Suggested marketing budget for lawyers?

April 27, 2016 by
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Yesterday, I talked about the need to establish a marketing budget for your practice. A reader emailed me a link to an article with a similar theme. The author was speaking about technology companies, not law firms, but makes a good point about the vital need to invest in marketing:

“You need to be the best marketer in your marketplace to succeed in today’s Internet world. You need to spend at least 15% of your revenues on marketing and sales, and preferably over 20% of revenues to really grow.

If you do not spend at least 15% of revenues on sales, and more on marketing, then your company will have a very difficult time not just growing, but even surviving.”

This doesn’t mean lawyers must follow the same guidelines. Tech companies and law firms are as different as night and day. While I can’t tell you what percentage of your revenue you should invest in marketing, at least not without knowing your current situation and goals, I can tell you some of the factors I would consider:

  • Your current gross and net income. How much do you have available for marketing after overhead, debt service, and other fixed costs of doing business?
  • Your practice areas, current marketing methods, and budget. What results are you getting? (i.e., traffic, leads, percentage of sign-ups, etc.)
  • Your average fee per case or client. Are they typically one-time clients or clients with ongoing legal needs?
  • The lifetime value of a client. How many times will he return, how much will he spend, how often will he refer?
  • Your target markets. (Niche markets are usually easier and less expensive to reach.)
  • Your ideal client and the costs to attract and court them. (Big companies, for example, might involve more expensive presentations, wining and dining, and a longer time frame. If you advertise, your cost per client is likely to be higher than other marketing methods.)
  • Your competition. How many other lawyers or firms do what you do? What marketing methods do they use? How much do they spend?
  • Your experience, reputation, and USP? How are you different or better? How easy is it to market you?
  • Current marketing resources: in-house talent, size of your email list, websites/blogs, social media following, etc.
  • Your credit worthiness. Can you finance your marketing with a line of credit at favorable rates? If you advertise, note that many publications offer generous credit terms.
  • Your attitude towards marketing. Do you like it? Are you good at it? How aggressive are you?
  • Other offices, practice areas, lawyers in your firm? Can you amortize or share marketing expenses?
  • Your goals. How many? How fast? Do you want high volume or high quality? Where do you want to be in 5 or 10 years?

Lawyers tend to have big margins (i.e., the size of the average fee vs. the cost to deliver the service), which means you can probably justify a bigger investment in marketing than you currently spend. Don’t forget to include the lifetime value of a client in making that calculation.

Depending on your practice areas and primary marketing methods, you might find that you can do just fine with a modest marketing budget. If you get most of your business through referrals, for example, you don’t need to spend 15 or 20% of your gross on marketing. If you want to grow bigger and faster, however, or you’re in an especially competitive market, you just might.

Whatever other marketing you do, you should focus on referrals

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Filed Under: Law office management, Marketing legal services, Marketing Plan Tagged With:

Write it once, use it forever

April 21, 2016 by
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I’m sure you have a welcome letter you mail to new clients. You probably also use some kind of “memo” or form to accompany mailed documents, along with check boxes to indicate what the recipient should do (e.g., sign and return, review, etc.)

Form letters save time and reduce the risk of errors or omissions and I encourage you to create them for all aspects of your practice.

Gmail has a feature called “canned responses”. Outlook and other email applications have something similar. They allow you to create email templates or “form letters” you can use instead of composing an original email each time, or copying and pasting paragraphs or whole emails from another document.

Go through your “sent” emails for the last 60 or 90 days and look for “frequently sent emails,” whether originated by you or sent in response to an inquiry. Flag them for creating canned responses.

Here are a few ideas to get you started:

  • I got your email (and will reply soon/this week/after I review your questions)
  • Thank you (for coming in, calling, returning documents, for your help)
  • Here’s what to do/expect (what happens next, watch your mail, please call me, don’t forget to send us)
  • Answers to FAQs (hours, parking, fees, practice areas. Provide answers and/or direct to pages on your website)
  • Marketing inquiries (do you accept advertising, guest posts; I’m available for interviews)
  • Checking in (with clients, former clients, networking contacts)
  • Nice to meet you (after a networking event, introduction, phone conversation)
  • Announcing (new content on your website, firm news, new laws/regs)
  • Promoting (your newsletter, your ebook, your seminar, your podcast or youtube channel)
  • Reminders (next appointment, court dates, due dates)
  • It’s time to review (your lease, trust, corporate docs, agreements, legal status)

In addition to complete emails, you can set up a “library” of frequently used paragraphs, links, and subject lines.

