Professional Competency Skills Webinar Series:

Billing and Accounting for Small Firms

WEDNESDAY DECEMBER 5, 2018 WEBINAR

Cindy Melfa

Affinity Consulting Group, LLC

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Professional Competency Skills Webinar Series

Wednesday, September 5, 2018 12:00 pm - 1:00 pm Harnessing Technology and Avoiding Multitasking Errors Paul J. Unger, Affinity Consulting Group, LLC

Many lawyers feel the stress of time and the professional and ethical obligation they have to be responsive to the judicial system, their clients and other attorneys. Often adding to that stress is the relentless march of technology and the ongoing need to learn how to use software and hardware to help efficiently manage a legal practice. This one-hour webinar shows you how to make technology work for you rather than the other way around. We’ll discuss technologi-cal tools designed to make a lawyer’s life easier and strategies for learning how to use technol-ogy to assist you in the practice of law. We’ll also discuss the research regarding multitasking and how staying focused on one thing at a time can make lawyers far more efficient and avoid errors.

MCLE #161876. 1 CLE hour.

Wednesday, October 3, 2018 12:00 pm - 1:00 pm End of Year Preparations -- Best Practices for Your Law Firm Cindy Melfa, Affinity Consulting Group, LLC

Key to professional competency and a lawyer’s ethical responsibility to law firm management is the importance of taking care of end-of-year fiscal responsibilities – from monitoring your trust accounts to reviewing your budget and 1099 requirements to writing off aged accounts receivable and looking at your unbilled work in progress. This one-hour webinar offers a num-ber of best practice tips regarding early end-of-year preparation, including: reviewing your stale items on bank reconciliations, examining your unallocated payments and credit balances, look-ing at client costs advanced, and more!

MCLE #161878. 1 CLE hour.

Wednesday, November 7, 2018 12:00 pm - 1:00 pm Business Continuity - The New Frontier of Backup, Data Protection and Disaster Avoidance John Federico, Affinity Consulting Group, LLC

Catastrophic data loss can cripple your law firm and lead to malpractice claims, among other unpleasant things. You can’t afford to be without a plan for avoiding this. Learn how risk management, from creating backup rules to establishing responsibilities in your office, is necessary for ensuring professional responsibil-ity in serving your clients. Learn all the steps and technology you need to build a rock-solid system that will keep you up and running or per-mit a quick recovery from worst-case scenarios.

MCLE #161880. 1 CLE hour.

Wednesday, December 5, 2018 12:00 pm - 1:00 pm Billing and Accounting for Small Firms Cindy Melfa, Affinity Consulting Group, LLC

You may not even like to hear the word accounting, but efficient, accurate accounting is essential to the success of your practice and your professional responsibility as a lawyer. In this one-hour webinar we’ll explain your legal-specific accounting responsibilities, and why accounting software is important to your practice. Many lawyers either use software for billing only or use one program for billing and another for the rest of the accounting function, which do not share information. We will also discuss why it’s imperative that you use software for your entire accounting function and how to avoid using two programs when you only need one in order to ensure you bill your clients fairly.

MCLE #161882. 1 CLE hour.

Harnessing Technology and Avoiding

Multitasking ErrorsWed., September 5, 2018

12:00 pm - 1:00 pm

End of Year Preparations Best Practices for Your

Law FirmWed., October 3, 2018

12:00 pm - 1:00 pm

Business Continuity - The New Frontier of

Backup, Data Protection and Disaster AvoidanceWed., November 7, 2018

12:00 pm - 1:00 pm

Billing and Accounting for Small Firms

Wed., December 5, 201812:00 pm - 1:00 pm

PDF Power HourWed., January 2, 2019

12:00 pm - 1:00 pm

www.nebar.com

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FACULTY BIO _____________________________________________________________________________________________________________________________

Cindy Melfa Affinity Consulting Group, LLC

Cindy A. Melfa is the managing partner of Affinity Consulting Group’s Naples, FL office. Prior to joining Affinity, she was the founder and president of Legal-Tech Solutions, Inc. Cindy is a certified law office software consultant with over 24 years’ experience in law firm accounting, financial workflow and management, practice management, and document management. With an educational background in management and marketing, and prior employment as a law firm real estate closer and firm administrator, she consults with law firms throughout the United States and Caribbean on law office software as well as sophisticated practice management issues. Cindy is a graduate of Florida International University (B.A.), and a certified consultant/trainer. Besides actively consulting on law office productivity and management issues, Cindy has served on the LexisNexis Certified Consultants panel, the PCLaw Product Advisory Board, and Amicus Attorney President’s Club, in addition to conducting webinars for LexisNexis.

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SMART BUSINESS STRATEGIES FOR THE LEGAL WORLD.

EXPERIENCED. CREATIVE. CONNECTED.

Efficient Billing and Accounting

for Small Firms

Presented By: Cindy Melfa

Partner, Affinity Consulting Group

cmelfa@affinityconsulting.com

Partner, Affinity Consulting Group

Law firm consultancy focused on helping law firms implement technology, finance, marketing and management solutions

Worked in a law firm as an Administrator performing the billing and accounting functions

28 years experience with law firm billing and accounting

Presenter

Law School does not adequately prepare

lawyers for running a business

Best lawyer in the world could be the worst at

business planning, bookkeeping and general

accounting principles

Lawyer ≠ Accountant

Understanding the Basics

Keep you in tune with how your practice is doing

Monitor Cash flow and keep it moving

What types of matters net highest revenue

Keep vendors paid

Serve clients more professionally

Keep CPA from cringing…

The Right Software Will…

Law Firm Bookkeeping

Contingency & Flat Fee NOT Exempt!

