.

So what are the benefits and drawbacks?

Benefit #1: Help at a lower cost

Hiring a virtual assistant is liberating.

With the right assistant, you’ll have the help you need with client intake, sales and marketing, bookkeeping, purchasing, etc. That’s fairly straightforward, right? You’ll receive more free time and better quality help for less money.

That’s right.

You won’t have to cover an employee’s salary or benefits. You won’t need to offer incentive programs or pay for unemployment insurance. It’s a win all around.

Drawback #1: Help at a lower cost

Virtual assistants are looking for one thing.

Money.

If your money dries up, they go away. If they’re in the middle of several tasks or projects they stop immediately.

So? What’s the problem here?

That’s business as usual. Doesn’t seem like a problem… until you decide to switch virtual assistants. The pay structure comes at a lower cost but it makes simple things like switching providers extremely difficult.

You’ll need overlap.

Your virtual assistants probably won’t share information with their replacements. What you save in salary and benefits you spend with training and effort. That can be difficult if you’re already pressed for time.

Benefit #2: Freedom from employee reviews

Employees have power.

These days, employees are more than willing to write a negative review about your company. Make a poor management decision, mishandle key initiatives and employees will tell the world it, anonymously of course.

Not so with virtual assistants.

There aren’t very many places to go with their complaints. Sure it’s possible they can use a traditional review platform like Google Reviews, Facebook or Yelp but it’s far less likely. Why?

It makes them look bad.

It affects their ability to win more business from clients in the future. No one’s going to want to hire a firm or individual that badmouths their client online.

Would you?

Drawback #2: Potential for abandonment

No one wants to be left high and dry.

But it happens from time to time. Hire individuals and they simply vanish. Work with a firm and they go out of business. Choose recklessly and it becomes an expensive problem.

You need rock solid reliability.

Look for individuals or firms with a proven track record. They should be able to provide you with references, case studies and/or testimonials. They should be in business for at least five to seven years. You’ll want proof of stability – whatever that means for you.

Benefit #3: Instantly scale your business up or down

You’ve just won a large client.

You’re flooded with work. Then you win three more clients. Then two more clients after that. This is a good problem to have but it’s also a difficult one.

Virtual assistants give you the ability to scale.

You can instantly increase the amount of support staff you have on hand. Especially if you’ve done the upfront preparation necessary to find the right firm. This is fantastic because it means solo, micro and even large firms have the support they need to grow rapidly.

Here’s the caveat.

You’ll need to make sure you find the people/team you need well before you need them. Waiting until you’re flooded with work is a surefire recipe for disaster.

Drawback #3: Data security/compliance

They know a lot about you.

How your business works and what you do. A few of your assistants may have access to private client data. Do both of you have a plan to secure your data? You should.

You’re legally responsible for your client’s data.

The virtual assistants you choose should have good data security policies in place. If they’re working with your client’s data background checks should be fairly standard. It’s a smart idea to have clients sign your agreements with the appropriate clauses.

You’ll want to make sure that you know how they do business.

Do they share their data with third parties? Do they use data encryption to protect your data? What happens to your data if you decide to end your relationship with them? These are crucial questions you’ll need solid answers to. If they’re unsure about these questions or their answers are vague and unhelpful, walk away.

There’s no need to expose your firm to an unnecessary lawsuit.

Hiring a virtual assistant is invaluable if you know what you’re getting into

You need to know you can trust them.

The right virtual assistant is a blessing in disguise. They enable you to scale your business up on demand. In the right hands, they generate a significant amount of revenue and free time.

But only if you know what you’re doing.

With the right assistant, you’ll find you’re able to complete a disproportionately large amount of work. Paradoxically, you’ll find you also have more free time.

Choose wisely and you’ll find a trustworthy virtual assistant is just what your firm needs.

The Ultimate Guide to Using Virtual Assistants at your Law Firm

October 10, 2018 By Andrew McDermott 3 Comments

Are you working too hard?

Many attorneys feel they’re forced to make a terrible choice. Between their family and work. Or their body and sanity over work. As the demands on attorneys go up, their ability to cope falls.

You’re expected to do more with less.

What if you’re running your own firm? The expectations are greater.

These expectations take a heavy toll

Expectations are high for attorneys.

You’re expected to hit your billable quotas. To go above and beyond for clients. To bring new clients into the firm. To Network. And on and on.

There simply isn’t enough time.

To complicate things further, the expectations placed on you are climbing. Day-by-day you’re expected to produce more value for your clients and your firm. Hourly rates are climbing as actual billable hours fall. Why?

Firms aren’t doing enough.

That’s the strange conclusion researchers came to in the “2018 Report on the State of the Legal Market.” That sounds ridiculous, doesn’t it?

So what’s really going on here?

Attorneys, partners, firms – they simply don’t have the time they need to make big changes. They’re overwhelmed, buried under a mountain of work. According to the 2017 State of U.S. Small Law Firms study, 70 percent of firms feel they spend too much time on administrative work.

That’s non-billable work. So what’s the solution?

