Law school admissions are down. So what?

November 5, 2013 by
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The Wall Street Journal recently reported that the “Number of LSAT Test Takers is Down 45% Since 2009”. Fewer test takers, fewer law students, fewer attorneys.

Is this a good thing or a bad thing? Neither. It’s just a thing.

Sure, fewer lawyers means less competition, but don’t get too excited. It doesn’t matter how many other attorneys do what you do. What matters is if there are enough clients.

If you handle bio tech law, for example, and you are in a small town where there are no clients for your services,. the fact that you are the only attorney in town doesn’t help you. If you are in Silicon Valley, however, where there are lots of clients, it doesn’t matter that there are lots of attorneys competing for those clients. You’re in the right place.

Go where there’s lots of competition and be better.

Work harder. Deliver more value. Be different. And infuse into what you do the uniqueness that is you because in the end, it’s not just about the legal work, it’s about the relationship.

If you own a law school, declining law school admissions matter. If you are an economist or a think-tanker, measuring the ratio of lawyers to clients nationwide, declining law school admissions matter. But if you are a practicing attorney thinking about your future, it doesn’t matter how many attorneys there are or whether or not there is enough business for all of them. What matters is if there is enough business for you.

And there is. So don’t worry about the competition. But don’t get too comfy when there appears to be less of it.

Do your clients always pay you on time and in full? If not, this can help.

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Filed Under: Inspiration, Legal industry Tagged With: , , , ,

The wave of the future for attorney marketing

October 24, 2013 by
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In the 1967 film, The Graduate, Dustin Hoffman’s character was at a party, wondering about his future career, when he was taken aside and offered some advice. “Plastics. There’s a great future in plastics,” he was told.

Plastics were the next big thing in 1967. Today? Who knows.

The thing is, when it comes to attorney marketing, there is no next big thing. It’s still all about information and people. Always was. Always will be.

Technology changes. Fundamentals don’t.

Educate your market place about the law, about problems and solutions, and about the process. Stay in touch with your clients and prospects. Treat people the way you would like to be treated. That’s all attorneys have ever had to do to build a successful practice and it still is.

Don’t get hung up on what “everyone” else is doing or feel left behind if you aren’t following the latest trend. But don’t stick your head in the sand, either. Technology does make things easier, quicker, and cheaper.

Put content on a website or blog because it makes it easier to educate your market and communicate with clients and prospects, not because someone said you must. Use social media to find and engage people because it expands your reach (and you enjoy it), not because all the cool lawyers do it.

The wave of the future for attorney marketing is information and people, same as always. Slicker and more fun with an iPad, but still the same.

Starting or expanding your website or blog? Start here.

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Filed Under: Career satisfaction, Client relations, Communication, Legal industry, Marketing legal services, Online Marketing, Social media, Technology

Illegal aliens can now practice law in California

October 8, 2013 by
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California Governor Jerry Brown just signed a bill allowing illegal aliens to become attorneys.

Yep.

Officers of the court no longer have to abide by the law. That oath thingy? Upholding the Constitution? Nobody really takes that seriously, do they?

Grow up, people. Laws are silly.

I am curious, though. When an illegal alien attorney reports his or her income, whose social security number are they using? Who cares, as long as it’s not mine.

Anyway, just when you thought there were already too many attorneys competing for clients, now this. What to do. . .

Take sides. Make some noise for or against this, on your blog and in the media. Tell the world what you think. Why it’s wrong (or right), what it means, what’s next. Issue a press release. Write a paper. Give interviews. You can do this even if you’re not in California.

Whatever you do, do it loudly. You’ll get support from people who think you’re saying something that needs to be said. And you’ll get attention from people who think you’re evil and should be burned at the stake.

Either way, you’ll get traffic to your website and new clients. Just like I’m sure this post will do for me.

Need ideas for blog posts? Other ways to get traffic? Make the Phone Ring has what you need. Go here.

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Filed Under: Legal industry, Marketing legal services, News, Online Marketing, Press release, Publicity, Web traffic Tagged With: , ,

How much do lawyers earn?

September 18, 2013 by
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How much do lawyers earn? A lot, apparently. According to a recent study, law firm net profit margins were among the highest in the world of commerce, at nearly 20 percent. In contrast, the average net profit margin for private companies is around 7 percent.

