Attorney Journals, San Diego, Volume 224

SAN DIEGO

Volume 224, 2022 $6.95

Law Firm Marketing Budgets for Solicitors

Sue Bramall

Competencies a Lawyer Needs to Succeed Today

Larry Bodine

Breathing New Life into a Law Firm’s Aging Receivables

Jake Krocheski 10 Safety Tips for Law Firms, Attorneys, and Legal Professionals

Johnny Lee

11 Ways Lawyers Can Broaden Their Client Base

Stefanie Marrone

CAUTION! A Management Buyout May Not Be the Way

Roger Neu

Analytics: The Ally that Law Firm Leaders Need

Norm LaCroix

Attorney of the Month

Brian K. Findley, Findley Law San Diego To the Moon: Achieving Stellar Results

2022 EDITION—NO.224

TABLE OF CONTENTS 6 Law Firm Marketing Budgets for Solicitors— Not Such a Black Art

by Sue Bramall

8 Ten Safety Tips for Law Firms, Attorneys and Legal Professionals

by Johnny Lee

10 Breathing New Life into a Law Firm’s Aging Receivables EXECUTIVE PUBLISHER Brian Topor

by Jake Krocheski ATTORNEY OF THE MONTH

16 Brian K. Findley, Findley Law, San Diego To the Moon: Achieving Stellar Results

EDITOR Wendy Price CREATIVE SERVICES Penn Creative

by Dan Baldwin

CIRCULATION Angela Watson

22 Analytics: The Ally Law Firm Leaders Need

PHOTOGRAPHY Chris Griffiths

by Norm LaCroix

STAFF WRITERS Dan Baldwin Jennifer Hadley CONTRIBUTING EDITORIALISTS Larry Bodine Sue Bramall Jake Krocheski Norm LaCroix Johnny Lee Stefanie Marrone Roger Neu ADVERTISING INQUIRIES Info@AttorneyJournals.com SUBMIT AN ARTICLE Editorial@AttorneyJournals.com OFFICE 30213 Avenida De Las Banderas Suite 200 Rancho Santa Margarita, CA 92688 www.AttorneyJournals.com ADDRESS CHANGES Address corrections can be made via email or postal mail.

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24 Top Competencies a Lawyer Needs to Succeed Today

by Larry Bodine, Esq

26 Eleven Ways Lawyers Can Broaden Their Client Base and Get More Business

by Stefanie Marrone

28 Caution! A Management Buyout May Not Be the Way to Sell Your Company

by Roger Neu

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Law Firm Marketing Budgets for Solicitors— Not Such a Black Art

by Sue Bramall

With all law firm expenditures under the microscope, how do you ensure that your marketing budget is planned and spent wisely to generate the maximum return on investment? Here are some practical tips for 2022.

Clear Objectives First, start with a clean sheet of paper, resist the temptation to start with last year’s budget and assume that you will do all the things that you did last year. If you wish to achieve different results and win business from a new source, then you need to do some things differently.

Refer back to the firm’s business plan, think about your headline objectives and make a broad allocation accordingly. For example, if you wish to focus on developing 50% of new business from existing clients, then around 50% of the budget should be allocated to client-facing activities, rather than prospecting.

Identify the two or three main firm-wide activities that must happen this year and carve out that funding accordingly.

Understandably, many firms have been putting major projects on hold for the last two to three years. However, a seriously dated web site will not be doing you any favors, so maybe now is the time to get on with it.

Departmental Budgets If you have departmental marketing budgets, then encourage each team to take a similar fresh approach to their planning.

In an ideal world, marketing resources need to be allocated where they are likely to yield the highest return, rather than, say to the department that shouts loudest. Try not to fall into the trap of spreading a limited budget amongst too many for the sake of fairness. A ‘spray and pray’ approach will achieve little if resources are spread too thinly.

Make sure departments back up the budget requests with a clear plan, dates, and responsibilities—one page should suffice.

Providing a standard template for each department will help to guide their thinking and will make it easy for you to compare and combine the departments across the firm. Keep it concise. A one-page A4 spreadsheet with twelve columns (one for each month plus total) with rows for each activity is easy to monitor.

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Management Information Making tough decisions about where budgets should be allocated is much easier if you have reliable information regarding the fruitfulness of your various marketing activities.

How do you know whether one particular activity has delivered an acceptable return on investment? Without a systematic approach to collecting information about inquiries, opportunities, and new clients, then you are forced to rely on anecdotal evidence.

Make sure you have a system to measure inquiries, whether by telephone, email, or referral. Receptionists usually record all incoming calls, so they just need to record one more valuable piece of information, “Where did you hear of us?”

Via your new client opening procedure you should record where clients say that they heard of you.

These two pieces of information will allow you to track your conversion rate—the percentage of inquiries that sign up to become clients.

For example, Google’s pay per click marketing can be a huge item of expenditure. Do you know precisely how many clients you receive from this each year? How does the cost per client from Google compare with the cost per client from pay-perclick, the annual golf day or referral fees, if paid?

Armed with this information you will clearly be able to see which marketing activities yield the most inquiries and which of these translate to the most lucrative work.

Both measures are important, as a high volume of low-value web inquiries is not usually as attractive as a smaller number of higher-value referrals.

Set Policies There are always unplanned for opportunities that occur throughout the year. Some of which may be worthwhile and fit your strategy, others are simply aggressive advertising executives who try every partner in the firm to try and find a less experienced one to agree to their ‘must buy’ opportunity.

Set clear policies against which you can assess opportunistic budget requests during the year. For example, “We only undertake long-term preplanned advertising.”

This will help to deflect those persistent advertising sales executives, whilst enabling you to quickly identify opportunities that do fit your strategic objectives.

Client Focus Double check if your expenditure is really aimed at the right clients. For example, does your corporate hospitality program reflect the leisure interests of your partners—or the preferences of your key clients? Most importantly, are there any key clients who are being neglected within the current hospitality program?

If junior fee-earners are encouraged to participate in marketing the firm, do they have a clear understanding about how they can access budgets? Low-key entertainment such as a regular coffee or glass of wine can go a long way in building relationships.

Replace Are you paying for online directory listings that may no longer be necessary? If the information on your web site is up to date and your personal profile on LinkedIn is detailed, do you really need to pay for expensive profiles on other sites?

Shop Around For new activities, make sure that you test the market, for example if you are looking for a new web site, SEO agency or want a rebrand.

Take the time to put together a clear brief that you can issue to several providers and make sure that you understand all the costs over the total contract—and negotiate hard!

Consider New Solutions One of the most common problems that I come across on the ground is the lack of a user-friendly contact management system (database). Practice management systems rarely do the job and the big company systems are just out of reach of most firms.

