Sharon: Welcome to the Law Firm Marketing Catalyst Podcast. Today my guest is Marcia Watson Wasserman, Founder and President of Comprehensive Management Solutions which works with boutique and mid-size law firms providing COO to go services in all areas of operations with the goal of increased profitability. Marcia, welcome to the program.
Marcia: Thanks for having me, Sharon.
Sharon: So glad to have you. You have extensive law firm administrative experience which all our listeners may not be aware of. Can you tell us about it? Give us a brief overview?
Marcia: Certainly, I started working in law firms when I was an undergrad at UCLA. I was a part-time legal secretary and a paralegal and then I was an office manager, and as I continued my education through the Anderson School, I eventually became Executive Director and Chief Operations Officer of multi-state law firms, including an AMLAW200 firm. I have twenty years of law practice management experience as well as a fractional COO to small to mid-size law firms and I also facilitate managing partners and legal administrators’ roundtables.
Sharon: You bring just an astounding amount of experience to any law firm you work with and as part of that, you’ve developed an expertise in helping firms go remote. How has the process changed with the pandemic and the virus or has it?
Marcia: The coronavirus certainly has accelerated the process. Firms need remote work agreements. They need policies. They need procedures in writing. They need adequate equipment and systems, ergonomic setups for people who are working at home, VOIP phones so that they can answer the firms’ phones from their residence. It’s important to have updated software. You need document management software, document creation and NYC subway software like Hot Dogs, the ability to get digital signatures like DocuSign, collaboration and software tools like Netdocs or Imanage, Cleo, Microsoft Teams and the ability to accept credit card payments when you can’t get into the office and something Lawpay which is a great service because they are able to do trust accounting as well so that they can isolate money that needs to go into trust rather dumping it all in your general account.
Sharon: That’s a lot of stuff to be thinking about. Is this sort of distributed throughout the firm in a sense or is it just the administrator’s responsibility?
Marcia: Often the lion’s share of making sure it all happens is on the administrators’ shoulders, but communication is really key. That’s one of the most important things in going remote that you need to communicate even more than you used to before and ultimately partners have to approve expenditures. If you’re getting all the software, you have to be budgeted for it and get it when you can afford it.
Sharon: Wow! It sounds like so many things that people don’t think of. They think of, “O.K., just go home and start working, all right.” So if the whole firm is forced to vacate their premises suddenly like in this situation it was like, “O.K., good-bye, see you,” as opposed to a firm being able to plan for a transition, what are firms doing with their office and office equipment leases and their leases for their offices?
Marcia: It depends who your landlord is. If you’ve got a major landlord that has a lot of buildings, then they’re probably not as willing to accommodate you as long as you’re able to pay rent. As long as the buildings are almost fully occupied—and by that, it may not mean anybody’s in the premises right now or very few people—but as long as the law firm continues to pay rent, the landlord’s not going to do very many deals. They will however if you’re near the end of your lease. They will be thrilled to renegotiate it with you even if you want more space, but the price may not be really reflective of market conditions. I’m hearing from the brokers we’re probably a year or two away from the market really shifting to realistic numbers. So, people are stuck in their space by and large unless they’re in a situation where they have a more flexible landlord and they can renegotiate for less space, better terms, the same thing with equipment. If you’re not using equipment, then it’s up to the firm to reach out to the different vendors and see if they can renegotiate the contracts for fewer copies, if it’s a copy multifunction device, less toner. In some cases, they have to up the situation. Like with software, you may have more people, some continuously using the software, so you may need more software licenses. You basically have to look at every line item in your budget as far as expenditures go and figure out which ones you can reduce, which most firms have done and if any of them haven’t, they should be looking at their equipment leases as well as their leases for space.
Sharon: And backing up to the leases for space, you’re saying that brokers are saying that right now, the market is sort of holding steady because law firms—maybe they’re waiting—if they ever think things are going to revert where everybody will be back in the office. They’re just paying what they’re paying and it’s going to be two years before that there’s a lot of empty spaces. Is that what you’re saying?