While you’re at it, don’t forget to set up different “email signatures”.

For prospective clients, your signature might promote a free report or free consultation, invite them to connect with you on social, or invite them to review specific pages on your website. For existing clients, your signature might invite them to sign up for your “clients only” email list or cross-promote other services offered by you or your firm.

Using canned responses, form letters, and checklists might save you 30 minutes a day, or more. How much would that be worth to you over the course of a year?

Leverage is the key to earning more and working less. More

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Filed Under: Law office management, Productivity, Time Management Tagged With: , , ,

How much cash should you have before you open your own office?

April 15, 2016 by
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I just heard from a lawyer who works for a firm and is thinking of going out on his own. He wants to know how much he should have in savings before making the leap.

Well, you need some cash–but a lot less than you might think.

You don’t have to invest in inventory. You don’t need to hire anyone until you have clients. You can get into an office with a couple months rent.  And if you plan to advertise, you don’t have to buy TV time or billboards, you can start with a small budget and scale up.

In other words, you don’t need a big pile of money to open your own practice. What you need is some cash on hand to pay your bills until the practice is producing enough income on its own.

But how much?

Six months? A year? Two years?

I don’t know. I don’t have a formula. But I can tell you this: it’s better to have “too little” than “too much”.

A big pile of money in the bank takes the pressure off of you. You can take your time. Be selective. Relax and do things “right”.

And that’s the problem. If you don’t have to hustle, you probably won’t.

When I opened my first office, I had almost no money in the bank. I sold my childhood coin collection to buy some (cheap) furniture and pay the first month’s rent on a small office. I bought an IBM Selectric typewriter with nothing down and payments of $43.43 per month. I bought some stationery, cards, pleading paper, legal pads, file folders, and pens. I had enough left over to cover a couple of months rent and basic expenses.

I was open for business, but I didn’t have any. No clients.

I took out a cheap classified ad in the local bar journal, seeking overflow work and appearances. And I hustled my rear end off to bring in some clients of my own. At first, I took anything, including work I hated and was barely qualified to handle. Most of my clients paid me next to nothing because that’s all they could afford and I took it because I needed whatever they could pay.

Every month was a struggle to cover my bills. It took five years before I figured things out, but I made it.

I made it because if I didn’t bring in business, I didn’t eat.

Looking back, I don’t know what would have happened if I had had lots of money at the start. Yeah, I do. I probably would have gone through it, thinking I had lots of time, and only then would I have had enough pressure to make things happen.

Your situation is different. You have more experience as a lawyer than I did. You know more about marketing than I did. And you have the Internet, which allows you to ramp things up more quickly. But you also have more competition than I did.

The bottom line on making the decision to open your own practice has little to do with how much money you have at the start, and everything to do with your drive and determination.

How bad do you want it?

If you’ve got lots of energy and you’re willing to work harder than you’ve every worked before, if you’re prepared to do whatever it takes to make it, you’ll make it.

Or you won’t. There are no guarantees. No paycheck, no benefits. Nothing. You have to build it all.

It’s called risk, but risk is the path to reward.

Make sure you have a marketing plan before you open your own practice

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Filed Under: Law office management, success Tagged With: ,

Too hot, too cold, or just right?

April 7, 2016 by
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If you give prospective clients too many options for hiring you, you risk confusing them, and a confused mind usually says no.

If you only give them one option, however–hire you or don’t–you may lose them for other reasons.

The objective is to find a balance between too many  options and not enough.

Take a look at each of the services you offer. Are there too many choices? Are you confusing them with variables, add-ons, upgrades, and optional services that make it difficult to choose?

If so, look for ways to simply those options. Aim for clarity. Make it easier for them to decide.

If you don’t offer any options, however, if you give them a choice between “A” or “nothing,” look for ways to provide them with a second option. Something that adds value without adding confusion.

Let them choose “A” or “B” because whichever one they choose allows them to get the benefits they seek, and allows you to get a new client.

