The end of the year is a time for reflection and planning, both personally as well as professionally. New Year’s resolutions are our mechanism for handling our personal wishes and plans for the coming year. Professionally, it’s a good time to reflect on how our firm did — whether we made money, lost money, what kinds of clients and cases we handled, how we dealt with our colleagues, staff and adversaries, and whether we’re enjoying the work we do.

In the aftermath of the World Trade Center and Pentagon attacks and the war in Afghanistan, more of us are soul-searching to find meaning in our work. Depending on the nature of your practice, you could directly help individuals by drafting wills or reviewing estate plans and there’s also a desperate need for volunteers to assist victims’ families and small-business owners near the Trade Center with the paperwork and bureaucracy they have to tackle to get back on their feet.

Year-end often is the time when lawyers who have been unhappy at work seek to form new firms or partnerships or change careers completely. Other lawyers work with their tax advisers to figure out how to allocate their firm’s profits. Since the Internal Revenue tax code allows for a significant deduction for the purchase of equipment, this often is a good time to buy new computer equipment. If you’re considering upgrading some of your technology infrastructure, specifications described here may be helpful.

Those considering starting their own firm must be prepared with a significant financial commitment. Long gone are the days when you could rent a room, hang your shingle, get a desk, phone, stationery, business cards and a typewriter and meet any prospective client’s needs. Today, clients’ expectations are higher and their needs are greater. They expect you to be available by cell phone in an emergency and answer lower priority inquiries by e-mail. They anticipate sharing in drafting documents and even exchange them with you electronically. They want to find out more about you and your firm by looking at your firm’s website. And they demand responsiveness and competence.

So, what does it take to get a five-person office started? The short answer is lots of money or access to other people’s money. Whichever funding method you choose, you need a cushion of cash to live on while the new firm is becoming established. Even if you have an amicable exit from your previous firm, it will take time to begin performing client work, generating bills and getting paid. All this time you will have such substantial expenses as rent, salaries and furniture. Technology purchases have become a significant portion of the starting budget of a new firm and should be an ongoing expense for established firms.

Too often, lawyers make a huge investment in computers and software but hold off on staying current, only to be confronted again with another huge investment. Some of my clients regularly upgrade their hardware and software, while others still are using programs and equipment that’s more than five years old. Had it not been for the fears of Year 2000 incompatibility, there would be many more firms with older systems. Firms that make regular incremental upgrades actually spend less money over time on technology than those that “get their money’s worth” by waiting too long to upgrade. The fact is that offices that regularly upgrade have to learn fewer changes between versions than those that jump several versions every few years. Software vendors tend to make incremental improvements between versions.

Changes

Consider the differences between WordPerfect 9 and 10 vs. jumping from WordPerfect 6 to 10. Between versions 9 and 10, Corel added almost no new features, focusing instead on making the program more stable and more compatible with Microsoft Word in terms of converting documents. In contrast, since version 6, there have been many new functions, and converting any customization such as macros, templates and toolbars is more difficult. Changing from older billing and practice management programs to the latest versions often can involve time-consuming conversions and rethinking design decisions to adjust to improvements and new options. Even the cost of upgrading the software is usually less when moving from one version to the next instead of upgrading from several versions earlier. Additionally, software vendors limit or eliminate technical support for older versions, making it difficult to resolve problems when they arise.

If you’re getting started, your first decisions will involve space. Where do you want your office to be located? Part and parcel of that decision is staffing. If you choose to be in a shared suite, you will pay extra but have access to a receptionist, photocopier and other amenities, depending on the arrangement. If you go it alone, you may need support staff. While there are many successful sole practitioners and small firms that function with little or no support staff, I believe at least one assistant is vital to a firm’s well-being. Handling solicitations, filing papers, stuffing envelopes and managing client appointments are tasks better delegated to an assistant.

