I often consult with lawyers setting up a new solo or small firm practice. There are many items involved in setting up any new business – like applying for an employer identification number (EIN) and Working on computerdeciding on the best entity to use for the business.

But there are also aspects of setting up a law practice unique to the legal profession. The OBA Management Assistance Program maintains the Opening Your Law Practice resource at www.okbar.org/oylp and provides a day-long seminar on the subject twice a year.

As the end of the year nears, law firms are making their plans for the next year. So in this month’s column, I decided to outline the technology tools a lawyer should consider when opening a new solo and small firm practice.

HARDWARE

There are many different ways to assess cost for law firm technology purchases. First, there is the initial purchase price. Today that is more associated with hardware than software, as most software tools have evolved to subscription-based models.

Everyone in the office needs a computer for their workstation. If there is more than one person in the office, the computers must be networked. Setting up a network for a small firm is not a hard task. But since it is rarely done, it is better to pay a local computer shop to set it up than try to learn how to do it yourself. That vendor will likely know things about network security you do not. But do enough research to know what you need because, like buying a car, you may be offered additional options.

As for the computers required, you already know whether you are a Mac or PC user, and nothing I write here is likely to change that opinion.

Reception and secretarial workstations are likely best set up with desktop computers. But for the lawyers, I strongly recommend a business-class laptop. Roughly speaking, these will be in the $1,000 to $2,000 price range. It is better to purchase one with Windows 11 Pro pre-installed than Windows 11 Home because Pro has superior security and networking tools, including the hard drive encryption tool BitLocker.

For comparison purposes, I have included a screenshot of a Dell XPS 17 laptop on the Dell website costing just over $2,000. A model just like this, but with Windows Home instead of Pro, costs $50 less. That is not $50 you would want to save. I would never buy a laptop with smaller than a 17-inch monitor, but that is my opinion. I also believe it is best to have at least 16GB of memory. Note the computer in the graphic has 32GB of memory.

The reason a laptop is highly recommended is that sometimes you need to work from different locations, whether you are working from home or on the road. That will go much better if you use the same machine every day and everywhere. Certainly, you can work remotely from a home computer. But for security and hardware reliability, it is best to have a law office computer no one else uses. Remember the “I’m not a cat” lawyer who became internet famous because his daughter had configured the Zoom settings, so he appeared remotely in court via Zoom as a talking cat? For client confidentiality and many other reasons, the laptop serves as a work computer that your family may not use when you bring it home.

When working in the office with your laptop, you will want to be connected to the network and have an additional monitor (or two). So it is best to purchase a port replicator that works with your model so you can quickly and easily connect to the network, the additional monitor, the printer and other peripherals. Old-style “docking stations” that had custom housing that attached to the computer have been replaced with plug-in port replicators.

I continue to be a fan of the Fujitsu ScanSnap line of desktop scanners. The ScanSnap iX1600 is the recommended model. But you can save money by buying the older ScanSnap iX1400.

I have little to say about printers, except that this is where the needs of large firms and solo and small firms differ. A small firm is usually better off buying low-range to mid-range-priced printers and locating them where needed. A large firm may still decide to buy massive printer/scanner combination devices. They have an IT department helping them to get the most from those machines.

SOFTWARE

Today, most software is sold on a subscription basis, paid annually to get a better rate.

Lawyers process words – a lot. But they sometimes need to use a spreadsheet or prepare a presentation. So the first thing one needs to purchase is a Microsoft 365 subscription. Word, Excel, PowerPoint and Microsoft Teams are all included in the Microsoft 365 Apps for business ($8.25 per user, per month with a one-year commitment and auto-renewal) and Microsoft 365 Business Standard ($12.50 per user, per month with a one-year commitment and auto-renewal). Both come with 1TB of secure cloud storage in OneDrive.

Business Standard is recommended. The Business Basic plan is too basic for lawyers with only web-based apps. Those who want enhanced security and data access controls may choose the pricier Business Premium. Teams is an included secure videoconferencing tool that is great for internal communications.

Over the years of serving in this role, I have developed a strong opinion on the next subject.

A solo and small firm lawyer should next subscribe to a practice management software (PMS) solution. Products such as Clio, MyCase, CosmoLex, Rocket Matter and PracticePanther combine most tools needed by law firms into one interface, including time capture, billing and invoicing, digital client files containing all documents, attorney notes, a secure client portal for sharing sensitive material and much more.