Attorneys, you’ll have to work even harder

Wait a minute. That’s unreasonable.

For many firms and practitioners, that’s also impossible. Many legal professionals are already being pushed to their limits. Burnout and mental health issues are already a problem in the industry. It’s not a viable long-term strategy.

It’s no secret.

Most attorneys spend more time on non-billable work. Client intake, business development, bookkeeping, marketing – these are all tasks that can (and should be) done by someone else.

So why isn’t this happening?

Many attorneys aren’t sure where or how to start. They’re not sure where they should be dedicating their time and effort. It’s much easier to avoid the problem instead.

Seriously, why bother?

The support you bring on, they won’t be able to do it as well as you. That’s the rationale, right?

It’s true.

With the right professional on your team, these tasks can be done better. But that’s the frightening part. Are you truly indispensable to your firm if you’re no longer needed? As you’ll soon see, delegating important tasks increases your value to your firm.

Why your value grows when you delegate

It gives you focus.

Delegating enables you to focus on the important tasks that only you can do – protecting your clients, billable work, strategic planning, etc. Over and over we see that attorneys spend more of their time on essential but non-billable work.

Delegating solves this problem.

It enables you to double, triple or even quadruple your productivity. You’re able to get more work done, more than you ever have before – with more free time besides. It sounds impossible, but it isn’t really.

It’s just difficult.

But the alternative is much worse. If you’re willing to do the work the rewards compound with time. Want more time with your family? It’s possible with this system. Interested in networking with key influencers? You can with more free time.

Whatever your aims, delegation helps you achieve it.

You’ve heard this before. It wasn’t helpful the first time

Delegate. Outsource.

This advice isn’t new and it isn’t helpful. It seems that way on the surface, doesn’t it? You delegate and you get things done. Isn’t that what you’re supposed to do to?

Sure. But how do you do that?

It’s never really explained. This advice is simply trotted out and laid at your feet with no context or clarity on how you actually go about delegating your work.

You need a framework.

A framework or system gives you clear instructions covering: (a.) what should be delegated and when. (b.) how to delegate tasks and most importantly (c.) when not to delegate.

This framework is your blueprint.

It’s based on risk, reward and complexity. In The Art of Delegating Legal Work, Norman Clark shares what he calls the delegation matrix. Here, let me show you what that looks like.

Let’s break this down.

The vertical axis covers risk/reward. How important is the task? Is it appropriate to delegate these tasks? Let’s say you fail to deliver fantastic results on a particular task. How serious are the consequences?

This is fairly straightforward, right?

The horizontal axis discusses complexity. How hard is it to deliver adequate to fantastic results? Does it require a lot of specialized training, experience or knowledge? The more complex your task, the harder it is to delegate.

Here’s how you handle the tasks in each quadrant.

Low risk/low complexity. This work is quickly delegated to an appropriate in-house staff or virtual support team. Data entry, answering the phones, screening calls, client intake, etc.
High risk/low complexity. This can be routine work that’s fobbed off onto junior associates. But it can also be work that’s easily handled by freelance attorneys who are highly experienced in your particular practice area. This gives you a tremendous pool of talent at dramatically reduced costs.
Low risk/high complexity. This work isn’t a dramatic risk to your business but it’s still complex enough to warrant independent help. Examples include sales, advertising and marketing, bookkeeping and advanced client intake.
High risk/high complexity. This where the real magic happens. This is the work you do. It’s billable work and it’s incredibly valuable to you and your firm. It enables you to ring the meter, to dramatically increase your billables. The best part? Delegating the other three quadrants means your billables are higher and you have more free time.

Can you see it?

What you’ll need to do next? The decision matrix has already told you.

You’ll need to build a virtual bench

This is the part most get wrong.

Most attorneys attempt to build a virtual bench when they need it. This primes firms for failure. Think about that for a second. If you have a pressing deadline or a matter that needs to be taken care of quickly, you’re desperate.

That desperation clouds your judgment.

Instead of looking for the best legal professional desperation compels you to look for an adequate legal professional. They’re not the same things.

Adequate professionals require a significant amount of handholding and patience. They’ll do what you tell them to do but they require constant management and care. These professionals don’t save time, they consume it.
The best legal professional functions as a trusted advisor. They’re typically specialists who are able to get a significant amount of high-quality work done in a short amount of time. They’re proactive and quick to offer helpful advice, strategies or tactics.

Here’s where things get complicated.

Adequate professionals masquerade as the best. If you’re not sure what to look for an adequate professional will sell you on their ability to get the job done.

Don’t take their word for it.

You’ll need to filter out poor performers ahead of time before they’ve embedded themselves in your firm.

But how?

There’s a simple and straightforward tactic you can use to attract A player all-stars. It’s offensive to some but it’s incredibly effective.

Get adequate professionals to disqualify themselves

How are you supposed to do that?

There’s no way a freelancer or firm will willingly disqualify themselves from consideration. If there’s money to be made the inadequate find a way to get it.

This is true…

If you’re an inexperienced professional yourself.

