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Maximizing the Benefits of a Well-Planned IRA Beneficiary Designation

September 1, 2015

by David Zumpano with 2 Comments Asset Protection Estate Planning Drafting Software

Many attorneys and financial professionals struggle over how to properly designate the beneficiary of an IRA. While it can be confusing, understanding the core elements of the procedure greatly simplifies the designation process and offers multiple solutions. The three key elements one must analyze before designating the beneficiary are as follows: first, what is the overall intention of the IRA owner; second, who is the intended beneficiary; and third, what is the proper language to use on the IRA beneficiary designation form. As we examine and grow to understand these three issues, great practice opportunities will emerge.

The most important element in determining the proper IRA designation is the overall goal of the IRA owner. If the owner’s goal is simply to transfer the IRA interest to someone else at death, then a simple designation to the individual will suffice. The challenge comes when we start to identify more advanced goals. What happens if the IRA owner intends for the beneficiary to receive the IRA protected from the beneficiary’s predators and creditors? What if the owner wants the beneficiary to receive the IRA over a lifetime rather than all at once? These are situations in which a mere direct designation to the beneficiary will not accomplish a client’s goal.

The U.S. Supreme Court, in Clark v. Remeker, ruled that funds held in an inherited IRA do not constitute “retirement funds” and thereby do not derive the same protection benefits as the original IRA. (573 US, 2014). The one exception to this ruling occurs if the beneficiary is the surviving spouse and the surviving spouse rolls the decedent’s IRA into his or her own IRA. However, although the surviving spouse may be permitted to make distributions from the IRA over his or her life expectancy, such withdrawals will not necessarily be protected. Further, while a surviving spouse can maintain the protection of the original IRA owner, the surviving spouse can lose the IRA proceeds to his or her long-term care costs.

If the goal of the IRA owner is to preserve the IRA for the benefit of his or her beneficiaries and protect it from said beneficiaries’ creditors and predators, then a direct designation of the beneficiary must not occur. Currently, the only way to absolutely protect an IRA from the creditors and predators of the beneficiaries is to designate an irrevocable trust as the IRA beneficiary and designate the intended IRA beneficiaries as the beneficiaries of said trust. This two-step approach assures continued protection of the IRA funds after the death of the original plan holder and for the lifetime of the trust. The challenge for practitioners now becomes how to effectively name a trust as the IRA beneficiary and how that designation impacts the individuals intended to benefit from the IRA.

A trust can be a qualified designated beneficiary of an IRA without violating the IRS rules that require a “stretch out” of the payments from the IRA over the lifetime of the beneficiary. The four criteria to ensure compliance with the “stretch” rule necessitate the trust (1) to be valid under state law, (2) to be irrevocable at the death of the grantor, (3) to have all beneficiaries clearly "identified" within the statutory time period, and (4) a copy of the trust must be provided to the IRA plan administrator. These conditions can easily be met, but the most common violation is in having a qualified beneficiary that is identifiable.

An identifiable trust beneficiary must be clearly identified by the terms of the trust prior to September 30 of the year following the IRA owner's death. While this seems simple, it typically is violated in two fashions. First, a nonhuman beneficiary is named, creating a situation where there is no measurable life in being (i.e. a charity). Second, the terms of the trust do not clearly identify a beneficiary that can be named within the statutory time period. This violation typically occurs when the terms of the trust require some condition precedent to the vesting of the beneficial interest. While appearing complicated, once a practitioner has an understanding of these two issues, language can easily be inserted into the trust to ensure that those provisions are not violated. As Lawyers with Purpose members, our client-centered software system has all necessary language to ensure that the provisions are not violated by providing clear and proper warnings when an attorney makes choices that could put the stretch out in danger. Once the trust beneficiaries are properly identified, a trust can be named as beneficiary to maintain the asset protection for a non-spousal beneficiary (or spousal beneficiary if long-term care costs are an issue).