I often tell lawyers seeking a billing program to consider just subscribing to a PMS because they contain – among their many features – time and billing (and frankly, the cost is not much greater for the entire PMS package as compared to a good, dedicated billing software). Even if they are not ready to embrace digital client files powered by PMS solutions, it is still better to learn the time-capture and billing tools within the PMS solution so you will not have to change billing programs when you ultimately adopt digital client files, as you likely will.

Even if you put together a combination of time capture, billing, client portals and cloud storage for documents instead of the all-in-one PMS solution, you still might miss one positive aspect of PMS solutions: great tech support included at no extra charge. Their business goal is to keep you as a customer forever. That means they will continue to assist you until your tech support inquiry is answered. And their cloud storage was built from the beginning to provide lawyers with a secure place to store client matters. Protecting lawyers’ confidential information is one of the provider’s most important goals.

Client portals are simple to use when the documents are already in your digital client file. If all documents are scanned or saved to a client file, sharing them with clients via the portal is typically quick and easy.

PRACTICE MANAGEMENT SOFTWARE ALSO PROVIDES BUSINESS CONTINUITY PROTECTION

These days, with so many online threats to our data, it is not only important that we protect our clients’ data, but also that we should protect our business continuity – our ability to continue with operations in the face of a disaster or adverse circumstances. How would you proceed if you learned your office had been flooded or destroyed by fire? Obviously, it would be a difficult situation with time devoted to dealing with insurance adjusters and coming up with a new place for operations. But what about your court appearances scheduled that week, and the next? Today, most lawyers would at least have their calendars available on their smartphones and hopefully client contact information as well. But what about the client files, needed exhibits and your notes on questions to ask witnesses?

Larger law firms with dedicated IT staff may utilize other options. But for a small firm lawyer, the best way to protect your client’s confidential information, along with your work product and your business continuity requirements, is a subscription to a cloud-based practice management solution. Then, if the physical office is destroyed or inaccessible, your staff can either go home or to another location with internet access and log in to the exact same interface they use every day with access to the digital client files. With practice management software, all you need is an internet connection, a computer with a web browser and your username and password to log in and do your work.

OBA members can contact Practice Management Advisor Julie Bays with questions about practice management software or to set up a demo of PMS for you and your staff. If you are in  a different jurisdiction, see if your state bar association has a practice management advisor on staff.

OTHER SOFTWARE TOOLS

There are many other software tools and services that may be useful for the new solo and small firm lawyer – from customer relationship managers (CRMs) to document management systems (DMSs). But starting with the tools we have discussed here and mastering them gets you started on a firm foundation.

Practice-specific tools are also important. I simply cannot imagine preparing a bankruptcy petition and schedules without using software to keep everything organized. Many will benefit from form and automated document assembly services like www.oklahomaforms.com.

Our biggest security threats today often appear in our inboxes. Most malware and ransomware attacks begin with someone in your organization clicking on an email attachment or a bad link in an email. Often, these attacks result in the criminal interloper gaining access to usernames and passwords.

A password manager allows you to use long, complex passwords and different passwords for every site or service you log in to. Two-factor or multifactor authentication tools mean that even if your username and password are obtained by a criminal, they still won’t be able to log in to your account because they won’t have access to your cell phone to receive a text or another alternate authentication method. Anti-virus, firewalls and other security tools are also important.

Several years ago, I would have added speech recognition tools to this list. But now, the dictation feature built into Microsoft Word in Microsoft 365 means you probably will not have to use a different tool.

CONCLUSION

I hope this overview has been useful to readers. Certainly, these tools are not limited to solo and small firm operations. Oklahoma lawyers can contact the attorneys at the OBA Management Assistance Program if they have further inquiries about software or any other aspect of law office management. 

Originally published in the Oklahoma Bar Journal — December, 2022 — Vol. 93, No. 10

Do you ever have trouble spotting your cursor? Since I often use three monitors, it is sometimes easy for the tiny, little cursor to get lost when I have many windows open. There’s an easy way to fix that – just make your mouse pointer a little bigger. Start with the Windows icon at the bottom left and then click “Settings,” then “Devices,” then “Mouse” and you will see the entry at the right “Adjust mouse and cursor size.” I adjusted from the default size of 1 to size 3 and then selected yellow for my cursor color. It is easy to make the change and easy to change back if you don’t like it.