But you’re not.

Not anymore. How do I know that? I’m about to share a proven strategy you can use to automatically sort through poor performers. The A players rise to the top. The B and C players drop out of the hiring process.

Here’s how it works.

You place an ad. You outline the specifics of what you’re looking for in your job description. Share requirements, expectations and qualifications needed. You use a tool like JobScore or Recruiterbox to share your ad across multiple platforms instantly.
Filter candidates with applicant tracking systems and software. There are free options like Qandidate and paid options like Recruiterbox. You’re looking to filter out irrelevant candidates, spammers and You want to minimize the amount of time you spend with non-potentials.
Create a list of potentials. These are candidates you feel may be a good fit as a virtual assistant for your firm. You can use additional tools like HarQen to automate and semi-automate video and phone interviews.
You spend a bit By now, you should have a short list of potentials. Let these candidates know you’re willing to spend 10 to 30 percent more on the best professional.

What gives, this sounds like a standard hiring process?

It is, so far.

Here’s the part where we switch things up.

Ask potentials to arrange an interview. This is a phone interview with the previous client, manager or partner. It should be with someone they’ve worked with, at the organizations they’ve listed on their resume.

Doesn’t seem like much, does it?

But it is. This step is the most significant step in the entire process.

Here’s why.

B and C players, they don’t want you to speak with anyone at their previous firm/company. They know their performance was lackluster or less than adequate. Ask for this and they’ll run.

What about A players?

A players will leap at the chance to arrange an interview. They know they’re exceptional and that they’re amazing to work with. They also know they’ll have no problems getting a former manager or superior on the phone. This is how you get potentials to disqualify themselves.

What happens post-hire?

Incentivize A players. Ask them to recruit for you. Why would you do that? Birds of a feather flock together. A players know other A players. Give them a financial reward or compelling incentive of some kind.

Why go to all the trouble?

Research shows a mis-hire costs as much as 27 times an employee’s salary. A virtual assistant isn’t an employee but mis-hire is still incredibly damaging.

A players can and will fail

A players need systems.

They won’t succeed without the proper support. You’ll need to provide them with policies and procedures, expectations and guidelines. What specifically do you need a virtual assistant for? Is it…

Legal
Paralegal
Client intake and phone calls
Bookkeeping
Purchasing
Sales and marketing

You’ll need to decide ahead of time.

Next, you need to find a professional who is willing and able to create a system. They’ll need to work with you to create a system of do’s and don’ts.

The work won’t be divided equally.

It could be 75/25 or 60/40 with one of you doing most of the work. If you’re well-versed in a particular area (e.g. paralegal) you’ll need to take the lead. If you’re completely out of your depth in an area like sales and marketing you’ll need to rely on professionals you hire.

It’s hard work initially.

But the work is mostly frontloaded. You’re paying these professionals to do two things for you:

Build and maintain systems (in these respective areas) for your business.
Complete the work required in accordance with the systems you’ve created.

If you’re building a marketing system you could…

Hire a top 3% freelancer from Toptal.
Work with them to build a sales and marketing system that doesn’t depend on you.
Hire cheaper freelancers who’ll follow the system you’ve created.
Use a service like Odo to follow up with and convert the leads your system generates.
Use FancyHands to schedule new client meetings.
Close new clients.

Did you catch it?

The most important criteria in this framework?

It’s delegating.

I’ve just given you the system you need to delegate or outsource your work successfully. Use this with any practice area, skill set or topic. The system, the framework you use to delegate, that’s what matters.

Choose your assistants carefully.

How do you work with virtual assistants successfully?

You start small.

You give a group of virtual assistants test projects. Low-risk assignments you can use to gauge their trustworthiness.

You have a system.

Now it’s time to put them to work. Use the following formula to ensure your work with your virtual assistant is successful.

A player + low risk work + systems = results

If they’re successful with low-risk work they’re more likely to be successful with high-risk work. This enables you to measure performance on a variety of levels/metrics. Then, when you’re ready, you change the formula a bit, like this:

Trustworthy A player + high risk work + systems = exponential results

See the difference?

It’s a data-driven way to extract exceptional results from your virtual assistants. And the best part? It minimizes your risk of failure.

Expectations are high for the legal professional

You’re expected to hold and carry.

As a legal professional, you’re expected to provide your firm with a year-over-year increase. To be the rainmaker. To hit your billable quotas. To do more with less.

It’s too much to carry alone.

Most attorneys, solo practitioners and small firms try. They do their best but it isn’t enough. It was never intended to be.

You see what’s really going on.

Attorneys, partners, firms – they simply don’t have the time they need to achieve the results they want. More and more firms are buried under an avalanche of busywork. As we’ve seen, 70 percent of firms feel they spend too much time on non-billable work.

This doesn’t have to be your story.

You can double, triple and even quadruple your productivity. You can achieve more on a scale that seems legendary. But it all depends on having the right people and the right system.

You have what you need to win.

With the right team and the right framework, you’ll have everything you need to achieve more with less. No overwork necessary.