We’ll leave aside some of the traditional items — such as renting space and getting telephone systems and photocopiers — to focus on the basic necessities of equipping a modern law office. We’ll work with a hypothetical office of five people. Networks enable files and printers to be shared, perform central backups, maintain an Internet connection and share information such as calendar events, to-do’s and a contact list.

For five people or more, the preferred way to connect the computers is with a dedicated server. The leading network operating system now is Microsoft Windows 2000 Server. The other two main players are Novell’s Netware and Linux. Unless you have an excellent network vendor who can support a Linux network, a five-person firm on a limited budget should consider the Microsoft Small Business Server 2000. This includes licenses of many of the tools a small firm will need, including SQL (structured query language), which is becoming an increasingly important component as more of the legal programs offer higher performance versions that require SQL.

Costs

To get an idea of a budget, we did a little shopping and came up with some items and prices. For the server, I suggest a Dell PowerEdge 2500, Intel Pentium III 933 MHz with 256 MB RAM, 15-inch monitor, two 18-GB drives (set to copy data constantly from one to the other for backup with total storage space of 18 GB), 24X CD-ROM, tape backup drive and software, 10/100 network card, Microsoft Small Business Server 2000. This costs $4,200. To protect it from lightning or electrical surges, an APC BackUPS Pro 500 costs $140. Higher-priced units offer longer times to shut down in the event of power failure.

You also will need cables and a central connector to link the computers. For $140 you can purchase a Linksys EtherFast Cable/DSL Router, which, in addition to allowing you to share printers and information among the computers, allows a single Internet connection for the network, along with a firewall to protect it from intruders. The cost for cables will depend on the distance of the computers and server from the router, and the labor charges to run the cables through the ceiling to wall outlets in each office.

For workstations, I’m assuming standard desktops rather than laptops. I’d choose five Dell Pentium III1.2 Ghz computers with a 17-inch monitor, 20-GB hard drive, 20/48x CD-ROM drive, 10/100 network card, Microsoft Office 2000 operating system, Microsoft Office XP Small Business Edition and Norton Anti-Virus 2001, costing $1,425 each, for a total of $7,125.

On one of the workstations, I would add a CD-RW drive, which allows users to burn or create CDs for additional backup of such critical databases as case management, timekeeping and accounting programs. When purchased with a new computer, the additional cost for the CD-RW drive is $80.

Depending on their particular needs, attorneys might consider a laptop instead of a desktop. This will increase the expense but will allow lawyers more flexibility in where they work. Another splurge I would recommend is a Dell 17-inch flat panel monitor. While this adds $800 to the cost of each system, the monitor takes up less room on the desk and is much easier on older eyes.

Printer

The decision to buy a single high-speed printer, several less-expensive laser printers or a digital copier that also can scan and print will depend on the volume of work and your cash flow. In this hypothetical office, I would purchase a Hewlett Packard 5000N and cable that prints 16 pages per minute and can accommodate large capacity trays, at a cost of $2,090.

This brings the initial hardware purchase to $13,775. If we assume this is a typical firm using the most popular law office software, I’d add a single-user version of Quickbooks Pro 2001 for $220, a five-user license of Time Matters 4.0 for case and practice management for $950 and a five-user license of Timeslips 10.5 for timekeeping and billing for $850. If only one or two people print bills and reports, the firm could save a little money by purchasing limited API licenses for $25 each and use Time Matters to enter their time records. Since the Microsoft Office Suite is included with the workstations, the starting software expense is $2,020.

These estimates don’t include labor, consulting fees for customizing software or training staff, time needed to transfer data from old computers or assisting your firm with the inevitable bumps encountered in the early days of a new firm or technology upgrade. Make sure there’s enough money to get through the rough spots.

Carol L. Schlein is president of Law Office Systems in Montclair, a training and consulting firm specializing in law firm automation. Copies of previous columns are on her company website, www.losinc.com. For information about her quarterly meetings for Time Matters users and training services, check the website or e-mail info@losinc.com. Schlein formerly chaired the Computer and Technology Division of the ABA Law Practice Management Section.