The perfect law practice

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If you could design the perfect law practice (perfect for you, that is), what would it look like?

Why not take some time and write it out?

Consider things such as:

  • Where would you have your office(s)?
  • Which practice area(s) would you focus on? Eliminate? Add?
  • How much would you earn?
  • What types of clients or cases would you have? How many?
  • What billing model(s) would you use?
  • Would you work for a big firm? Own the firm? Would you have partners?
  • How many employees would you have?
  • How would you build your practice? What marketing methods would you use?
  • Where would you live? How long would you commute?
  • How many hours would you work per day/week? How many weeks would you take off each year?

Don’t stop there. You’re designing your perfect practice (and life) so make sure you have everything the way you want it.

Once you’ve done this exercise, put it away for a few hours or a day or two, come back to it, add or modify it, and then ask yourself two questions:

1) How much of this do I already have in place?

You may be pleasantly surprised to discover that you already have much of what you want, or close to it. If not, you’ll know exactly what needs to change.

2) How do I get from where I am to where I want to go?

Asking this question will help you create a list of things to do, think about, or research. It will also prompt your subconscious mind to start looking for answers.

If you take the time to do this, develop a plan and begin working on it, the impact can be life changing.

This can help you plan your ideal practice

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How to upgrade your client list

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Go through your current client list. Look at the numbers: how much did each client pay you over the last year and over their lifetime?

How much are they likely to pay you in the next few years?

Some clients might not have a lot of work for you but may send you a lot of referrals.

Add this to your numbers.

You should see that some of your clients (and cases) are worth a lot more to you than others.

Let’s call those “high value” clients.

Everyone else is either “average” or “low value”.

Study your numbers. You should see some patterns.

You should see that a large percentage of your total revenue comes from a small percentage of your client list.

Maybe 80/20, maybe a different ratio, but you should find that “a precious few” of your clients and cases bring in a disproportionate amount of your income.

Obviously, you want more of this type of client or case.

One way to get them is to reduce the number of low value clients, and also perhaps many of the “average” clients, to free up your time and other resources so you can focus on attracting more high value clients.

How do you “reduce” the number of low value clients in order to do that?

You could increase your fees. That’s the easiest way to do it. If it doesn’t, keep raising them until it does.

You could ask for bigger retainers. Reject cases with smaller damages. “Fire” clients who slow pay or who are “more trouble than they’re worth”.

I know, the idea makes perfect sense to you but it also makes you nervous. So you’re unlikely to go “cold turkey”. You don’t want to let go of low value clients until you see more high value clients coming your way.

Okay. Go through your list and study the high value clients you identified.

Where did they come from? What marketing methods did you use to attract them? Did they find you through search? Referral? Ads? Did they hear your presentation or meet you at an event?

Who are their colleagues, clients, friends or neighbors? Who do they know who might have legal needs or know people who do?

Then, get busy.

You might not be ready to let go of (all) low value clients just yet but there’s something you can do. You can stop marketing to them.

From this day forward, focus exclusively on marketing to your high value clients.

This will help

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Too much business, not enough revenue

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A lawyer tells me, “I have too much business and not enough revenue. I feel that I am working myself to death.”

Ah, yes. Overworked and underpaid. I haven’t talked to every lawyer in the world, so I can’t be sure, but I suspect this is a common problem. 

He continued:

“Everything I take on seems to expand in complexity and it is hard to get the work done. I have hired assistants in the past but they don’t seem to work out very well.”

Okay, class. What would you suggest to this fellow traveler?

Mike?

“He needs to keep hiring assistants until he finds someone who works out.”

Yes!

I know finding and training people can be a frustrating experience, but it’s not impossible. You have to keep looking.

Use an agency to screen people. Be willing to pay more to get top talent. Hire temps until you do.

You can’t do all the work yourself or you will always be overworked and underpaid.

However, before our friend does this, he needs to do something else. Anyone?

Mary: “He needs to increase his fees.”

Bingo! Gold star, Mary. We’ve got some very smart people in this class.

Increasing his fees will simultaneously increase his revenue and decrease his workload. That’s what they call a twofer. 

Unless. . . well, sometimes, when you charge more you get more work, not less. You get better clients who are willing to pay more and they give you lots of work.

How about we put that aside for now. Any other ideas?

Jerry?

“What kind of practice does he have? If he doesn’t specialize, he should. It will simplify his work and attract better-paying clients because clients prefer specialists.”

That’s right. Good advice.

Well, I see our time is up for today. Excellent ideas for our friend. I’ll pass them along.

Okay, no homework tonight, guys. See you tomorrow.

