Labor Eats Profits

Episode Notes

Transcript

The Un-Billable Hour

Labor Eats Profits

09/18/2019

 

[Music]

 

Intro: Managing your law practice can be challenging. Marketing, time management, attracting clients, and all the things besides the cases that you need to do that aren’t billable. Welcome to this edition of The Un-Billable Hour, the Law Practice Advisory Podcast. This is where you will get the information you need from expert guests and host Christopher Anderson, here on Legal Talk Network.

 

[Music]

 

Christopher T. Anderson: Welcome to The Un-Billable Hour, the Law Practice Advisory Podcast helping attorneys achieve more success. We are glad you can listen today on Legal Talk Network.

 

Today’s episode is about – well, I initially thought it was about people, we’ve done several episodes about people, and in a sense maybe it still is, but I think it’s more — the more I thought about it and when we put this show together, it’s really about production. It’s about efficiently getting things done, inefficiency in your production line basically using too much personnel, using too much time to get things done, to get things produced for your clients, to get the work that you promised them done reduces your gross profit, it eats into your gross profit.

 

Gross profit is you get the revenue, the billed amount, and then after you pay the direct costs of producing the product like that hourly work that you have to pay to get the product out the door, what’s left over after that is your gross profit. Like if you’re making a car, what you get the purchase price for the car then you got to pay for all the materials, the parts, the labor, and then what’s left over is your gross profit.

 

From that, you have to pay yourself, your salary and your profit, from that you have to pay for any marketing your business is going to do, and then for whatever is left over, you’ve got to run the business, you got to pay all the admin, the rent, the utilities, everything else to run the business.

 

So whenever you can perform the same quality of work for your clients unless you have more money that you can use for marketing or to pay yourself, your profits or both, and so really this episode is going to be about production, but it’s also about people and the title of today’s show is ‘Labor Eats Profits.’

 

And my guest today is Liz Goddard. Liz has — I’ve read Liz’s bio and she’s got entrepreneurship in her blood. I’ll let her talk more about though, she’s also got deep experience working with and managing people, together with her partner Nicole Grinnell, they have founded Cc: My Admin and I’ll let her give you the colemans and how to actually spell that all in a moment.

 

 

But their company solves the dilemma that a lot of us face it, you can’t grow your business without employees but you’re often unable to afford the employees you really want without the growth. And so, it’s sort of a catch-22 and they come at that problem for you.

 

I, of course, am your host, Christopher Anderson, and I am an attorney with a singular passion for helping other lawyers achieve success with their law firm businesses.

 

In The Un-Billable Hour, every month, we explore an area important to help you be a more profitable lawyer through growing your revenues, getting back more of your time and/or getting more professional satisfaction from your business.

 

The Un-Billable Hour is dedicated to bringing you guests each month to help you learn more about how to make your law firm business work for you instead of the other way around.

 

And of course, before we get started, I do want to say a thank you to our sponsors. Answer1, Solo Practice University, Scorpion and LAWCLERK.

 

Answer1 is a leading virtual receptionist and answering services provider for lawyers. You can find out more by giving them a call at 1-800-answer1 or online at www.answer1.com, and that’s of course www.answer1.com.

 

Solo Practice University is a great resource for solos, no matter how long you have been practicing. Make sure you check out solopracticeuniversity.com and learn how to run your practice better.

 

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And again, today’s episode of The Un-Billable Hour is ‘Labor Eats Profits’, and my guest today is Liz Goddard, Co-owner of Cc: My Admin.

 

Liz, welcome to The Un-Billable Hour.

 

Liz Goddard: Pleasure. Thank you for having me. I’m very excited to be here.

 

(00:04:55)

 

Christopher T. Anderson: I am excited to have you because as you heard in the intro, I mean this is — we’re going right at the part of what we talk about, about getting more done, getting more profit, getting more quality for your clients by doing less, and that’s kind of what I’ve understood that you have basically dedicated your life and certainly your business to.

 

So, if you don’t mind my introductions are always ridiculously short and very uninformative, so I’d like to give you an opportunity, if you will, to tell a little bit more about your background that led you to come at this problem and particularly in legal.

 

Liz Goddard: Absolutely. So my background is it kind of starts, as you mentioned, it’s kind of in my blood. My father was the serial entrepreneur and he owned many different businesses throughout my life and I saw us either be feast or famine depending on them. And I learned just by watching him completely be a slave to the business and struggle to grow in certain areas and if it did grow, it was a tremendous impact on our family.

