The day and age of omnipresent driverless cars will be here sooner than you may think, according to a recent Washington Post article by Ashley Halsey III. The cars are really quite impressive. However, they are still imperfect. For example, they don't yet have the ability to interpret hand signals from a policeman.
Similarly, small law firms and solo practitioners cannot run perfectly without a "driver"— that is, an executive director. Law is a business, and lawyers want to better manage their practices. Hiring a part-time executive director is one way that a solo or small firm can better manage the practice, deliver higher-quality legal services, and make more money doing it.
An executive director manages the firm. He helps the lawyer identify the problem areas, suggests and creates solutions to the problems, arranges for the personnel to be trained to handle the solutions, and provides follow-up involvement and guidance.
Within that general framework, the specific tasks that an executive director performs are many and varied: facilitating and participating in the process of preparing a business plan; preparing or facilitating the preparation of a marketing plan; preparing or facilitating the preparation of cash flow projections; collecting accounts receivable; establishing and maintaining good relations with the firm's creditors, including, but not limited to, the firm's banker; organizing the office routine; hiring necessary employees as the firm grows or as new personnel are required to replace retiring personnel; facilitating and arranging for the training of employees, both at the staff and professional levels; buying new equipment; creating purchasing procedures for supplies; leasing new facilities; and all the other, myriad details of running a practice as a business.
When discussing the functions of an executive director, most people imagine a full-time, on-site employee. However, the above tasks, while numerous, are not all necessarily intensive and can be handled by the right person on a part-time basis, either on-site or from the office of an independent contractor.
In a law practice, the lawyer is the revenue center. The executive director will not produce revenue. However, the executive director will produce — or cause the production of — profits, in several ways.
First, the executive director can do tasks that the lawyer would otherwise have to do, freeing up the attorney to turn his attention to more lawyering, thus, increasing overall firm revenue.
Further, the executive director will be sensitive to the costs that the firm incurs through maintenance of the library, health insurance and other big-ticket costs. By focusing on reducing those costs, the executive director usually can facilitate savings for the firm.
Most lawyers, especially solo practitioners, concede that they spend 10 to 20 hours a week doing what they consider to be management activities. Assuming a billing rate of $100 an hour (a very modest rate, to be sure) and 15 hours a week, the value of the time expended by a lawyer in management activities would be $1,500 a week, approximately $6,500 a month, and approximately $78,000 a year.
If just half of those management activities were taken over by an executive director, the gross annual savings would figure to be $39,000. The director has to get paid, of course, but a part-time salary costs the firm substantially less than the amount you and however many of your law firm colleagues would save in the process.
By hiring a "driver," the lawyer, especially the solo practitioner, benefits by having a better-run organization that is poised to accept growth and deliver higher-quality legal services to the clientele. As long as the lawyer is either lawyering in the present or marketing for the future, an executive director will be valuable to the team.