However, cloud computing now offers a really cost-effective solution with easy-to-use web-based systems that cost just a few dollars per user. As the systems are web based—they are accessible anywhere and need no technical support.

Move to E-Newsletters E-newsletters are easily one of the most cost-effective ways of keeping in regular contact with your clients, prospects, and intermediaries. Think of the savings in design, print, postage, and fulfillment.

Print and Digital While I am a huge fan of email marketing, the printed brochure and newsletter is still essential in certain circumstances, such as at events, and for certain markets, such as elderly private clients.

With advances in the quality of digital printing, you can reduce the length of your print runs and print smaller batches of brochures as required.

Outsource If a member of the marketing team leaves, do they necessarily need to be replaced with another direct employee? When you add in the potential fee to the recruitment agency, you may find that money could go a long way with outsourcing of certain activities.

For example, is it really the best use of valuable fee-earner time for them to research and draft articles for the firm newsletter when legal content can be bought in or ghostwritten at a fraction of their hourly rates?

Collaborate Working with a number of firms, it often strikes me how much reinventing the wheel goes on. For example, I wonder how many law firms have spent many hours researching and preparing presentations on The Bribery Act recently. How much time might have been saved if practitioners in a single specialism collaborated and produced one presentation that all firms could use?

It May Be Personal In a partnership, you need to remember that all marketing expenditure is discretionary spend and this colors an individual’s view on the necessity of marketing. I remember discussing one particular activity with an equity partner who bluntly told me that he would rather keep the profits up to enjoy another skiing holiday.

Whatever the structure and strategy of your firm, hopefully these tips will enable you to stretch your marketing budget further this year. n Sue Bramall is director of Berners Marketing which specializes in providing marketing and business development support to law firms. Article Source: EzineArticles.com/?expert=Sue_Bramall. Learn more at www.bernersmarketing.com.

Attorney Journals San Diego | Volume 224, 2022

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10 Safety Tips for Law Firms, Attorneys and Legal Professionals

by Johnny Lee

Violence committed by clients against attorneys and legal professionals is real. It happens in small towns and big cities, and in small and large legal practices. Some practice areas are more volatile than others, such as divorce and family law, dispute resolution, employment law and real estate litigation.

Particularly in a bad economy with high unemployment, tempers are short and more people reach levels of desperation.

While dramatic cases like shootings at law firms make headlines, the majority of security incidents among attorneys and staff are unreported because they involve harassment and lower-level threats. In the privacy of attorney-client meetings, emotional and sometimes irrational individuals lash out at their lawyers. Money is often at the heart of disputes and many attorneys are confronted with disagreements about their billable hours. Clients become upset and irate about how their case is proceeding or the outcome of a case. Meetings that involve elevated voices and foul language can be the precursor to a physical altercation.

Receptionists and other staff in law firms also encounter angry, hostile clients. Although experienced receptionists have a thick skin and are sometimes trained in how to manage harassment by clients and opposing parties, there are situations when they are truly threatened and in danger.

Law practice management should include systems and procedures that ensure workplace safety and violence prevention for attorneys and staff. All law office employees should acquire the skills to recognize and manage threatening, potentially dangerous individuals. Client-facing legal professionals need tools to protect themselves and prevent early-stage situations from escalating into major, dangerous events.

Here Are 10 Safety Tips for Attorneys and Legal Staff



Create a Safe Work Environment for Receptionists Ensure receptionists have a clear view of the office entry way with little opportunity for people to sneak in or hide,

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particularly doors, elevators, and all traffic flow. Design the front desk to provide a barrier between receptionists and clients but also allow easy escape. Delineate a clear understanding of where clients are allowed to be in the lobby and front desk area.

Remove office objects from the front desk that are potential weapons and keep them stored in drawers or cabinets— staplers, scissors and letter openers. Keep computer screens and family photos away from public view.



Establish Safe Meeting Areas for Clients and Attorneys Safe areas can include windows to allow co-workers to see what is occurring inside but still maintain confidentiality.

Meeting areas should have two entrances so attorneys and staff can avoid being cornered. Before entering meeting rooms with potentially threatening clients, remove potential weapons from them.



Install Security Technology Technology helps protect employees, reduces the severity of incidents and provides ways to quickly respond to situations.

Consider installing buzzer doors that allow entry only after verification of the visitor. Provide panic buttons for attorneys, receptionists and other staff to discreetly notify others of a potentially dangerous situation before it escalates. Cameras and adequate lighting also help deter assailants.

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Train All Attorneys and Staff How to Handle Angry Clients Defusing skills and knowing how to de-escalate hostile behavior are essential for attorneys and client-facing employees.

Listening skills, redirecting negative behavior, setting boundaries and assault awareness are all acquired skills that should be continually honed with training and practice. There are many free online resources and security consultants who provide these services.



Establish a Workplace Violence Policy and Procedures These should include clear instructions on how employees can report any concerns. Just as important as the method of reporting is an environment where all employees feel safe and supported. A danger that occurs in all workplaces, including law offices, is domestic violence spillover.

When employees face domestic violence threats they must feel comfortable enough to inform their manager about embarrassing, private matters.



Provide Employee Assistance Programs Employee issues also arise from within a law practice. Human resources should provide support programs to employees with disciplinary issues or personal problems. This type of support helps prevent acts of violence and helps create a stronger, healthier workplace.



Develop Risk and Threat Assessments When a threat by a client emerges or is identified, a law office needs a process to determine the likelihood and severity of the threat. A process that gathers information, collects and reviews evidence and weighs warning signs is part of a good threat management system. Connections and relationships with local law enforcement and security professionals are paramount to risk analysis. Front desk personnel should be given descriptions of the threat with safety instructions should identified individuals arrive at the law firm.



Utilize Legal Resources to Increase Employee Protection Workplace restraining orders and trespass orders can always be obtained. Misdemeanor charges such as telephone harassment, stalking or property damage can be levied to create a paper trail for a threat, and the charges warn the individual not to harass legal professionals pending the trial. Many states also have a victim notification system that automatically calls any phone number once a person is released from jail.

 Establish Emergency Response Procedures Should a threat ever become a reality, emergency response procedures help prevent a bad situation from becoming a complete catastrophe. A system that notifies all employees, has escape and lockdown procedures and support mechanisms for emergency response personnel are all components of crisis management.



Coordinate and Communicate with Neighboring Businesses It is important neighboring businesses are aware of potentially threatening, dangerous individuals. When a man bent on killing an attorney opens fire, anyone in the vicinity can be a target. Not only can emergency management be coordinated, but the surveillance of individuals and potential risks is increased through such community partnerships.