 

And then, I felt that personally because he passed away suddenly when I was 19-years-old, I was a sophomore in college and got the call and had to come back then with my brother, he was also very entrepreneurial, cut all the sentences on the board and run this company.

 

And I saw how — I mean, one, inefficiently it had been done because it realized slowly on him, he did have people working underneath him and working with him, but ultimately didn’t really share his vision and have the process in place to really scale. But also I was just young and it was a very difficult experience and I’d heard that in the height of the recession.

 

So once we dissolved that company, I went on and said I’ll never own a small business again, like for total suckers, right? And I got into corporate HR.

 

Christopher T. Anderson: Well, you certainly had a trial by fire, yeah.

 

Liz Goddard: I did, I absolutely did. So I went and got a job in Human Resources because I loved humans, which is a funny joke in HR, and I’m sure with attorneys as well, but I really had a strong corporate career there for seven years and learned how inefficient corporations can be when they start hiring tons and tons of people and how people just accept that I need to hire people and you’d be great out today, and yes, I’m going to hire them for 40 hours worth of work, pay all this extra stuff, and then they’re probably only going to work 30 hours a week for me because that’s just what you do, right?

 

So, when I got burnout on HR, I kind of said, I need to take a step back, I don’t know what I’m going to do. I reached out to my good friend, who’s now my co-owner of Cc: My Admin and she had started a virtual assistant business and she was taking on small clients to the point where she was at bandwidth and said, I think there’s a lot of businesses out there that need an entire team or assistant and we could help them.

 

And so we’ve partnered together and our first client was an attorney, and I quickly learned how much attorneys need to staff well without having a fix with that.

 

Christopher T. Anderson: Yeah, because attorneys really do face that and we’ll talk about that in a little while with that dilemma that we talked about at the top of the show just like they know they need someone, but they’re really worried about affording it particularly since I think you used a great word with regarding your dad’s business but growing up you tasted that feast or famine.

 

And although in this show, we talk about how it doesn’t have to be that way that is the reality of a lot of lawyers that haven’t worked with me yet, and so they’re really reticent to hire full-time when their needs go up and down and up and down. So this really speaks to that, and so, you say your first client was a lawyer, did that lead to kind of really understanding the legal space as opposed to maybe other businesses?

 

Liz Goddard: It did and when we service a multitude of businesses but we found specifically that attorneys and solo and small firms really need quality support but their caseload is Ebb and Flow and we realized that they — sometimes they’ll bring a lot of people on because they got a big case and they have to let them go or they have a paralegal and oh, they are 00:09:09 now, but they’re not ready to hire another.

 

And so, I quickly learned the needs of a small and solo firm and it just made so much sense that they didn’t need to hire directly in all cases.

 

Christopher T. Anderson: Yeah, and what I’d like to — it’s kind of, I want to do this show a little bit backwards, okay, I want to talk about the solution, I want to talk about not necessarily just what Cc: My Admin does, but the experience that you’ve grown to know about why not hiring full-time mate might work.

 

But before we get there, I want to get to some of the effects that were seen by people not — by delaying hiring overworking their people and one of the first things that I wanted to talk to you about was that I think you’ve mentioned that you experienced, I’ve certainly experienced in my work that a lot of small firm owners and a lot of small law firm lawyers lose focus on getting new clients. And that this is actually part of that.

 

(00:10:00)

 

So could you talk a little bit about why you feel that a lot of small law firms are not getting focused on getting new clients or even building their current clients around this problem?

 

Liz Goddard: Absolutely, and one of the first things I noticed was an attorney either goes out on their own or maybe they’ve always been on their own and they hung their shingle and they think, great, I’ve got a client or I’ve got a couple flagship clients.

 

And then they realize that it’s more than just practicing law, it’s more than just doing that billable hour and they start saying, oh wait, I have to market, oh wait, I have to prospect and I actually have to bill the time. And then, a client really can’t afford for me to use my rate, so now I’m going to do the work like a paralegal would do, but I’m just charging the paralegal right, and then I need to make sure that I’m billing, and so before you know it, these owners of the firm are spending less time getting more clients and they’re spending all their time there up till midnight or 2 o’clock in the morning making sure their time is in or making sure they’re billing their clients, making sure those Facebook ads are going out.

