Run Your Practice Like a Business

You are an entrepreneur.

Take the Litmus Test

If you report your practice income and expenses at tax time, you are a business. For example, as a solo practitioner, I file a 1040, and submit my expenses and income on a  Schedule C.  Other business structures like LLCs, LLPs, S Corps., etc., may have different reporting requirements.

The point is the same.

Financially and legally, you are in practice as a business and should run it accordingly.

Field-Tested, Data Confirmed

There’s no substitute for data. I have found multiple tools form the basis to get these answers.

As a result of my years as Practice Manager of an expert witness practice, I find no better business tools:

• Track your P&L on a regular basis.
• What efforts are generating income?
• What is a drain on financial and time resources?
• Where is the money going? Chase savings once you know what has low return.
• Spend when there is good return on investment.

A forensic practice can be a lifelong endeavor, and data you collect now helps you grow with each accruing year.

Rely on intelligence, not luck, to bring in cases, build your reputation and pay your bills.

Best Practices

• Pursue transparency in your operations. That means bookkeeping and timekeeping aligns with the work you have done–you spent 4 hours and 4 hours is accounted for and 4 hours is billed. Your invoices are easy to navigate. You would be happy to have your file reviewed by a judge. <
• Require a retention agreement and retainer at the start of your work. It should detail what you expect from the retaining attorney, down to cancellation fees and payment schedules. Pro tip: a late fee or interest rate on overdue accounts motivates payors to pay you promptly.  
• Document your conversations with an attorney if it impacts scope and approved charges. I prefer emails, but they are discoverable and attorneys might prefer a different workflow.
• Get your charges approved in advance!
• Understand the legal implications. For example, in-house documentation, like invoices, can be subject to Document Production and Disclosure demands.

Less Hassle for Everyone

Running a business can be like herding cats: distracting, time consuming and not always logical.

Streamlined methods reduce hassle and stress for you, your staff, attorneys and their staff.

Examples:

• Billing on a regular basis improves cash flow.
• Detailed contemporaneous timekeeping flows more easily into an invoice.
• An invoice that anticipates questions improves collections.
• PRO TIP: Report volume of records reviewed, to justify the time. Acrobat Pro displays total pages in a document. ¹

Stop Wasting Your Time

A delegation plan is cost-effective.

Skip time-consuming learning curves.

Bookkeeping costs 10% of what you charge. Creating a website costs half of what you charge and is time-limited. Administrative staff costs 15% of what you charge and can be remote.

Cash Flow

How you manage your practice has a direct relationship to a steadier income.

• Billing monthly produces income monthly.
• Billing After Work is Done. Many experts bill after they have spent considerable time reviewing records, conducting an IME, and writing the report. In fact, they submit the invoice with the report.

If you invoice only when you submit your report, consider this:

• You are floating the value of your time.
• Sticker shock can derail getting paid. Saving up your charges to bill all at once can well result in an unhappy attorney who may not pay or try to negotiate your fees down.
• You waste time trying to collect.
• Testimony at deposition or trial, followed by settlement, can leave your fees in purgatory as the attorney scrambles to justify not paying you. A case that is lost means expert fees now come out of the attorney’s pocket.

Testimony Security

Testimony is one of the most expensive and time-consuming work you will do. There is the potential for getting stiffed for a large sum. Here are things you can do to lessen your risk.

• Cancellation fees are built into your retention contract.
• Before deposition or trial testimony, always insist on payment in full to date AND payment in advance of an estimate.
• Receiving funds from an estimate in advance looks like a retainer but isn’t one. The goal is (1) so you can say on the stand that you have been paid in full–that your testimony isn’t reliant on getting paid (aka bias), and (2) you don’t personally incur big costs before you take the stand.
• The prepaid estimate includes your prep. time, time spent with an attorney prior to testimony and your usual testimony minimum. If that is not an 8-hour day assigned to testimony, consider requiring that in the pre-payment.
• Consequence if you don’t: the attorney who retained you, if their client received less than hoped, faces their own financial problem. If they pay you, will they receive less out of their share of the award? This scenario rarely results in a happy result.

Feelings Are Crucial

Practice as a professional, with a collegial attitude delivered in an ethical and trustworthy manner, and everything you do will earn respect.

Attorney interaction should be smooth and not marked by conflict (especially about money.)

Attorneys will feel better about working with you.

Positive feelings drive their relationship with you now and in the future. We all want to work with people we like and trust.

Pursue streamlined, cost-effective methods to collect what you are owed, reduce your expenses (dollars and time,) while improving your reputation with attorneys.

Don’t leave money on the table. 

Let’s talk about your practice, or use this form to ask questions.