Practice Management
This treasure trove of guidance, practical tips and valuable insights, provides everything a lawyer needs to organise and run an efficient, profitable and enjoyable legal practice.
The detailed Commentary contains a wealth of knowledge on most aspects of legal practice, including:
- ethics;
- the solicitor/client relationship;
- the employer/employee relationship;
- matter management tools;
- risk management issues;
- client communications;
- costs disclosure and billing;
- employment including recruitment, training and retention; and
- financial management.
This publication can help firms make money – and reduce the stress levels of all team members.
The practice management guide is an excellent starting point for those interested in creating a strategic business plan for a new or existing law firm.
Also included is our comprehensive Legal Practice Health Check Tool, which allows a firm to readily assess its current performance and set goals for future development.
The related Reference Manual 101 Policies and Procedures contains most of the policies and procedures a small law firm will need. Adopt these policies completely or use them as a framework to establish your own.
Subscribe to this amazing resource today and take control of your legal practice’s future!
Guides in this publication
MATTER PLAN
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“ Commentaries ”
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“ In the legal profession the term ‘costs’ refers to the fees and other expenses a solicitor charges a client for their professional services and other payments that arise out of the provision of legal services, including disbursements such as court fees. Costs are one of the most heavily regulated ... ”
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“ Nature of disclosure1 Timing of disclosure2 ”
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“ Costs disclosure is not required in relation to certain clients, described in the legislation as ‘sophisticated clients’ or ‘government or commercial clients’ as defined by the relevant legislation to include clients such as lawyers, law firms, public companies, liquidators and government entities. ... ”
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“ Cost agreements are not always required although clearly as between the practitioner and their client there will be disclosure but without the need for formal compliance with the regulation. The limits are: ”
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“ In NSW & VIC there is a standard costs disclosure for fees under $3,000 which is included in the precedents. If the total legal costs in a matter (excluding GST and disbursements) are not likely to exceed $3,000 (the higher threshold), a law practice may, instead of making a disclosure under ... ”
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“ Knowing that clients are disinclined to read, sign and return cost agreements, the letter sending them usually provides that unless heard to the contrary the practice will assume agreement. There will almost always be a later opportunity to have the agreement signed. Of course, many practitioners ... ”
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“ Costs are remuneration for professional work when acting in the capacity of a barrister or solicitor. Payments to a practitioner for work which is not professional work, are not costs. Disbursements are payments made, or liabilities incurred in the course of practice and which the practitioner is ... ”
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“ Firms are required to provide an estimate of the total of costs, excluding GST and disbursements, and information on the impact of any significant change to these costs. A law practice must take all reasonable steps to satisfy itself that the client has understood and consented to the proposed ... ”
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“ What is a disbursement Disbursements are payments made, or liabilities incurred in the course of practice, and which the practitioner is bound to pay whether put in funds by the client or not; or payments which, by established custom and practice of the profession, the practitioner is bound to pay. ... ”
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“ A lawyer may request money on account of fees be paid into a trust account before the commencement of work. This is particularly so in criminal and other court matters where the inclination to pay may wane with an unwanted outcome. The funds may cover legal fees as well as disbursements and the ... ”
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“ The costs agreement will set out the billing cycle. Commonly a regular monthly billing cycle is adopted covering work undertaken during the previous month. ”
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“ A lump sum invoice is one which sets out a recital describing the legal service provided and a total amount. An itemised invoice is one which sets out in detail each of the legal services provided, the date they were provided, and the cost for each service. An itemised invoice allows for an invoice ... ”
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“ A law practice cannot charge for the time spent in preparing an invoice. A law practice cannot charge for the time spent in preparing an itemised invoice for a client who has already received a lump sum invoice. ”
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“ All bills should be accompanied by a written statement setting out the avenues that are open to the client in the event of a dispute and any time limits that apply to the taking of such action. Under the uniform law in NSW and VIC each bill or covering letter must be signed by a principal of the ... ”
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“ In 1991 the Australian Competition and Consumer Commission released guidelines to assist businesses in the withdrawal on one and two cent pieces. In the purchase of goods or services for cash, businesses were advised to round the final payment: ”
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“ – When to charge and how to charge Goods and Services Tax (GST) is a broad-based tax of 10% applied to most goods and services, including legal services. Businesses are required to register for GST if their turnover exceeds the $75,000 threshold. If turnover is less than $75,000 than registration ... ”
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“ Reducing fees can create good will but needs to be handled with care as some take offence to the implication that they cannot afford to pay for the work they have retained. It is also a hard won reality that comes from experience that people are inclined not to value any advice given for free. ”