 

And they’re exhausted and they’ve lost track of why they started this business, which was to get more clients, the service of clients, to be able to bill at what they really were, and so that’s just the common thing I kept seeing.

 

Christopher T. Anderson: Yeah, and you’re so right. I mean, that’s what brings a lot of lawyers to my business as well is that they — I think the way you just phrased it is exactly if they’ve lost sight or I think it’s to better save lost connection with why they got into this in the first place because they — in the words of ‘The E-Myth Revisited’, the woman in that book loved baking pies, her grandmother taught her to bake pies, she loved baking pies and so she opens a pie business. And before you know it like she’s hating making pies because it’s all she’s doing and the business is demanding so much more of her.

 

And then what we see is that these lawyers that get caught up in this bad, vicious cycle actually hesitate to get more clients, hesitate to do anymore marketing, hesitate to do more sales, hesitate to grow their business, because in their minds they directly associate more clients more business with more work less sleep, more aggravation, less knowledge of what their kids look like, and that’s where they find you and sometimes where they find me.

 

Liz Goddard: To your point, I have talked to so many attorneys who said I’ve turned off my marketing funnel because I can’t take anymore work. And I think, what?

 

Christopher T. Anderson: Yeah, crazy.

 

Liz Goddard: That’s ridiculous. That’s not the answer.

 

Christopher T. Anderson: No, no and what they don’t realize with that I don’t want to go too much sideways on this, but I want the listeners to hear this, right? The problem with that is when you turn it off and turn it on, and turn it off and turn it on every time, you do that you lose momentum, and every time you turn it back on it’s more expensive, and the process of getting new clients gets harder and that inconsistent marketing costs you so much. And so, what they find is going back to your words, feast or famine right?

 

They turn it off because they’re too busy, then they do all the work and uh oh, there’s no work left to do, now there’s no money coming in, let’s turn on the marketing and one month goes by, two month goes by, okay, now the work is coming in, oh now, I’m too busy, I’ll turn it off and that rollercoaster just keeps going.

 

And I think what we’re going to be talking about here is a really big solution to that, but I want to get to one more effect and ask you about this because we talked about how they get hesitant to do marketing, they don’t even have time where they’re spending all night doing their bills, which is like the bane of everybody’s existence.

 

And then this horrible thing happens that they’re working harder, they’re working longer, they get a little bit new business in but they see that their net profit is not increasing. What has been your experience with that? A lot law firm owners experience a lack of increasing profits even though they’re working harder.

 

Liz Goddard: I think this is probably the most demoralizing thing to any business owner and partners of law firms are definitely no exception to that. They think I’m working so hard to gain these new clients or the services of clients and what they’re doing is they’re wasting their time or they’re spending more money than they need to but maybe it’s that that maybe where their money is going.

 

It may be that’s that, their focus on bringing all these clients but they’re not servicing the current ones and so they’re just that you’re having a more attrition. So there’s multiple ways you could look at that, but ultimately, you’re spinning your wheels and you’re not going anywhere.

 

And what I see and I use this example there’s this great book called ‘Essentialism’ and it talks about a person, who’s really good at multiple things and little arrows are shooting out of a circle, and their energy pins different areas and they’re getting just infinitely further.

 

But, if they were to funnel on one thing or really focus energy on what they’re really, really good at, to their strong suit, they’re going to fly in one direction. And so, that’s what you see so often is people who are working so hard and at the end of the day they think, well, I didn’t take anymore money home. And that was one of the problems that we tried to address when we started the company.

 

Christopher T. Anderson: Yeah, and you said the book is called ‘Essentialism’?

 

Liz Goddard: ‘Essentialism’ and the author is actually 00:14:57 as well, but if you’re listening look at that, that’s a great book.

 

(00:15:00)

 

Christopher T. Anderson: Yeah, and then for everybody even through this it is Michael Berger, I did finally remember that one. Okay, great, so now that we’ve thoroughly depressed our listeners about all of these problems that occur and by the way this pessimism or this frustration of decreased profits doesn’t usually even intake into account the fact that that lawyers work in 60, 70, 80 hours a week.

 

They’re not even like counting the fact that their billable rate has gone to like 60 bucks an hour. But we won’t even go there but now that we thoroughly depressed them we’ll take a break and what we’re going to do when we come back? So we’re talking with Liz Goddard of Cc: My Admin and we’ve just kind of gone over the negative effects to a law firm of being in this cycle of this catch-22, if you will, of really knowing you need more employees.