Mac users: Go to the Apple Menu in the upper left corner of your screen and then click “System Preferences,” then “Accessibility,” then “Display” in the sidebar. In the “Pointer” tab, there is a scale to adjust your cursor size and outline and fill color.

The  holiday shopping season is upon us, and that means it is also time for our annual Tech Toys for the Holidays Digital Edge podcast.

Sharon Nelson and I highlight an eclectic assortment of holiday gifts with a technology focus. We have some budget shopping items like an AirTag lock for $15.90 or a UBeesize 67” tripod at $13.49 for steadier cell phone pictures, and some that are budget busters like a Nemo personal submarine.

Links to all the featured tech toys are in the show notes. Happy shopping and happy holidays.

What if you copied a lot of documents to a USB flash drive for working offline and now you can’t find the drive? Do you have to report this potential breach to firm management or notify the client of this potential breach? Suppose a hacker has gotten into your laptop and perhaps downloaded some files?

The short answer is there is no breach of confidential information if the device is encrypted or the files are encrypted . We have known for some time that misplacing portable devices with appropriate encryption is not a security breach because the information remains inaccessible. This means there is also a good case to be made for encrypting all laptop hard drives.

Protecting Portable Devices from Catherine Reach, Director, North Carolina Bar Association Center for Practice Management, was published in ABA Law Practice Magazine this month and she has republished it on her blog. It is a comprehensive treatment on securing portable devices, from encryption, to remote wiping, to office policies.

Businesses exist to make a profit. Lawyers often go into practice with the goal of helping their clients with their legal needs. Profits aren’t always the first thing a lawyer thinks about daily, but this should be a primary goal every day.

That is how OBA Practice Management Advisor Julie Bays began her article  Using Technology Tools to Build Financial Security. She focuses on the technology tools that directly impact the law firm bottom line. From attracting a client to the firm, retaining the client and managing the client file, legal technology can help law firms increase efficiency and their bottom line.

We have certainly seen many weather-related disasters this year. How long has it been since your law firm reviewed its disaster plan? Disaster Planning: It’s Not Just for Hurricanes is our new Digital Edge podcast.

Jim Calloway and Sharon Nelson get Shawn Holahan’s top tips for disaster planning in legal practice.  Shawn Holahan is Practice Management Counsel and Loss Prevention Counsel for the Louisiana State Bar Association. Being from the Big Easy, she knows a thing or two about dealing with hurricanes and other types of weather disasters.

Her list of items to prioritize in disaster planning is valuable information, even for those of us for whom a tornado or prairie fire is more likely than a hurricane. Shawn emphasizes the importance of keeping your plan simple and explains “No Tech” Binders and the pre-disaster steps all lawyers should take.

Prior to Shawn’s position with the bar, she litigated employment discrimination matters. While with her firm, Hurricane Katrina destroyed the city and her home, which necessitated moving her firm and family to another part of the state for several months before New Orleans could once again support its residents.

There is a transcript of the interview posted at the site for those who prefer to read rather than listen. I imagine some lawyers will copy the transcription into their disaster planning file.

Did you know that roughly 96% of worldwide email traffic is spam? Or that one of the more recent scams is to text someone an innocent or flirtatious message, followed by, “Whoops, wrong number,” in hopes of opening a conversation? Or that iPhone scammers are now using the TestFlight app to avoid Apple’s approval process for new apps and convince people to install malicious software?

“Wrong Numbers, Fake Invoices, and Catfishing: How to Avoid the Top Internet Scams” was recently published by PCMag.com. It covers all those issues and more. It also gives clear and simple instructions on how to avoid scams.

Consider this plan:

  1. Read the article.
  2. Share with your staff (and friends and family).
  3. Consider whether this might give you a chance to do some informal email marketing/client service by sending your active clients the link and a brief email warning about how fraud schemes are increasing. No sales pitch about your services, just a warning from a professional.
  4. Then consider whether to also send that to former clients whose files were closed in the last year.