But so what? Does knowing this help you in any way?

Unless you are an economist (or the mother of a lawyer) there’s no point in comparing the legal “industry” with any other. You are not the industry.

In the same way, there’s little point in comparing your profit and loss statement with that of any other lawyer. True, you may learn that you are spending too much on rent or employees or advertising, relative to your gross revenue, and maybe you could make some adjustments. But what really counts isn’t how much you spend running your practice, it’s how much you take home.

If your net margins are “only” five percent but you take home millions, who cares that you spent a fortune on advertising or payroll?

On the other hand, if your net income is one-third of revenue, much higher than the average, but your gross is only $150,000, you don’t have much to brag about.

I’m not suggesting that you pay no attention to the cost of overhead. In fact, I’m a big believer in keeping fixed costs as low as possible. But, your number one priority isn’t low overhead, it’s net profit.

How much did you take in? How much did you spend? How much was left?

Don’t forget to subtract the value of your services before you calculate your net. If it would cost $150,000 to hire an attorney to do what you do and your net income is $150,000, your net profit is zero.

A cynic would say, “you don’t own a practice, you own a job”.

Yeah, but I’ll bet you’re the best boss you’ve ever had.

Get more clients and increase your income. Get this.

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Filed Under: Attorneys fees, Increase your income, Law office management, Legal industry Tagged With: , , ,

How to get more business clients

September 5, 2013 by
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An article in Entrepreneur, “Hiring a Lawyer: Five Mistakes to Avoid,” tells startups what to do to save money and avoid getting hurt when hiring a lawyer. If you want to get more business clients, you might want to know what kind of advice they are listening to.

Here are the “five mistakes,” followed by my thoughts on how you can use this information:

1. Hiring a lawyer too soon.

Summary: Some startups hire a lawyer before they know what they want and need. See if there is a pro bono legal clinic at a law school where you can learn about the issues and process. Consider “hiring” them to do some basic work.

DW: What can you do? How about offering free information that does the same thing? Educate your target market about the issues, process, risks, and options. How about holding your own “clinic” where startups and young companies can come and learn (and network) and maybe even get some basic work done free?

You might get endorsed by a business school or community organization, perhaps the chamber of commerce, and get some publicity for your good work in helping the community.

2. Hiring the wrong lawyer.

Summary: Avoid hiring someone who does not specialize in what you need. Get referrals and interview several attorneys before you choose.

DW: Clients prefer specialists (and articles recommend them). Specialists earn more, too. So if you don’t specialize, maybe you should. If you do specialize, start promoting the fact that you do and educate your market about why this is important to them.

3. Hiring a big firm when you don’t need to.

Summary: You will pay more and you may not need to. Many smaller firms have great lawyers, some of whom came from big firms.

DW: Educate your market about the advantages of hiring a smaller firm. Not just lower fees. Smaller firms usually give more personalized attention. Make sure clients know why this is a benefit to them.

4. Not haggling on fees.

Summary: Negotiate fees. Offer equity in partial payment.

DW: Never negotiate fees. You can be flexible about retainers, payment options, and offer alternatives to hourly billing, but never negotiate (reduce) your fees. If you do offer alternative fees, promote the heck out of it. Clients like them.

Take equity if you want to. You could hit a winner. But since most startups fail, don’t go “all in”.

5. Seeing a lawyer as just a lawyer.

Summary: If offering equity, you’re taking on a business partner. Make sure your lawyers have expertise in your field and can do other things for you, e.g., lead you to investors.

DW: Every business lawyer has a stake in it’s client’s business, even if they don’t own any stock. As the client grows, they have more legal work. There are more opportunities for referrals from partner companies, vendors and suppliers. You can grow with them, so help them grow.

Use your contacts and knowledge to help your clients get investors, better financing, new customers, and better suppliers. Look for opportunities for them. Make introductions. Send articles about their industry, marketing, and management. And make sure your prospective clients know that you provide this kind of help.

If you don’t have these connections and knowledge, start developing them. Because the world doesn’t need more lawyers who merely deliver competent legal work. It doesn’t need more lawyers who merely “protect and advise”. It needs more lawyers who can help their clients prosper.

Marketing is not difficult, when you know The Formula.

