Professional Services Accounting ARTICLE -

Why Law Firms Need Legal Administrators

Target Audience: Legal Professionals, Professional Service Firms, Law Firm Partners, Law Firm Accounting

Lawyers don’t go to law school to become business administrators — management just comes with the job of being a partner. But given the increasingly competitive legal landscape, most attorneys need (and would probably prefer) to focus on clients rather than administration.

Enter the legal administrator. This professional is trained to manage the business end of a law firm, freeing up attorneys to do what they do best: Practice law.

Do a little math

Every law firm can be divided into two disciplines: 1) the practice of law, and 2) administration of the firm’s business. Responsibilities associated with the latter can easily overwhelm practicing attorneys and can involve:

• Supervising billing and collections,
• Purchasing supplies,
• Administering payroll,
• Overseeing financial reporting, and
• Hiring and managing associates and support staff.

Generally, the bigger the firm, the more likely it is to need a legal administrator. Those with more than 10 attorneys should definitely consider it. And even if you have fewer than 10 attorneys, you should calculate the cost of not having an administrator.

Take the billing rate for each of your attorneys and multiply it by the number of hours they spend annually performing administrative functions. Is this amount more or less than you would pay for a legal administrator? If the amount is equal to or greater than the cost of an administrator, the decision is clear. If it’s less, but you intend to continue to grow the firm, you may still want to hire someone.

Core competencies of a legal administrator

The key to hiring the best administrator for your firm is to develop a job description. It should outline the responsibilities of the position and the necessary competencies the individual will need — such as an advanced degree or previous experience with a firm of the same size.

At a minimum, applicants should have a BA; a degree in law firm management is desirable. Experience in the field is also crucial — especially if your firm has never had a legal administrator. Some firms seek candidates with an MBA or a CPA credential, but they aren’t necessary for most midsize to small firms. And keep in mind you’ll likely have to pay a higher salary for such qualifications.

Consider interpersonal skills as well. A successful administrator will need to effectively deal with attorneys, staff and people outside the firm such as vendors. Along the same lines, make sure your candidate’s demeanor suits your firm’s culture. Someone from a firm of several hundred may not fit into a 15-lawyer office.

legal administrators can multi Task

Depending on the size of your firm, your administrator should be able to perform or oversee a range of activities. For example, legal administrators in smaller firms typically fill the role of human resources manager. This includes hiring and supervising support staff and administering employee benefits and compensation. It may further encompass tasks such as creating mentoring programs and running the firm’s summer associate program.

Financial management typically is a large part of a legal administrator’s job. Such responsibilities might include budgeting and planning, preparing financial statements, collecting receivables, monitoring billing time, and interacting with the firm’s outside accounting and investment advisors.

Mundane as they are, facilities and operations issues also demand an administrator’s time. This includes space planning, maintaining office equipment, ordering supplies and managing records.

Look inside or out for a legal administrator

Occasionally someone in-house, such as a paralegal or legal secretary, is interested in and appropriate for the administrator job. But in most cases, firms are better off hiring a professional with proven experience.  

One place to start is the Association of Legal Administrators, whose mission is to improve the quality of management in legal services organizations and enhance the competence of legal administrators. Its website, http://www.alanet.org, includes information on the role and a career center where employers can post ads for open positions.

A law firm is a business

If you’re reluctant to make the financial commitment to hiring a legal administrator, consider this: Profitability increases when employees concentrate on their core competencies. For lawyers, this means law. For legal administrators, it means the many tasks associated with running a successful business.

Find out how our expertise in professional services accounting can add value to your business. Email us or call us at 1 (888) 875-9770.

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