Chronology of what has been done on a matter

Periods of Inactivity? Are cases stagnant?

Can be used for lien against proceeds if client pursues change in representation

Why Track Time?

Reasonableness of Fee

Ethical duty to communicate with client; explains work done in easy to read, professional fashion

Effective Hourly Rate and other reporting metrics – make smart business decisions

Know where your time and that of all staff is being spent – time is your widget! Includes NB time.

Why Track Time?

Assessing Productivity

Partners, Associates, Professionals, Staff

What are they doing?

How Long Does it Take Them?

Are they PRODUCTIVE?

Track everything

Marketing

Continuing Education

Administrative Time

Client Work

Reporting

Review Regularly

Modify Behavior

Tracking Time is More Than Just Billing Time

9

Lead by example – not “do as I say, not as I do”

Have regular meetings to review case status, particularly those with long periods of inactivity

Properly train staff to use software

Ability for billing staff to see all time is in for everyone is all time is logged.

Enforce Consistency

Efficiency is key. Timekeeping may show inefficiencies.

Contemporaneous timekeeping will tremendously increase accuracy

Allows you to discover your true costs. Cost of production –revenue = profit.

Capturing Time

Productivity Paradox

Why Relevant?

Alternative fee arrangements (AFA’s)

Alternative fee arrangements (AFA’s)

BENEFITS

Client’s Perspective Firm’s Perspective

More Predictability

Lower Risk

Faster Results

Better Financially Able to

Pursue Matters

Efficiency

Loyal Clients

Number of Clients

Efficiency and

Accountability

Predictable Revenue

No Cap on Income

Potential

Alternative fee arrangements (AFA’s)

• Fixed-fee & contingency

• Fixed Plus Hourly

• Value or incentive billing

• Flat fee by matter stage

• Volume discount

• Hourly Plus Contingency

• Flat fee for portfolios of work

Productivity

Collections & Receipt/Payment Allocations

WIP & AR

Cash Flow

Financial Statements

Key Reports

Productivity v. Profitability

Productivity v. Profitability

Receipts/Payment Allocations

A/R & WIP

Cash Flow

Balance Sheet

Income Statement (aka

Profit & Loss)

Trial Balance

Financial Statements

Assets

Bank Accounts

Fixed Assets

Money due to Firm

Liabilities

Notes Payable/Loans

Credit Cards

Payroll Taxes Due

Equity

Account Types

Income

Fee Income

Interest

Expenses

Office expenses (rent,

utilities, insurance, etc.)

Payroll & Benefits

Account Types

Balance Sheet

Income Statement (P&L)

Retained Earnings

Trial Balance

What’s Wrong with QuickBooks?

Not matter centric

Trust compliance (no negative balances)

Billing templates limiting, particularly for AFAs

Lack of write-up/down tracking

Software

Can’t assign billing templates & specifics to matter

No LEDES billing

IRS Attorney Audit Technique Guide for hard/soft cost distinction

No Timekeeper Summaries/Recaps

Lack of ability to show trust balances by matter on report or on bills

Lack of Productivity Reporting

Why Not QB?

Lack of Pre-Bill or Batch Bill Editing

Lack of control over payment allocation

Rate limitations by employee by client

No split billing

No integrated practice management –everything is a link

Why Not QB?

Best options for smaller firms v.

larger firms

All-in-One or piece meal

Legal Specific v. General

Software

Software

Smaller firms: Tabs3, PCLaw,

CosmoLex, Actionstep, etc.

Mid-Sized firms: Orion, Rippe &

Kingston, Coyote Analytics,

ProLaw, Tabs3

Large firms: 3E by Thomson

Reuters, Aderant

Software

All in one terrestrial product: TBA and PM – can buy what you need

Has option for web portal

Renowned stability & support

Scalable

Peer to peer, server or hosted server

Tabs3

Tabs3

(*prices may have changed)

Full TBA but only a few PM features – all or nothing

Can pair with Time Matters or Amicus

Mobility app

Lexis purchased in early 2000s

Peer to peer, server or hosted server

PCLaw

PCLaw

(*prices may have changed)

SaaS/Cloud product with full TBA

and robust PM and workflow

Banking and credit card integration

to download transactions

LawPay credit card integration

Client Portal

Centerbase

SaaS product with full TBA

Some PM but not robust

$59/mo per user if annual; $69

for month-to-month

Cosmolex

SaaS product with full TBA and

PM

Client Portal

$60/mo/user

ActionStep

Terrestrial/traditional full TBA

and PM

Newer company but designed

by accountants for lawyers

Competitive pricing

Coyote Analytics

Several other SaaS and terrestrial

options but many not full TBA,

thus not recommended

Links often problematic and only

certain things pass through

Timeslips, FreshBooks, Bill4Time,

etc., Clio

Other Options

Research options and get the right tools for you; seek help if unsure

Train everyone properly

Review the correct reports. Be aware of your financial situation; keep your finger on the pulse.

Know when to get help, perform checks and balances and ask CPA to review.

Conclusion

Name: Cindy Melfa| Email: cmelfa@affinityconsulting.com