Practice Pointer: Protect your clients’ privacy! Never send an email to groups of different clients (and their email addresses) in the “To:” line. Always use the “BCC:” line so you aren’t sharing their private information with other recipients of your email. When sending BCC, group emails in small batches to no more than 30 or so recipients to avoid inadvertently being flagged as spam.

As you likely know, Microsoft 365 provides great speech recognition built right into Word, Outlook, PowerPoint and OneNote. You just click on the microphone icon labeled Dictate and begin your dictation.

But to dictate into other applications on your computer, there are other built-in options.

It’s simple on a PC, just use the Windows key + H to open the dictation Windows. (If it hasn’t been enabled, you may receive a link to first enable the feature.) Place your cursor in any text entry box and dictate away. You can also dictate appropriate punctuation. I suggest memorizing this keystroke combo so you can quickly use it when needed. Use this to dictate into Microsoft Excel or a web search engine for example.

I must confess I didn’t know how to do this on a Mac. But longtime technology tipster Kim Komando shared how to do it in a recent feature:

“On a Mac, it requires a bit more setup.

  • Click the Apple logo, then System Preferences.
  • Choose Keyboard > Dictation. Make sure this is set to On. You can set up a shortcut to start dictation here, like hitting the Control key twice.
  • Now, open a document, tap the cursor, then tap your shortcut. You can also select Edit > Start Dictation.
  • A microphone will appear. Hit Done when you’re finished.”

Most of us are doing business in the digital world these days, but protecting your clients’ confidential information must always be top of mind. Two recently released opinions from the Pennsylvania Bar Association Committee On Legal Ethics and Professional Responsibility may provide helpful guidance for lawyers.

Formal Opinion 2022-500 Ethical Considerations for Lawyers Storing Information Relating to the Representation Of A Client On A Smartphone is brief. It highlights how smartphone apps can inadvertently compromise client information without an attorney being aware of the sharing. The conclusion is straightforward:

“If a lawyer stores information governed by Pa.R.P.C. 1.6 on a smartphone, then the lawyer must take steps to prevent access to or disclose of the information. Consequently, a lawyer may not consent to share the information with a smartphone app unless the lawyer concludes that no human being will view that information, and that the information will not be sold or transferred to additional third parties, without the client’s consent.”

Let me suggest that if you have apps on your smartphone that you have not used in a long time, they may have been sold to a third party with a different business model, and you may not know what access they have to information or how they will use it. Just delete them!

Formal Opinion 2022-400 Ethical Obligations for Lawyers Using Email and Transmitting Confidential Information is a 15-page opinion discussing what lawyers may and must do (in the committee’s opinion) to be safe using email with client matters. This is a great resource that should be downloaded and saved. It includes an appendix of selected opinions from other states relating to this topic.

Note: Ethics advisory opinions from other jurisdictions are not binding on Oklahoma Bar members. In fact, “advisory” means they are not binding on lawyers from the issuing jurisdiction. However, the Pennsylvania Bar Association Committee on Legal Ethics and Professional Responsibility is well known for insightful and persuasive ethics opinions on lawyers’ use of technology.

The term “billable hour” has long been a topic of discussion in the legal community. However, for such a simple term, it can be used in different ways. The most obvious answer is that hourly billing and the lawyer’s hourly billing rate is the method, likely still the predominant method, of determining how much clients pay their lawyers. The lawyers in the firm have hourly billing rates, keep track of their time, and fees are determined by simple multiplication: hours times the lawyers’ rates.

The cover story of the August 2007 ABA Journal was “The Billable Hour Must Die”¹ by famed lawyer-novelist Scott Turow. No one who has read any of Mr. Turow’s books would be surprised that it is a well-written and persuasive piece. He repeats the phrase “dollars times hours.” Mr. Turow wrote:

Dollars times hours sounds like a formula for fairness. What could be more equitable than basing a fee on how long and hard a litigator worked to resolve a matter? But as a system, it’s a prison. When you are selling your time, there are only three ways to make more money – higher rates, longer hours and more leverage. As the years have gone on, the push has continued on all three fronts.

Mr. Turow’s criticism of the billable hour was stinging: “It rewards inefficiency. It makes clients suspicious. And it may be unethical.”² The billable hour, in case you’ve been keeping track, has not died. I doubt that Mr. Turow thought it would die because of his feature story.

