Trimble: Solo, small firm management: Ideas to become more profitable

In my last column, I addressed the lament of many solo and small firm lawyers that they spend so much time managing the business, they can barely find time to practice law. Alternatively, if they are not handling the business aspects themselves, they are paying a nonbillable employee to handle things like payroll, bookkeeping, collections, receptionist duties and other administrative tasks. For large law firms, the economy of scale makes it possible to pay others to manage. For smaller firms, it can impose a heavy burden on the profits of the business.

During my years of advising solo and small firms, I have often suggested a number of solutions to cut costs and improve profits. Among the suggestions have been to share office space with others; to share receptionists and legal assistants; and to share bookkeepers. I have also suggested that they utilize part-time contractors to assist with paralegal services and legal research.

The single biggest cost savings that solo lawyers have undertaken since COVID-19 has been to jettison brick-and-mortar offices and work from home. Working from home has not proven to be ideal for every personality and every practice type, but it has been ideal for many. However, working from home has still not alleviated the need to manage the business of the law firm. If anything, it has prompted many at-home lawyers to take on more management because they are no longer employing nonlawyer assistants. While there are many great bookkeeping and payroll software programs, these programs still require a human hand to enter data and crank out checks, payments and tax forms. So despite the advances we have seen in law office technology and management, the burdens of managing remain.

Last year I had the opportunity to meet a young lawyer from Berne named Cory Sprunger. Cory and his wife, Allison Sprunger, were operating their small firm, Sprunger & Sprunger. When we first met, Cory had recently published an article for Res Gestae in which he wrote about the challenges of small firm management. The premise of his article was, “Together we are stronger.” Cory described how he and Allison were pioneering a model by which lawyers could band together to share the burdens of law firm management. In order to make their model possible, they formed Sprunger Professional Employer Organization LLC, or SprungerPEO.

In 2022, Cory’s dad, Mitch Sprunger, retired from the health care industry and joined Cory and Allison in the role of chief operating officer for SprungerPEO. The goal of their business is to provide administrative support to solo and small firms. While Cory and Allison still practice law full time with offices in six communities in northeastern Indiana, they have also worked with Mitch to develop SprungerPEO into a business that has law firm customers from Evansville to Angola and Indianapolis to Fort Wayne.

I recently sat down with Cory and Mitch to learn more about the business model they have created in SprungerPEO. What they showed me was exciting and very much still evolving. Thus far, they have established four major categories of service. First, they offer IT services that include equipment, software, printer leases, cloud-based storage, IT support and more. Next, they offer a full menu of accounting and tax services that include Clio practice management, QuickBooks, bookkeeping management, cash and trust account management and more. Third, they offer communications services that include a live receptionist to answer phones and mail processing. And finally, they have payroll processing that allows them to offer some employee benefits and more. The offerings of SprungerPEO are a la carte; lawyers may sign up for any one of the services, a combination or the whole array of services.

According to Cory, they are constantly looking for new ways to provide services to reduce the time lawyers spend doing these things themselves. Cory shared a distressing statistic with me from Clio’s Legal Trends Report for Indiana: Many solo and small firm lawyers are only able to bill on average 2.5 hours per day for their legal time because of the burden of administrative tasks. Further, the small firms have administrative staffs who could be billing time for paralegal activities if they were not handling administrative work.

Mitch and Cory have three takeaways about their venture. First, they want to beat the statewide average billable hours per day for solo and small firms by allowing an additional 2.0 hours per day for legal work. They also want to free up legal assistants who may also be paralegals to engage in billable time. Second, they concede that this is not a new concept, but it is one that has been slow for many lawyers to adopt. Lastly, they observe that to get better, lawyers must be open to change.

My hope in sharing this story is to encourage law firms of all sizes to pay greater attention to the business of law and to find efficiencies that will make life in law less stressful and more profitable. I want solo and small firm lawyers in particular to think about how they do business, and to be open to exploring the bundling and sharing of services, such as the services offered by SprungerPEO and others in the same business.

Cory Sprunger was absolutely correct when he wrote in 2022, “Together we are stronger.”

#WillYouBeThere?•

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John Trimble (@indytrims) is a senior partner at the Indianapolis firm of Lewis Wagner LLP. He is a self-described bar association “junkie” who admits he spends an inordinate amount of time on law practice management, judicial independence and legal profession issues. Opinions expressed are those of the author.