 

But at the same time not feeling like you’re able to afford them and that causing these bad effects of being afraid to market, turning off your marketing sometimes, not getting bills out on time and not seeing increasing profits.

 

When we come back, Liz, I want to talk to you about what the pros and cons are about hiring direct and/or avoiding hiring direct is what just talked about versus outsourcing and how outsourcing can really work for a law firm? But we’ll do that right after we hear a word from our sponsors.

 

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Christopher T. Anderson: And we’re back with The Un-Billable Hour. We’re talking with Liz Goddard and we’ve been talking about the effects that a lot of law firm owners, particularly that are just growing their law firms from solo, true solo to a little bit bigger, but this really happens all along the spectrum about getting caught between knowing they need new employees and not feeling they can afford them and all the negative effects that happen in their businesses.

 

And what we’re going to talk about now is what to do about it, right? Because we don’t want to leave you all hanging like, okay, life sucks. There’s actually lots of great things you could do to get out of that cycle and to really goose the profits of your business, and make practicing law and your business a lot more fun.

 

So, Liz, what I want to ask you about first is outsourcing, like I want to talk about the pros and cons of direct hiring which means hiring an employee, whether it’s part-time or full-time and outsourcing that employee. So the first thing I want to do is like really define this.

 

When you hire a W-2 employee, I think a lot of times we don’t really consider all the costs of that. So can you kind of run us through what a business owner or what a law firm owner should be thinking about when hiring a W-2 employee?

 

Liz Goddard: Absolutely. So a W-2 employee, as you mentioned, it could be full-time, it could be part-time, but when we’re talking about a W-2 employee that means that you are going to have to pay your percentage of taxes, you are going to have them do the PTO, if you have certain amount of employees you’re going to do the — you’re going to do the fringe benefits such as health, dental, life, a bunch of other things that you may either consider that in fringe finishes or retention.

 

You’re going to be paying for paid holidays. You’re going to get depending on the size of the company, you may have to do certain audits, you may have 401k matches, so all of these benefits start quickly adding up that total. So maybe you’re used to hearing a base rate is $15 an hour, what you really do need to consider are the taxes, the PTO, vacation. Then, not to mention, equipment; so for the W-2 employee, they can’t use their own equipment, they need to be using something that you provide and it needs to be owned by the company as well as everything that they do is paid for by the company, right? There typically you can say they can’t work for anybody else so then you’re responsible for filling up their time that they need.

 

So it’s always this balance between one recruiting the employee but also retaining them. And so, yes, you have to do all the legal things you need to do to have an employee, but then you also have to remain competitive in the market in order to keep good staff.

 

Christopher T. Anderson: Yeah, and quite honestly, these days, a lot of the law firms I work with are having a harder and harder time finding good people and a harder and harder time keeping them, so this has become I think even more of an issue than it’s been in the past as the labor market gets tight.

 

(00:20:05)

 

Liz Goddard: Oh, retention is one of the biggest expenses for employers, because the expense of not retaining them is going to be having to recruit and train and the expense of bringing somebody on board, it’s a very expensive thing to, A, hire somebody, but then also to retain them and if you don’t, the cost of having to bring somebody else on. It’s a big issue right now. I mean our economy is doing very well, but that comes with that downside of man, people are poaching my employees and oh, it’s really hard to find good work.

 

Christopher T. Anderson: Yeah. And so I think a lot of people want to do this though, because they want to have that benefit of having the team that they recruited do things the way that we do things around here; this is my firm, we do things the way I do them and we produce the work that is reflective of my business.

 

So how can a law firm owner, how can a business owner get the benefits — those kinds of benefits of having a team without recruiting them, paying them and retaining them like a traditional W-2 employee, how can they get the same benefits without all that other stuff?

 

Liz Goddard: There is no doubt about it, the negative side that we talked about with the W-2 employee comes at the cost of the pro side of having an employee, which is control, right?

 

Christopher T. Anderson: Yeah.

 

Liz Goddard: You get to say when they log on, when they log off, you get to have complete control. So the answer to your question is sort of blending the two together. So having a 1099 or outsourcing using a vendor means that you do have to give them some flexibility, but you still call the shots in terms of deliverables. So, you set your expectations of how they should follow your processes, how they should interact with your client, so you are still getting to control that portion of what they are doing.

