It’s not how much you spend, it’s how much you earn

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In Oscar Wilde’s “Lady Windermere’s Fan,” Lord Darlington defined a cynic as “a man who knows the cost of everything and the value of nothing”.

Not all lawyers are cynics, of course, but many lawyers focus too much on the cost of building their practice and too little on the potential return.

They pinch pennies that might earn a nice profit. They avoid “spending” billable hours executing strategies that might earn them a fortune.

They don’t want to lose money or waste time and their aversion to these risks clouds their vision and stifles their growth.

I know. When I finally started making money in my practice, I lost thousands of dollars to some people I thought I could trust. Having been broke for so long, the loss rattled me and I was afraid to take a chance on losing more.

I shared what happened with a doctor I knew who pointed out that the losses were simply a cost of doing business, that I should accept them and move on. “At the end of the year, if you made more money than you spent or lost, that’s what counts,” he said.

And he was right. Most of what I was doing was working. My practice was profitable and growing, despite the losses and expenses.

It was an important lesson for me, and maybe for you, too. In building a practice, our task isn’t to avoid all risk but to intelligently manage those risks and maximize our return.

If you are too focused on the costs of building your practice, if the idea of losing money or wasting time is an anathema to you, I encourage you to find a way let go of your fear and get comfortable taking more risk.

Because without risk there is no reward. And because it’s not how much you spend, it’s how much you earn.

Referrals provide an excellent return on investment. Here’s how to get more

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Walk a mile in the other guy’s pants

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Whenever I set up IKEA furniture, the first thing I do is take everything out of the box, spread it out on the floor, and examine and count all of the parts. I make sure I have everything I’m supposed to have before I begin.

Then, I turn to the first page of the instructions and start with step one.

This helps me work quickly and ensures that I don’t leave anything out.

I followed a similar process in my law practice, using forms and checklists to open and close files, manage documents and correspondence and the calendar, and otherwise make sure I didn’t forget anything. (No computers, then. Fun times.)

I’ve seen more than a few attorneys who don’t do use forms or checklists. When they interview a new client, they grab a legal pad and start asking questions.

When I have a writing project, anything longer than a few pages, I organize my ideas and notes and write a simple outline before I begin. Some writers prepare highly detailed outlines, while others prefer to start with nothing more than an idea.

Some are plotters. Some are pantsers—writing by the seat of their pants.

The point is that everyone has their own way of doing things. Do what works for you.

But. . . do yourself a favor. Make a point of looking at the methods used by other people and try some of them.

If you usually fly by the seat of your pants in your work flow, give checklists a try. If you’re organized to a fault, try winging some things. If you follow a specific task management system or have a preferred writing app, try some others every once in awhile.

Your way may work for you. But you might find something that works even better.

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Only you can prevent forest fires

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We all have problems. Most problems are small and easy to fix. Some problems are potentially crippling and need to be addressed immediately.

An audit, a state bar complaint, a lawsuit, or an unhappy client threatening to leave, for example, are problems that should be at the top of our list of priorities because there’s so much at stake. Even if they have a happy ending, they are distracting and worrisome.

You need to fix these problems, or at least get them under control, sooner rather than later.

Okay, you get this. And you do it. You don’t ignore serious problems, you deal with them. When you see fire, you grab the extinguisher and put it out.

The question is, what are you doing to prevent those fires?

Do you have procedures in place to evaluate vulnerabilities in your practice? Do you use checklists to open and close files? Do you have redundant systems for calendaring critical dates and backing up client data?

Do you schedule time to update your software, library, and forms?

Do you regularly review all of your systems and procedures to make sure they still work?

Just because you haven’t had any major problems recently doesn’t mean you won’t. You need to prepare for every contingency and vigilantly keep watch.

You probably do a good job of doing this on behalf of your clients, but if you’re like many lawyers, you may be a little sloppy when it comes to your own interests. It might make sense to get another set of eyes on your operation to help you stay on track.

Have your accountant and insurance agents do an annual review. Ask an attorney friend to review your office procedure manual in return for your reviewing theirs. Hire a practice management consultant to look at your operation and give you a report.

Because the easiest fires to put out are the ones that never start.

When was the last time you reviewed your marketing plan?

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Did your daddy take your T-bird away?

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When was the last time you had some fun in your practice? If you can’t remember, you should probably do something about that.

Your employees need to have some fun. Your clients, too. And God knows you need some. Perhaps now more than ever. No matter how serious your work is, there’s always room for Jello.

How, you ask? Maybe there should be a CLE class on the subject. Something like, “The last laugh: humor and the death penalty”. Okay, maybe not.

C’mon, you can do this. Summon your inner child and let him or her, zie or zer, help you to remember what it was like when fun wasn’t a four letter word.

