Unit 1 – Introduction to Legal Practice and Practice Management

Question 1

List the different business structures in which an attorney’s business may be conducted

Answer 1

➢ Sole proprietorship
➢ Partnership
➢ An incorporated company (separate legal entity) or
➢ A practice in association with others (work-sharing arrangements / offices to rent)

Question 2

What are the conditions placed by the LPA on how attorneys may practice?

Answer 2

The LPA provides that attorneys may only practice:
➢ For their own account
➢ As part of a commercial juristic entity
➢ As part of a law clinic
➢ As part of Legal Aid South Africa
➢ As an attorney operating full-time for the State or in the employ of the South African Human Rights Commission

Question 3

How d o advocates operate?

Answer 3

Advocates operate as sole proprietors
(cannot form partnerships) or conduct business through an incorporated
company.
Advocates forming part of bar associations practice in ‘groups’ in shared office spaces.

Question 4

What is “the practice”?

Answer 4

Practice refers to the business enterprise in terms of which legal services are rendered for financial gain by owners of the enterprise.

Question 5

Key Elements of a Legal Practice

Answer 5

➢ Services → it provides or sells services that produce income for owners
➢ Costs money → Has expenses
➢ Staff → Employs People
➢ Business Premises → Has a business premises and infrastructure that requires resources
➢ Compliance → Subject to certain statutory requirements.

Question 6

Management

Answer 6

Implies a continuing process
and it entails a wide range of activities
with the aim of providing direction to the business’s resources
in order to achieve its goals in the most cost-effective way.

Question 7

What does General Client Care and Marketing Consists of?

Answer 7

➢ Handling Complaints

➢ Information Management and Feedback to Client

➢ Client Awareness

➢ Rendering Services

➢ Etiquette

➢ Membership of Organizations

➢ Sponsorships

➢ Time management

➢ Entertaining Clients

➢ Professional Development

➢ Labor Law

➢ Clarity about Fees

➢ Advertising

➢ Business Cards

Question 8

Handling Complaints

Answer 8

▪ Although a complaint may be directly only at a particular member of staff, it reflects negatively on the practice as a whole.
▪ Deal with complaints immediately and firmly.
▪ Do not hesitate to reprimand and apologize profusely to the client.

Question 9

Information Management and Feedback to Client

Answer 9

▪ Report to clients regularly, such as twice per month.

Question 10

Client Awareness

Answer 10

▪ Ask your clients what they expect.
▪ If their expectations are unrealistic, convey that message to them in a diplomatic yet firm manner.

Question 11

Rendering Services

Answer 11

▪ Render your services as quickly and efficiently as possible.
▪ Immediately confirm your instructions to the client in writing.
▪ This assures you understand the mandate and allows you to begin dealing with it immediately.

Question 12

Etiquette

Answer 12

▪ Telephone → Ensure that the receptionist answers incoming telephone calls promptly and in a professional and friendly manner. Keep a record of all calls that are missed or that need to be directed to the appropriate person.

Question 13

Membership of Organizations

Answer 13

▪ Turn your membership of sporting, cultural and/or religious organizations into an appropriate marketing tool for your
practice as it can expose you to new clients.

Question 14

Sponsorships

Answer 14

▪ This is another promotional tool.
▪ Law Society Rules allow activities such as the sponsorship of a sports event or prize-giving ceremonies.

Question 15

Time management

Answer 15

Be punctual as it is of vital importance in all business.

Question 16

Entertaining Clients

Answer 16

▪ Entertaining clients or potential clients is commonly used by law firms to market their services, provided that it is in good taste.
▪ Can be used to inform clients about your services.
▪ Be cautious about potentially unduly influencing certain individuals.

Question 17

Professional Development

Answer 17

▪ You as the practitioner in your field, you must remain updated on the changes in the law of your field.
It is your responsibility to ensure you are up to date.

Question 18

Labor Law

Answer 18

▪ You must ensure that you have a decent grasp of employee relationships with regards to dismissals, appointments, the
CCMA, etc.

Question 19

Clarity about Fees

Answer 19

▪ Discuss and agree on fees and invoicing methods with your clients at the first consultation.
The importance is twofold:
* Firstly, it ensures that your clients are fully aware of what is expected of them as far as payment of fees and disbursements are concerned.
* Secondly, it provides a proper structure to your offices as to how much money may be expected from a particular case, as well as when payments by clients will be made.

Question 20

Advertising

Answer 20

▪ Law Society Rules permit the advertising of attorneys’ services.
▪ There are, however, certain guidelines and parameters within which you may advertise. For example, you cannot advertise yourself as the best firm or better than other
firms.