Marcia: I think we’re going to see empty spaces, but the law firms are not defaulting by and large on making those payments. They don’t want to be in default on their lease. Every situation’s a little bit different, but I’ve been hearing that firms are making payments. The landlords did agree in most part because people weren’t using parking to abate some of the parking charges for an extended period of time. So, they’re not paying for parking spaces they aren’t using. The actual lease—it still depends on the specific form of lease. They’re different from firm to firm. There are force majeure clauses in some of them that allow you to terminate the lease. By and large, they don’t allow you to terminate the lease. So we’re in a limbo a lot as to what’s going to happen and I’m not hearing that firms quit paying their rent even if they’re barely using the space as long as they have the means to do it.
Sharon: That’s interesting. So, a lot of landlords are still in a sense making out in terms of they’re getting the money even if the space isn’t being used it sounds like. I realize it does depend on each situation. Are most firms using their own real estate attorneys to negotiate this or are they turning to real estate brokers, real estate agents, real estate specialists?
Marcia: If they’re wise, even if they have real estate lawyers, they will use a broker if they’re renegotiating because somebody’s getting paid anyway and it’s better to have someone representing you who knows all the nuances of working with that landlord and their leases and their deals and what’s out there and can negotiate on your behalf. It doesn’t cost you any more because if you don’t use your own broker, their management teams are just going to get the money because they allocate it, so better to have your own representation and if you have an in-house real estate lawyer who could everything over, all the better.
Sharon: That makes a lot of sense, yes. So, a lot of people I think are realizing now lawyers and other professionals who’ve sort of said before, “There’s no way we can all work remotely. That’s just not going to work,” but now since everybody is forced to, how are lawyers who were previously resistant to working remotely handling the change? Are they still resistant or are they just saying, “Hey, we can really do this?”
Marcia: A great majority are adjusting to it and are productive. It’s a change in mindset and some of it’s generational. The boomers and some of the older lawyers are still a little bit against it, even it mostly working. The millennials and the Gen Z’s are totally on board and thrilled and happy to do it this way and there was a poll taken at an Association of Legal Administers Webinar on change management recently and 91% of the people who participate responded that more remote work will be a permanent change. So the focus needs to be on how it gets done rather than where it gets done and I’m seeing most of the people that I work with, most of the lawyers in my managing partner roundtables, agree that this is a permanent shift. Not everybody is going to work remotely all the time, but more people will work remotely and I’m seeing of the diehards who said “no way, no how,” talk about, “Well, we’re going to take less office space. We’re going to open satellite offices closer to where people live to accommodate them. We’ll stagger shifts so that if somebody is driving thirty, forty miles to come to work, we’ll let them work at home a couple of days a week just to make it easier on them” and there are still some firms where I’m hearing frustration from their administrators that the senior partners want their legal assistants, their legal secretaries back in the office right outside their door because that’s what they’re used to even though it’s worked perfectly well having them do their work remotely.
Sharon: Yeah, I would say no matter what generation, it would seem that lawyers would say, “Hey, we can really make this work.” Right now, we’re sort of in an emergency situation, like a fire drill situation, but when things settle down, however they do, it seems like O.K., they’ll be thinking about what they need to do like you were talking about, satellite offices or other things to make it work long term. What do firms need to do to maintain employment morale when they’re not around the water cooler? Employers have satisfaction and loyalty, especially because at least in a lot of firms, salaries have been slashed. What do they need to do to maintain I guess morale satisfaction—I would say loyalty would be in the sense?
Marcia: Well first and foremost, they have to try to maintain their culture if they’ve had a positive culture and the best way to accomplish that is for leadership to be transparent and show vulnerability. If they’ve had to cut wages, then they need to share more financial information than they would have and in the beginning, I think some firms react to thinking, “Oh no, this is never going to work,” but what I’m seeing is the great majority of them are doing just fine. They’re not doing as well because people were scared the first couple of months when everybody went remote and clients weren’t sure what would be happening with their own businesses. There was somewhat of a slowdown and to anybody that does litigation, the courts have come to a screeching halt and are barely functioning. So, that transparency and a lot of communication goes a long way toward giving people a sense of community and in some firms, they didn’t slash salaries or put people on furlough at all. They were able to maintain it and, in some cases, only the partners took the hit and let everybody else continue on and I do think a lot of people, on the staff level in particular, are happy that they have jobs. They’re not as uncomfortable as they otherwise might be and it’s up to the firms to do everything, they can to maintain that culture and that connection.