You might come up with things like:

  • Adult coloring books in your waiting room
  • Weekly pizza parties in the conference room
  • Picnics and barbecues for clients and staff
  • Christmas and Halloween parties
  • Casual dress day and themed dress days
  • Bobble heads on your desk
  • Recipes, quotes, puzzles, and humor in your newsletter
  • Take your employees to the baseball park on opening day
  • Contests and drawings with silly prizes
  • An espresso machine in the lunch room

Surprises are fun. Send clients a bill with an unannounced discount. Give them a small gift. Invite them to dinner, just because.

It doesn’t take much to lighten the mood in your practice, help your clients forget their troubles for a few minutes and make your practice a fun place to work.

Referrals are fun. Here’s how to get more 

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If Felix Ungar ran your law practice

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The Odd Couple’s  Felix Ungar was a neurotic perfectionist neat freak who fussed and bothered about everything. His roommate Oscar was a slob. The two loved each other (friends) but drove each other crazy.

If Felix ran your practice, some good things would happen. Every document would be checked and rechecked before it was filed or mailed. Every document would be backed up (“in triplicate”). Every piece of software and equipment would be up to date. Your desktop would be tidy and dusted, and so would the desktop on your computer.

Your firm would operate efficiently. But eventually, Felix would drive you and your staff crazy, not just with the fussing and tidying but with continual changes in management, operations, and marketing.

Continually changing your forms or procedures, for example, requires continual re-training. There would be daily memos and weekly meetings where the latest micro changes were rolled out.

The employee handbook doesn’t need to be updated every week. The bookcases don’t need to be dusted every day.

Continual changes to your website layout, checklists, forms, intake and file-closing procedures can confuse and frustrate your staff and clients.

You don’t want your practice run by Oscar Madison, of course. He would tolerate too much clutter and disorder. Software would be updated “whenever”. Too many things would slip through the cracks.

You need to try new things and keep old things in working order. But just as the law looks to the reasonable man standard, so should you in the management of your practice.

Felix and Oscar were both well-meaning but neither could have been considered reasonable.

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Why you shouldn’t hire a marketing manager for your firm

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Wouldn’t it be nice to turn over all of your marketing to someone else? Put a marketing manager in charge of your marketing? Let them take care of bringing in the business so you can concentrate on the legal work?

That may sound good but it would be a mistake. Marketing professional services cannot be delegated. Clients may write their checks to your firm but it is you they are hiring.

Nobody can build relationships with clients and prospects and referral sources like you can. Nobody can speak or network for you. Nobody can make the case for hiring you like you can.

So forget the idea of hiring others to do your marketing.

On the other hand, you can (and should) delegate many marketing support activities.

Have others do most of the leg work, organizing, research, editing, website updating, confirmation emails and phone calls, event planning, slide-making, and other activities that support your marketing.

Under your guidance and supervision.

You need to be involved and make the big decisions. You need to put your imprimatur on every ad, every article, and every email. You need to be in charge of your marketing.

Because clients hire you, not your firm.

Marketing assistants can help. Outside consultants and agencies can help. But you are the marketing manager for your practice.

Marketing starts with the right strategies. Start here

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Going out on your own: solo or partners?

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An attorney is thinking about going solo but he’s considering the value of taking partners. He says,

“My friend told me that he has long fought the perception that his firm is too small for many clients who are looking for more horsepower. He recommended partners with one or two other lawyers as a way to combat that perception.”

He wants my take on the subject.

Behold:

His friend is right–many clients are more comfortable with a bigger firm than a solo. But many clients prefer a solo. And there are plenty of them. Small companies that want a close relationship with a lawyer. Clients who don’t want to (or are unable to) pay higher fees for a bigger firm and all of their associated overhead.

If you are inclined to go solo, target clients who don’t want a big firm. Sell the benefits of working with you and ignore everyone else.

If you want to target bigger companies with bigger budgets and lots of legal work, sure, partner up. It’s a different model, more competitive, but so what? If that’s what you want and you’re prepared to work hard and fight for market share, go for it.

But don’t be too quick to choose.

Smaller companies have a lot of growing to do, and will have a lot of legal work along the way. Big companies usually start out as small ones and if you get in with small companies before they get big you can grow with them. Marketing is easier when you target smaller clients. There’s a shorter time frame, too.

There’s a third choice. You could start out with an office sharing arrangement with other attorneys. You can look bigger and cut costs this way until you decide on a formal partnership or you rule that out.

Speaking of partnerships, have you heard the stories? Or should I say the nightmares? Partners who steal. Partners who don’t do their fair share. Partners who drink. Partners who cost you some of your best employees.