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“ Credit terms are quite common and need to be clearly documented and administered. ”
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“ Notification of rights is a requirement in all states and is found in all example invoice precedents. If the client has not been advised of their rights in a costs agreement, then practitioners must advise the client of their rights at the time of issuing the invoice. ”
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“ Monthly accounting for work in progress is recommended in order to achieve target lockup days. If debtors are not followed up promptly cash flow reduces making it imperative to adopt a debtor’s policy for effective debtor control. All overdue accounts must be followed up promptly and repeatedly. ”
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“ When a retainer is terminated before completion, a practitioner may claim costs for the work done to the date of termination on a quantum meruit basis if: The client terminates the entire retainer; ”
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“ When there are costs owing to the practitioner from the client, the lawyer may retain possession of the client’s documents which are legitimately in the practitioner’s possession. However, the Australian Solicitors’ Rules specify that when a practitioner claims to exercise a lien for unpaid legal ... ”
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“ If a practitioner has an equitable charge over the client’s property incorporated into the costs agreement, ordinarily the practitioner could exercise that power in seeking payment of costs. However, general charges such as a charge over ‘all my estate, rights, title and interest in and to any real ... ”
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“ Sound financial management is absolutely critical to the success of the law practice. There is a high correlation between practices with poor financial management and increased probability of experiencing professional negligence claims. The link is clear. Principals, who do not manage their ... ”
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“ Methods of payment include: Credit card; ”
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“ All By Lawyers cost agreements include the following authority to transfer money to pay their invoices: Trust money ”
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“ Lawcover recommends that practitioners use the costs assessment scheme to recover costs. Instituting proceedings against a disgruntled client who refuses to pay an outstanding bill exposes practitioners to the risk of a cross-claim in negligence being filed. The advantage of the cost assessment ... ”
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“ The following outline of costs assessment was written for NSW but the procedure is similar in the other states. This publication will be expanded to cover cost assessment in the other states in due course. In the interim refer to the relevant State Supreme Court. NSW Procedure ”
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“ A client may be entitled to complain to the Legal Services Commissioner about a costs dispute. If the complaint is made after the law practice or client has already applied for assessment of such costs, the assessment will ordinarily be stayed until the complaint has been determined. Similarly, if ... ”
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“ Practical issues relating to remote signing of documents such as agreements, deeds, affidavits, wills and powers of attorney by companies and individuals. Remote signing of documents has become an important issue for practitioners and their clients due to the coronavirus pandemic. Face-to-face ... ”
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“ Sharing documents with clients and colleagues via LawConnect from your LEAP matter eliminates the issue of email security and provides more functionality. Send or receive large files ”
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“ Company execution It is arguable whether a company can execute a document electronically under s 127 of the Corporations Act 2001. ”
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“ FIRB approval All foreign buyers now require Foreign Investment Review Board approval. Thresholds for all property classes have been reduced to $0. All contracts entered into with foreign buyers after 29 March 2020 will need to include an appropriate FIRB approval condition. A condition can be ... ”
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“ The ongoing response to coronavirus means that emergency measures are rapidly being introduced to modify the usual procedures. The website of each court should be referred to. Courts are making particular arrangements for matters to be dealt with on the papers, such as bail variations, guilty ... ”
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“ Employers have legal obligations to ensure the health and safety of their employees and contractors and also to ensure that the health and safety of members of the public is not put at risk from the conduct of their business or undertaking. This includes managing the risk of exposure to and spread ... ”
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“ The federal government has made temporary changes to insolvency laws under the Coronavirus Economic Response Package Omnibus Act 2020 aimed at relieving current economic pressures on individuals and companies. The Act commenced on 25 March 2020. ”
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“ For COVID-19 updates and information see the Family Court or the Federal Circuit Court. Virtual hearings ”
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“ The courts in each state have implemented changes to reduce the risk of the spread of coronavirus. It is important to check the relevant court website for detailed information. ”
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“ The courts in all states have announced a suite of changes to processes and procedures in response to coronavirus. It is important to check the relevant court website for detailed information. Wills ”
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“ Costs 101 Trusted and useful sites by area of law ”
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“ The fact that practice management and business skills is a mandatory part of the annual continuing professional development requirement for Australian legal practitioners points to the perceived need to improve the profession’s management training. The introduction of the mandatory practice ... ”
