By Jeffrey Paulsen
Paulsen Law

 

Hypothesis:
Traditional Law Firms and Company Legal Functions are rarely aligned. 
 

Traditional Law Firm Business Model:
A “traditional law firm” means a law firm that has a highly leveraged business model that depends on annually mandated increasing billing rates as well as every lawyer, paralegal and other time-keeper to meet or exceed mandated minimum billable hour targets to cover high overhead expenses. This is the business structure used by most large law firms.

 

Most traditional law firms are bound by various constraints, limitations and restrictions based upon their business models which are driven by targeted profits per equity partner and minimum billable hours to achieve a bonus. These law firms have an “eat what you can kill” mentality that rewards individuals for achieving or surpassing internally generated targets as a measure of success. The internal compensation systems of these law firms do not reward lawyers for providing the most efficient legal solution alternatives available to their clients.

 

Traditional law firms are typically operated based upon business models dependent upon having each attorney, paralegal and legal assistant record the maximum number of billable hours possible. Compensation systems in these business models reward those attorneys that bill the maximum number of hours possible and those that collect the maximum amount of money possible based upon the hours billed by the attorney as well as other time keepers working on matters for which the attorney receives billing credit. In virtually all traditional law firms, you receive greater credit for the individual billing of hours and collections. Not for sharing your work or by selecting the best available lawyer specialist or legal resource for the client. In other words, traditional law firm business models are unchanging with no latitude. (Latitude means freedom from normal restraints, limitations and restrictions.)

Company Legal Function Business Model:
A “company legal function” means the internal company management of legal risks and legal issues faced by a company. Legal managers may utilize in-house lawyers, paralegals and legal assistants, retained outside lawyers, non-lawyer legal service providers and other individuals working on behalf of lawyers. Typically, companies will have a General Counsel or another qualified professional to oversee this critical business function.

 

A company’s legal function is driven by a different business model than the traditional law firm. Companies are driven by strategic business objectives and the need for each and every business area, including the legal function, to make continuous operating improvements. Compensation within company legal functions is driven by assisting the company in achieving business objectives, rewarding the protection of the company from legal liability and by providing continuous functional improvements. To achieve functional improvement, a legal manager must maintain a consistent level of high quality legal protection for the company and to do so in ways that are more cost effective each year.

 

Company legal managers are responsible for protecting the assets of the company, identifying and minimizing potential legal risks to the company and operating within a defined budget. In-house lawyers responsible for leading and managing legal functions not only need to understand the strategic objectives of the company, but they must also provide legal assistance to support these objectives. These legal function managers are compensated like others in the company and based upon a defined set of goals with most objectives having an expense control component. When it comes to handling a legal issue, legal managers are often faced with “make or buy” decisions utilizing in-house legal staff or retaining an outside law firm. The legal manager must select the best and most efficient legal resource available to the company in terms of quality, responsiveness and cost. In other words, company legal functions operate in a varying circle of latitude that needs to be constantly adjusted to meet the needs of the company.

Alignment/Non-Alignment:
Because of these very different business models and compensation systems, traditional law firms and company legal functions can rarely be aligned. While traditional law firms are aligned with providing good results for the company, they are not aligned with selecting the most efficient legal resources available for the client. Full alignment can never be achieved as the business models and compensation systems of traditional law firms do not reward behavior that supports making the selection of the best available lawyer specialist and most efficient legal resources for the client company.

 

Because of this non-alignment, “traditional law firms” leave company legal managers with minimal choices to improve their legal functions when only utilizing legal resources from traditional law firms.