Sometimes, a third option is warranted. Should you offer it as option “C” along with the first two options? Should you hold back and offer it later? Or should you include it as a free bonus for choosing your higher priced package?

The answer is: I don’t know. And neither do you.

You could look at what other lawyers offer. You could conduct surveys and see which option prospective clients say is the most attractive. You could “go with your gut”. But the only way you’ll know for sure is to offer different options it to prospective clients and see how many sign up.

If you’re still not sure, start with two options. Price the second option higher than the first, but not a multiple of the first. $3,000 and $4,000, but not $3,000 and $10,000.

If you charge by the hour and you don’t offer any flat fees or packages, look for ways that you could do that because more clients will sign up when they know in advance how much it’s going to cost.

Master the art of successful billing and Get the Check

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Filed Under: Attorneys fees, Closing the sale, Fees and Billing, Law office management

Does your practice run like a well-oiled machine?

March 29, 2016 by
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If your practice was a machine you would want that machine to operate at peak efficiency. You’d want everything to work properly, needing little more than routine maintenance.

Your machine would make no sound other than the quiet hum of a well-oiled, finely tuned motor. It wouldn’t need a lot of attention, it would just work.

Your practice should be like that–no snags, no sticking points, no wasted time or money. You should know that everything is working efficiently and not be worried about it suddenly seizing up, and if there is an emergency, you should have a plan in place for that.

You create this efficiency through systems.

Your workflow should have a system. All of the steps should be documented, with all of the forms and procedure you need close at hand. You should have the right software and other tools you need, and know how to use them.

You should have an office manual that outlines all of the mundane functions of running an office, including a process for hiring and training employees, bookkeeping, billing, banking, and replenishing supplies. Your staff should know how to handle nearly everything and not have to come to you for every little hiccup and burp.

When you have all of this in place, when your practice runs efficiently and produces optimal work product and profits, you can focus on the one remaining task: marketing. Because without marketing, nothing else matters.

No marketing, no new clients, and your machine will grind to a halt.

You don’t need to have brilliant marketing, but whatever you do must be done regularly, consistently, and efficiently. You do this the same way you run the rest of your practice–with a system.

Your system should tell you what you will do this week to bring in new clients and serve existing ones. What will you write, where will you go, who will you call?

You should have the forms, the letters, the scripts, and the process at your fingertips so that you don’t have to figure out what to do, you can just do it.

Marketing should never be an afterthought, something you do when the files are running low or when you think about it and can find the time. It should be planned in advance and executed on a regular schedule.

Marketing is the fuel that makes your motor run. Keep your tank full and it will take you where you want to go.

Start or update your marketing plan with this

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Filed Under: Law office management, Marketing legal services Tagged With:

I’d rather have four quarters than 100 pennies

February 26, 2016 by
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I love keeping things simple. But simplicity for simplicity’s sake is a foolish economy if it results in fewer or poorer results. “Leverage” means getting MORE results with less effort, or at least more results with the same effort.

A marketing guy I follow echoed my philosophy when he said, “I’d rather have four quarters than 100 pennies”. He was talking about the value of having fewer but better clients.

Fewer clients with bigger cases, or fewer clients who have more work for you and are willing and able to pay higher fees.

Fewer but better clients means you have fewer hands to hold, problems to solve, and fires to put out. It means you can spend more time and more money bringing in new clients and keeping them happy. It means you can earn more income with less effort.

That’s why I talk about letting the mass market of lawyers handle the mass market of clients, while you focus on the upper crust. Let everyone else fight over the scraps while you feast on the steak.

Unless you are especially well funded or daring, you probably won’t be able to do this immediately. But you can immediately state this as your objective and start working in that direction.

When you make it your intent to transition your practice to better clients, you start looking at the universe of clients differently. You make changes to your ads and marketing documents and websites, you start networking with a different crowd, and you do other things that affirm the new direction of your practice.

Eventually, you will embrace this new paradigm and make bigger changes. You eliminate marginal practice areas, for example, and focus on one or two. You might cut down on marketing channels or techniques and focus on the ones that are better suited to the practice you are trying to create.

You may be nervous about some of these changes. I know I was when I started turning down business. There’s a big void in your file drawer when you no longer handle anything that shows up, but if your experience is anything like mine was, you will quickly fill that void with new and better clients.