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“ Principals of small law firms wear many hats. They may be a sole practitioner, in which case the hats are all piled on top of each other, or they may be partners in a partnership or co-directors in an incorporated legal practice, in which case the hats can be shared around a bit. But there are ... ”
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“ Policies and procedures The foundation for management of the business of a legal practice is to have policies and procedures which record and effectively automate the firm’s operations. ”
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“ The importance of managerial controls cannot be overstated. They provide the basis of profitable and low stress practice. Profit is not necessarily related to size or location or how busy a firm may be. Research shows that busy firms are often poor profit performers due to poor managerial ... ”
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“ Privacy Act requirements The Privacy Act 1988 (Cth) provides for mandatory reporting of eligible data breaches. These requirements apply to data held by ‘an Australian privacy principles entity’, or a credit reporting body, or a tax file number recipient. ”
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“ File notes File notes are a critical item in terms of risk management. Without effective file notes the file is incomplete and the practice is exposed. File notes must record what happens on a matter, what instructions are received, what advice is given, what actions are taken. They represent ... ”
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“ Firm documents Documents including letters, precedents and pleadings need to be standardised for consistency and to save the effort involved in constant re-invention. ”
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“ Research by the Centre for Work + Life at the University of South Australia has concluded that the cost of being a bad place to work outweighs the cost of paying above average wages and providing excellent conditions including training opportunities and flexible work practices. Unhappy employees ... ”
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“ Staff costs are the biggest overhead for any law firm, so recruitment must be given due priority and adequate resources. It is false economy to save money on recruitment if that means costing the business time and money later by reason of internal disharmony, poorly performing team members, poor ... ”
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“ The firm should have an induction policy and a procedure for applying it. When a new employee commences at the firm it is an opportunity to cement the relationship from the start and show them that they are joining a well-run organisation within which they, like all other team members, are valued ... ”
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“ Employees need a clear career path. This may be towards partnership or towards undertaking work that is more responsible. It may be to learn new skills by attending training courses. Not everyone needs to be aiming for something completely life-changing all the time, as long as there is a path to ... ”
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“ Employers have a duty of care at common law and also statutory obligations to their employees. Legal practitioners have additional professional obligations to behave appropriately towards employees. Government authorities in each state provide substantial assistance, including template documents, ... ”
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“ An internet usage policy assists all members of a legal practice to understand and be clear about the firm’s rules and guidelines in relation to the use of equipment, the office network and the internet itself. Such a policy protects the firm as well as the employee. ”
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“ Bullying Bullying is a workplace health and safety issue. ”
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“ Review of staff performance is a matter requiring careful attention by the principal or by any appointed manager. Reviews should be regular and scheduled. They should be conducted with discretion. Employee reviews should be a private discussion between the principal and each team member to hear ... ”
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“ It must realistically be accepted that, for some people – especially young lawyers, their career path will probably take them out of the firm. Sometimes no matter how well employees are treated, no matter how highly they are valued, they need or want to move on. Although it can be frustrating as a ... ”
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“ The relationship between solicitor and client is multi-layered. The fundamental basis of the relationship is the retainer; this is essentially a contractual relationship that may be evidenced by a written document, oral agreements or implied conditions. In addition, the proximity of the parties to ... ”
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“ to the solicitor/client relationship The Australian Consumer Law, found in Schedule 2 of the Competition and Consumer Act 2010, is generic consumer protection legislation. The Legal Profession Uniform Law and the rules made pursuant thereto are specialised consumer protection legislation aimed ... ”
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“ Solicitors receive many enquiries from potential clients, some that result in opening a file and a matter proceeding and others that do not. Just as a record of any initial conversations with clients who proceed to instruct the firm are then kept on the client’s file, it is also important to keep a ... ”
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“ An actual conflict of interest between solicitor and client is in breach of the solicitor’s duty to the client. Such a conflict may arise directly, where the personal interests of the solicitor conflict with the interests of the client, or indirectly, where the interests of another of the ... ”
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“ to third parties A solicitor may be liable to a third party in negligence if a duty of care can be established. This will be so even if no retainer can be established: Vagg v McPhee [2013] NSWCA 29. A third party who relied on a representation by the solicitor that the solicitor was acting on ... ”
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“ Solicitor's lien A solicitor has a common law possessory lien over a client’s documents until the solicitor’s costs have been paid. This includes documents held on behalf of the client in relation to matters other than the matter in relation to which the costs are owed. ”
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“ Cash Solicitors must make any payments from their trust account by cheque or electronic funds transfer: s 144 Legal Profession Uniform Law. ”
