Now is the perfect time to prepare a 2010 financial budget for your business. With your new goals in hand you can plan for major changes, and better predict your business’ future.

You can download our Microsoft Excel Law Firm Budget Plan from this website. After the Excel Budget Plan is downloaded, determine which accounts will be needed and which accounts can be deleted. Remember to add unexpected expenses like bonuses, parties, repairs and new purchases. Your budget can be created from scratch or from last year’s income and expense accounts. With this in hand you can project how much you need to spend in the new months ahead and how much sales you must generate to continue operating at a profit. This is easier to maintain if you have an accounting program like Tabs3’s General Ledger. Most professional law software have a built in budget calculator that lets you allocate budget figures for the current year and from the previous year’s income statements. Lastly, don’t get overwhelmed in creating your budget because these numbers are just a forecast of what your business might bring in and spend in the coming year. Being able see what accounts exceed or fall short of your plan enables you to make it a great year.

 Excel Budget Plan (31 kB)

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If you have not reviewed your firm’s procedures on billing costs, this article might help you. As a consultant, I have experience in working in a variety of settings. Some firms are finding creative ways to recover for their  expenses.  Here are a couple of tips I’ve gathered along the way:

1. Some Costs Aren’t Being Billed Anymore

Things have changed in the last few years. Because of the low price of long distance calls, being at .02 cents a minute or less and (Voice over IP (VOIP ), some firms are no longer billing for long distance. Hardly anybody uses a fax anymore and most of the faxes are going to emails. Copies are sent in PDF format, also attached to emails, which means less and less printing and copy expenses.
Separate Soft and Hard Costs

2. Separate Soft and Hard Costs

Soft costs are photocopies, postage, faxes, long distance calls, etc. and hard costs are purchased done in advance for the client. Examples of hard costs would be check or credit card purchases for filing fees, court reporters, and FedEx.

3. Factoring Costs by Calculating a Percentage of Fees

There is a growing trend for law firms calculating soft costs by factoring in a percentage of their rates. This is usually 3 to 4 percent of their fees. They see these costs as an overhead expense. This saves them money on having to pay for cost tracking software and systems.  Your engagement letter can stipulate instances where your soft cost will be separated. This might not work in cases that you will have to submit costs to the court for reimbursement.  

Here are some articles on ABA Rules for recovering expenses.

https://www.abanet.org/tech/ltrc/publications/costrecovery.html

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Small Business Growth 10 Year Projection

Knowing what technology will shape small business growth 10 years from now will better help you plan for the future.  That’s why Intuit and the Institute for the Future conducted a ten-year forecast examining how technology will influence small business and how these businesses will change society and economy. Their research is being published in as a three-part series called “Intuit Future of Small Business Report.”  

In early 2007, they released the first installment based on demographics and trends in small business.  They found three emerging trends affecting the way business will be conducted by 2017.

• New and Diverse Entrepreneurs.  More mixed groups will be the major source of entrepreneurs. There will be more women, immigrants, younger and older age groups, than in the past.
• More One Person Businesses.  More businesses will be conducted by one person with no employees because of changes in traditional employment and the rise of technology.
• Increase in Entrepreneur training.  The success of small businesses will increase because entrepreneur classes will be a major curriculum in schools. 

The second installment, released in June 2007, focused on technology trends and small business.  They identified three emerging technology trends that will most affect small business by 2017.

• Connectivity.  Small businesses will use networks, mobile devices, tracking devises, and digital infrastructures for more flexibility on when, where and how business is conducted.
• Inexpensive and easy Web services.  The faster and easier to use internet will increase small business presence and expand relationships.  Intelligent devises will enable interaction with the public.
• Wireless Marketing. The most important factor affecting customer’s purchasing decisions will be marketing on cell phones, mobile devises and automobiles.  Customers will be able to reach any company’s relevant information from anywhere and when they need it. 

The third installment, released in February 2008, confirmed what the two prior researchers predicted. Small business entrepreneurers will find it easier to compete with large companies:

• Collaboration. Greater chance for small niche businesses, especially artists and skilled workers, to compete because of social networks and the internet.
• Greater Small Business Opportunities. Small business will have the same access to products, resources and infrastructure abilities that only larger companies have had in the past.
• Small Business Globalization. Because of technology, small business will find it easier to connect throughout the world. Giving small businesses opportunities to new markets.