 

But what you are not controlling is hey, you are going to clock in from this day, this time, this time and you are going to work Monday, Wednesday and Friday. It’s really more using them in a sense of, this is what I need done and I need it done by this date. And so in that sense you do have control and control over things that really do matter.

 

You get to say, this is how I would like it to be completed and as long as you get it done when I need it done, I don’t care when you work.

 

So the downside of a 1099 is they are not going to be on call from 9:00 a.m. to 6:00 p.m., but the good side is they are going to get everything they need to get done or they are not meeting your requirements as a contractor and then you can let them go.

 

Christopher T. Anderson: Yeah. And like you said, this could be 1099, like the law firm could do this as a 1099, just have some contractors and I just have to say, not giving legal advice here on this show as to when they are a 1099 versus when they are an employee, just make sure you consult with a — if you are doing it yourself, make sure you are consulting with a labor or employment lawyer to make sure you don’t run afoul of thinking they are 1099.

 

Because you know what, not for nothing Liz, I know unfortunately a lot of business owners who think like that, if they just say you are a 1099 now that that makes it so, and they are often rudely awakened that that’s not so. That’s where using a vendor can actually be very helpful.

 

Liz Goddard: Yes. And Chris, that makes me cringe, that makes me cringe when people say like oh, they are 1099, I am thinking — my background was in human resources, and I think ooh, it’s not. I mean if you are hiring them directly as a company, you need to be very careful and speak to an employment attorney to make sure that you understand the clear lines and that is, again, as you said, a huge benefit to using a vendor, because they have already had those conversations with employment attorneys.

 

Christopher T. Anderson: But what I wanted to like ask you to talk about with regards to this, because you said, you lose some of the control of having them there all the time, but using a vendor or using a 1099, but since you are a vendor, let’s speak to it from your perspective, like do you still — are you still able to retain the control of, this is how we do things, this is the process I want you to follow, this is the checklist, this is the templates we use, this is the work product, what it should look like, can you still accomplish those things?

 

Liz Goddard: Yes, you absolutely can and I can give you an example.

 

Christopher T. Anderson: Yeah.

 

Liz Goddard: So let’s say you are using a paralegal and you want to say hey, these are the templates that our firm likes to use, here is the client and here is the objective and I need it filed by X date.

 

Christopher T. Anderson: Right.

 

Liz Goddard: Those are terms that this is how our business runs and our processes, but I am not telling them how to do the work, I am not telling them when to do the work, and therefore that 1099 relationship is still intact and very clear.

 

Christopher T. Anderson: Good. Yeah, so that makes a lot of sense, it’s a lot more comforting.

 

What kind of roles have you seen lawyers be really successful in outsourcing? Can you outsource everything or what roles are best outsourced from a firm?

 

Liz Goddard: Well, every firm is going to be a little different because each attorney has their strong suit, but generically speaking, a solo to small firm needs someone who is going to be answering those leads coming in, so answering phone calls, and the great thing about what we do and even your — one of your sponsors, Answer 1, they are going to answer those calls and you are not paying for someone to be on roll. Like you are not going to have someone sitting at a reception desk who is twiddling their thumb for three hours a day because you aren’t really getting that many calls.

 

(00:25:02)

 

So we set somebody up with a virtual receptionist who is going to take all their calls and they are also going to calendar anything and they are going to make sure that you are not answering the phone, so you are not giving away free legal advice, which we all know happens when people are calling just for a quick question.

 

Christopher T. Anderson: Yes, yes.

 

Liz Goddard: So that’s incredibly important and that person is also the legal assistant and they are going to be handling anything that is not billable to the client. You should not be paying a paralegal to be doing something that is not billable and you certainly shouldn’t be paying yourself or another associate that isn’t going to be billable to the client.

 

So we partner them with a legal assistant who handles the e-filing, who handles drafting engagement letters and, again, depending on the practice area, it’s going to decide what that legal assistant is going to be doing, but they handle — they are the lowest price point and they are going to handle all the things that’s not billable.

 

And then they would also get a paralegal and they are only going to use that paralegal to be doing billable tasks, and we say if that paralegal’s hours that any vendor is billing you is 85% or higher billable, then you need to look at how you are running your firm, because it’s not running efficiently.