Sharon: Also, just happy to be working from home and not making the commute too. So, how have you seen it done wrong and what pitfalls do firms need to avoid?
Marcia: Well, at the very beginning, there were some very old-fashioned firms out there that still had old technology, file rooms, libraries, paper files, no VOIP phones–
Sharon: When you say VOIP, V-O-I-P, right?
Marcia: Yeah, Voiceover Internet Protocol phones. The only telephone they had was the firm’s landlines with a PBX board and when suddenly you needed to be remote and have the phones answered remote, they had to quickly get a phone vendor to give them an internet telephone system so that people could be working from home and answer phones and forwarding lines pretty transparently. I mean I heard of one old-fashioned firm that has about ten to twelve attorneys and they had nothing set up. Their file server was in the office. They didn’t have anything in the Cloud. They had paper files for everything. They had document folders in Word, but not a very sophisticated system for everybody to work remotely and they spent a couple of months trying to get up to speed to catch up with what other firms were doing. A mistake that I’ve seen in some firms is that they weren’t communicating enough with their people. So, everybody felt very isolated. The best firms at the beginning were holding daily check-ins on Zoom just to make sure everybody was OK and they’ve continued holding practice group meetings or firm meetings. If they used to hold them weekly or monthly, they’re continuing to do that on Zoom. If they’re onboarding new employees, they’re making sure they have buddy systems and mentoring systems in place. That’s what you need to do. In order to support firm culture, you need to do fun events too so that Zoom’s not just business, business. I’ve heard about firms doing magic shows and bringing magicians from the Magic Castle to do a magic show virtually, trivia contests. Some of them who are a little risk averse are doing socially-distanced events like walking on the beach or having a picnic where food is catered and where normally they’d bring their families, they’re limiting it to just employees just so people can have that connection and see one another.
Sharon: Wow, talk about a total sea change! It sort of like there would have nothing that would have gotten some of these firms to change and so it’s just like being dragged along kicking and screaming. Do you think that most firms will remain remote once the crisis is over?
Marcia: The AOA survey said 91% believe remote will continue. I don’t know that we will see a lot of firms going completely virtual, but I do believe they’re going to take less space; they’re going to design their space in a different way. I was at a webinar that Cushman and Wakefield did and they’re showing ways of redesigning your space so you can take a lot less space to allow for people who are telecommuting and staggering hours and hoteling to a degree. It’s a whole different mindset on how you structure the space and again, satellite offices are what I’m hearing to accommodate people so they don’t have to drive as far, and some positions will remain remote full time. There may be certain types of positions; maybe someone who does collections, some of the paralegal research positions can easily work remotely. It’ll depend on the life circumstances of the employees. Some of them have children that they’re homeschooling. Some of them have other responsibilities and some of them just can’t work from home because they may have roommates and they don’t concentrate as well. I’ve heard of associates begging to come back to the office because they’re too distracted at home. So, I think we’re going to see staggered shifts and people working from home a few days a week. You can’t really go back to where we were. I just don’t see that we’d pause and then go back to where we before COVID. Too much has change and people are being too efficient and effective this way, particularly in a place like L.A. where maneuvering traffic is so difficult and at the end of the day, if you take less space, it’s going to reduce overhead, improve profitability; employees at all levels will be happy because it will improve their work life balance and blend. So it’s a win/win for everybody and it’s unfortunate it took a pandemic to shake the trees and get everybody to realize this because the technology’s been there for a while, but the best thing to come out of the pandemic is the ability for firms to reinvent as they go forward.
Sharon: Right and I just don’t think there would have been anything else that could have gotten a lot of firms off the mark in a sense. I think just talking to you, it’s really evident that they need someone with your expertise and leadership to help them and to be helping them think through what they need. It’s so important. There’s just so much when you think about it. So, Marcia, thank you so much for being with us today and for everybody listening today, that’s it for today’s episode of the Law Firm Marketing Catalyst Podcast and we’ll be back next time with another law firm industry professional who can help you move your firm forward. You can find us wherever you download your podcasts and please rate us. Thank you so much for listening.
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