You need to count your closed files. Here’s why:
In going through their records, it has become apparent that most firms don’t count the number of files they have open at any particular time.
They know when they’ve opened the file. They don’t, however, always know when a file is closed. In fact, some firms don’t designate files as closed in their recordkeeping system. They have lots of active files and semi-active files, but there isn’t a clear demarcation of the closing of the file.
That’s unfortunate because, in my opinion, one of the key metrics for a successful firm requires determining whether there is equilibrium between the number of files opened and the number of files closed.
What I mean is that for any particular period of time, you should know the number of files you’ve opened and the number of files you’ve closed. The difference between those numbers should be relatively small. There will usually be a difference, but it should only be significant if the firm is growing rapidly or, alternatively, closing up shop.
Many years ago, I attended a seminar by a California lawyer who drew an analogy between a family law practice and a toilet. He explained that as material came into the top of the toilet, it needed to be flushed out of the bottom. If you didn’t keep the input balanced with the output, you had a clog.
A family law practice is much the same. You need to have a certain number of clients coming in and a certain number of clients going out. If the number of clients coming in begins to exceed the number of clients whose files are being closed, you’re going to develop a clog.
The only way you can tell whether you’re getting into trouble is to count the number of files you’ve opened and compare it to the number of files you’ve closed. In our firm, we keep a trailing 12‑month count of files open versus files closed. I see the report with both numbers indicated, along with a monthly graph, on the tenth of each month. You should do the same.
That means that you should receive a monthly report that tells you the number of files opened in the last 12 months and the number of files closed in the last 12 months. You should make sure that those numbers stay relatively close to one another or that you understand why they’re not closed. For instance, in a period of rapid growth, you might open many files while hiring additional staff to help with those files, and the number will get out of whack. Eventually, however, those numbers will come back into alignment. In the absence of a period of growth, those numbers should not be disconnected from one another.
For lots of firms, because procedure varies from state to state, determining the point at which a file is closed is difficult. Issues linger on long after the primary work in the case has been concluded. It doesn’t really matter what event is designated as the event that results in the file being closed. Personally, I designate a file as closed when we’ve done everything that we anticipate having to do in the file. Usually, that means that the Qualified Domestic Relations Orders have been properly qualified.
While it doesn’t really matter what you determine will be your designation of a file being closed, it does matter that you have a system so that you can count open files and closed files. Keeping up with this indicator and making management changes when the indicator gets out of whack is the best way to prevent your practice from getting clogged.