Law firms committed to workplace security ensure safe workplaces through the design of their facilities and the implementation of accessible, sophisticated technology. They train attorneys and employees in basic security skills to help mitigate hostile encounters. Conscientious law firms provide support for employees in need and establish an environment where their concerns can be disclosed. Safe law firms establish and practice threat and emergency management procedures that are vital in maintaining a safe workplace. While shootings in law firms are rare, the much more common hostile encounters with clients are sometimes warning signs that should be taken seriously.

These safety tips provide a general framework for establishing a safer law office, but the key requirement is to recognize threats against attorneys and legal professionals are real and can happen anywhere. n Johnny Lee is president of ePanic Button and director of Peace at Work. ePanic Button is a PC-based panic button and incident notification system that helps protect front line employees and prevent early-stage situations from escalating into major, dangerous events. He was previously the Workplace Violence Specialist for the Office of State Personnel in Raleigh, North Carolina, Training Director for the UNCChapel Hill Injury Prevention Research Center’s PREVENT program, and Victim Services Coordinator for the Asheville, North Carolina Police Department. For more information on Attorneys, Law Firms and ePanic Button visit: epanicbutton.com/law-firms-attorneys-and-legalprofessionals. Article Source: EzineArticles.com/7290693

Attorney Journals San Diego | Volume 224, 2022

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Breathing New Life into a Law Firm’s Aging Receivables

by Jake Krocheski

When it comes to managing their receivables, many firms tend to regard this as an aspect of financial management. It is, after all, about money; you can touch and feel the dollars.

However, receivables management is just as much a function of practice management. It is not just about numbers. Behind most receivables more than 90 days past due is a story about why the account has not been paid—cash flow problems, complicated transactions, and many more. Understand those stories, get to the bottom of them—and you will have a better understanding of how to get paid.

Firms find themselves facing a dilemma. On one hand, they truly want to embrace institutional thinking and run as a business, putting structures and procedures in place and holding people accountable. On the other, they are reluctant to hold the individual attorneys accountable and deprive them of their autonomy because of the different circumstances that may exist that impact payment from clients. The two attitudes create an uneasy balance. It is hard to have clear-cut procedures while poking holes in them with plenty of exceptions.

The truth, though, is that your firm must. Everything is not black and white. You need to make it clear to your attorneys and staff—as well as your clients!—what your policies and your expectations are. Yet, there needs to be a fair amount of latitude for decisions based on individual client relationships.

It will be important to layer your firm-wide efforts, to take into account both formal collection procedures and practices and the informal, individual efforts that exist in practice to service clients. Mid-year is an appropriate time to focus on these issues, before getting into the mad rush of year’s end.

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To ensure that your receivables are not enjoying a ripe old age, take these steps: 1. Step back and start dissecting the older, harder-to-collect backlog of receivables. It may be necessary to dig deep to understand just how old they are. Many firms do not differentiate between receivables that are 90 days past due and those that are much older. Understand the dates on the aging report to discover how old the receivables really are.

Look to see if there is any recent billing activity on the account, when the last payment was received and for how much. It is surprising to us how firms continue to do work for clients without considering whether they are paying their bills.

2. When managing the backlog of receivables, look first at your oldest receivables and work your way back to those that are newer. It may seem harder, but it will be productive to spend time first with the oldest receivables, moving forward to determine their collectability.

3. Ask all attorneys to review their clients with outstanding balances. Tell them up front that you are looking for the truth from them. The point is for them to take decisive action: make the collection themselves, get help from the firm’s accounts receivable management team or clear the books. The attorneys are in the best position to assess whether a receivable should be kept on the active list or written off. However, they are often reluctant to follow through with the write-off process.

Evaluate each account and determine the likelihood of payment if the firm invests more time and

CLIENT CONNECTION ASSISTS LAW FIRMS OF ALL SIZES

effort to collect. Don’t kid yourself about the reality of collecting an account. When a receivable exceeds 180 days past due, there is only a 50% chance that it will be collected, and the likelihood drops off dramatically after that point. There may be a logical reason why it has not been paid. Perhaps the client does not have the ability to pay. Maybe the attorney has worked out an arrangement with the client whereby he can pay after the matter has been completed. Make sure the responsible attorney communicates to the firm what arrangements have been made with each client.

4. Urge firm leadership to be decisive and step in to take action. Management must work through receivable issues and not just accept attorney statements like: “I’m working on it” or “I’m in contact with my client about this.” For firms that are mid-size or larger, if you don’t yet have a committee, give serious thought to forming one. If yours is a smaller firm, this responsibility will rest squarely with firm leadership. Collections typically can’t be handled adequately by one person. Get your arms around the problem by creating—and empowering—a committee.

5. Evaluate the firm’s overall collection efforts. Ask yourselves: Did we do the job right, or did our processes and procedures allow receivables to age far longer than they should have? Review the firm’s policies and procedures concerning receivables that go beyond 90 days.

Determine if policies exist only on paper. Implementation is the key. Do you have the right people in place to move the ball forward, and are they empowered to do so? Many firms review their older receivables with the goal of determining why accounts have not been paid and if they have collection problems. When doing this, they frequently learn they have long had problems, but did not detect them earlier in the aging process.

6. Make the most of your dedicated collections staff, those whose job is to focus exclusively on receivables.

Evaluate the ability of your staff to help in accounts receivable management. Ensure they have the skills and talents that can help attorneys reduce the backlog of

receivables. Also, measure the staff’s performance to ensure progress is being made and sufficient time is being devoted to working directly with accounts receivable, as opposed to other administrative duties. At the same time, recognize when attorney involvement is essential.

7. Make the decision to write off the account after all efforts have been exhausted. Admittedly, that is far easier said than done. Nevertheless, if efforts have been made to collect that do not bear fruit, accept the fact that there is little chance of getting paid and write it off.

If the attorney continues to hold up the write-off process, firm leadership needs to step in and get the account written off.

8. Consider enlisting the services of experts in managing law firm receivables, like Client Connection, to help you tackle difficult receivables. In many cases, the more time you take to deal with your receivables, the more they age, and the harder it becomes to collect.

Not only can consultants deal with problem situations, but they can help give collection efforts the focus they require, as well as recommendations for preventing these problems from happening again.

Client Connection assists law firms of all sizes throughout the United States by furnishing accounts receivable management services, developing practical receivable programs, training law firm staff in effective accounts receivable management methods and executive placement of professional collections managers. n Jake Krocheski has over 25 years of experience as a management consultant to the legal profession.

His expertise is in helping law firms of various sizes and practice areas develop accounts receivable management programs and client intake procedures. Mr. Krocheski has published several articles on accounts receivable management for various law practice management journals, including The American Lawyer, Legal Management and Legal Times. He is based in Washington, D.C. and Dallas, but he travels extensively and welcomes the opportunity to meet with law firms interested in discussing their accounts receivable needs. www.clientci.com.