 

Legal Industry Options:
However, businesses and legal managers now have other options to improve their legal functions. The globalization of the business world, improvements in legal related technology and software products, as well as new legal provider law firm business models offering creative and collaborative customer focused legal services, now give legal managers options to address the traditional law firm non-alignment problems. To address these non-alignment problems, legal managers should:

 

1. Consider legal products available including detailed electronic billing systems, software products and legal portals that will allow legal managers to design their own legal software and portals that are appropriate for their business and legal function.
2. Consider alternative legal services available including the ability to utilize high quality lawyers with lower billing rates that have chosen to leave traditional law firms and high quality lawyers that offer creative flat fee or retainer fee options not offered by traditional law firms. 
3. Consider using contract General Counsel as well as other contract lawyers and non-lawyers located both in the U.S. and overseas.  These professionals can handle legal matters that cannot be serviced cost effectively by internal company lawyers because of the cost of salary and benefits or by traditional law firms because of their unchanging model of increasing annual billing rates and mandated minimum billable hours.

 

Achieving Legal Latitude:
Managers who manage company legal functions need to consider all available options other than legal services offered by traditional law firms that are subject to restraints, limitations and restrictions because of an outdated business model. A new breed of lawyers, law firms and non-lawyer professionals are emerging that recognize that traditional law firm business models no longer align with the modern day needs of companies and their legal managers. Hiring lawyers and other legal service providers that are customer focused and acting solely in the best interests of the customer, including finding new and creative ways to provide high quality legal services that are also more cost effective each year, is now a possibility. 

 

Legal managers can now create a “LEGAL FUNCTION WITH LATITUDE.”  Legal latitude allows legal managers to use the resources available in the legal industry to find the best and most efficient legal service providers for their company’s legal function. Legal latitude provides the freedom needed to implement legal function quality and cost improvements in order to keep up with the changes and improvements occurring in business.

 

Jeffrey F. Paulsen has 25 years experience as a business lawyer as a Fortune 500 company Divisional General Counsel and large law firm partner. Jeff is the owner of Paulsen Law and Managing Director-Legal of Latitude Advisors in Bloomfield Hills. Contact him at 248-456-0646, www.paulsenlawfirm.com.
 

By Spencer A. Silk
Franklin CIO Services

 

Document imaging is a method for managing office documents. It functions by scanning paper documents to create exact image copies in digital format. In this process, the company can keep the digital images on a server. These digital files can be saved within the office or in an off-site area (cloud).

 

Although the shift to digital imaging may lead one to assume that overall paper use is on the decline, the truth is that paper consumption has risen consistently over the last ten years. If a company strives to be environmentally conscious, document imaging can benefit the planet. There are significant environmental benefits to document imaging and scanning. Even if a company does not go entirely “paperless,” document scanning and imaging can greatly reduce printing rates. As an example, if an employee handbook were digitized and stored on a server, employees would not have to print it out every time they needed to check a policy.

 

Lower Energy Bills. Imaging cuts down on the amount of money that companies must spend on powering printers. This may not seem like a large amount of energy savings, but it would be quite a hefty chunk depending on the number of printers in a company.

 

Diminished Ink Usage. LaserJet and Inkjet toner is highly toxic and costly. Moreover, it is stubborn – printer ink is tough to remove from the paper during the recycling process. Less printing thanks to document imaging means your company will be releasing less noxious ink into the environment and saving money.

 

Decreased Paper Usage. Too many times employees print a document, only to realize too late that one or more pages were almost completely blank or not needed. A single line of print condemns that piece of paper to the recycling bin. Establishing a document scanning procedure often creates a company culture of eco-awareness, so that employees are less likely to hit “print” except when necessary. In general, document scanning reduces the overall paper consumption of most firms.

 

While specific company papers ought to be shredded, most of the documents made must be kept for future reference. Many companies generate many files. This is normally complicated, particularly for people keeping documents for a long time already. The great thing is, there are document management strategies that managers can choose for legal and storage size considerations. Document imaging or scanning is one of the most efficient alternatives.

 

Save Cost. Document archiving also helps reduce costs. When several office workers require the same file simultaneously, they need to print or photocopy the document. With the use of electronic files saved on the office computer system, they can access exactly the same file simultaneously.