As many readers know, Oklahoma City attorney Mark Robertson and I co-authored two books for the ABA titled Winning Alternatives to the Billable Hour (2nd and 3rd editions). Although both books are now out of print, one edition was one of the top-selling books for the ABA that year. More recently, Mr. Robertson wrote Alternative Fees for Business Lawyers and Their Clients, which is still available from the ABA.

Most lawyers equate alternative billing with flat fees. Flat fees are very popular with consumer clients – but there are many variations. Task-based billing is another alternative where the lawyer bills a fee per task completed. This can be a good method for limited scope representation when the lawyer does one task, like document drafting, and the client decides if they need further assistance for an additional fee.

BILLABLE HOURS AS A MEASURE OF PERFORMANCE 

One of the reasons hourly billing has proved so durable is that it is also often used as a measure of associates’ performance in law firms, particularly larger law firms. Often, law firms have a billable hour target that is disclosed to potential associates during recruitment. An associate who fails to reach the minimum target repeatedly may not be considered for partnership. It is certainly true that this is an objective measurement of performance, and we lawyers do like objective data.

However, it is certainly daunting to have a requirement of billing 2,400 hours or even 2,700 hours annually. As we all appreciate, one cannot bill all their time spent at work, and even larger firms have internal committees requiring a lawyer’s non-billable participation. Then there are items like CLE attendance, meetings with potential clients who do not hire the firm, pro bono service and more that are not billed. But even to ethically bill 2,400 hours a year requires not only a commitment but also good health and a steady stream of work assigned by the partners. Associates trying to hit these numbers often find their personal and family time is significantly impacted.

The signing bonuses and compensation for new associates in top-tier national law firms can be stunning. The time commitment is huge, and of course, if one wants to make partner, developing your own book of business is essential. Certainly, most lawyers in private practice find themselves working long hours, particularly when pretrial preparation for a major trial is underway. But it’s one thing to miss going on a trip for a traveling soccer tournament because you have a week-long jury trial ahead, and another thing to spend all your time at the children’s soccer games talking to clients on your cell phone.

That brings up another use of the term billable hour. It has come to symbolize the massive commitment of hours lawyers might bill and the impact on their personal and family lives. This reflects a personal decision lawyers have to make, but it shouldn’t be done unconsciously. Lawyers and other personnel in the law office are among the firm’s most valuable assets. There are a number of studies showing that the quality of work suffers after more than eight or nine hours are worked in a day.

It was traditionally almost used as bragging rights among lawyers that they went an entire year without a vacation. Large-firm lawyers are trying to meet their billing requirements and properly serve their clients. Small firm lawyers may have another concern that being out of the office for an entire week will impact the number of new clients that month. Any consideration of the number of hours you want to bill or work each month should be informed by the high rates of stress and mental health challenges reported in our profession. As an older lawyer, I note this is one area where the newer generations of lawyers have a better approach to work-life balance. I’ve talked to many lawyers in the twilight of their careers who confessed to me that one of their greatest regrets was the number of their children’s activities they missed while the children were growing up. That is one reason why we are seeing the trend of partners moving on to become in-house counsel for a client. The compensation might be less, but your weekends are generally your own.

It’s not my job to make these personal decisions for you and your career. I just want to encourage lawyers to think about the long-term implications of these decisions, particularly if they are on a law firm’s management team.

EFFICIENCY IMPROVEMENT IS DRIVING BUSINESS OPERATIONS TODAY

Across the world, businesses are increasing the efficiency of their operations, often through increased reliance on technology, and inefficient businesses find that they have trouble competing with innovative competitors. This represents the main challenge related to hourly billing today.

Efficiency in business operations means using technology to create more efficient processes that require less human intervention and rely more on processes and technology. For more businesses, after absorbing the cost of the technology, the result is uniformly positive. If you reduce the hours required for an employee to create a widget from 5 to 2.5 hours, theoretically, the company can produce twice as many widgets for sale.

Implementing a technology process, like automated document assembly, which reduces the time a lawyer must spend on a project, equates to lawyers to a billable hours cut and revenue reduction. It may be a move that is good for the firm and required, but that fact impacts the risk/reward analysis of implementing new technology innovations. However, businesses that don’t keep up with modern technology while their competitors do, often find themselves losing market share and affecting profitability.