Article Source: EzineArticles.com/?expert=Jake_Krocheski.

Attorney Journals San Diego | Volume 224, 2022

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FIRM FOCUS ON EMPLOYEE BENEFITS LAW

Corey F. Schechter PARTNER

Butterfield Schechter LLP is San Diego County’s largest firm focusing its law practice primarily on employee benefit legal services. Our experience in employee benefits law and business law provides creative solutions for the most pressing business concerns. We are also dedicated to employee ownership and know all things ESOP (Employee Stock Ownership Plans). Learn more at www.bsllp.com.

Marc S. Schechter FOUNDING PARTNER

Paul D. Woodard

mschechter@bsllp.com

PARTNER

Helping You See ERISA and Employee Benefits Law Clearly Practice areas include: ESOPs - Pension, Profit Sharing, 401(k) Plans - ERISA Litigation - ERISA Compliance - IRS and DOL Audits - Nonqualified Deferred Compensation Plans - Stock Options Plans - Business Transaction & Succession Planning - Qualified Domestic Relations Orders (QDROs)

10021 Willow Creek Road, Suite 200, San Diego, California 92131 Telephone: (858) 444-2300 Facsimile: (858) 444-2345 www.bsllp.com

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Attorney Journals San Diego | Volume 224, 2022

SPECIALIZING IN COMPLEX BUSINESS LITIGATION

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• $2.1 million jury verdict for firm client in Doe v. San Diego Unified School District, et al. (2018)(Jason Kirby & Michael Kirby).

• $1.1 million arbitration award for firm clients on cross-complaint after zeroing plaintiff on $6 million damage claim in Step Strategy Advisors v. Solid Gold Health Products for Pets, Inc., et al. (2018)(Jason Kirby lead counsel).

• $22,659,551 settlement for clients defrauded in a local Ponzi scheme in Levin v.

Chicago Title, et al. (2021)(Michael Kirby & Jason Kirby.

501 West Broadway | Suite 1720 | San Diego, CA 92101 | 619-487-1500 | www.kirbyandkirbylaw.com

Yan Li, Esq., Kaaveh Zargar, Esq., Chris Guldjian, Esq., Frank Fasel, Esq. and Chad E. Irvin, Esq.

We’ve Recovered Millions Fighting Against The World’s Largest Corporations Chris & Frank Accident Attorneys is a dedicated team of California personal injury attorneys and support staff focused on helping clients recover from serious injury accidents.

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600 Anton Blvd, Suite 1700 | Costa Mesa, California 92626 2667 Camino del Rio, Suite 301-18 | San Diego, CA 92108 714-882-5800 | www.ChrisAndFrank.com

TO THE

Moon ACHIEVING STELLAR RESULTS INJURY AND MEDICAL MALPRACTICE ATTORNEY BRIAN K. FINDLEY

by Dan Baldwin Law at peak performance in the 21st century is a smaller, independent practice, leaning heavily into tech,” says Brian K. Findley, founder of Findley Law—Injury and Medical Malpractice. Findley launched the firm in November 2021.

“A video camera has me in court in Napa Valley in the morning and Los Angeles in the afternoon, all from my desk in San Diego. And in the time in between hearings, I am meeting with a new client, either in person or over Zoom, to figure out how I can help. This was just not possible even a couple of years ago. I am helping more people and spending more quality time with my family than ever. My practice and my life have been elevated.”

According to Findley, doctors used to have this model of smaller, independent practices, but they lost it. “In the last ten years, there has been a massive consolidation in the healthcare industry that has gobbled most of those small practices up. Most doctors are now connected with hospitals and larger groups and have stricter productivity guidelines.

They are seeing more patients in less time. It’s worse for the patients and it’s worse for the doctor. We are seeing physician satisfaction levels at all-time lows.”

Findley believes tech may have evolved just in time to save lawyers’ smaller, independent practices, and he’s fighting to keep it. “We don’t need to spend time managing a huge

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clerking staff if we move to paperless files. We don’t need a pyramid of supervision by other lawyers if we are sufficiently specialized and competent. We don’t need an army of staff if artificial intelligence can handle rote drafting and organization tasks.”

More tech has freed up Findley’s time to focus on a more analog concern—his clients. “I like to represent quality clients —good people who have had something bad happen to them, and who need somebody to stand up for them. I like to get to know my clients as people because I know the amount of time and resources I’m going to invest in their case. I want my clients to feel like we’re family,” says Findley.

Findley Law is a solo attorney operation. One of the problems traditional firms have always had is that there is usually a great lawyer on the letterhead who everybody wants to call, but clients sometimes discover that once the representation starts, the lawyer actually handling their case is an associate working for the prominent name on the letterhead. “That lawyer generally has less experience and less ‘skin in the game’ than the big-name lawyer. The younger lawyer becomes the filter for everything the client wants the attorney to know, and actually has a lot of control over how the case is handled. When a client hires my firm, the client hires me, one-on-one with no filters,” Findley says.

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© Bauman Photographers

2022

© Bauman Photographers

Stellar Performance in Injury and Medical Malpractice Findley’s “family” is fairly evenly divided between general personal injury cases and medical malpractice. Clients agree on his ability to handle cases efficiently, effectively and with the necessary personal touch that builds the confidence and trust between attorney and client that leads to a legal victory.

Findley is best known for his casework in the arena of medical malpractice, of which most California practitioners steer clear.

“I can get through a set of medical records pretty quickly and thoroughly. And I can speak the doctors’ language pretty well in a medical malpractice or personal injury case, and that is a significant advantage,” he says.

Due to California’s MICRA laws, a good medical malpractice attorney is hard to find. Because of his knowledge of MICRA and medical malpractice jurisprudence, he is often brought in as co-counsel on cases that have a medical malpractice overlap or are just medically complex. He maintains an up-to-date list of the cell phone numbers of some of the world’s top experts in a number of medical specialties. He has worked successfully with enough expert witnesses in not only medical specialties, but even the IT professionals who manage the hospitals’ electronic medical records systems, that he can read and truly understand a patient’s medical chart—and the people that created it.

“When you know the language corporations, insurance companies and medical institutions speak—money—you know how to make them pay attention. And that attention is directly proportional to the amount of money we can make wrongdoing cost them. So, I say let’s fight hard for that and see what we can do to make a change,” Findley says.

A Case of Butterflies Findley recently tried a case with attorney Jan Mulligan in Anaheim. A local hospital had been sold to a for-profit corporation that immediately slashed budgets for nurses’ pay, training and education. A few years of record profits later, a 18

Attorney Journals San Diego | Volume 224, 2022

cascade of preventable nursing errors took the life of their client’s husband during a routine procedure. He left behind a large family, including two adopted grandchildren, who depended on his income to live.

