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The 2000′s have witnessed a rapid development in the sophistication of lawyer management and in the growth of the number of law firm professional administrators. The increase during that period paralleled the doubling, tripling and often more than quadrupling in size of many legal organizations in private practice or corporations. Firm governance requires lawyers qualified in the economics of partnership affairs, financial planning and appraisal of results, the management and business objectives and development, the administration of legal specialties, lawyer recruitment and career development, strategic and business development planning and the policies and oversight of the general administration of personnel and operations. Size, volume, complexity, number of offices and availability of talent are frequent determinants of law office organization structure. The impact of these factors will, at a relatively early stage, suggest that professional administrator assistance will benefit lawyer management. For acceptance by the legal organization, the talent and intelligence applied to the field of administrative endeavor should equal the talent and intelligence applied by lawyers in their efforts. In some firms, the financial aspects may be managed separately from the administrative functions, resulting in a “dual administration.” In other offices, a full-time administrative partner may be supported by a layperson to assist in the administrator’s responsibility. A qualified professional administrator should have the sensitivity and ability to speak for the administrative policies of lawyer management, be a voice for the business side of the law practice and carry out the administrative policies of the partnership. Professional persuasiveness in the development of improvements should be expected and is a desired quality. The administrator with the support of a supervisory staff and larger firms should have a marked beneficial impact on retained income – gross, billings, saving time of lawyers and management, costs of personnel, space, equipment, supplies, communications that support lawyers and are not excessive, efficiencies, use of legal assistance (paralegals), and the coordination of business development and practice management activities. The administrator should provide a good application of cost effectiveness concepts, such as in organization and space planning, managing automation, aiding committees, providing and interpreting data, practice development, good employment and other personnel policies, safety, purchasing policies and knowledge of the best law office practices. Qualifications Ideally, the general personnel qualifications of the administrator should include the following: Acceptance by the lawyers as to professional and the ability to gain respect and to respect others; Proven management experience and capability at the level required, including an understanding of human resources problems and the nature of the legal organization; Educational background in management; Personality, patience and inclination that will mix well in a law firm with diversity of professionals and support personnel; The ability to educate, make decisions and work with the ideas of others in a law firm containing high levels of intelligence and its share of idiosyncracies; Knowledge of financial management, budgeting, variance reporting and the ability to express oneself and discuss the firm’s financial and management reports; Sensitivity to all levels of the office, whether senior partner or file clerk; Ability to recognize an important minority view; Recognition that the problems may run the gambit from the most delicate in partner or client relations to routine housekeeping; Willingness to test the waters; Availability (by phone or in person when needed); A sense of balance and judgment about organization and system while maintaining a sense of purpose; and An excellent understanding of the capabilities of automated systems and the use of spreadsheet analysis to facilitate the planning process. The firm should set the administrative status at a sufficiently high level so that there is acceptance of this professional position by the lawyers, their secretaries and others. For the size and type firm – and for the accomplishments expected – the economic value of the position should be determined within a compensation range to meet the market for this level of position. Cash compensation should be directly related to the administrator’s responsibility and the firm’s expectations. Goals or plateaus of achievement should be established for the administrator (similar to management by objectives) i.e., in the financial area, how has the presence of the administrator affected interest income; investments; collection of billed fees and costs; recapture of out-of-pocket costs through the introduction of cost recovery systems; reduction in unbilled time and costs; reduction in lawyers’ time devoted to firm administration, etc.? Compensation Assuming that these goals are achieved, the administrator’s total cash compensation (salary and bonus) may be based upon the following: An ad hoc salary and bonus system predicated upon the compensation level paid to administrators by comparable firms; A salary tied to the base salary of senior associates, or draws of newer or mid-level partners (based upon the partners’ compensation levels) with no bonus arrangement; A salary tied to the base salary of senior associates or draws of newer or mid-level partners (based upon the partners’ compensation levels) with an ad hoc bonus, based upon performance evaluation; or A salary tied to the base salary of senior associates or draws of newer or mid-level partners (based upon the partners’ compensation levels) with a bonus equal to that paid to the lawyer group to which the administrator’s salary has been related, based upon performance evaluation and the administrator’s ability to achieve the established goals. In most firms, there should be one partner (or shareholder) who is the principal responsible for the administrator’s evaluation, development and recommendations on compensation and to whom the administrator can refer for policy and problem discussions. The evaluation and compensation of the administrator at year-end should be a matter of informed judgment based on the impact of his or her position on income, costs, human relationships, retained income and ability to meet the future. Direct management by lawyers generally includes partnership affairs, policy determination and implementation and the organization and management of substantive practice areas. The following functions apply to the lawyer management: economic benchmarks, practice planning, income distribution, admission to partners, departures of lawyers, capitalization and appraisal of results. Within departmental organization, the following are included: management of workload, fees and billing, quality control and productivity, training and development, recruiting professionals, practice development, client matters control, origination, maintenance and acceptance of business, and legal assistance (for technical direction). By collaborating the management function of partners with a professional administrator, the partners may be relieved of much of the details surrounding the following financial, administrative, practice development and human resources activities, including the following: Financial administration: budgets and forecasts, billing control, control of time and money, bookkeeping, purchasing, automated financial and management reporting, and related variance reporting. Administrative supervision: legal assistance (administrative aspects), non-lawyer support personnel, automation, files, reception, communications and other services, library, practice development and human resources. Salary administration; Employment; Training; Records; Benefits; Employee relations; and Safety and health. An administrator should possess the sensitivity and the ability to communicate with and for the partners, be a voice for the business side of the law practice and be capable of implementing administrative policies. An administrator operating at a high level should increase retained income, with related contributions to increased gross income, improved cash flow, more effective use of personnel, space and equipment, and planning and providing logistical support for practice development activities. JOEL A. ROSE is a certified management consultant and president of Joel A. Rose & Associates, Cherry Hill, N.J., which consults to the legal profession. He can bereached via e-mail at [email protected].

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