Then, one day, you’ll get your first “quarter”–a big case or client–and you’ll realize that if you can get one, you can get more. And that’s when everything will change.

This helps you create a profile of your ideal client

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Filed Under: Increase your income, Law office management, Leverage, Marketing legal services

What are you working on?

February 24, 2016 by
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What are you working on right now? I’m not referring to your regular work–cases, client work, or the daily activities of running your practice–I’m talking about something else: a project or group of projects designed to take you or your practice to a higher level.

So tell me, what are you working on?

You might be updating your website or expanding your advertising. You might be working on a new office procedure manual, updating your forms or form letters, or writing a series of emails to former clients. You might be putting together a list of names of professionals in your market you plan to call and invite to lunch. You might be working on a new presentation, an ebook, or a video.

You should always have a project you’re working on, and when someone asks, you should immediately know what it is.

There’s always something you can do to improve your marketing or the operations in your office. You can always improve your speaking, writing, negotiation, and sales skills.

So, what are you working on?

Are you learning how to get more referrals? Are you watching training videos about software you bought but haven’t used? Are you planning a meeting with your staff or partners to discuss ways to streamline the workflow in the office, lower costs, or increase profits?

You should always be working on at least one project designed to advance your skills or improve your results. And you should always have time scheduled during the week to work on that project.

You are are a professional but you also run a business. That business has many facets, many moving parts that need to be coordinated and maintained. Your business competes with other firms who do what you do and you need to stay at least one step ahead of them.

Delivering quality legal services isn’t enough. Most lawyers do that. If you want to stand out from the crowd, you have to do more.

So tell me, what are you working on?

Are you working on your website? This is what you need

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Filed Under: Law office management, Marketing legal services, Personal development

What would happen if you stopped marketing?

February 18, 2016 by
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A few years ago, I saw a few episodes of a program called, “Life After People”. It depicted what the earth would look like in 25, 50, 100 and 300 years (I think) if mankind was extinct.

It showed our tallest skyscrapers decaying and eventually crumbling into dust. It showed the forests overtaking our cities. It showed some animal species thriving, and others becoming extinct.

It was both a fascinating and frightening portrayal of nature reclaiming the earth, and it made me realize all of things humankind does to maintain and nurture our planet.

Thinking about this program made me think about what would happen if professionals stopped marketing. If we no longer did anything to bring in new clients and keep them happy, what would our practices look like in a few years?

What would happen if you pulled all of your advertising and stopped networking, writing, and speaking. If you never added anything new to your website, posted on social media, or sent your clients and prospects another letter or email?

What would your practice look like if you did nothing more for your clients than the legal work you were hired to do? If you did nothing else to inspire your clients to tell the world about their great experience with you?

If you stopped all marketing, what would your practice look like in a year? Five years? Ten? Would you still be open for business or would the weeds overtake you and hasten your extinction?

Just as mankind maintains the world’s infrastructure and continually creates new and better ways to add quality of life to our days on Earth, so must every lawyer maintain their practice and make it grow.

Do yourself a favor and make a list of everything you do that could be considered marketing. Big things and small things. Old things and new things. Easy things and challenging things. Making this list will help you see how much you do to keep your practice’s engine in good repair.

Then, imagine what would happen if you stopped doing these things and let the practice run on it’s own. No doubt the image you see in your mind’s eye would be sobering, even if you haven’t seen “Life After People”.

Finally, look at your list again and imagine what your practice might look like in a few years if you made a little extra effort to do the things we call marketing a little better, and found some new things you could do to help your practice grow.

And grow you must, because if your practice isn’t growing, it’s dying.

If you want a simple marketing plan that really works, get this

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Filed Under: Law office management, Marketing legal services

It’s a blog about nothing

February 10, 2016 by
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Remember the Seinfeld episode where George and Jerry pitch a show to a studio head? “What’s it about?” the boss asks. With a smirk and dramatic pause, George says, “Nothing. It’s a show about nothing!”

No they didn’t sell the show. That wouldn’t have been funny. Better we should laugh at our pals and their madness.

But we shouldn’t be so quick to dismiss the value of “nothing”.