The hospital refused to offer a reasonable settlement. Findley and Mulligan rented a house near the court and turned it into a war room. They prepared for dozens of expert witnesses’ technical testimony at trial in addition to the emotional testimony of family and friends.

The trial lasted a month. The jury gave a multi-million-dollar verdict in their client’s favor. The following day, the client went to her husband’s grave to tell him about the victory. Arriving at the site, she saw twelve paper butterflies suspended on wires, so that they seemed to hover above his grave. A note read, “With sympathy and respect.” The note was signed by “the Jury.”

Taking on complex and challenging cases is something in Findley’s nature. “I love solving a medical mystery. I love making a significant difference in one person, or one family’s life, versus making smaller differences for more people,” he says.

An Early Look at the Future Although he didn’t realize it at the time, an early experience with an attorney initiated a process that eventually led to a successful and growing law practice.

When Findley was a teenager, a woman T-boned him with her pickup truck. His car was destroyed. No one was seriously hurt, but he found himself in a position where his immediate future was on the line. When the police arrived at the scene, they took one look at Findley and then to the lady who was heading to church (and who was at fault), and they cited Findley for the accident.

He had a date in traffic court and feared that he would never have the right to drive again—or worse. A friend’s dad was a lawyer who offered to represent him in court. He met with Findley on the day of the hearing, wearing a suit, nice shoes and handing out business cards to everybody. He was professional and impressive. He counseled Findley and put him at ease and proceeded with the representation.

Findley noticed how the judge and everyone in court treated the attorney with respect as he stood up for his client and explained the story to the judge. The judge agreed and dismissed the ticket.

“I can’t say that in that moment I knew I wanted to be an attorney, but that feeling of being counseled and calmed, and stood up for by someone with power, never left me. I try to give that feeling back to my clients every day.”

The Construction of a Law Firm “There is a revolution going on with lawyers starting up smaller firms and solo practices. We are on the front lines of that. Especially now coming out of the pandemic, where a lot of remote technology was pushed to the forefront. There

A tech-heavy practice leaves more time for family adventures.

is a synergy now between what is possible for the small firm practitioner to do along with a recognition that this is actually better—better service to our clients and better quality of life for the lawyer,” Findley says.

He comes by that belief through experience. For example, when he was just out of law school, Findley practiced construction defect defense with a mid-size defense firm. He found himself sitting around a deposition table with thirty or so different attorneys representing different sub-contractors. He says half of them spent their time reading the paper or playing on their phone while somebody else took the deposition (usually Findley).

“I’m not a handy guy. I can’t even build a bird house, so it wasn’t interesting. I wasn’t passionate about it, but at least I was practicing law. One night, I went into the office of another associate attorney and said, ‘Is this it? Is this what we’re going to be doing, always working late, and hoping someday to be partners in this firm? Doing this work?’ She said I needed to practice the kind of law that I could be passionate about. ‘You need to practice where you can represent one person at a time and make a real difference in one person’s life, instead of saving

a developer a few bucks on a sub-division they threw together too quickly,’ she said. That really was my ah-ha moment.”

Findley says he “cut my teeth in injury work” with Mulligan, Banham, and Findley. He began working with Jan Mulligan and Betsy Banham in 2012. In 2014, they offered a partnership.

“Jan and Betsy had been doing personal injury and medical malpractice work for 30 years. They were excellent at it. Learning from them was a gift. There is truly no higher standard of compassionate lawyering and thoroughness in preparation than Jan and Betsy’s work.”

The pandemic provided the opportunity of creating his own firm. “The isolation necessitated by the pandemic caused us all to become more self-sufficient and tech-savvy. We had been pretty decent at adopting tech and streamlining services at MB&F. But with Findley Law I wanted to take it to the moon,” he says. By using artificial intelligence to power through discovery, cloud computing to manage complex file systems, and remote conferencing to be everywhere at once, Findley believes he is doing just that.

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© Bauman Photographers

Findley and his wife, Jessa, are from the South.

He was born in Chicago but grew up in Georgia.

He and Jessa met at the University of Georgia and after graduation he earned a generous scholarship to law school in San Diego. Jessa was graduating at the same time with a horticulture degree. “I asked her, ‘Do they grow things in San Diego?’

She said, ‘You bet your behind they do!’ We packed our stuff into a U-Haul trailer, and the night before we left, I asked her to marry me. The rest is history.”

They have two kids, Isaac and Everly who are “old enough to make their own sandwiches but young enough to enjoy vacations with us, so we are in a golden time.”

He says on arriving in San Diego he knew he’d never leave. “This really is the promised land.”

He is an avid mountain biker within a strong and growing community of mountain biking lawyers in southern California. “Most of my cycling buddies are lawyers. San Diego is the perfect climate and geography for it. Some say, in business, cycling is the new golfing,” he says.

Findley serves in leadership positions in the American Association for Justice, the American Bar Association and Consumer Attorneys of San Diego, where he serves as President-Elect. “It’s so fulfilling to see each of these organizations pull through the pandemic leaner and stronger, with in-person events now opening up again.”

Also growing rapidly is Findley Law. “We are San Diego’s high-end, low client list, ultraresponsive and personal attorney to the everyday person. Corporations have in-house counsel; the Godfather has a consigliere. When ordinary, good people get hurt bad, they come to me. I fight for regular people against enormous power and odds, in what are often very complicated cases. And when I shoot for the moon, I achieve stellar results.” n Brian K. Findley Findley Law 1620 Fifth Avenue, Suite 625 San Diego, CA 92101 619-860-1712 findleyinjurylaw.com

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EXP ER I ENCE

“Shooting the Moon” to the Promised Land

» EDUCATION • B.A. University of Georgia, 2003 – double major in Psychology and Philosophy • J.D. Thomas Jefferson School of Law, 2007 – cum laude

» BAR ADMISSIONS • State of California • United States District Courts for Southern, Central and Northern Districts of California

» HONORS AND AWARDS • • • •

Best Lawyers in America, 2020 – present Super Lawyer, 2017 – present Super Lawyer Rising Star, 2016 Outstanding Trial Lawyer Award, Consumer Attorneys of San Diego, 2018 • Top 50 Verdicts in California, 2018 • Top Young Attorneys, San Diego Daily Transcript, 2013

» COMMUNITY AND INDUSTRY LEADERSHIP POSITIONS

• President-Elect, Consumer Attorneys of San Diego, 2022 • Board of Directors, Consumer Attorneys of San Diego, 2016 – present • Executive Officer, American Association for Justice, Professional Negligence Section, 2019 – present • Chair, American Bar Association, TIPS Medicine & Law Committee, 2020 – present • Bench-Bar Committee, San Diego County Bar Association, 2018 – present • Vice Chair, American Bar Association, TIPS Standing Committee on Plaintiff’s Policy, 2017 – present • Barrister Alumnus, Louis M. Welsh American Inn of Court

Analytics: The Ally Law Firm Leaders Need

by Norm LaCroix

Do you know what (and who) drives the profitability of your firm?