Already, many legal documents are created by technology-based processes with supervision and review by the lawyer. That trend will continue. Here’s one example: Suppose the firm has a new client that operates in a dozen states and has many contracts regularly created in each of those states. A few decades ago, that would have been a major (and expensive) legal project to make sure each contract properly complied with state law. And when the client decided to expand to two more states, there was more billable legal work.

Don’t get me wrong, this is still a great deal of work. But today, you can search Google for contract management software and locate articles like PCMag’s “The Best Contract Management Software.” Contract management software covers a wide range of capabilities. How handy would it be for the lawyer to receive a notice from their software/service that Georgia law has recently changed, and that change impacts four existing contracts you should review? The existence of contract management software may be a signal that corporate clients will move more of these functions in-house.

A law firm may be a leader in drafting contracts for a specific industry, and the firm may be able to accomplish monitoring and compliance through the processes they have used for years. But they probably should be aware that a potential threat in the future is a competitor law firm offering to do the same services the law firm provides at a monthly flat fee that is less than the firm’s typical monthly billing. That is just how business operations function today. Technology innovations create winners and losers.

A MODEST PROPOSAL

I’ve noted before in this space that I believe one solution would be that most hourly engagements should have some task-based provisions in them. Tasks that are appropriately done by legal assistants and technology-based processes might be billed at a flat fee within the hourly contract, e.g., draft and file the complaint with the court, send off for service and do other things to ensure a matter is billed at a flat fee. Clients will appreciate it if that flat fee is actually somewhat less than they would have been billed had the lawyer done it on an hourly basis. That becomes a win-win for the attorney and client. As artificial intelligence and automated document assembly products continue to improve and lawyers incorporate templates into their practices, this is not merely a theoretical discussion about the future.

And, yes, this is the first step down a road leading to many more flat fee agreements, especially for consumer clients who will be reassured that there will be no surprise bills.

WHAT IS VALUE?

I recently visited a website for a firm focusing on probate, guardianship, wills and trusts practice. The firm has one lawyer and one paralegal. The domain name of the website contained terms associated with peace of mind. The website featured many pictures of families and children as well as pictures of the lawyer and her legal assistant. The outline of services they offer listed many items we would not consider legal but only legal related. But they all spoke to removing uncertainty for one’s future and encouraging with all the support that the firm provides.

Most lawyers produce quality legal work. They are proud of their documents that reflect years of refinement and experience related to the subject matter. If your audience is a client’s corporate general counsel, the care and craftsmanship of the well-drawn contract will be appreciated. Many consumer clients, however, value the documents a lawyer prepares far less than the time the lawyer individually spends with them and the relief that someone they trusted was advising them and handling the legal work for them.

Increasingly, for consumer clients today, it is the user experience that is the most valuable thing they receive from their lawyers. They may assume their good lawyer will produce good documents. But whether they refer clients to you in the future depends more on how you made them feel than that well-drafted provision in paragraph 14. So, automating your document creation to the extent possible may free the lawyer to have more billable time to counsel with the client and follow up proactively during the representation. And that can be good for the lawyer and the client.

TIPS FOR IMPLEMENTING ALTERNATIVE BILLING

  • Take your time, using “bite-sized” steps.
  • Mine your closed files for objective data. Your recollection may be a bit biased.
  • Start with things that make sense to you and the client – g., a flat fee for courthouse filing, no matter who does it.
  • Written fee agreements and documentation are keys.
  • Pay special attention to areas where you can delegate and automate better.
  • Look at the goals from a client’s viewpoint. Predictability is at least as important as cost.
  • If your firm rewards based on billable hours, consider changing or expanding the focus to dollars billed and received. (We should have done this long ago.)
  • Could one aspect of your practice be transformed? g., corporate formation, minute book and first year’s minutes, up to 2 hours of phone questions answered during the next year, running your new business advice letter, all bundled together. Clients get predictability and “free” calls to the lawyer. You get a year to prove how valuable you are.
  • Keep reviewing and improving the process.

Endnotes

1.  Note that this article is now behind an ABA-member-only paywall.

2. Id.

Originally published in Oklahoma Bar Journal, October 2022