 

Save Time. Files from document scanning services will even help workers use their time more proficiently. With traditional archiving, employees use a considerable amount of time sorting, compiling, retrieving, filing, and re-filing on a regular basis. This is not the situation when you have the files in digital format. While on their work desk, they can access files with only a few clicks.

 

Save Space. This can be a great alternative for offices using file cabinets, shelving or dedicated storage areas for their records. Using this new form of archiving, a great deal of space and cabinets can be saved.

 

Better control. Document imaging also allows for the control of employees’ access to digital files. This works well for managing confidential information. Additionally, it enables the monitoring of employees accessing a certain document.

 

These are only a few benefits of going for a document imaging service. If you want to see for yourself, find a company offering reliable document storage and management solutions and speak to them.

 

Document imaging is more important in business than ever. Not only is paper storage problematic at best, but without having a copy of the paper somewhere, should something happen as in a flood or fire, there is no easy way to recreate all of that paperwork. Having easy access to scanned documents on the network makes it much easier to find as well. While it can take hours to drag out boxes and sort through file after file, it only takes a matter of minutes to find the right piece of paperwork in an electronic format. Save money, save time and reduce paper waste and fire hazards by having a company that specializes in document scanning services take care of old paperwork.

 

Regardless of the size of a business, using document imaging can end up helping the environment and saving time, space and money.

 

Spencer Silk is a principal at Franklin CIO Services, LLC and a member of the Business Improvement Team. He has been involved in a number of Imaging project justifications and implementations. He can be reached at ssilk@franklincio.com  or by visiting www.franklincio.com or  www.bizimpteam.com.
 

By Mike Eller
Populist Cleaning Co.

 

Having the right cleaning company is a big deal. The best commercial cleaning companies have the knowledge and training to keep your workplace clean, hygienic and safe. They help you project the appropriate image toward your employees, customers, and other partners in the market place. Studies have shown that in a clean, orderly environment employees have a better attitude toward their employers and are more productive.

 

Selecting the right vendor for a long-term relationship should be your goal.  Choosing wisely saves time and money, but even more important, insures peace of mind. Your cleaning staff has regular access to personal workspaces, board rooms, break-rooms, and rest room areas. They have keys to locks and security information for your building. These are huge issues from a risk and liability perspective and should be taken very seriously during your evaluation phase.

 

How can you make sure you’re making the right choice? Be prepared and allow enough time for the entire process to unfold. Choose a cleaning contractor that can pay attention to what you consider to be the most important aspects of your building: clearly expressed expectations matched with customized specifications from your vendor offer a great starting point to a long-term, professional partnership.

 

The following questions will help you assess your needs in terms of frequency, and necessary duties. The information compiled from your answers will provide a profile that will enable you to determine which vendor will afford the best fit for your company. The first part covers background information on you and your company. The second part will focus on important questions to ask potential vendors.

 

Part I: Questions to ask yourself

What cleaning duties do I need performed?

• Routine janitorial - vacuuming, dusting, bathrooms, trash/recycling
• Specialty services - cleaning refrigerators, washing dishes
• Seasonal services - windows, carpet, tile
• What supplies do I need ordered – rest room paper products. Etc..

 

What is the square footage of my facility/or the area(s) I need serviced?

 

How many bathrooms in my facility? Do I have locker rooms or showers?

 

Do I have any special or delicate surfaces in my facility that would require certain cleaning products (i.e., natural stone)?

 

Do I have any other special considerations (regular office parties, corporate meetings, lots of food events, regular after hours use)?

 

How many people work in my building?

 

What is the amount of outside traffic through my facility per day?

 

When and how often do I want the cleaning staff to clean?

 

What are my cleaning budget and payment terms?

 

Who will be responsible for providing cleaning and paper supplies (ordering, payment, etc.)?

 

What have I been most unsatisfied with in the past or former cleaners/cleaning company: (budget, security, communication, quality of cleaning, consistency, etc.)?

 

Part II:  Important questions for prospective vendors

How long have you been in business?

 

Is your company bonded and insured?