Can you distinguish among the clients that truly make a difference to the bottom line and those that merely add “noise” to the top line?

While you may know who the biggest revenue producers in your firm are, do you know which among them make the most meaningful contributions to the bottom line? Can you measure the impact of changes to multiple key performance indicators, your drivers of success? Can you provide real and timely insight for decision making based on those performance indicators? Are you able to access a full range of data and information when you want it, totally independent of an already burdened IT organization? Can you or your team respond in minutes to the myriad of ad hoc requests for information from all sides of the organization?

If you can’t answer yes to these questions, there is almost certainly a serious information gap that exists between actual business performance and timely actionable measures needed to drive strategic solutions, which needs to be bridged.

The professional services industry, and legal in particular, has undergone dramatic change, and market dynamics everywhere have been altered in a lasting way. Competitive pressures, more cost-sensitive and better informed clients, rising expenses and static fees have challenged law firms as never before. These changes have driven the need for integration of analytics and business intelligence management tools into the business process of professional service firms in order to be able to access truly relevant data, discover real knowledge, make informed decisions and take the actions necessary to provide a meaningful competitive advantage, improve service to clients and potentially enhance profitability.

The embrace of business intelligence and analytics as an embedded management tool, however, requires a mindset that not all law firm leaders, practitioners or managers 22

Attorney Journals San Diego | Volume 224, 2022

embrace, or even understand. It requires a reset at all levels of the organization and needs to be an investment priority in much the same way it has become in the corporate world. Given the proliferation of user-focused BI tools in the marketplace today, that investment is modest, however, compared with the historical “IT-centric BI platforms for large-scale systems” according to the Gartner Group, which “have tended to be highly governed and centralized, where IT production reports were pushed out to managers and knowledge workers.” While ad-hoc querying and other analytic tools have been available, “they were never really fully embraced by the business analyst masses, primarily because they are perceived by most as being too difficult to use,” the Gartner report adds.

In recent years, as a result, demand for user-friendly BI tools has shifted the focus of platform emphasis from “ITauthored production reporting, to governed, business-userdriven data discovery and analysis,” the report adds. So today, there is little reason for law firm management not to join their corporate client colleagues in the use of the most sophisticated business analytical tools to better manage the business of law. n Norm LaCroix has more than 20 years of experience in the legal industry. As a senior executive of one of the world’s leading law firms, Norm was responsible for the management, development and profitable growth of the firm. He increased profitability by integrating business intelligence and analytical tools into the management of the broad-based business activities of the firm. For more information, visit decisionanalyticsgroup.com.

Article Source: EzineArticles.com/8347503

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Top Competencies a Lawyer Needs to Succeed Today

by Larry Bodine, Esq

Strategies for Success The top 3 competencies or strategies for a lawyer to succeed today are the ability to generate new business, to learn the business of their clients, and networking.

The first is an ability to generate new business. A partner in a law firm is not only someone who knows the law and can do the work for clients, but is also an entrepreneur who has to generate enough work for himself or herself as well as all the associates. Just like any entrepreneur, you need to build a business around yourself. It’s a critical element, today more than ever, that you not only be able to do good work but also generate new business, so that you have work for yourself as well as all of the people you work with.

A second skill lawyers need to cultivate is to learn the business of their clients. This means going beyond the legal affairs of the client and actually getting to know the client on an extra-legal level on which you are really asking of the client: • How does your business make money?

• What are your most profitable lines of services and products?

• What about your competitors? How are they threatening your client right now?

You want to start a business conversation with your clients.

That’s how you get a client for life.

The third ability would be networking. It is more than just going into a room full of people that you don’t know and passing out a bunch of business cards. It’s more a relationshipbuilding skill where you can walk into a room of people and, hopefully, you have done some homework, and you already know some of them. It’s not walking up to people and telling them, “I do this and I have these great credentials.” Instead, you approach them and ask questions, such as, “Tell me about yourself.” It goes right back to Dale Carnegie, who said that a person’s favorite topic is themselves, so why not bring that up in conversation?

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Most Common Business Development Problems The three most common reasons people call me are: • “Our firm just lost a major client.”

• “All of our senior rainmakers are in their 70s.”

• “None of the junior partners have ever originated a file.”

They’ve discovered late in the game that they should have been working on business development all along, during the fat years and when there was plenty of work to go around. Now that the lean years are either upon them or threatening them, they call and say, “What should we do? Should we buy what?”

My response is, “No. I would recommend instead that you need business development training. You need to have someone spend a day with the attorneys away from the office, away from the telephones and interruptions, and basically spell out the different business development techniques.”

The good news is that business development is a learnable set of skills. I started out as one of the most introverted, shy, tubby little boys that you could ever possibly imagine. Today, I’ve gotten to the point where I just love going out on a sales call. When I was a kid, if you told me that I would turn out this way, I would have been astounded. The point is that business development can be learned, although it needs to be taught.

Anybody who is smart enough to get through the bar exam and survive in a law firm has all the mental ability that is required to grasp a learnable set of skills.

The key part is to have a training session. In the training session, you spell out the techniques, so that not only do the attorneys understand what to do, they know how to do it, because I find that in most law firms business development gets hung up on tactics. The lawyers want to know: What do I say? How do I make them like me? What do I do when I’m at a trade association meeting? If you can explain all those steps, then all of a sudden, business development becomes a lot easier.

Personal Business Development Plan Part two is the attorneys need to sit down and write a personal business development plan. It needs to be written down, just as you would write an entry in your calendar or it won’t get done.

If you don’t write something down, you’re just not going to do it. It’s not real until you write it down.

Focus on things in the following order.

Focus first on your current clients. That’s the low-hanging fruit. These are people who like and trust you and are sending you checks. And you just need to see if you can serve them and help them in additional ways.

Focus on referral sources. These are people who are just as good as clients; they love you, they trust you, they send you business. The only thing missing is they don’t send you a check, but otherwise, they are just as good as a client.

Find an organization in which to become active. The point is to join an organization of clients, and not just to be a mere member of the organization. You don’t want to be a face in the crowd. You want to be on the board of directors; you want to be the program director; you want to be the newsletter editor; you want to have some position that’s visible so that you will become known to everyone in the organization.

