People look to lawyers for wisdom. Help me into or out of this situation, with the least friction possible. And lawyers are trained pretty well to manage risk. But lawyers and law firms themselves can get into some pretty sticky situations when it comes to HR compliance and bookkeeping. This is because they don’t have the time (or training) to invest in HR and a professional back office. Especially in the case of a growing law firm, it is simply not always easy to follow HR and back office best practices.
Here are 8 things we’ve noticed about growing law firms:
1. Just because you’re a law firm…
Just because you’re a law firm doesn’t mean that you can’t wind up in hot water. Many law firms get sued by their employees or become subject to governmental investigations that can lead to penalties and fines. It’s the same thinking as just because you’re a doctor doesn’t mean you can’t get sick. Employment lawsuits happen and they can pop up at any time. Smaller firms hope to mitigate the risk through a more cordial work environment, but those can bring about oversights and HR mistakes. While it’s smart to not overpay for unnecessary services (see No. 7), it’s also smart to strike a balance and not become penny wise, pound foolish. Some investment needs to happen to ensure you are compliant.
2. Your employment lawyer friend from law school is not an HR expert
There is more to HR than having a good employment lawyer prepare your documents. Anyone who has been involved a workplace lawsuit or investigation knows that every email, every text message, and every little detail can be twisted and turned by a claimant, regardless of whether or not the original documents are airtight. So there’s more to HR than having great docs in place. There’s day-to-day stuff that needs transparent processes, solid documentation, and just plain, old fashioned “getting things done.” Benefits administration and payroll management need experts who can do it compliantly and correctly. And just because you’re an ERISA attorney or argued an FLSA case doesn’t mean those skills will transfer over to operational effectiveness.
3. Your billable time is gold, best spent not in back office
We’ve talked about giving more weight to your hourly rate here, making sure that you and your team are spending as much time as you can on truly billable work. Leave the rest to a professional, yet cost-effective, back office team or person. We can’t stress this enough to bolster your P&L: you’ll need to break an egg to bake the cake.
4. Run your books clean and clear
Bookkeeping can take on a variety of forms. Here’s our primer on it: Bookkeeping 101, for a quick overview. Keeping the books clean and clear means closing every month (or quarter, depending on your volume) and reviewing the work being done. If you find yourself stuck with this task (sucking your billable hours like a vampire), or you’re paying for a bookkeeper and struggling to keep them busy by giving them HR tasks as well, then you need a paradigm shift. This is the type of set up that can cause HR liabilities. Find a solution that will give you expertise in both fields while not eating up your profits.
5. Automate your back office as much as feasible
Since you are a growing law firm, you may not have had the luxury of getting everything set up to run smoothly in your back office. Using a cloud-based system for all things payroll/benefits administration/bookkeeping and automating these processes, will certainly save you time and in the long-run money. The key is to be sure the systems you use are compliant and the documentation you generate is available and in order for easy reference.
6. Integrate your systems
When one system feeds data into another, you can get your back office groove on. Having one place for hourly tracking, 401k administration, payroll management, benefits administration, bookkeeping, and compliance trainings enables swift processing and administration. Follow the mantra: Enter data only once. Choosing a stack of systems that integrates well requires some research. Using APIs and an integration service like Zapier can get you there.
7. Avoid non-necessities
Sometimes an HR system or service will try to overwhelm you into a contract with fancy features and trainings available. Pay for what you need, not what you don’t. Even if you think you may only potentially need some training, don’t pay for it yet (yes – we’re talking about PEOs). When the time comes, your expert HR team or person will know to procure what’s necessary. We’ve seen lawyers pay for a “100% total HR coverage” of which they made 8% use during the contract lifetime. Avoid these unnecessary costs.
If you identify with any of this, we can give you some honest feedback on the various options out there. While we love ourselves, we know our model may not work for everyone. And we can’t offer you legal advice – that’s where your employment lawyer friend DOES come in handy. Share your concerns and thoughts with us here: firstname.lastname@example.org.