5 Essential Annual Review Considerations for Solo and Small Firm Lawyers

Many lawyers use the months of December through the end of February to catch up on static cases, take care of office administrative tasks, review employee productivity, create pleading and other templates for use during the year, review their retainer agreements, streamline office procedures, and review their malpractice plans. If you don’t do these things during slower periods of the year, you should. This article contains some considerations for attorneys in solo practice to implement during their annual review.

1. Revise Retainer Agreement to Include Social Media Provision
Social media and review sites are often a significant asset or a significant detriment to a small firm attorney. Bad reviews can cost a lawyer thousands or even hundreds of thousands of dollars over the course of their career. Many lawyers now include a short paragraph in their retainer agreements prohibiting the client from posting a negative review online about the firm’s services.

While the legality of such a provision may be questionable in your jurisdiction, it probably won’t hurt to include such a provision. Just make sure to include a short severability clause in your retainer agreement in case a court finds the social media provision to be unlawful or unenforceable.

2. Draft a Template Declination Letter
In order to reduce your exposure to lawsuits from potential clients that you meet with in person or speak with on the phone, always make sure to do a conflict check using www.clientconflictcheck.com software when the potential client initially contacts your office. ABA model rule 1.18, which has been implemented in nearly every state jurisdiction, requires lawyers to avoid conflicts of interest involving potential clients that contact the lawyer’s office.

Further, if a lawyer meets or discusses a case with a potential client, it is the best practice to issue a declination letter to that potential client ensuring that the potential client understands that there is no attorney-client relationship and you do not represent them. We have provided you with a sample declination letter. Many bar association referral services require their panel of attorneys to utilize these declination letters.

3. Work on a Budget
At the end of the year, many lawyers will begin gathering financial documents to provide to their tax preparer. This is a perfect time to utilize this information to see what expenses might be eliminated and what areas might be improved to increase revenue. For example, if a lawyer practices in multiple areas of law and the revenue streams show a bulk of revenue is attributed to one particular area of law, a lawyer may want to look at specializing in that area of law. The credibility that the lawyer will have if they specialize in one particular area cannot be overlooked. Likewise, many lawyers spend tens of thousands of dollars each year on expenses that could be easily eliminated. For example, many firms spend huge amounts of money on legal research access, yet rarely use it. Many legal research companies offer unbundled access for specific tasks you may need. Further, many bar associations are now offering free legal research tools for their members.

Along the same vein, you may consider adding certain expenses that will increase overall productivity and save you time. For example, if you spend a significant amount of time balancing your books, you may want to hire a bookkeeper to go over your credit card statements, input information into QuickBooks or other financial planning software, and input all checks you have written, categorize all of your expenses, and so forth. You should be able to find a bookkeeper for between $100 and $300 per month to accomplish this task, which will save you many hours of time. Also, if you do not have a fast method to check for conflicts of interest, you will save yourself and staff many hours over the course of each year by implementing a specific procedure using software that everyone in the firm can use at the same time.

4. Review Malpractice Policies
Nothing should stop you from continually shopping malpractice carriers. Since lawyers are required to renew you’re their policy every year, have your insurance broker shop around for favorable rates with other companies. Similarly, make sure you are actively using a double calendar system and a client conflict check procedure in your firm because you will be required to indicate on your malpractice insurance application that you implement these procedures. If you do not implement these procedures, you will very likely be denied malpractice insurance coverage. If you indicate on your application that you do implement these procedures, but you really don’t, you are committing a crime in some jurisdictions by providing a false insurance application and setting yourself up for denial of coverage in the event you are sued.

5. Review Employee Productivity
If you do not have a method to track your paralegals hours, review legal assistant’s daily practices, and review the productivity of associate attorneys, you should immediately figure out a way to assess your firm’s productivity. For example, many billing software programs include the capability of tracking time and productivity reports can be generated fairly easily.

Having the ability to generate these reports will help you discuss any issues with staff as you will have hard data to support your discussions.

One way to increase productivity is to make certain essential functions available in “the cloud”. For example, there are many billing software programs, including Bill4Time.com and other “unbundled” law firm software applications such as www.clientconflictcheck.com that provide lawyers with excellent resources to help their employees maintain high productivity and a very low cost.


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