The Evolution of the Firm

THE EVOLUTION OF THE FIRM

David Jeter and Nate Jackson started a small general law practice in 1992 near Sacramento, California. Prior to that, the two had spent five years in the district attorney's office after completing their formal schooling. What began as a small partnership--just the two attorneys and a paralegal-assistant--had now grown into a practice that employs more than 27 people in three separate towns. The current staff includes 18 attorneys (three of whom have become partners), three paralegals, and six secretaries.

For the first time in the firm's existence, the partners feel that they are losing control of their overall operation. The firm's current caseload, number of employees, number of clients, travel requirements, and facilities management needs have grown far beyond anything that the original partners had ever imagined.

Attorney Jeter called a meeting of the partners to discuss the matter. Before the meeting, opinions about the pressing problems of the day and proposed solutions were sought from the entire staff. The meeting resulted in a formal decision to create a new position, general manager of operations. The partners proceeded to compose a job description and job announcement for recruiting purposes.

Highlights and major responsibilities of the job description include:

* Supervising day-to-day office personnel and operations (phones, meetings, word processing, mail, billings, payroll, general overhead, and maintenance).

* Improving customer relations (more expeditious processing of cases and clients).

* Expanding the customer base.

* Enhancing relations with the local communities.

* Managing the annual budget and related incentive programs.

* Maintaining an annual growth in sales of 10 percent while maintaining or exceeding the current profit margin.

The general manager will provide an annual executive summary to the partners, along with specific action plans for improvement and change. A search committee was formed and two months later the new position was offered to Brad Howser, a long-time administrator from the insurance industry seeking a final career change and a return to his California roots. Howser made it clear that he was willing to make a five-year commitment to the position and would then likely retire.

Things got off to a quiet and uneventful start as Brad spent the first few months just getting to know the staff, observing day-today operations, and reviewing and analyzing assorted client and attorney data and history, financial spreadsheets, and so on.

About six months into the position, Brad became more outspoken and assertive with the staff and established several new operational rules and procedures. He began by changing the regular working hours. The firm previously had a flex schedule in place that allowed employees to begin and end the workday at their choosing within given parameters. Brad did not care for such a "loose schedule" and now required that all office personnel work from 9:00 to 5:00 each day. A few staff members were unhappy about this and complained to Brad, who matter-of-factly informed them that "this is the new rule that everyone is expected to follow, and anyone who could or would not comply should probably look for another job." Sylvia Bronson, an administrative assistant who had been with the firm for several years, was particularly unhappy about this change. She arranged for a private meeting with Brad to discuss her child care circumstances and the difficulty that the new schedule presented. Brad seemed to listen half-heartedly and at one point told Sylvia that "assistants are essentially a-dime-a-dozen and are readily available." Sylvia was seen leaving the office in tears that day.

Brad was not happy with the average length of time that it took to receive payments for services rendered to the firm's clients (accounts receivable). A closer look showed that 30 percent of the clients paid their bills in 30 days or less, 60 percent paid in 30 to 60 days and the remaining 10 percent stretched it out to as many as 120 days. Brad composed a letter that was sent to all clients whose outstanding invoices exceeded 30 days. The strongly worded letter demanded immediate payment in full and went on to indicate that legal action might be taken against anyone who did not respond in a timely fashion. While a small number of "late" payments were received soon after the mailing, the firm received an even larger number of letters and phone calls from angry clients, some of whom had been with the firm since its inception.

Brad was given an advertising and promotion budget for purposes of expanding the client base. One of the paralegals suggested that those expenditures should be carefully planned and that the firm had several attorneys who knew the local markets quite well and could probably offer some insight and ideas on the subject. Brad thought about this briefly and then