How to earn more without working more

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C’mon in, the water’s fine

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Yesterday, I mentioned that specializing was one of the keys to growing my income and cutting my work to three days. Many attorneys resist the idea of specializing.

Some believe that having more practice areas allows them to earn more overall by having more services to sell to their clients. “Why refer it out when I can do it myself?”

Some think like a professional instead of the owner of a law practice that employs lawyers (including themselves.) Because they can, they think, they should.

And some have a poverty mentality and are afraid to let anything go.

When I decided to specialize, at a time when I was barely surviving, I was scared to death. It was the most counter-intuitive decision I ever made.

But it was also the best decision I ever made.

Yesterday, I got an email from an attorney who agrees. He said,

“When I did that [specialized], I did notice a slight drop in income for about 2 months (it was not that great, and didn’t last long). The drop was only due to not taking every case that came in the door. I referred those to other attorneys doing that specific work, who in turn, would refer my types of matters back. This allowed me to meet the needs of my clients without doing it all myself. I began seeing increased earnings quickly, could concentrate on matters that really interested me, built my referral network, and most importantly worked fewer hours, but billed more.

I know what you’re saying does work. People do have to get off the fence and commit to what they truly want, though.”

Think about joining us. But only if you want to earn more and work less.

Here’s where to start

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Opportunities or obstacles

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Wealthy people, and those destined to become wealthy, look at problems as opportunities, stepping stones to something greater.

An opportunity to learn, meet new people, or improve their skills.

Others look at problems solely in terms of the risks and costs.

Wealthy people don’t try to avoid problems at all costs. They look for the opportunities hidden in those problems. They continually try new ideas and new methods and eventually realize the outcomes they seek.

Everyone solves problems but wealthy people go out of their way to find problems they can solve. They believe that the bigger the problems, the bigger the paycheck.

If you have trouble seeking out big problems in the quest for a bigger paycheck, as an attorney you can do the next best thing: seek out clients with big problems.

In your quest to build wealth, remember that the problems you solve don’t have to be your own.

How to identify and find clients with big problems

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High ticket vs. low ticket

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When I started practicing, I took anything that showed up and what showed up was mostly small stuff. That was fine because I needed to settle cases quickly to pay my bills and smaller, less complicated cases made that possible.

Besides, I didn’t have the experience or resources to compete with bigger firms. So I didn’t try.

Focusing on smaller cases also meant that no one case or client was make or break. If I lost a case, if the client went away, I had plenty more where that came from.

For a long time, I was able to keep overhead to a minimum so my practice was profitable. Eventually, as I hired more staff and moved to bigger offices, overhead made a significant dent in the bottom line.

There is also psychic overhead. More clients mean more people to worry about, and more staff to manage.

So today, I would do things differently.

As soon as I could, I would move towards having fewer clients who pay higher fees.

Fewer clients mean lower overhead and fewer people to keep happy. Bigger clients mean bigger paydays.

To earn $300,000 with small clients you need a lot of them. To earn the same amount with bigger clients, you only need a handful.

One writer summed up the difference this way: “I’d rather have four quarters than 100 pennies”.

True, to compete with the big boys and gals you need to be one of them. You need a higher level of skill. That takes time to acquire.

And, with fewer clients, losing one could be costly so you need to work hard to keep them happy and have a way to replace them when they go away.

Both models work. High volume and high ticket are both viable ways to build a practice. And there’s nothing wrong with having a mix.

But while I could handle the tumult of a high volume practice when I was younger, today I like to keep things simple. And quiet.

Earn more. Work less. Here’s how

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Will your law practice make you rich?

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I was reading one of “those” articles, you know, the ones that give you a list of reasons why certain types of people, habits, or beliefs are more conducive to success.

This one was about what rich people do differently.

One of the items on the list caught my eye because it’s something I did in my practice and something I preach in my sermons to you.

Verily: “Rich People Choose to Get Paid Based on Results”

When I began my practice, I charged by the hour and made a good income “per hour”. I earned a lot more, however, when I moved away from hourly work and focused on cases that paid contingency fees. It didn’t matter how many (or how few) hours I worked on a case. On more than a few cases, I earned the equivalent of thousands of dollars per hour.

If you practice in areas that aren’t conducive to contingency fees, there are other ways to be compensated that aren’t tied to the number of hours you work.

Charge by the matter, not by the hour. Ask for higher fees or bonuses for better results. Work with clients who offer equity instead of just cash. Hire more attorneys and earn the difference between what you pay them and what you bill the client.

If you can’t do this, look for other opportunities, outside of your practice. Because you’ll never get rich trading time for money.

