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help promote a solid understanding between you and your lawyer is in the
area of cost. Too often we hear stories of people who are surprised (and dis-
appointed) by the amount they are being billed by their lawyers. Most ser-
vice clients would not allow another professional services provider, for
example an IT consulting firm working on a software development project, to
begin without first establishing some understanding about cost. The same
principle should apply to legal services. Thus, before your lawyer begins
work, establish an understanding about cost. Specifically, no work should be
started before it is clearly defined and you have a clear cost estimate. One of
two things should happen: The attorney will agree and you will have a mu-
tual understanding that benefits both you and the attorney, or the attorney
will inform you that your expectation is too low, in which case you will need
to rethink your estimate, persuade the attorney to work at a lower rate, or
Legal Counsel

consider other options. Regardless of the path you ultimately pursue, both
you and the lawyer will likely be glad you recognized this disconnect up front
instead of discovering an unwelcome surprise once the work was finished.

Monitoring the Work
Your relationship management activities should not end when your lawyer
begins work. Even if you have done well in selecting a lawyer and defining
the scope of the lawyer ™s work, you should benefit from diligently monitor-
ing the work. In this section, we touch on a few ideas you may want to con-
sider to help keep your legal matters on the right track.
First, try to understand your lawyer ™s knowledge and capabilities. Differ-
ent lawyers have different strengths and areas for improvement. To know
how to advance a given relationship and how to assign legal projects, you will
be well served to understand what your lawyer is capable of.
Second, try to understand what your lawyer is doing. This may sound ob-
vious, but it is not as easy as it seems without diligent monitoring. Some legal
projects are large and complex, and often may involve issues unfamiliar to
the firm management. You may want to spend some time understanding what
your lawyer is doing to complete a project. It is inevitable that from time to
time a lawyer or law firm may begin to drift off course (hence, the “choice of
law” example earlier). If you understand what your lawyer is doing, you will
probably be more capable of providing value-added suggestions or steering a
drifting lawyer back onto the right track.
Another issue that can arise, especially when working with a large law
firm, is that you may not know who is doing the work until you receive a
memo or phone call from someone you do not know or, probably worse, see
an unfamiliar name on your bill. There are at least two situations where this
seems to come up: (1) matters requiring an attorney with expertise in a
highly specialized area (e.g., an ERISA attorney) and (2) matters where jun-
ior attorneys are working on a less complex matter”something that can be
concerning if you perceive that the junior lawyer is “learning on your dime.”
You can avoid this sort of thing by requesting to be notified as to who will be
working on a given matter and what he or she will be doing.
Finally, review each bill carefully. By doing so, you improve the chance of
catching any problematic trends early. You should be comfortable speaking
with your attorney if the work description is insufficient to provide you with
an acceptable understanding of what is going on.

Good legal advice is a must have for the professional services firm. From
firm inception to daily operations, legal requirements affect the organiza-
tion, employees, clients, and management of the professional services firm.
516 The Back Office: Efficient Firm Operations

The identification and retention of an attorney for the firm is one of the first
orders of business and should be done prior to an emergency need. The ongo-
ing relationship of the firm with its legal advisor(s) requires effort from both
parties but will yield results in the form of reduced risks, exposure to law-
suits, and positive outcomes for the firm, its employees and clients.

IRS publication 1779 about contractor and employee relationships is available from
The HR Esquire web site has information on employment law and a specific section
on Federal and State minimum wage information and is available from
The U.S. Patent and Trademark office provides a variety of online resources, in-
cluding search capabilities available from http://www.uspto.gov.
The copyright office of the Library of Congress provides information and fre-
quently asked questions about registration for copyrighted works and is available
from http://www.copyright.gov.
Martindale-Hubbell provides extensive search capabilities on individual attorneys
and firms and is available from http://www.martindale.com.

1. U.S. Internal Revenue Services (IRS) available from http://www.irs.gov/govt /fslg
2. US Internal Revenue Services (IRS) available from http://www.irs.gov
/businesses/small /article/0,id=99921,00.html.
3. HR Esquire available from http://www.hresquire.com/minimum-wage-laws.htm.
Office Management

There is no substitute for the comfort supplied by the utterly taken-for-granted relationship.
”Iris Murdoch, British novelist

This chapter discusses the key attributes of running an efficient and organ-
ized office. Your office(s) first and foremost needs to be a productive work
environment for your staff. When hiring a new employee is the space, phone
extension, and computer ready for them on the day he or she arrives”or are
you scrambling to get these things set up during their first couple of weeks
on the job?
Further, the professional services firm office is your face to clients and
prospective and existing staff. It ref lects either organization or disorganiza-
tion, confidentiality, or lack thereof or it ref lects simplicity or complexity.
What catches your client™s attention when entering your office space? What
first impression does your office and staff leave?
Office management includes support services such as managing and main-
taining the facility; organizing and managing the administrative staff; ensur-
ing proper services are provided such as phones, offices, and document
reproduction centers. Office management may also include some of the softer
aspects of running the firm including fostering the firm™s culture and captur-
ing and maintaining the history of the firm. For smaller firms, office manage-
ment duties are typically combined with other functions (e.g., book-keeping)
that can be carried out by one person. In larger firms, office management
may actually be the function of a dedicated full-time employee or a depart-
ment of employees. In this chapter, we discuss many of the basic services
provided by the office management function and the growth points in the life
of the firm when transitioning from part-time staff to full-time staff and
other organizational actions are appropriate.
518 The Back Office: Efficient Firm Operations