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Filed Under: Attorneys fees, Fees and Billing, Legal industry, Marketing legal services, Referrals, Specializing Tagged With: , ,

Waterboarding our cat

July 1, 2013 by
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We took Seamus to the vet to get his teeth cleaned. They found a problem and had to pull a tooth. The vet sent him home with instructions for his care, which included eating only soft foods for ten days.

As you probably know, cats are fussy about everything. And stubborn. Seamus doesn’t like soft foods. He wanted his regular food and when it wasn’t forthcoming, no matter what we offered him, he wouldn’t eat more than a few morsels.

He wasn’t drinking water, either.

We were concerned. The vet said that if he didn’t get water, his kidneys could shut down. She said we should probably bring in him to be hydrated via IV.

My wife went online and found an alternative. Some cat owners in this situation used a big syringe to force feed their cat during their recovery period. And so for the next several days, that’s what we did. I held him tightly and my wife fed him baby food and water. He didn’t like it. Not one bit. It was torture, but it kept him alive.

But he was still unhappy and listless. He wanted his regular food, in all its crunchy glory. But it wasn’t ten days post surgery and we didn’t want him to bust his stitches.

Do we wait three more days and watch him suffer?

My wife went online again and found another vet’s website that discussed the issue. He said that one week on soft food was enough and the animal should be sufficiently healed by then.

We crossed our fingers and gave Seamus a bowl of his regular food. He devoured it. He looked at us like he wanted to say, “oh hell yes,” and when he was done, he drank water.

And today, he’s fine.

Anyway, here’s the thing.

When you give your clients advice, are you telling them what’s best for them or what’s best for you? If you tell them ten days when seven days is probably okay, are you doing that to cover your tush in case something goes wrong?

This is why two thirds of our population is on some kind of medication. Physicians don’t want to suggest anything non-traditional. If something goes wrong, one of our kind will will come at them with our six-shooters a’blazin. So they take the easy way out and prescribe the medically accepted pill of choice. It’s best for them, even though it may not be the best for the patient.

So, how about you? Where do you draw the line?

Do you tell your clients they need to have certain documents prepared to protect themselves or do you let them “take their chances”? In a contingency fee matter, do you recommend settlement because it is best for the client or because you don’t want to risk losing your fee?

I admit, it’s often a tough call. But that’s the gig. That’s what we get paid to do.

I do wish for one thing, though. When a stubborn client doesn’t want to follow our advice even though it is truly what’s best for them, we should be allowed to waterboard them.

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Filed Under: Client relations, Law office management, Legal industry Tagged With:

Building a high volume law practice

May 8, 2013 by
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When I started practicing, my goal was to build a high volume law practice. Lots and lots of smaller cases and clients.

Why?

Because there are more of them. I figured I had more chances to get small cases simply because there were more of them.

And because when I was getting started, I wasn’t good enough to handle the big ones.

But even when I was good enough, I still focused on small cases. My thinking was that a high volume of small to medium size cases would scale. As I brought in more business, I could hire more employees and get a bigger office. Or, as I later did, I could open a second office. And, if things didn’t work out, I could just as easily scale down.

Small cases meant smaller risk. Big cases require a big investment of time and resources and with only a handful of those cases, I could suffer some big losses if one or two went south.

The other reason is that a high volume law practice would make marketing easier. More clients meant more opportunities to get referrals from those clients. 500 clients meant 500 fishing lines in the water.

And I was right. I got lots of referrals. And life was good.

I always thought my exit strategy would be getting one or two monster cases that would allow me to cash out and be “done”. In law school, we heard that’s what our torts professor had done and it sounded good to me. But it never happened. I got some decent sized cases, but no monsters.

Many attorneys turn away small cases. They want bigger cases, with a bigger potential payoff, and there’s nothing wrong with that.

They probably don’t get as many referrals as I did, but the referrals they do get are bigger. If they’re really good, they get referrals from other attorneys who don’t handle big cases.

Some attorneys do it all. Small cases, medium cases, big cases. Bring it! The small cases allow the firm to finance the bigger cases. That works, too.

There’s no right or wrong way. You have to find your way.

If you aren’t (yet) a great attorney, be a prolific attorney. If you are a great attorney, you’ve got options.

If you want to get more clients and increase your income, learn The Formula.

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Filed Under: Law office management, Legal industry, Marketing legal services, Referrals, Relationship marketing Tagged With:

Do attorneys charge too much?