The final step lies in properly naming the trust as the beneficiary of the IRA. This requires an attorney to have a clear understanding of the distinction between outside beneficiary designations and inside beneficiary designations. Outside beneficiary designations reference beneficiary designations made outside of the trust on the beneficiary designation form of the IRA itself. Typical outside beneficiary designations are the trust, a specific article within the trust, or a particular beneficiary within the trust pursuant to a particular article. Examples of these outside designations could be as follows: “Pay to the trustee of the ABC trust dated 1/1/2015,” “pay to the trustee of the family trust under Article Four of the ABC trust dated 1/1/2015,” or “pay to the trustees of each separate share trusts under Article Five of the ABC trust dated 1/1/2015.” These three outside beneficiary designations distinguish which beneficiaries of the trust will receive the IRA. More importantly, these designations will also distinguish the stretch period based on the life expectancy of the oldest beneficiary inside the designated trust (the general trust, the family trust, or the separate share residuary trusts).

Inside designations refer to the specific beneficiaries named inside the trust document. When the proper inside designations are made after the correct outside designation, meaningful and comprehensive protection is afforded the client. Typically, a family trust will name the spouse and children of the client as beneficiaries. In such a situation, the oldest beneficiary would likely be the surviving spouse and therefore trigger a much shorter stretch-out period. In addition, a second stretch period at the death of the surviving spouse would be lost because it was not rolled into the surviving spouse’s IRA. Alternatively, when a residuary trust is named as outside beneficiary, the IRS would then examine all beneficiaries inside the residuary trust and choose the oldest beneficiary for the measuring life of the stretch. Finally, when the outside beneficiary is designated as separate share trusts, each separate share trust under the particular article would be analyzed to identify the oldest beneficiary therein. Typically in each separate share trusts there is only one beneficiary, so each beneficiary would use his or her age as the measuring life for stretch calculations.

Disclaimers are an important tool to consider in conjunction with outside and inside designations in IRA planning. Disclaimers may be effectively used on both outside and inside beneficiary designations. The use of disclaimers can create a variety of options to meet the overall goals of the client after death.

Proper inside and outside beneficiary designations together with the effective use of disclaimers are powerful planning tools. As an example, let’s analyze a situation in which a client desires to leave his IRA to his spouse of the same age, while still getting the most return on his investment for his wife and children. In this scenario, the client’s outside IRA beneficiary designation form names a family trust as the primary beneficiary and the surviving spouse as the contingent beneficiary of the IRA.

When the client names the family trust on the outside beneficiary designation form, the trustee of the family trust accepts the IRA designation. The surviving spouse, as sole inside beneficiary of the family trust, may choose not to benefit from the IRA. In accordance with the terms of the family trust, she can disclaim her interest in the family trust within the trust document. The IRA must then be paid in accordance with the trust terms to the residuary trust and the oldest of the residuary trust beneficiaries (in this scenario, the client’s oldest child) becomes the measuring life for the stretch.

Alternatively, as primary outside beneficiary, the trustee could disclaim the trust’s interest in the IRA in accordance with the outside beneficiary designation form before it is ever transferred into the family trust, resulting in the IRA going directly to the contingent outside beneficiary designation, the surviving spouse. The surviving spouse could then roll the inherited IRA into her own IRA and get all the benefits associated therewith. As evidenced, this plan permits an examination of the surviving spouse's health and income with regard to long-term care costs at our client’s death. In doing so, we have given our client and his spouse the greatest opportunity to ensure that the overall protection goals of the IRA owner (client) are met.

By understanding and implementing the three key elements in determining IRA beneficiary designations (the overall intention of the IRA owner; the intended beneficiary; and proper language to use on the IRA beneficiary designation form), we as LWP attorneys are able to provide our clients with the best IRA distribution plan to fit their desires and needs.