 

Who will have keys and access codes to my facility?

 

Do your employees have uniforms or ID badges?

 

Do your employees undergo background checks?

 

Do you carry workman’s compensation insurance on all employees?

 

What methods or procedures do you use to measure quality assurance?

 

What happens if I’m unhappy with the cleaning or some other problems arise? Look for a complaint procedure and strong commitment to customer service and satisfaction.

 

What kinds of facilities do you currently clean? What kinds of facilities or services cause you the most problems?

 

What do we need to know about your cleaning processes and practices to avoid potential misunderstandings?

 

Ask the vendor to provide their version of specs for your facility. Tell the vendor what you need, but also look for creativity and initiative on the part of the vendor such as potential cost-saving options. If requested, allow the vendor to tour your facility more than once. Taking a second look in many cases allows for a more thorough proposal and a much better understanding of the job at hand. It also shows a sincere approach to evaluating the details and the subsequent price for cleaning your facility.

 

You’ll also want to ask open-ended questions to assess communication style. For example: “tell me how you see your company staffing our building.”

 

Does the vendor answer your questions directly? Note whether the vendor asks pertinent questions and listens to you. Be wary of vendors who try to do all the talking. If they’re talking, they’re not listening, and if they aren’t listening now, will they listen later?

 

Finally, be sure to check references and referrals for qualified vendors.

 

Vendors that provide exactly what you ask for demonstrate their commitment to work hard for your business, and that they are serious about obtaining the contract to clean your facility.

 

Mike Eller is the President and co-owner of Populist Cleaning Co.
Mike has been in the commercial cleaning arena for about 25 years.  His company serves customers throughout southeast Michigan.
 

By Karen Sandborn
Marketing Director, Madonna University

 

Madonna University graduate students and their professor, interested in determining what small businesses consider to be Critical Success Factors (CSF) for doing business, conducted an exploratory study as part of Madonna’s qualitative research methods class, during the Fall 2010 and Fall 2011 academic semesters. Of the 53 small businesses (under 500 employees) that participated in the study, 45 were based in Livonia.

 

Purpose of the study:

• identify the current CSF of small businesses and
• interpret whether they have changed significantly from those shown in literature

 

Each student asked five businesses from varying industries the same 10 questions and recorded the responses. Once transcribed, the responses totaled 300 pages. Business identities were kept confidential, and all recorders were erased once the data was validated.

 

Results of the research:
Both groups of interviews revealed similar results, despite the diverse industries, sizes and legal entities of the participants. While this review process is ongoing, Madonna students learned that quality, customers and finances are the top critical success factors. These factors are similar to those reported in other literature.

 

Other conclusions:

• Many businesses said they had adjusted their CSFs due to the economic downturn. Between 30-39% believe these changes are permanent. 43-48 believe they are just temporary.
• The general economy and increasing operating costs were identified as the top hindrances to profitability, with financial issues and competition close behind.
• Obtaining financing has become more difficult for 37-43 percent of those surveyed. The remainder reported no effect due to good banking relationships, or not needing financing. Only one business said it was easier.
• Overall, businesses indicated many advantages to operating in Livonia

 

Next Steps:
Madonna University’s Patricia Pelavin, Ph.D., adjunct faculty member for the master’s class, wants to continue this project by embarking on a quantitative pilot study. “As a result of our qualitative research, we have compiled a list of critical success factors that we would like to have small businesses rank in an online survey,” said Pelavin, who is currently working to find a Chamber of Commerce, or small business group willing to share their list so the survey could be sent out sometime this fall. “We really need a list of 300-500 businesses in order to have an adequate pilot sample for this type of research,” she said.

 

When she meets with potential partners, Pelavin is quick to share the benefits of this type of research. “This is a wonderful opportunity for our students to gain research experience and to collaborate with businesses,” she said. “While the identity of the study participants is confidential, the results will be shared with them, so that they can make strategic planning enhancements for their companies. Everybody wins.”