Remembering TCPaul, 2016-2019

Overhead frustrations

So, we have 1.333 staff persons per partner in our law firm. themapmaster04/15/19
. . . heythere04/17/19
More support staff than attorneys does seem unusual, unless flharfh04/15/19
What is the ratio of billers to non-billers? I think this i brassica704/15/19
I'm curious if overhead includes associates, in which case i dingbat04/15/19
The partners are the only billers. Not a mill. If we cut themapmaster04/15/19
Are some of your support staff paralegals? Don't they bill a flharfh04/15/19
No paralegal degrees. The best of em' work on probate files themapmaster04/15/19
well, maybe they care more about an easy work-life than maki dingbat04/16/19
Is this general practice? Everything about this seems wrong midlaw04/16/19
Seems like the ratio is skewed in the wrong direction. What isthisit04/16/19
General practice. Represent a number of small employers, s themapmaster04/16/19
Get rid of at least 1 of the staff and charge more. cranky04/17/19
I think you're overthinking this. Is the staff adequatel superttthero04/17/19
We run a 56% overhead for staff and associates. 1.33 staff p jorgedeclaro04/18/19
Office rent is also probably huge. Pet peeve of mine, greed 2ski04/18/19
themapmaster (Apr 15, 2019 - 1:55 am)

So, we have 1.333 staff persons per partner in our law firm. Overhead expenses were sixty percent of firm’s income. Very frustrating. I feel like overhead expense shouldn’t be more than fifty percent, in principle, in a law firm.

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heythere (Apr 17, 2019 - 3:22 pm)

. . .

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flharfh (Apr 15, 2019 - 4:27 pm)

More support staff than attorneys does seem unusual, unless you are in a high volume, mill type practice where paralegals do most of the work.

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brassica7 (Apr 15, 2019 - 5:30 pm)

What is the ratio of billers to non-billers? I think this is the key. The ratio of partners to staff doesn't seem so important. Does "staff" include associates?

Overhead of 60% of firm income does seem high, though.

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dingbat (Apr 15, 2019 - 7:45 pm)

I'm curious if overhead includes associates, in which case it might not be that ridiculous

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themapmaster (Apr 15, 2019 - 7:49 pm)

The partners are the only billers. Not a mill. If we cut staff, they complain they are over worked. Not sure if they have a legitimate gripe. Most likely we need to raise rates. $175/hour and $200/hour may not cut it in 2019 even in a low COL area. No wonder the court appointed lawyers work from home often. Their rates here are less than a third of market rate.

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flharfh (Apr 15, 2019 - 9:49 pm)

Are some of your support staff paralegals? Don't they bill at least some of their time?

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themapmaster (Apr 15, 2019 - 10:46 pm)

No paralegal degrees. The best of em' work on probate files which we get paid for on a flat rate.

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dingbat (Apr 16, 2019 - 12:03 am)

well, maybe they care more about an easy work-life than making money.

But they're still lousy business people if they're charging much less than market rates. They're probably old fossils stuck in their ways.

Unless you're a partner as well, what difference does it make to you? If you are a partner, maybe you should re-evaluate

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midlaw (Apr 16, 2019 - 6:29 am)

Is this general practice? Everything about this seems wrong - the rates, the ratio - everything.

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isthisit (Apr 16, 2019 - 11:33 am)

Seems like the ratio is skewed in the wrong direction. What are the titles of your support staff? A good para is worth his weight in gold if he can consistently bill and churn out work product. What else do you have in the office?

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themapmaster (Apr 16, 2019 - 10:59 pm)

General practice. Represent a number of small employers, small time litigation, estate planning, probate.

No paralegal degrees. We call them legal secretaries.

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cranky (Apr 17, 2019 - 7:02 pm)

Get rid of at least 1 of the staff and charge more.

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superttthero (Apr 17, 2019 - 8:05 pm)

I think you're overthinking this.

Is the staff adequately busy and not doing things that should otherwise be handled by attorneys? Is everyone reasonably satisfied with their compensation? Is the firm having a hard time due to staff expense?

I've worked at mills with a 6:1 ratio and at firms with 2 full time staff for 5 attorneys.

Your question about what is right is too form specific.

Stop thinking like an MBA.

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jorgedeclaro (Apr 18, 2019 - 12:04 am)

We run a 56% overhead for staff and associates. 1.33 staff per attorney. Small law (under 10 attorneys) so that means 3 non revenue producing staff and another minimal revenue producing staff.

Perhaps you should change to a compensation model that’s not as dependent on monthly ordinary income. Our compensation is based on a monthly rolling average of receipts where compensation is determined by a matrix based on average receipts and seniority in the partnership. I can think of one time in the last 3 years where we didn’t hit our monthly budgeted overhead and we average around a 10% monthly surplus over budgeted overhead which we then evaluate at the end of the year for distribution or retained earnings. This could potentially take some of the stress out of your overhead, unless there simply isn’t the work to go around.

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2ski (Apr 18, 2019 - 8:30 am)

Office rent is also probably huge. Pet peeve of mine, greedy scum landlords. rant over..

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