For a deeper understanding of Lawyers With Purpose and what we have to offer your estate planning and/or elder law practice, join us in Phoenix, AZ, in October. If you are even considering coming to this event register today – The first 2.5 days of the program are officially SOLD OUT and the room is at capacity. We still have a few spots left for the BIG Tri-Annual Practice Enhancement Retreat that kicks off Wednesday afternoon. For registration information contact Amanda Ross at aross@lawyerswithpurpose.com or call 877-299-0326.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

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Why Clients Are So Confused (and Their Lawyers too)

August 26, 2015

by David Zumpano with No Comment Estate Planning Drafting Software

When people come into my workshop, the first thing I ask is, “What do you want to learn?” The response is almost immediately, “I want to learn how to protect my assets.” Ninety nine out of 100 lawyers would stop there and say, OK, let me show you the way. But a Lawyers with Purpose attorney knows to ask the next question: “What are you afraid of losing your assets to?”

That's when the answers start to vary. Predominantly the No. 1 answer is that people are afraid of “the government.” Interestingly, they're not really sure what this means, but typically it tends to relate to taxes or probate. Often, they're not even sure what taxes they're concerned about or the difference between income taxes, estate taxes or gift taxes. They're just afraid of taxes overall.

Secondly, they're afraid of losing everything to long-term care costs or Medicaid. We know Medicaid doesn't take any of their money, but some of it may have to be applied to the cost of care before Medicaid will pay for their long-term care costs.

The third most common response is family members. Most people who are concerned about family members have family members they are afraid will challenge their estate or cause havoc for the remaining family members. We as attorneys know that it's the family members we don't anticipate who cause the greatest damage. Finally, clients want to protect from lawsuits. They are keenly aware of the possibility of lawsuits and they want to make sure that everything they've worked for is not lost to one.

As we analyze each of these separately, it becomes clear why people are so confused. They are trying to distinguish between estate planning, tax planning, asset protection planning, Medicaid or benefits planning, and general asset protection strategies. To keep it simple, at Lawyers with Purpose we teach four layers of planning.

First, estate planning is ensuring that what you have gets to whom you want, when you want, the way you want, without unnecessary cost or delay.

Second, asset protection planning is ensuring that your assets are protected from predators and creditors. The key distinction we train our members on is between obtaining asset protection after death, by way of post-death trust planning, and asset protection while alive by way of the IPUG™ protection trust. These trusts ensure that clients are able to create them, control them, change them, and even benefit from them, without the threat of being lost to predators, creditors, nursing homes, family or any other potential threat.

The third level of planning is needs-based benefits planning. This often includes Medicaid benefits, Veteran's benefits, and other needs-based benefits available to pay for a client's care if needed. Planning for these needs-based benefits is a level above and beyond general asset protection planning, but it is usually distinguishable and identified when using the LWP™ client enrollment system and documentation creation system.

Finally, there is tax planning. This only applies to two-tenths of one percent of America, but it's the No. 1 reason why people want to protect their assets. So, while it is important and necessary to some, the vast majority (99.8 percent) really don't need it. That's why the Lawyers with Purpose training on its TLC™ estate planning process is essential to ensure clients are properly educated on how to achieve the estate plan most meaningful to them.

If you want to learn more about Lawyers With Purpose consider being in the room with us and our members and experience it first hand! We'll be in Phoenix, AZ, October 19th – 23rd! Click here to review the full agenda. If you register by August 28th you can still snag a seat at Early Bird pricing! This is THE estate and elder law event you DO NOT want to miss.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

When Is It Too Late to Protect Assets?

August 21, 2015

by David Zumpano with No Comment Asset Protection Estate Planning Drafting Software

Many people are accustomed to the concept of "protecting their assets," but few are clear on the details of how to do it. The primary concern for clients is the loss of their assets to long-term care costs. Most people believe they need to wait five years to protect their assets, and once they enter a nursing home, they believe it's too late. The truth is, it's never too late to protect assets. As the LWP™ Medicaid Calculation software shows, individuals can qualify immediately for Medicaid, even if they have assets in excess of half a million dollars. The trick is to know the Medicaid laws and rules and how they apply to each client fact pattern.

I'll use Mary as an example. Mary called my office frantic because her mother was admitted to a hospital, and she was advised that mom would be going to a nursing home. She immediately contacted her dad's lawyer to see what to do. Dad's lawyer was swift to give them advice on protecting their assets from the threat of mom's impending long-term care costs. Mary was thrilled that the lawyer showed them how to protect $175,000 of their $450,000. Although they were losing $275,000, they were thrilled to protect the balance.