How to do legal billing right

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Some thoughts about multiple streams of income

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My income doesn’t depend on any one source. That affords me a degree of safety and peace of mind and lets me peruse creative interests. I didn’t create these sources of income at the same time, however, and if you’re thinking about starting something new, neither should you.

Don’t spread yourself in too many directions or you will find it difficult to excel at anything.

Mark Twain said, “Put all your eggs in one basket and watch that basket”. If you want another basket, make sure the eggs in your first basket are safe.

Make sure you have partners or employees you trust and systems in place that afford you time to invest in your new venture. And, if possible, choose as your next venture something that allows you to leverage the knowledge, contacts, and resources you developed in your practice or first business. This will give you a running start.

On the other hand, it is by no means clear that you should do anything other than what you’re already doing. If you’re doing well and enjoy it, why stop?

Don’t start something new merely because you think you must have additional sources of income. You don’t. Unless you have a strong reason to start a new business, you’re almost always better off taking what you’ve already built and making it even bigger.

As you develop excess cash flow, you can invest it in ventures that don’t require much of your time or mental bandwidth.

I retired from my practice because I didn’t want to do it anymore. If that had not been the case, I probably would be just as happy and prosperous today, or even more so.

How to earn more and work less: click here

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I challenge you to double your income

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Are you satisfied with where you are in your career? I hope not. I hope you’re doing well, of course, but you’re hungry for more.

If you’re complacent, that has to change. It’s time to find another itch to scratch.

I have a challenge for you. You can set the time frame but I’ll give you the goal: to DOUBLE your income while cutting your work hours in HALF.

How does that sound? Scary? Crazy? Or exciting as hell?

I can’t imagine you wouldn’t want this to happen but I can see how you might question if it is possible. So start there. A new project. To find out if this goal is possible for you and what you need to do to make it happen.

Do you know (or know of) any lawyers who earn twice as much as you do? Sure you do. But do any of them work half the hours you work? That might be a little harder to deduce because “busy” is how professionals define success. So, make that a part of the project. To find the “Tim Ferriss” of the legal world.

Contact some higher-earning lawyers and ask about their schedule. You can start with me. When I was practicing, in a short period of time I quadrupled my income and simultaneously cut my work week down to three days.

I know, I know, your practice is different, the competition is greater, the world is a different place. To which I say, “Hell yes, it’s different. For one thing, you have the Internet. It’s easier to scale up your income today than when I did it.”

Doubt me if you wish. Then, go prove me wrong.

If you’re nervous, don’t attempt everything at the same time. Start by working on the income side of the equation. Once it starts going up, work on cutting the hours.

On the other hand, you might be better off doing them together.

I think I was able to increase my income so quickly because I simultaneously cut my hours. Working less forced me to think outside the box I had been living in, to work smarter and do bigger things.

I did it because I was miserable. I had to change my life. If you’re not in the same place I was, it might be harder for you because you might be unwilling to take chances and endure the discomfort of change.

It comes down to this: To double your income and cut your work in half, you have to either be fed up or fired up. If you’re content right now, you need to find something outside of yourself—a cause, someone you want to help—and do it for them.

Fed up or fired up.

That’s my word for the day. Let me know if you accept my challenge.

Marketing is easier when you know the formula

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Do you (still) work nights and weekends?

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When I started practicing, even though I had few clients, I showed up at the office every day, including Saturdays. I spent most of that time setting up form files and writing form letters I could use once I got some new clients, and doing whatever I could think of to try to make that happen.

When I finally got some new clients, I started staying late at the office and bringing work home with me. I thought that’s what I had to do to make it and I was too scared to do anything else.

Maybe you are where I was. Maybe you’re working longer hours than you need to, or should. Even if you are getting things done and making money, at some point, you have to ask if this is the right way to go.

What if you set up some boundaries for yourself? What if you worked a full day but reserved your nights and weekends for yourself and your family? What if you actually scheduled took a vacation?

In the short term, as you work fewer hours, you’ll probably earn less income. In the long term, probably sooner than you think, you might see your practice explode, as mine did when I made the switch.

All work and no play really does make Jack a dull boy.

Start living a little. At night, on weekends, read novels, play games, take the kids to the park and toss a ball. If you don’t have kids, start making some. You’ll have the energy now, so get busy.

Leave your work at the office. Turn off your phone. Use your free time to get in shape. Start a hobby. Take a class or join a club. Not only will you have some fun, you’ll meet some new people (who share your interest) and have something to talk about besides work.

You’ll be more relaxed. More interesting. And have more energy. You’ll attract new friends, business contacts, and clients. You’ll have time to work on taking your practice to the next level.

You’ll earn more without working more. And finally realize that work isn’t the goal, it’s how you reach the goal.

How to earn more without working more: go here

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