Why Is This Topic Important?
This topic doesn™t receive the attention it deserves because it is a support
function. The bulk of professional services firm management attention, in-
vestment and discussions will appropriately focus on billable activity and
business development. However, business development will suffer if one
walks into a poorly run professional services office and notices immediately
that no one is attending to the reception area, the phones are not answered
consistently, and the space looks cluttered and unorganized. A disorganized
office begs the question: If the firm is willing to treat its own offices this
poorly, how well can it possibly service client accounts? Conventional think-
ing would suggest that running a simple function such as answering the
phone or maintaining an impressive reception area should be an easy act for
a professional services firm. Doing the work of the firm, selling, and working
with clients is complicated; managing the office is not. Or is it?
Rarely does the “plant” run as smoothly as one wishes. Many important
duties can get complicated due to inattention, time demands or office poli-
tics, for example:

• Assigning offices
• Optimizing administrative staff assignments
• Prioritizing duplication services
• Executing common tasks, such as new employee onboarding or recruit-
ing events
• Filing confidential client or employee information

What can appear to be a simple office change for one attorney or consul-
tant can cascade into a mess of negotiations and disgruntled workers who
don™t want to be moved or don™t like their office assignment.
A well-run office management function is important for four key reasons:

1. It helps keep your billable staff from focusing on unproductive office
and administrative matters.
2. The reception area and workspace are transparent to the client and re-
f lect on the firm.
3. The organization of the workspace can increase staff productivity or
hinder it.
4. The function can be (and most often is) a central force in promoting a

A professional service firm maximizes profits by ensuring the profession-
als are as billable as possible. Their time is not well spent on office or facil-
ity issues. So the a critical objective for the office manager is to keep the
Office Management

professionals from having to spend precious time on nonbillable office man-
agement issues. Additionally, the office manager ™s goal is to provide services
that make the job easier, or to facilitate doing components the job using a less
expensive resource (i.e., graphics specialist, research analyst, typist).
This chapter provides an overview of the office management function. We
discuss the typical support services provided, facility management best prac-
tices, and the hiring of office managers.

What Is Office Management?
Office management consists of three primary functions. First, office man-
agers typically provide support services to the rest of the employees. These
services include administrative support, scheduling, print and document re-
production services, design/graphics support, telecom, mail, and so on. Sec-
ond, the office manager maintains the physical facility and manages the
landlord and building services. Maintaining the facility encompasses space
planning, maintenance, office moves, security, storage, vending and coffee
service, break rooms, and so on. Finally, the office manager in some cases
may be responsible for other duties such as coordinating local office social ac-
tivities, celebrating major firm events, publishing firm newsletters, maintain-
ing a history of the firm, and providing meeting space outside the building, to
name just a few of the other miscellaneous duties.

Support Services
Support services are those common services that can be leveraged across all
the staff. They are typically items that can be centralized relatively easily
and they use standard processes to control scheduling and quality.
Support services are also activities that need to be routinely performed to
support the professional staff in the normal course of their work (e.g., docu-
ment duplication and filing). Support services sometimes require the acqui-
sition of capital equipment (e.g., copying machines, graphics workstations,
postal equipment). Plotters, high-end printing, paralegal services are just a
few examples of support services.
When deciding which activities to support at a centralized office level,
consider those which:

• Are required by all staff.
• Exhibit economies of scale.
• Can be effectively executed by lower-cost administrative staff than by
professional staff.
• Are experiencing labor pool scarcity.
520 The Back Office: Efficient Firm Operations

In most cases, any service that is required by all staff should be supported
if not managed centrally. If most client work requires some kind of graphics
production for reports, in most cases, it will be appropriate to have a graph-
ics production group managed centrally. This ensures a unified look to
graphics and that best practices can be easily adopted and adhered to, as
well as achievement of scale economies in production. If this function is not
centralized, then each professional staff group or project team would need to
hire their own graphics production resource wasting valuable time and in-
creasing costs.
Support services typically have some economies of scale, for example,
copy machines. You wouldn™t want each principal in the firm purchasing his
own copy machine (with the resulting disparity of machine types, speeds,
service plans, etc.). The benefits of centralizing purchasing and management
where there are economies of scale is well-explored territory. Obviously, by
grouping the purchase better pricing can be negotiated and volume dis-
counts will apply lowering overall purchasing costs. Additionally, the expen-
sive equipment can be located optimally so that appropriate staff can access
and use it easily. Finally, this keeps your expensive professional staff billing
clients for services, and not negotiating equipment leases.
Support activities also experience economies of scale in labor. For ex-
ample, rather than hiring three half-time personnel to do estimating, you
can centralize the function and do the same amount of work with one full-
time person thus saving the fractional utilization of a half person. These ac-
tivities are labor intensive and the firm can reduce costs by managing a
centralized highly leveragable unit. These services include postal mail
management, graphic production, paralegal services, administrative ser-
vices, and so on.
Finally, you need to consider availability (or scarcity) of resources when
analyzing centralization. For example, if most professional staff need a small
but critical function for each client engagement, for example a project finan-
cial controller, and the labor pool for this function is small, the firm will be
better off hiring one full-time equivalent and leveraging that resource across
the business rather than having each principal try to procure the resource in-
dividually. Decentralization in this case would lead to low utilization of a full-
time resource or the procurement of many high-cost part-time contractors
neither of which is desirable. If each client proposal or project needs some
specialized research for a short period of time, the firm is likely to create a
centralized support group that provides research rather than having each
principal hire their own research associate.
The most common support services include:

• Administrative staff management
• Document reproduction
Office Management

• Travel booking and trip management
• Mail rooms
• Record keeping and document management

Administrative Staff Management
It is almost always more efficient to centrally manage the administrative
staff. The job function of the entire administrative staff is usually similar,
the pool of staff can share responsibilities, they typically have standard du-


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