To read the reports go to:
http://www.intuit.com/futureofsmallbusiness/

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I guarantee you that whoever said, "There’s a sucker born every minute,” was not talking about lawyers. Still, many small law firms get defrauded every year by their employees. In small companies, the focus is on the business and not on the accounting. It may seem impractical or unnecessary to segregate duties, but one person should not be entrusted in doing all of the bookkeeping. Small law firms should have an oversight system and enforce these policies. An accounting firm or CPA can help you create and implement effective internal control procedures for your firm. This will reduce errors and discourage fraud.
Here are 10 tips in segregating duties: 

1. Do not have an employee sign your company checks, do not use signature stamps, and do not pre-sign checks.

2. Be the first to review mail. Open mail from banks and review credit card and bank statements for discrepancies and errors. Verify signature on checks.

3. Have bank statements sent electronically to your personal email account or to your home.

4. Deposit duties should be performed by two people. One makes copies and records in the deposit book, while the other records in the accounting program.

5. The person writing the checks should be different from the one mailing the checks. This prevents the checks from getting “lost” or changed after they are signed.

6. When signing checks make sure you compare corresponding invoice to the vendor name and amount on the check. Avoid issuing “urgent” checks without backup.

7. Print check register and look for missing checks, additional checks and completeness.

8. Review accounting reports for write-offs, write-downs, and bad debts.

9. Online bill pay should only be performed by owner and employees should not have bank passwords. 

10. Someone other than the bookkeeper should do the bank reconciliations, or at least review them every month.

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If you need additional help you can visit our Frequently Asked Question section where you will find Q&As.

We also have links to helpful websites and to the manufacturers of the software and products we supply.

My blog offers additional help on our products and services. If there is something that you are having trouble with and think that others might also need to know, please send me an email at betty@lawexe.com. I will try to help you with your software question.

Betty Milia

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Are You Law Firm Expert?

This is your chance to get noticed! We are looking for skillful writers who can share their expertise about law firm technology.

What we want

We are looking for either full length tutorials on some aspect of law firm life, software and law firm products, or shorter blog posts about the products we sell. We are looking for original and insightful articles and posts that are of interest to a well-informed legal industry readership. Only original work is accepted, submission and publication means you'll agree not to publish it online anywhere else.

What we don't want

We don’t want Spam.

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No News is Not Good News

Have you ever read an article that quoted a colleague of yours on a topic you specialize in? You wondered why they didn’t contact you. The reason they are getting attention is because they know the importance of free publicity. They have made a connection with the publisher by sending out press releases or writing articles. To generate more buzz for your business, you should have a publicity-generating activity to set yourself apart from the other firms. Appearing in any form of media gives you credibility and can establish you as an expert in your field and generate more business for your practice. And it’s free.

You Gotta Have a Plan

To improve the process you should have a plan. You must determine what your goals are before you can execute your plan. Your plan can be very detailed or as simple as a list. First decide who you want to attract. Your audience could be peers or potential clients. Then set your goals, and develop a strategy to follow through. Find out what they read, what they watch or listen to, and then target that media.

Extra, Extra, Read All About It

Before you call attention to yourself, find something newsworthy to report. This is easy in the legal field because so many things go on every day. You can send out a press release every time something new happens in your practice, for example, a special event, a grand opening, a new employee, a recent case that was won, or a new service being offered.

Sometimes there may be nothing news-worthy to report, especially for small time operators, so that’s when you have to make it up. Create media exposure, that is. You can write an article by offering advice or tips on what you know. Is there a particular subject that interests you? Set yourself apart as an expert in this topic by writing about it. You can research it thoroughly and write an article for the local trade newspaper or magazine. Because publishers like giving freebies to their readers, you can offer a free brochure on current law changes in immigration, tax, or in whatever you specialize in. The same article can be used in your marketing and added to your web site if it doesn’t interfere with copyrights. Most articles you produce can have multiple uses.

Do it Often

Once you develop a plan to regularly create newsworthy information about your business, you will be ahead of your competition. Soon, it will be you being quoted in the media as an expert in your field and you office will be flooded with inquiries and new business leads.

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Hello,

Welcome to our new blog section. This blog is meant to be informative as well as fun. I will discuss issues that are important to me and I hope you find them as equally important to you. Please give me your suggestions and input so we can make it worthwhile for both of us.

--Beatriz Milia

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