Question 21

Business Cards

Answer 21

▪ Most attorneys carry business cards that may be handed to persons interested in your services.
▪ Be careful not to hand these out indiscriminately as it may
amount to touting for business, which is considered misconduct by the Law Society.

Question 22

General Management

Answer 22

➢ Management implies a continuous process
➢ Comprised of a wide range of activities to achieve the goals of the practice in the most cost-effective way.

Question 23

The Four Fundamental Actions of the Management Process

Answer 23

➢ Planning
➢ Organizing
➢ Guidance
➢ Control

Question 24

Planning

Answer 24

▪ Identifying the goals of the practice.
▪ Determining how these goals should be achieved.
▪ Determining what resources are required to achieve them.

Question 25

Organizing

Answer 25

Organizing who will do what, when and how.

Question 26

Guidance

Answer 26

▪ Instructing and motivating staff to perform activities in view of the practice goals.
▪ Effective guidance requires good communication and leadership skills.

Question 27

Control

Answer 27

▪ Namely monitoring the overall performance of the practice and reviewing actions or situations that deviate from the practice goals.

Question 28

Balancing the ethics scales

Answer 28

➢ Financial reward versus professional ethics and Constitutional Framework

Question 29

Personal Management

Answer 29

The overall management of a practice is impossible if the people involved do not individually manage themselves.

Question 30

What does Effective Time Management involve?

Answer 30

▪ Planning ahead.
▪ Establishing the order of tasks
▪ Control interruptions
▪ Delegate

Question 31

Elaborate on establishing the order of tasks

Answer 31

• First, Important + Urgent Tasks
• Second, Important + Not Urgent
• Third, Urgent + Not Important
• Finally, Not Important + Not Urgent

Question 32

How should one delegate?

Answer 32

• Identify activity and when it should be delegated.
• Choose a capable person to delegate to.
• Explain the necessity of the task and why it is delegated.
• Explain the goals and results to be obtained.
• Provide all necessary information to them.
• Assist them to establish priorities.
• Set reasonable deadlines and record them.
• Demonstrate your confidence in the person.
• Delegate in such a way that you would like to be delegated to.
• Demand the completed work at the set time.

Question 33

Def of financial management

Answer 33

➢ Financial management refers to the control, management and administration of the financial resources to maximize financial returns.
➢ Similar to other types of business

Question 34

What is required ito financial management

Answer 34

You are required to keep a record of income and expenses

Question 35

What is included in Expenses?

Answer 35

➢ Expense include salaries/wages, stationery, office rental, municipal matters, fuel for drivers; vehicles etc.
➢ Remember that resources listed as expenses must be purchased for use in the office, and actually used for that purpose.

Question 36

What do included expenses consist of?

Answer 36

your:
▪ Letterhead
▪ The partners
▪ Who is responsible for the firm

Question 37

What about income and assets?

Answer 37

➢ Income is derived from professional fees; and
➢ Businesses have assets (for example immoveable property,
moveable property and debtors) and liabilities (for example bank overdrafts, creditors or outstanding balances in terms of credit agreements).

Question 38

Actual vs Budgeted Financial Performance

Answer 38

➢ One of the main aims of financial management is to consider actual financial performance against budgeted financial
performance

Question 39

Value of Financial Reports

Answer 39

➢ Financial reports help us to analyze how the business has performed.
➢ The most important financial reports are the income statement, balance sheet, cash flow report, the debtor’s age analysis report, the trust surplus report and fee debit report.

Question 40

Income Statement

Answer 40

➢ The statement sets out the income and expenditure of the enterprise for a specific accounting period.

Question 41

Balance Sheet

Answer 41

➢ The financial position of an enterprise at a particular point in time is set out in the balance sheet. It contains details of assets, liabilities and the owner’s equity in the enterprise.

Question 42

Cash Flow Report

Answer 42

➢ This report reflects the influx and outflow of cash in the enterprise for a particular period.

Question 43

Debtor’s age analysis report

Answer 43

➢ This report shows the amount of money owed to the enterprise by clients for services rendered.

Question 44

Trust surplus report

Answer 44

➢ This report reflects the amount of money in each client’s trust account that is available for transfer to the business account.
In other words, funds that have already been earned by not yet transferred.

Question 45

Fee Debit Report

Answer 45

This report reflects the fees that have been debited for a particular period, meaning the income earned by the enterprise through the rendering of services. This report is also
used to monitor the performance of the respective fee earners in the enterprise.