In keeping with my assertion that you can write a blog post or email about anything, or nothing, I’m going to give it a shot. I’m going to take a random idea and see if I can fill the page with something interesting and useful.

First thing that pops into my head: shopping. Here goes.

I’m not a shopper. If I go to the mall with my wife, you won’t find me trying on clothes. In the past, you’d find me at a bookstore. Today, I’ll hit a computer store, but only for a few minutes. Mostly, I find a comfy chair, read and watch people.

Basically, I do nothing.

But that’s okay. What I like to do at a mall and what my wife likes to do are different. We’re different people. One person’s gourmet meal is her husband’s poison.

We need to remember this in selling our services.

Not everyone will see the need or the value of what you offer. Some will say yes, some will say no, and some will say, “Ah, get me out of here, there’s an attorney talking!”

We must also remember that the ones who say no do it for different reasons.

One prospect may say no to your estate planning services because she thinks you charge too much. Another might say no because she doesn’t see the need or the urgency.

I spoke to a young woman recently who had a baby eight months ago. I asked if she and her husband had updated their will (knowing they probably didn’t have one at all). She told me they were going to wait until after they had a second child before doing that.

Yep, that’s what she said.

If you are an estate planner, what would you have said in response?

The point is that you need to know the different reasons prospective clients say no to your proposition and be prepared to address them. You can handle an “objection” by presenting the information as part of the pitch or on your website, etc., or you can address it when they vocalize it. (NB: it’s better to handle an objection before it comes up.)

The point is that people are different and so are their reasons for saying no. If you want to sell more of your services, you need to figure out those reasons and do something about them.

So there you go, a post that started out about nothing and turned into something. Sweet! I’m calling my buddy Art Vandelay and letting him know.

What to put on your website. 

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Filed Under: Blogging, Communication, Law office management, Marketing legal services, Writing

How to protect your referral fee when you refer cases to other attorneys

February 3, 2016 by
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I heard from a PI lawyer who had referred a case to another lawyer and was supposed to get one-third of the fee. When the case settled, the referring lawyer heard about it not from the lawyer who settled the case but from a friend of the plaintiff.

Not good.

Even worse, the plaintiff had another accident 4 months later. The same firm handled that case, which settled for $200,000, and they never told the referring attorney about it.

When he finally spoke with someone at the firm about the second case, the referring attorney was told that they don’t pay referral fees on “second generation cases/referrals”.

He asked if I think he’s entitled to a referral fee on the second case.

My take? In equity, maybe. In law, probably not. In the world of commerce, where screwing your referral sources is a great way to kill referrals (and your reputation), I think they should take care of you.

But they’re PI attorneys so I won’t hold my breath.

The bigger question is what to do to protect your referral fee in the future.

Two things. First, you need to have a written agreement that specifies what you get, not only on the original referral but on subsequent cases with the same client. Get this signed before you make the referral.

To be enforceable, it probably has to have reasonable limits (like a non-compete agreement), something like subsequent claims within two years of the original injury. (I’d also ask for a fee on any referrals from that client during the same period.) Ask around, find out the standard in your community. And be prepared to negotiate.

Second, your agreement should specify that you have a lien interest in these cases, and you should so notify the insurance carrier and/or opposing counsel on the first case. That way, when the case settles, your name will be on the check and they have to come to you to get your endorsement.

Your agreement can also specify a lien interest (and attorneys fees if not paid) on subsequent cases, but if you don’t know about those, it’s not as easy to protect your referral fee because you have nobody to notify of that interest until after the fact. Still, better than nothing.

And without an agreement, nothing is what you’ve got.

Hey, I’ve been there. I’ve referred cases to other lawyers and was screwed out of a fee when they settled. You live and learn.

My last piece of advice? Stay in touch with the client. Because you want him to tell you when he has another case, or he has a referral.

Be his “personal attorney” for life. His advisor. The conduit of all of his legal matters.

Think “clients, not cases”. And think about the referral as, “bringing in another lawyer,” not “referring out” to another lawyer.

I’d love to hear how other lawyers handle this subject. Please post in the comments.

Get more referrals from lawyers and other professionals: click here

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Filed Under: Attorneys fees, Law office management, Marketing legal services, Referral sources, Referrals Tagged With:
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