Mary eventually called me because her sister knew me and insisted she get a second opinion. When we put Mary's mom's fact pattern through our Medicaid qualification software, we were quickly able to determine that, in fact, Mary's mom qualified for Medicaid immediately and all $450,000 of her assets were safe and protected for dad, who still resided at home. In fact, I run into dad frequently at breakfast, and six and a half years later, mom is still in the nursing home and he's still at home with 100 percent of his assets protected. So, the question is not whether it is too late. The question is, how much can we protect and how soon?

It’s easy with the LWP Medicaid Calculation software. It shows you how. If you would like a FREE demo of our Estate Planning Drafting Software click here to schedule a call now!

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

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There’s No Such Thing as the 60-Month Rule

August 5, 2015

by David Zumpano with One Comment Estate Planning Drafting Software

Over the last 23 years of delivering public workshops to more than 10,000 people, I'm routinely asked about the 60‑month rule. The Lawyer with Purpose “How to Protect Your Stuff in Three Easy Steps” workshops have a slide that asks:

Have you heard that if you need Medicaid, they can take your home?
Have you heard that if you want to protect your assets from the nursing home, you have to give them away?
Have you heard that if you give them away, you have to wait 60 months?

After the audience acknowledges they've heard all three, we are swift to say, “None of these are true!” The truth is, there is no such rule.

Sixty months is a rule under the Medicaid law that is merely a period of time in which Medicaid can look back at your financial records. It doesn't even apply in all Medicaid circumstances. For example, in many states that offer community-based Medicaid for care in the home, there is no look-back period. But understanding the look-back period is absolutely useless in regards to clients' fears of Medicaid. It has no relevance other than to identify whether the client has made any uncompensated transfers within that time period. So what if they have? When a client retains us, we routinely convey assets away and get them qualified in as little as two to three months. Sixty months has no impact on determining when an individual qualifies for Medicaid, it's just a period of time to determine if they've given assets away. If incomplete transfers have occurred over the 60 months, a client can get them back, and utilize other legally approved strategies to neutralize the impact of transfer.

Knowing the laws and rules is critical. That's why the LWP Medicaid Calculation software is so valuable. For every client fact pattern, it does the figuring for you. It considers every variable in the Medicaid law of your state and compares them to every variable of your client's fact pattern. Artificial intelligence optimizes the planning strategy and timeframe to get the client qualified in the shortest period of time, protecting the greatest amount of assets. Don't let your client suffer from the 60‑month syndrome; learn how to protect them now.

If you aren't a Lawyers With Purpose member, and want to learn more about our estate planning drafting software, schedule a live demo by clicking here.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

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“Strategic” Networking Takes Less Time

July 21, 2015

by David Zumpano with No Comment Coaching & Implementation Systems & Processes

I’ve worked with many professionals who tell me the key to success is “networking.” When I hear this, I always ask if their networking is “strategic?” Often, they look at me with a quizzical look. What is strategic networking? Strategic networking ensures the time you spend in networking and relationship-building is effective and most important — measurable. Most attorneys have good relationships, but don’t track them effectively. A result you lose something precious, your time.

Strategic networking ensures you actually enjoy your relationships on a personal level, not just a business level, and together your strengths and theirs can be utilized to really impact each other’s business and your community.

Get strategic on Thursday, July 23^rd at 2:00 EST, I am hosting a one-hour webinar entitled, “Having the Time to Have it All – Three Time Strategies to Have a Practice with Purpose and Profit”.

======== > REGISTER NOW HERE

In this webinar I will share how in just two 1½ hour meetings a week you can create strategic relationships that enable you to help more people. I will also share the way to empower your support team (rather than manage them), to grow your practice, help more people and receive the financial benefits of creating that value. You can have an effective work-life balance and enjoy your business relationships rather than dread them. Or worse, have them out of obligation. When you work strategically, you are able to identify the most effective relationships that enable you to help the greatest number of people and the specific structure you need within your firm to support that need.