 

Christopher T. Anderson: Right.

 

Liz Goddard: And then of course you as the owner or an associate needs to be doing primarily billable tasks, and then we kind of set all of that off with somebody who does just time entry and billing. Actually when I said earlier the legal assistant was the lowest paid one, actually that one who is doing your time entry is going to be your very lowest paid outsourced person, and they are just entering your billable time and they are going to make sure that it is entered into your case management system or they are sending it to the carriers, making sure that it’s word just correctly. They are keeping up with carrier guidelines, so you don’t get push back on your invoices. They are making sure invoices go out and they are making sure you get paid.

 

So often I talk to fellow attorneys who are like oh, I did the work but I forgot to invoice them and it’s like then why did you even do it.

 

Christopher T. Anderson: Yeah, indeed. Very often like I have a saying, your customers and clients will have the same level of urgency around paying your bills as you had them getting them out the door, and that is — yeah, that’s a huge bane of the existence.

 

So you are saying you can actually outsource that time entry and billing and collecting the money, those are all three things that can be done outside the business?

 

Liz Goddard: Absolutely. In fact, that should be their sole role. They should wake up in the morning and say, I want to look at Chris’ receivables and see who hasn’t paid and let me call them, let me send them emails, let me see what’s going on, let me update Chris on what’s outstanding. I can’t get a hold of that client, maybe he can. Because when you are splitting your attention to so many things, something has to suffer, and that should not suffer because that’s your cash flow.

 

Christopher T. Anderson: Yeah, that alone, that alone would make so many of listeners of this show make their lives so much better. That’s a really, really great tip.

 

We are going to hear from our sponsors here in a second. We are talking with Liz Goddard and we are talking about the advantages of outsourcing functions of your business so that you can focus and your business can focus on what really matters and also so that you can scale, you can flex up, flex down with the employees.

 

We just talked about outsourcing that time entry and billing management, which is an unbelievable concept, that’s fantastic.

 

What I want to talk about when we come back Liz is I am going to ask you a little bit about the owner him or herself. You mentioned a little bit about the owner like needing to focus on billable stuff, but what I want to really talk about is like how owners get caught up doing a whole bunch of stuff that they shouldn’t be doing and I am going to ask you whether you can outsource that as well, like both business and personal stuff, and I have got a few more questions for you. But we will do all that right after hearing a word from our sponsors.

 

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[Music]

 

(00:29:51)

 

Christopher T. Anderson: And welcome back to The Un-Billable Hour. We have been talking with Liz Goddard. She is the co-owner of Cc: My Admin. And we have been talking to her about the ability to use outsourced or outside law firm contractors or vendors that supply contractors to get a lot of functions done that need to be done more and less as business goes up and down so that the law firm can focus on the important stuff.

 

And so Liz, I said that I wanted to ask you about, when we came back, about the owner him or herself. I think a lot of owners get caught up doing, well, we just talked about billing, so that’s a huge one, but just other stuff like — just administrative functions, checking their email, reading the mail and there is a bunch more, I am sure you know more than I do. What kind of things can the owner take off their plate so they can focus more on being a business owner?

 

Liz Goddard: The answer is it varies by each attorney, but the way we focus is we say — speaking to the owner and saying, what is the one thing that you are really good at, that you are passionate about and what helps your firm grow, and they list that out. And then we say, let’s flip it, what stays at the bottom of your to-do list or what do you push off because you really don’t like it or what keeps you distracted. And what we have just done is we have now created the delegation list.

 

And so maybe that is remembering to put my kids’ soccer games on my calendar. Maybe I get 100 emails a day and three of them really matter, three are the ones that I actually have to answer, and so we will use the inbox as an example. So then we supply them with a legal assistant, who really just becomes their right hand. And yes, they are e-filing and they are handling the calendar and they are doing client intake, but they are also helping streamline the owner’s life, and they are responding to all the emails. They are putting things on people’s calendars. They are taking it to the right team member if it doesn’t need to be handled by the partner. That’s a great example.

 

Another one is, I was talking to a couple the other day; both attorneys at two separate firms, and their quality time together at night is entering their billable time, how romantic at midnight. And so they are both watching TV and entering their billable time. And so we took over that portion of it and they are like wow, we got two hours back from our day.