No Cold Calls You need to generate some new business and you need some education on what the techniques are; it then becomes so much less scary. You don’t need to make any cold calls; you don’t need to put yourself in any uncomfortable situations. I hate cold calls. My first job was selling encyclopedias and it was all cold calls. I just loathed the job and I remember swearing to myself, “I’m going to find a way to make a living that does not involve cold calls.” The wonderful thing about business development is, as was mentioned earlier, it’s all about building relationships. Start with the people that you already know. You probably have a huge network and you’ll never have to make a cold call.

You just need to see the menu of techniques you can choose from, so you can pick the ones you like. But then you’ve got to write down your plans and there’s got to be a date attached to each activity. Then when you actually start, it’s like the Nike slogan: “just do it.” And then when you do it, amazingly enough, new business comes in.

Asking Questions, Not Self Promotion One lawyer asked me, “I realize that the reason I haven’t gotten enough clients is that I am afraid of promoting myself. There is a conflict going on inside of me. Promoting me feels like I’m not being authentic and true to the profession and myself. I

am trying to portray an extremely valuable service and yet my feelings tell me I am not valuing myself highly and to believe my own words when trying to get clients. How do you deal with fear of self-promotion?”

Let me make clear that good business development is not self-promotion. In fact, what you should not do is go out and hype yourself or brag or really push yourself on or take advantage of people. That’s not how you generate new business.

Think of the last time you went to buy a new car and one of the salespeople came over and started selling you and pushing something on you and asking you how big a monthly payment you could afford. That was totally repellent. I would encourage you not to promote yourself. That’s going to drive people away.

You’re right; it doesn’t serve the profession.

Rather, the attitude that I would recommend you adopt is: you want to get to know people, get to know your clients and potential clients, and ask them what is going on in their business. You want to start a business conversation. You want to find out, “Where are they making their money? What do they like about their business? Do they have any new products coming out?”

Get executives to talk about their business and then along the way, probe for what we in sales call “pain.” You want to probe for business issues that they’re facing … problems they need to overcome, editors that are nipping at their heels.

The old saying is “what keeps them up at night.” You’re not pushing anything. You’re asking questions. You want to draw out of them what their business pain is. Find out what their business problems are and then all you need to do is listen for an opportunity to say, “I can help you with that.” And that’s how you open a file.

You really have to remember that legal services are not sold.

Nobody is ever really able to sell legal services. Legal services are bought; they are bought by business people and individuals who have a problem that they needed to have fixed, and they found a lawyer to do that for them.

What you want to do is put yourself in a position where you’re constantly inquiring and looking for that person who has a need. The only way that you can find out about that need is to ask questions. It may turn out they have no needs.

In any event, you’ve accomplished something by developing a new relationship or deepening one that already exists; and at the very best, you found out that they really have something that’s troubling them and you can help them. I think that’s the highest calling of this profession. n Larry Bodine, Esq., is the Editor in Chief of Lawyers. com, the top online destination for finding a lawyer and the latest legal news for consumers. He has 11 years of experience as business development trainer who helped more than 250 law firms generate revenue and get new business. A former litigator, Mr. Bodine has operated four websites, and currently updates three blogs every day

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11 Ways Lawyers Can Broaden Their Client Base and Get More Business

by Stefanie Marrone

I

was talking to a lawyer recently who shared with me a story I hear too often. His client’s longtime in-house legal team changed when the general counsel left his role. My client was left odd-man-out when the new in-house counsel arrived and brought in his own favorite law firm.

Unfortunately, this lawyer hadn’t developed close relationships within the organization beyond the legal team and his main contact, so there was no one to advocate for him to stay on. He was phased out, and as a result he had a difficult 2021.

It didn’t need to be like that. If only he had planned ahead.

Have you heard the saying don’t put all your eggs in one basket? Well, it’s especially true for business professionals, especially lawyers.

Diversification of your client base is crucial for lawyers.

Don’t rely on one or two clients for all your work, because change happens within organizations and to organizations every day.

People leave companies, needs change, mergers happen.

Companies go out of business. You just never know.

It’s so important to also make sure that you’re building relationships with many different people at your client organization—not just your main contact—because, again, if one person leaves the organization, you don’t want to be left in the lurch.

Although word-of-mouth referrals will always remain one of the most powerful means of attracting new clients, it is out of your control as to ‘when’ these referrals might happen.

This is exactly why I always say it’s so important to be marketing yourself and your business even when you don’t think you need it, because anything can happen.

This is also how LinkedIn can help you because it’s such a visible and free way of marketing your capabilities and expertise.

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Speaking and writing can also help you, as well as networking and sending regular emails that are helpful to your clients and referrals. That’s how you keep them warm and that’s how you stay top of mind with them.

Here are a few ways to broaden your client base: 1. Make networking a priority. Mix business development into your existing activities. Look through your address book and get back in touch with clients with whom you haven’t done business in a while. Then reach out to referral sources beyond your immediate network. Ask current clients to refer you to others who could use your services.

2. Do a website audit. Make sure the content on the site is client centric. The more you talk about yourself, the more you will turn people off. The more you talk about your clients, the more you will engage them.

Make sure your site is optimized for mobile viewing as smartphones now account for fully 70% of total time spent on digital media. Add and edit existing pages and show prospective clients your knowledge about the problems they are facing by creating content that showcases your expertise. If your website doesn’t already feature client testimonials, now is a good time to add those. Case studies highlighting how your company helped clients can attract new business. You can pull some of these from your LinkedIn profile recommendations.

3. Establish a presence as a thought leader through content marketing. Use blog posts, articles, videos, and podcasts to demonstrate subject-matter expertise in your field while improving your Google search results. Value-added content provides you with useful

reasons to get in touch with clients and leads. You should set up an email newsletter to promote your content and post it on social media. Becoming an author is also a great way to appear in searches during a prospect’s research phase. Including a blog on your website, and updating it regularly, can also be one of the easiest ways to continuously produce fresh content, which then tells search engines that your website is active and frequently updated.

4. Enhance your online presence. Ensure that your website is updated and highlights your firm’s strengths. Make sure you’re taking advantage of tools such as SEO (especially local SEO) that can help you spread the word about your business. Google My Business is a fundamental essential to boost your local SEO, enabling your organization to be visible on search results pages relevant to its location. You can set up your free Google My Business listing here: google. com/business. Doing so will help prospects easily locate and identify your firm when searching online.

5. Embrace social media marketing. If it seems daunting for you, start small. You don’t need to be on all the social channels, but you do need to be on LinkedIn to reconnect with your clients and prospects. Here are some tips: www.jdsupra. com/legalnews/easy-proven-strategies-forreaching-6478210 6. Expand your offerings. Consider ways of expanding your existing expertise to offer new products or services. This may help you move into new industries and markets. For example, ask yourself what ancillary services or products could you easily create to allow your company to serve more types of clients?