Click HERE to register for this one time webinar to get better relationships in less time.

You don't need to work 60 hours a week to succeed. I willingly work 45 to 50 hours a week to run my seven companies (all successful), helping a lot of people, and creating value in the markets they serve. You can, too.

Join me July 23rd to make your networking strategic. You’ll not only get the “how,” but for the first time on a webinar, I’ll share with you the exact tools and resources I’m using to make time-saving magic happen. Feel free to swipe and copy what I’m doing step-by-step in your own practice—I encourage you to! Start by reserving your space on the webinar HERE.

Strategically,

David J. Zumpano, CPA, Esq., Practicing Attorney, just like you & Founder of Estate Planning Law Center & Lawyers with Purpose LLC

“Time” Is The Difference Between Surviving And Thriving

July 15, 2015

by David Zumpano with No Comment Uncategorized

The thought of thriving is ideal, but most attorneys I work with are overwhelmed and are just surviving. The reality is, as I discover their worlds, they're working long hours and weekends just to survive, just to keep their head above the water. Despite themselves, some are even thriving, but the personal cost is higher than they anticipated or want to pay. Again, the lack of time seems to show up in each of their challenges.

That's why on Thursday, July 23^rd at 2:00 EST, I am hosting a one-hour webinar entitled, “Having the Time to Have it All – Three Time Strategies to Have a Practice with Purpose and Profit”.

======== > REGISTER NOW HERE

In this webinar I will prove you do have enough time. The truth is, you're already doing it all, just in the wrong order. I will show you how to get the right help from others so together you can get it all done with less time required of you.

I will show you how I got my work-life balance back and how you CAN run a law practice that helps a lot of people, not at the expense of you, but rather with your skills being utilized effectively.

And, for the first time ever, I’m going to let you see the “backend” of my practice. I’ve never done this on a webinar before. You will see with your own eyes the platforms, systems and software that I am using to lead a successful practice that runs practically without me.

In all honestly, I can now manage my staff and every client matter right from my cell phone—which can be done sitting on the beach or while watching a sports game. Talk about freedom! Register now and I’ll show you how it’s done.

======== > REGISTER NOW HERE

C’mon, what would it be worth if one hour could save you ten hours a week for the rest of your practice life? Imagine if in the time you have, you could help more people, without increasing the amount of time required of you?

This is possible, but you must know and implement these three time strategies, so go now HERE to register for this one-hour event to identify what all successful people use to share their value and help more people in an organized manor.

I hope you can join us so you begin to thrive instead of just survive!

Here’s to making the time,

David J. Zumpano, CPA, Esq., Practicing Attorney, just like you & Founder of Estate Planning Law Center & Lawyers with Purpose LLC

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3 Time Concepts To Break Through Your Time Constraints

July 13, 2015

by David Zumpano with No Comment Coaching & Implementation Estate Planning Drafting Software Systems & Processes Team Building

Many lawyers I coach complain they don't have enough time to get everything done. Interestingly, I remind them the most successful people in the world have the same amount of time in a day as they do. How do they do it? I've been practicing law for 20 years and the last 17 as a solo practitioner. I've grown my practice from me and a secretary to a firm with over 20 employees, including five lawyers. I can honestly say that's not for everybody. I never expected it; it’s where I ended up. I will share the time-saving strategies I utilized to grow my practice. Join me in a one-hour webinar:

Thursday, July 23^rd at 2:00 EST for our “Having the Time to Have it All – Three Time Strategies to Have a Practice with Purpose and Profit”

======== > REGISTER NOW HERE

You don't have to have a large practice to succeed, but you do need to get control of your time so you have enough of it to satisfy all the needs of your practice and your personal life. Most lawyers I work with are being pulled in so many directions based on different marketing schemes of the individual organizations that recruit them. Many attorneys belong to multiple organizations, including one for estate planning, one for Medicaid, one for VA, one for special needs planning, one for asset protection, and yet another for tax planning. And then wonder why they don’t have time to keep up with it all. Don't get me wrong, each organization has value, but the challenge I've always found is there is always a lack of time to get it done.