 

It’s things that you think that are just status quo that just don’t have to be there, like don’t accept the norm of what has always been, because just the way people are doing business is completely changing and so should the way you staff and so should be the way you live your life, because you now have the technology, there are case management systems out there that are just helping you run your firm, like you should take advantage of that.

 

Christopher T. Anderson: Yeah, no, I think that’s a really good point too. I mean we are all getting used to it, right, we are getting used to the fact that we can have a car ride anytime we want one just by using an app. We are getting used to the fact that we don’t — when I was a kid, before we went on vacation, you had to go to the bank on Friday and get money, and you had to talk to a teller, I mean all these things are changing, changing, changing, and the way you staff and solve things in your law firm is changing too.

 

And I love the examples of things that — you are right, law firm owners are out there just thinking these are things law firm owners do. Law firm owners do their own books. Law firm owners do their own bills. Law firm owners call and do collections. Law firm owners pay the utilities for the business. Law firm owners — all these things that you are talking about, you are a good — I love the words you use, a right hand person can do for them and make their lives much better and enable them to focus on the business.

 

Liz Goddard: And I would add to that and say, I have seen firms say listen — we have gone to small firms and large firms and said hey, if you don’t want to enter your own time and you want an assistant to do this, that’s fine, but my expectation is that if you are no longer entering your time, then you should have an hour extra of billable time this week or this month, because that’s when you really start seeing that benefit of delegating.

 

So the challenge is yes, trusting and delegating and investing in that person, but the flip side is that like, now go do what you are good at, like do what you actually enjoy. Wouldn’t you rather handle — get three hours of something you don’t enjoy and do one hour of something that you get paid for and actually make more money, like that’s the dream.

 

Christopher T. Anderson: Yeah, either bill or make rain, right, one of those two things, so get some marketing done, get some networking done, get some sales done or get some billing done, billable work I mean, not writing out the bills.

 

I do want to ask, because a lot of people are going to think about this, like there are some things, taking my cleaning, picking up the kids, there are some things that just need a warm body, you have to have a physical person, is there a non W-2, can you — I think the word is insource, can you still have this contract relationship, can you have a non W-2 solution for some of that stuff where you need admin help on an ad hoc basis, but it needs to be a warm body?

 

(00:35:00)

 

Liz Goddard: I would be careful with having somebody in the office doing work and considering it a 1099. So again, I would advise that you talk to an attorney before you do that.

 

But what we have seen people do is say hey, 90% of my administrative work I want done by higher tiered US based people, but I really need someone to scan paperwork back at the office, and that’s where we say, we don’t — your firm may not be completely virtual and that’s okay. You may want to hire somebody who is in college and you pay them $10 an hour, and yes, it’s W-2, and maybe they work four hours a day, but they come in and they handle that ad hoc stuff.

 

Occasionally we are able to help attorneys where we can run — do a runner almost, send in scanned documents and then move on, so that is a possibility, but I would be careful before you bring somebody in the office and call them a 1099. But what we see often is someone brings them in at a much lower price point, that can handle just the true handing documents if it’s paper, but most companies really don’t need that anymore, because we are such a paperless world out there.

 

Christopher T. Anderson: Yeah, at least most of us aspire to be, right? So as we get close to the end, one of the things I just — I can — I know this is a podcast and I can’t really hear my listeners right now at this very moment, but I kind of can, and one of the things that I am feeling through the universe that they are concerned about in this conversation is security.

 

When I hire people in my law firm, I have my hands on them, I give them the stern talk about confidentiality, I give them a stern talk about keeping — not talking to other lawyers about our stuff. How do we solve for this? How do we talk to lawyers about being able to outsource, but still solve for their concerns about security when working with virtual team members?

 

Liz Goddard: That’s a huge concern. So the fact that you are feeling your audience listening — feeling that is accurate, because we get that question all the time. And the answer is a really great agreement. So the agreement that you are working with whatever vendor you are using, you want to make sure that you really are covered, not only from a confidentiality standpoint, but make sure that they have the insurance to back it up, which is actually a lot nicer than — you can’t really get that if you hire a W-2 employee. You absorb all of the risk.

 

So with using a vendor you have somebody and you have, if they are good, a strong insurance policy to further protect you and make you feel comfortable. Additionally, you just want to make sure you check like how, if this is a virtual environment and they are not sitting on your computer, how are they handling your documents. And I would get you to look into what are their practices to make — to ensure their paralegals and legal assistants aren’t storing things on their desktop.