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“ The fundamental rules relating to costs are set out in Part 4.3 of the Legal Profession Uniform Law and Part 6 of the Legal Profession Uniform Law Application Act 2014. Information ”
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“ Communications between solicitor and client are privileged if the communication was confidential and made for the dominant purpose of giving legal advice, or use in existing or anticipated legal proceedings. Privilege may exist under either common law or the uniform evidence law where applicable. ... ”
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“ The ethical obligations of lawyers are based on the obligations assumed by all members of a civilised society and extended because of the special relationship that the lawyer has with society as a member of the profession which establishes and administers society’s laws. An obligation to practice ... ”
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“ The lawyer’s ethical duties can be divided into three categories: Duty to the court; ”
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“ The existence of an ethical issue will often be self-evident. The vast majority of lawyers will feel a sense of unease when an ethical issue arises, even if in the early stages of development of that problem they cannot identify the exact nature of the problem. Experience tells that the best way to ... ”
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“ The flexible nature of LEAP allows firms to open specific matters to administer firm practice management and compliance issues. Managing the actual business of the firm in this way allows for readily accessible information, all in one place and restricted to relevant members of the team as required. ”
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“ The Legal Practice Health Check Self-Diagnostic Tool is based on a Lawcover Risk Management Health Check that was developed to reflect risk scenarios drawn from actual professional negligence claims against solicitors and has been developed and expanded upon with Lawcover’s permission. The first ... ”
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“ Leadership is the key. If the strategic framework is developed only as a hypothetical standard or a management tool and is not driven by the principal and the leadership team, the result is more likely to be cynicism, poor morale and a negativity that will be detrimental to the firm’s performance ... ”
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“ It is essential to have a plan. Failing to plan is in fact planning to fail. After using the Legal Practice Health Check Self-Diagnostic Tool found in the A. The business plan folder in the matter plan, the next step is to incorporate the data it provides into a business plan for the practice. ”
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“ Everything the firm does Branding and marketing is a part of everything a firm does. It is not a separate function or someone else’s responsibility. A firm has thousands of client touch points each year: in the office, on the phone, emails, mail, advertising and in the community. Every touch point ... ”
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“ Within the legal practice the fee earners must be assessed for their contribution to profitability. Key performance indicators can be used as benchmarks. These might include file volume, file velocity, the quality of the work, contribution to client relationship management and development or ... ”
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“ Currently there are compulsory contributions to be made for employees and these are presently payable at a percentage of the gross wage. See the Australian Tax Office Super guarantee percentage page for the latest rate. An employee is eligible if they: ”
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“ An asset register for the firm allows for the tracking of fixed assets and provides an estimate of their worth. It assists with taxation, insurance and potential sale-of-business compliance and provides an appropriate place to record detailed information such as serial numbers. An asset register is ... ”
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“ Warning If you are horrified at the thought that your credit balance at the bank is in fact a debit balance in your accounting ledger, then skip this bit and invest in a computerised accounting system, hire a bookkeeper and regularly visit your accountant. ”
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“ It is important that good accounting computer software is purchased and the records maintained by a competent bookkeeper or accountant. The most popular computer software programs in use by small business today are Xero, Quicken and MYOB. Prior to selection it might be wise to consult with your ... ”
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“ The simplest way to comply with state trust account regulations is to use an approved accounting software package with appropriate written delegations and procedures for the handling of trust money. All accounting records are required to be accurate, up to date and regularly monitored. The trust ... ”
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“ The simplest way to comply with state trust account regulations is to use an approved accounting software package with appropriate written delegations and procedures for the handling of trust money. All accounting records are required to be accurate, up to date and regularly monitored. See the ... ”
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“ The simplest way to comply with state trust account regulations is to use an approved accounting software package with appropriate written delegations and procedures for the handling of trust money. All accounting records are required to be accurate, up to date and regularly monitored. The ... ”
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“ The simplest way to comply with state trust account regulations is to use an approved accounting software package with appropriate written delegations and procedures for handling trust money. All accounting records must be accurate, up to date and regularly monitored. The Ethics and Practice Unit ... ”
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“ The simplest way to comply with state trust account regulations is to use an accounting software package with appropriate written delegations and procedures for the handling of trust money. The requirements for dealing with trust accounts are set out in Part 9 of the Legal Profession Act 2008 and ... ”
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