Should you attend? If you are struggling with a work-life balance, struggling with how to run a law "business," or feel you do not have enough time in your day to get all the work done, then this webinar will be a great use of your time. Click here to register for this special webinar.

In one hour, I will share with you the three key time strategies to have the time necessary to provide estate planning, elder law, asset protection, Medicaid, VA Benefits, special needs and tax planning all in the same time you have now. I look forward to sharing with you.

======== > REGISTER NOW HERE

Hope you don’t miss,

David J. Zumpano, CPA, Esq., Practicing Attorney, just like you & Founder of Estate Planning Law Center & Lawyers with Purpose LLC

P.S. For the first time ever, I will be showing non-members the exact technology platforms and systems that I use to manage and streamline my practice. Implementing what I’m going to teach you will not only save you a tremendous amount of time, but will finally help you lay a strong practice management foundation to take your business to the next level. Plus, YOUR STAFF WILL LOVE IT. Have them join you on the line!

======== > REGISTER NOW HERE

Do You Have The “Time” To Be An Entrepreneurial Lawyer?

July 8, 2015

by David Zumpano with No Comment Estate Planning Drafting Software Legal Marketing

A great question. Many lawyers fail to see themselves as entrepreneurs. The truth is, solo and small practitioners are entrepreneurs, but most are not operating like one. So how should entrepreneurial lawyers think? As a successful entrepreneurial lawyer, I have learned the Key Essential element to thrive is managing our time.

When you think of the most successful people: the United States, they get it all done in the same time we have; but they are using their time differently. Most attorneys I have worked with over the last 15 years struggle with having enough time to get it all done.

That's why on Thursday, July 23^rd at 2:00 EST, I will share real time effective strategies that have lead to my success. It's called, “Having the Time to Have it All – Three Time Strategies to Get a Practice with Purpose and Profit”.

In this one-hour webinar I will share the time strategies I utilize in my practice that grew it twenty-fold over the last seventeen years. I will also help eliminate misconceptions of time that hold you back from having the practice you're capable of having and keeps you working late night after night, day after day.

And, *for the first time ever,* I will be revealing to non-members the exact platforms and technology systems I personally use to manage my law firm, free up my time, and serve clients in a more efficient and streamlined way.

Without a doubt, what you’ll learn on July 23^rd is the “secret sauce” of my practice success. With a few clicks of a button each morning, I can see what everyone in the office is working on, what’s outstanding, and what matters to handle in what order to meet my projected revenue goals for the month. No more micromanaging and no more chasing my own tail each day.

JOIN US on the line and let me show you what tools I’m using and how I’m making them work in my firm.

Should you attend? If you are struggling with work-life balance, struggling with how to run a law "business," or feel you do not have enough time in your day to get all the work done, then this webinar will be a great use of your time. If you are struggling with how to hire the best people and have inconsistent marketing and cash flow, this webinar is for you! What is the opportunity? Simply stated, the opportunity is for those attorneys who want to provide estate planning, asset protection, Medicaid, veteran's benefits, special needs, and tax planning to clients who need these services to protect what they've worked a lifetime to earn and to preserve the dignity they deserve.

What's required to implement the information will share? To become an entrepreneurial attorney you must have a strong work ethic, really enjoy what you do and be passionate about helping people. You must also be a lifetime learner and really value relationships. That’s it! These are the essential elements that you’ll need to have on your calendar. I will show you how you can and still get your work done.

Click HERE to register for this time saving webinar. Even if you only utilize ONE of the three time breakthrough strategies, it will move you forward toward your quest to have the time to have it all. I look forward to sharing.