So yeah, there are pros and cons for every business model.

Best thing to do is to have a talk with some solos and some small-firm partners. Ask them what they like and don’t like. Get a sense for what you’re up against before you make a decision.

If you’re still not sure, start out as a solo. You can always ramp up in a year or two if you feel compelled to do so. That’s a lot easier than the hassle of getting out of a bad partnership. It will also give you time to find the right partners if you decide that’s where you want to go.

Whichever way you go, make sure you have a marketing plan

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Increase your income by focusing on income producing activities

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How much of what you do each day could be considered “income producing activities”?

Client work is income producing. So is marketing which brings in (and keeps) the clients. Everything else is is an expense and should be minimized, delegated, or eliminated.

In my opinion, in an eight-hour day, five hours of client work is a good target. Another hour should be invested in marketing. That leaves two hours that can be used for admin, lunch, and (your choice), more client work or more marketing.

If you have lots of clients, do more work. If you need more clients, do more marketing.

Of course this is just a starting point and your mileage may vary.

Next step: hire (more) assistants so you can do more work and more marketing. After that, hire more lawyers and/or legal assistants and have them do most (or all) of the work. Then, hire people to supervise and assist your team so you can continue to grow, open another office, and have time to spend some of the loot you’re bringing in.

That’s how I built my practice. That’s how I quadrupled my income and cut my work down to three days a week.

Sound like a plan?

This will help you do more income producing activities

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Do you make this mistake when replying to email?

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I don’t reply to every email I get and neither should you. Vendors and people pitching you something don’t expect a reply and you aren’t obligated to give one.

Prospective clients are another story.

Respond to prospects, even when they ask dumb questions or annoy you. Say ‘thank you’ for the inquiry, answer their question, and tell them what to do next.

You can use a (mostly) canned response. You can have an assistant respond on your behalf. You can point to a page on your site where they can get the information. But always reply and do it as soon as possible. They might be your next client. Or send traffic to your website. Or promote and share your content. Or send you referrals.

Capiche?

Of course, that goes double for clients and former clients.

When a client emails, you should do everything possible to reply within 24 hours (or the following weekday if it is a weekend or holiday). Actually, try to reply within two hours, even if it is to say you’re not able to respond fully just yet but will do so as soon as possible.

People who have paid you money (or sent you referrals) deserve as much respect and attention as you can give them.

Now, for an example of what not to do.

I recently bought somewhat expensive video course. After I went through everything, I had questions. I emailed the guy who produced the course seeking to clarify some points and to ask about a few things he didn’t address.

What happened? Nothing happened. Several days went by with no reply. I emailed again to ask if he had received my first email. Crickets.

I had asked several questions that could have been answered with a yes or no. He should have replied, if only to refer me to the section of the course where the issue was explained.

There is some good material in the course but I’m not inclined to recommend it to anyone, provide a testimonial, or purchase anything else from him. Too bad.

It takes a lot of effort to create a new client or customer. It takes but a simple error in judgment to lose them.

How to use email to get more clients

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Build a better practice with a better file closing checklist

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Most attorneys do a good job of onboarding new clients. They have a process for obtaining the information they need and explaining things to the client. They have documents ready for the new client to fill out, review, and sign. They have a routine for calendaring dates and follow-ups, and a set of form letters they mail to get the case started right.

They do these things to protect themselves from omissions, to save time, and because it gives the client a good first impression.

Unfortunately, not as many attorneys are as disciplined or detailed-oriented about how they close their files. But how you close a file is as important as how you open it.

What you do or don’t do at the end of the case can determine whether the client will hire you again, post positive comments and reviews, and refer other clients your way.

Of course, you lay the foundation for these things at every appointment and with every email or letter you send. But the final appointment is your last and best opportunity to “sell” the client and warrant your time and attention.

Your final appointment/file-closing process should include things that are too often taken for granted. You should have a checklist that addresses

  • What you say (e.g., asking if they have additional questions, cross-selling your other services, advising them about possible future needs, etc.)
  • What you give them (e.g., “after-care” instructions, marketing collateral, checklists, reports and other “added value,” etc.)
  • What you do (e.g., scheduling follow-up letters and calls, enrolling them in your newsletter, final billing/accounting, contacting them a few days later to make sure all is well, etc.)
  • What you ask them to do (e.g., asking for referrals and/or to pass out your information, asking for a review or testimonial, asking them to fill out a survey, etc.)

It should also include a review of the file to see what went right and what could be improved.

These things should be planned in advance. You should know who will do them (you, staff) and when. They should be a regular part of your routine and you should continually seek to improve them.

Because how you close a file is as important as how you open it.

How to get more referrals from your clients before, during, and after the engagement: here

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