7.

Consider partnerships with other organizations.

Find ways to partner with other businesses with which you may already have an informal relationship or get creative and market your product and services in different ways.

8. Highlight your good works. Get more involved with professional organizations, pro bono work, community service organizations, your alumni networks—all of these are great ways to meet people who could be potential clients and referral sources. Plus, you’re doing good for the community.

9. Focus on PR. This is a great time to focus on enhancing your visibility, which can raise your profile and keep you top of mind with current clients as well as people who aren’t familiar with you. You can do this through traditional public relations (quote and article placements) as well as speaking engagements and owned media such as starting your own blog, podcast, or video series which you can then promote on social media, email, and other channels.

10. Never eat alone. While it’s more challenging to network in person in these socially distant times, it’s not impossible. And you should make it a priority.

While social media, email marketing and webinars enable you to reach more people in a shorter span of time, one-on-one, in-person communication still provides a stronger connection to people that fosters relationship building. Remember that people do business with those they like, know and trust, so that is your ultimate goal.

11. Build relationships. Every person you meet could be a potential client or referral source. How you act towards others will also determine whether they are likely to be your client in the future. This also includes the vendors with whom you work. In addition, reconnect with people you worked with early in your career. This includes your peers in college, law school and your employers. All of them could become clients or refer work to you.

If we’ve learned anything over the past two years, it’s that anything can happen. So never stop marketing yourself or building relationships. And always be prepared—this is how you make sure all those eggs don’t crack. n Stefanie Marrone advises law firms of all sizes, professional service firms, B2B companies, recruiters, and individuals on the full range of marketing and business development consulting services designed to enhance revenue, retain current clients, and achieve greater brand recognition. She also serves as outsourced chief marketing officer/marketing department for small and mid-size law firms. Over her nearly 20-year legal marketing career, she has worked at and with a broad range of big law, mid-size, and small firms, which has given her a valuable perspective of the legal industry. Connect with her at www.linkedin.com/in/stefaniemarrone.

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Caution! A Management Buyout May Not Be the Way to Sell Your Company

by Roger Neu

Y

ou own your business and have been agonizing over having to go through a marketing and sale process and then not knowing what will happen to your employees. Then, what you believe to be the perfect solution appears right inside of your organization. A key manager or group of managers has approached you with the proposition of buying the business. The discussion then centers on how you can avoid having to take the company to market and how management’s purchase will provide certainty for the ongoing employment of your employees.

Well, nothing could be further from the truth. One of the first things management will say is that they can come up with at least 25% of the purchase price. Let’s use a $50M sale price which means they would provide $12.5M. TRANSLATION: “Management believes that a bank will lend them $12.5M against the assets of the company.”

So what management is really doing is the same thing that any buyer would do, which is using your assets to obtain senior debt from a bank for a portion of the purchase price. They are not putting their own money into the deal as equity.

Since the managers have little or no funds, they will now take it upon themselves to go to the market to find private equity funds and mezzanine lenders to fund the balance of the transaction.

TRANSLATION: “You are not avoiding taking the company to market, but have, in fact, put the marketing process into the hands of management instead of controlling the process yourself.”

Numerous articles have been written over the years that address the inherent conflict that exists when the person that is marketing the company (management) is the same person that is buying the company (management). Two key problems arise. First, management has no incentive to get investor groups to put a high value on the company because it will reduce the percentage that management can retain.

A $50M value may require an equity investment of $20M.

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If management has $4M to invest and outside investors add equity of $16M, management only gets a 20% interest. If, however, the total price is $40M with only a $10M equity requirement, the investor equity would only need to be $6M and management would retain 40% of the Company.

Second, a quasi-fund raising and marketing campaign by the managers will pollute the buyer pool in numerous ways that will be detrimental to a future sale if management is not successful.

The managers will assure you that they will be the ones doing the heavy lifting to get the deal done and it won’t be at all onerous for you.

TRANSLATION: “Instead of putting their full attention on running the company, management will now be busy trying to organize their own buyer group and trying to put funding in place. In addition, you and the company will have to do all the same work (and usually more) in providing due diligence information to various private equity groups and lenders.”

No investor is going to provide $50,000,000 in funding without putting you through all the paces.

Management will also be in for some surprises.

Management told you how they are going to purchase the company and protect the employees.

TRANSLATION: “He who has the money rules and if management is not putting up a significant portion of the equity, management will not control the company.”

The investors will control the company and will operate it to obtain the highest rate of return without regard to retaining all of the employees.

You, however, could be in for the biggest surprise of all! Even if you do sell to management, what is to prevent them from reselling the company in six months, one year or whenever? So, even if management, by some unusual set of circumstances, actually did acquire control, they could resell in a short period of time to a totally unrelated party and the guarantee for your employees and your continuing legacy that you thought you had will no longer exist.

Peterson Reporting.

Providing nationwide service since 1986.

Management could even double escrow the deal. While putting together management’s financial backing at the $50M price, management may be negotiating a follow on sale transaction at a higher price.

You were probably told that the management buyout would also avoid the probability of letting the world know that you are for sale. To the contrary, since many people will have to be part of the management buyout process, it is much more likely that your employees and the rest of the world will know that you have put a “for sale” sign on the business. It is much easier to maintain confidentiality in a well-run marketing process.

If the issues noted above are not already sufficiently concerning, this should get your attention. “You will be negotiating against your management in the buyer/seller process.” Negotiations can get intense and generally the management side will be trying to satisfy numerous parties including lenders, private equity groups and each of the individual interests of each manager. Some hard feelings in the context of a completed management buyout may be OK, but “some hard feelings” can turn into blatant animosity if you should decide that management’s final package is not adequate and their deal falls through. Now when you get ready to go to market you will be doing so without one of your most valuable assets, which is a motivated manager or management team. Management will also have expended a great deal of energy in trying to pull their deal together and will have a very limited appetite (and even less enthusiasm) for wanting to go back through another sale process.

Proceed with a great deal of caution (if you want to proceed at all) if your manager or management team wants to try to buy your company. It is something that sounds good and you want it to be true, but it generally isn’t true. If, however, the owner is intent on pursuing a management buyout, the advice of an M&A Law Firm will be your best ally in maneuvering through all of the minefields and giving you the best possibility of closing a transaction on satisfactory terms and conditions. n Roger Neu is both a CPA and an attorney with over thirty (30) years of experience in mergers and acquisitions (“M&A”) of privately held companies. Mr. Neu’s extensive experience in the M&A field, combined with his accounting and tax background and experience and training at Price Waterhouse, provide a solid base for planning and structuring mergers and acquisitions. Article Source: EzineArticles.com/?expert=Roger_Neu .

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