See you there,

David J. Zumpano, CPA, Esq., Practicing Attorney, just like you &, Founder of Estate Planning Law Center, & Lawyers with Purpose LLC

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Five Essential Roles For A Successful Practice – Part Four

June 24, 2015

by David Zumpano with No Comment Coaching & Implementation Team Building

This is the final post of a four-part series outlining the five key roles to a thriving, purposeful law practice: entrepreneur & visionary [Part One], transformer [Part Two], performer [Part Three], and leader. Today, we will distinguish the significance of the final role, the leader(s). We have established that the entrepreneur, visionary, transformer and performer are all needed to create a successful business, yet it is this final role, that of leaders, that can make a successful company exponentially more successful. Leaders take the ideas of value identified by the entrepreneur and the vision of the visionary to turn those ideas into achievements. Leaders work with the skills of the transformer, who transforms the idea and vision into something tangible that can be delivered by the performer to consumers to derive the intended benefit. Leaders expand the capability of these four key roles beyond that of the individuals who are performing them.

It is critical in any organization to have leaders, but there are different types of leaders. In smaller organizations, each of us must be self-led. Most small businesses (or law firms) actually start with one individual, the entrepreneur (or frustrated technician, as Michael Gerber declares in E-Myth). But as the sole person in the company, the entrepreneur is also required to be the visionary, the transformer, and the performer, or face almost certain failure. By default, they naturally become the leader of themselves. As the company grows, they hire their first employee, typically a performer to take some of the “performer” role off of them, and the company continues to grow. Eventually, enough employees are hired so each role is handled by separate individuals. This increases the capacity of the business, but requires each of the employees to communicate effectively and work “together” to achieve the intended result. Being self-led is essential to an individualʼs personal success, but successful organizations need two types of leading – self-led individuals and those who lead others.

A leader is one who is accountable to those they report to for the performance of others who are accountable to them to accomplish the stated objective or goals. In smaller companies, all employees are accountable to one leader who is typically the owner (entrepreneur); he or she is not always the person best suited to lead the organization, but often the role is “delegated up” by default. Even if the entrepreneur is capable of leading, they soon discover their talents are better utilized on “higher impact” matters. As the number of people in a company increases, the true test of the business's viability is determined. Leaders become essential to ensure that the multiple roles continue to work together to achieve the outcome anticipated by the owner, envisioned by the visionary, created by the transformer, and delivered by the performer. As the entrepreneur is “freed up” from these other roles, they are able to pursue other opportunities for the company.

The typical structure of leaders in a successful company or law firm is, first, the leader of a role. For example, this might be a performer who leads client services, drafting, funding, or even the attorney. Each must lead themselves in their individual role. When a certain role has multiple performers (i.e. several client service personnel), then the company needs a leader of the performers in each role (a.k.a department). That is typically referred to as a department head, or in Lawyers with Purpose, a “coordinator.” A client services coordinator, funding coordinator, drafting coordinator or the like are examples.

The next level of leader is a leader of department heads. A leader of those who lead the individual departments leads the company and coordinates all departments to ensure the intended success is achieved. The leader of departments is typically referred to as the director of operations (a.k.a D.O.). They coordinate all the different departments that are coordinating all the different performers within those departments. Additional leaders to successful companies include the leader of the future, who is otherwise known as the visionary, and the leader of the business, who is the entrepreneur. Finally, it is the role of the CEO (often the entrepreneur) to lead the director of operations and the visionary to ensure that the business remains relevant, viable and thriving.

In each of these roles, the individuals must be self-led. So the critical question is, is a leader also a performer, a transformer, a visionary or an entrepreneur? Obviously, the answer is yes. In each role of an organization, each can have multiple roles. For example, the leader of client services can transform the way the company delivers client services to the consumer to ensure they derive the intended benefits more efficiently. The distinction between the client service role and a transformer client service role is the impact of creating new ways to deliver the role. The same could be said of those in the marketing department, lawyers, or those in other critical roles in a small law firm. Once an individual is clear on their most effective role, it enables them to provide the greatest value to their organization. In fact, it is essential to identify what we do naturally and embrace it!