 

We have our own procedures that we do, that we have thorough audits on and we make sure to go into that, but you just want to make sure you are double-checking the policies and procedures of that vendor and make sure they align with your security comfort, as well as, I am talking to audience of attorneys, make sure you read the agreement and understand that confidentiality provisions are in there.

 

And occasionally some people say, you know what, I like your agreement, but I love a belt and suspenders approach, I would love for you to sign an NDA, and that’s no problem.

 

Christopher T. Anderson: Fantastic.

 

Liz Goddard: And if someone has a problem with that, you probably don’t want to work with them.

 

Christopher T. Anderson: Exactly, very, very cool. All right, for our last question, I was hoping you might be able to help the listeners here. They are listening to this thing, this sounds great, but how do I know with this particular function, whether it be a virtual ad, or an assistant for me, or a legal assistant or a paralegal, is there a way, is there a test that you can give me to help me decide whether this is a hire or this is an outsource, what would you say to that question?

 

Liz Goddard: When you say is there a test, do you mean here is a list of tasks and how do I know which can be outsourced and which can be brought and how?

 

Christopher T. Anderson: Yeah, let’s say just I have a job description. I am thinking about hiring a legal administrator or a legal admin, someone to help me with legal work, with copying, or I have a paralegal, or I need a law clerk or whatever, how do I make that decision about whether this is a good one to hire or a good one to outsource?

 

Liz Goddard: There is not a test that I know of and we don’t use necessarily formatted tests, but the way we handle it is we go through what we call a needs assessment and we say, lay out the good, bad and ugly of your firm and let’s see what we think you need. And ultimately you can go hire W-2s for that or you can use a vendor or you can use three different vendors. I mean obviously we want you to use one and we want it to be us.

 

And so the test really is to say hey, these are not 1099 functions, you really need to hire a W-2 for that, I will be the first to tell you that, mainly because I don’t want the risk as a business owner, and so we will push away work as much as we take it.

 

(00:40:00)

 

Christopher T. Anderson: Great. So a good vendor, a good ethical vendor will actually be able to, I think the term you used was do a needs assessment and that’s perfect. So just talk to a good vendor, do a needs assessment and they will help you figure out whether this is one that can and should be outsourced or really should be hired in-house.

 

Liz Goddard: I think that’s great.

 

Christopher T. Anderson: Yeah, fantastic. Well, that wraps up this edition of The Un-Billable Hour, the Law Business Advisory Podcast. Our guest today has been Liz Goddard, the co-owner of Cc: My Admin.

 

Liz, thanks so much for being on the show.

 

Liz Goddard: Chris, thank you so much for having me. Excited to talk to a lot of attorneys, we love them, and we want to see them thrive, as I know you do.

 

Christopher T. Anderson: Yeah, absolutely. To that point, the show is only 35 minutes long and I am sure that we have left a lot of questions unanswered. So if people want to learn more about Cc: My Admin or just have some questions that they want to get answered by someone who knows a lot more about it, I know your website is www.ccmyadmin.com, but is there a Twitter or a Facebook or any other way they should get in touch with you or email?

 

Liz Goddard: We do. We have Facebook, which is just Cc: My Admin. We have Instagram, again, Cc: My Admin. You can look me up on LinkedIn, Liz Goddard. We also have a business page, but the best way to get a hold of us is to go to that website, everything you want to know is on there. There are Frequently Asked Questions. If you want to reach out, talk to somebody, you can click on Talk To Us and we will schedule an appointment. So that’s really the best place you can go is our website.

 

Christopher T. Anderson: Perfect. Thank you. All right, this is Christopher Anderson and I look forward to seeing you next month with another great guest as we learn more about topics that help us build the law firm business that works for you.

 

Remember, you can subscribe to all the editions of this podcast at legaltalknetwork.com or on iTunes. Thanks for joining us and we will see you again soon.

 

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Outro: The views expressed by the participants of this program are their own and do not represent the views of, nor are they endorsed by Legal Talk Network, its officers, directors, employees, agents, representatives, shareholders and subsidiaries. None of the content should be considered legal advice. As always, consult a lawyer.

 

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Thanks for listening to The Un-Billable Hour, the Law Practice Advisory Podcast. Join us again for the next edition, right here with Legal Talk Network.

 

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