The next logical question is, I know my role, but am I stuck there? I would much rather restate it from the perspective that, once you identify what role you belong in, you should celebrate it because it provides you the greatest opportunity to thrive and have impact in the organization and affect its ability to perform successfully. To have a thriving, purposeful practice you need an entrepreneur to identify the value needed in the marketplace. You need the visionary to identify how to deliver the value to the marketplace. You need the transformer to transform the ideas and visions into something that can actually be deliverable to the individual and you need the performer to actually be able to deliver it in a way for the consumer to derive the benefit. And, as your organization grows, you need leaders at every level and in each role to continue to expand the reach of impact that your company can have.

So it's not a question of being “stuck,” it's a question of “celebrating” your unique skill that creates the greatest value inside a successful organization. At Lawyers with Purpose, we empower each team member to embrace their role and set the standards to interact with the other roles with the necessary reporting for the leaders to lead effectively. As a result, our members experience thriving, purpose-driven law practices.

If you aren't a Lawyers With Purpose member and want to know more about creating a purpose-driven practice, join our webinar Thursday, July 23rd at 2 EST "Having The Time To Have It All" to learn more about joining. Mark your calendar and register today to reserve your spot.

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center

Five Essential Roles For A Successful Practice – Part Three

June 23, 2015

by David Zumpano with No Comment Coaching & Implementation

In our previous posts, [Part One] and [Part Two] we outlined the five essential roles of a successful business as that of the entrepreneur, the visionary, the transformer, the performer, and the leader. We have already clarified that the entrepreneur identifies the value in the marketplace to be delivered and gets it delivered in a way that benefits the world, with his or her direct involvement (Level One entrepreneur) or without (Level Two entrepreneur). The visionary, as a distinction, is someone who thinks about or plans future pursuits with imagination and wisdom and is able to envision how to create the value the entrepreneur identified. The transformer is the one who, with their own skills, knowledge and resources, transforms the idea that is identified and envisioned to benefit the world into a product or service that is deliverable.

The role of the performer continues and completes the process by utilizing their individual talent to excel at delivering to the recipient the intended benefit identified by the entrepreneur, envisioned by the visionary and created by the transformer. Performers are critical to the success of the entrepreneur, visionary, and transformer. Without them, the value that has been identified and created is not delivered to anyone who can benefit from it.

When we think of a performer, we often think of an actor. An individual actor performs and makes the consumer imagine the role that the performer is portraying. The risk to performers, however, is that their role can be relegated to technology or commoditized. An example is when a high-level actor in a theatrical play on Broadway becomes commoditized to an extent by a TV show that recreates the role in a studio, and with technical assistance that increases the volume (number/time of production) and, ultimately, reduces the skills needed (with special effects). You can take this even further when you consider that some of the newer, most popular shows don’t even involve humans, but are cartoons that have largely eliminated the performer.

In a Lawyers with Purpose law firm, the individual performers are the differentiating factor because they create a user experience that cannot otherwise occur. Think of some examples in your practice of peak performers. You may be a peak performer; that is, an exceptional lawyer who uses your technical skills and abilities well. In that role, you are serving as a performer by delivering the value identified (legal options) to the consumer. Another example of a performer is your client service coordinator. They manage the client from the initial call to your office, through the entire process until the work is done. In your experience you can recall employees who are exceptional at this and others who were not – therein lies their level of “performer.” Performers solidify the value created by the transformers and envisioned by the visionary and solve the need identified by the entrepreneur. Businesses need performers at every level, from client services to legal technical to drafting to relationship management with allied professionals.

But be clear – performers are meant to interact with the ultimate beneficiary of the service or product. At Lawyers with Purpose, we are very clear on the role of the performer, and we have even set the standards for performers to thrive.

So there you have it – four of the five essential roles to have a thriving, purposeful practice, which will enable success that will be the envy of many. The distinction of the final role – that of leader, which will be discussed in our next and final post on this topic – will identity the potential exponential impact a leader can have on the first four roles.

If you want to learn more about what it means to become a Lawyers With Purpose member, join our webinar "Having The Time To Have It All" on Thursday, July 23rd at 2 EST. All you have to do is click here to reserve your spot today and we'll "see" you then!

David J. Zumpano, Esq, CPA, Co-founder Lawyers With Purpose, Founder and Senior Partner of Estate Planning Law Center