May 6, 2013 by
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A lot of people think attorneys charge too much. But you can’t charge too much. It’s not possible. If someone is willing to pay what you ask, then, by definition, it’s not too much.

Unless, somehow, an attorney has some kind of monopoly–government hook up, union contract, that sort of thing, or someone else is paying the bill–in a free market, the market determines price.

Willing buyer, willing seller, and all that.

Actually, many attorneys fees are too low. They don’t charge what they could. Why? Several reasons:

  • They try to match their rates to what other lawyers are charging, so they can “stay competitive,” and everyone gets locked into thinking that what everyone is charging is the “right price”.
  • They believe they will get more clients by offering rates somewhat lower than other attorneys.
  • They haven’t factored in the costs of overhead or inflation.
  • They start out low and are afraid that if they raise their rates they’ll lose clients.
  • They lack confidence in themselves and their abilities or think they don’t have enough experience to charge top dollar.

How do you know if you could charge more? You raise your fees and see what happens. Start with new clients. If there’s little or no resistance, roll out the increase with existing and former clients. Keep raising fees until there is “significant” resistance. I can’t tell you what that is, but you will know it when you see it.

Here’s the thing: the best clients don’t shop around for the lowest priced attorney, and you don’t want the ones who do. You should never compete on price. You’ll attract the worst clients, and besides, there will always be someone who charges less.

The best clients — the ones who return again and again and refer others — understand that you get what you pay for. In fact, if you charge less than most other attorneys, you’ll actually make them nervous. What would you think if you found out that the doctor who was about to operate on your brain charged much less than other surgeons?

You don’t want a reputation for being “low priced”. Instead, you want clients to think of you as “charging top dollar but worth every penny.” In this way, you get the better clients and maximize your revenues and profits.

Regularly survey the market and keep your fees at least in the upper one third of fees in your area. You don’t have to be the most expensive in town to get the best clients (although that may be an effective strategy for some lawyers), but you do want to be among that group.

Will you lose some clients as you raise your rates? Yes, but far fewer than you might imagine. And the revenue you lose by their loss will be more than made up for by the gains from other, higher-paying clients.

In fact, you may find that by raising your rates you actually find there is more demand for your services. More clients at higher rates? That would be okay, wouldn’t it?

The Attorney Marketing Formula: How to Earn More Than You Ever Thought Possible. Click here.

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Filed Under: Attorneys fees, Fees and Billing, Increase your income, Legal industry Tagged With: , ,

The only good lawyer is a dead lawyer

May 3, 2013 by
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In case you haven’t noticed, a lot of people don’t like lawyers. Hey, a lot of lawyers don’t like lawyers.

But why?

Because we help bad people get away with bad things? Because we’re mean? Because we earn a lot of money for doing nothing?

I guess there are lots of reasons. Most of which we can’t do anything about. But there’s one reason we can do something about.

A lot of people say they don’t like lawyers because we can’t be trusted. We lie. We don’t keep our promises. We say one thing and do another.

A lot of people think this. As long as they do, the legal profession will continue to be looked down upon and lawyers will have a harder time winning our clients’ trust.

What can we do about it? We can start by making sure we always keep our promises.

The other day I had a phone appointment with a lawyer. I called at the scheduled time, as we had arranged. The lawyer was “in with a client”. I was told the lawyer would call me back.

But he didn’t.

An appointment is a promise. Two people agree to meet or talk and they schedule it in their calendar. When someone doesn’t show up, they break that promise.

So, here’s the thing. If you want people to trust you, you have to do what you say you’re going to do. If you have an appointment, you keep it. If you say you’re going to call someone or you say you’re going to do something, you do it.

There is no gray area. There is no best efforts. As Yoda says, “Do, or do not. There is no try.”

If there is an emergency, okay, people understand. But you’ve got to tell them.

If you need to re-schedule, okay, that happens a lot. But you’re got to tell them.

Otherwise, they think, “flake”. “Doesn’t keep promises”. “Can’t be trusted”.

And people don’t want to hire lawyers that can’t be trusted.

Have you noticed how a lot of Texans who use the word “lawyer” intentionally pronounce it “liar”?

Now we know why.

If you want to learn more ways to build trust, get this.

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Filed Under: Client relations, Image, Legal industry, Personal development Tagged With: , , ,

Pros and cons of starting a law practice

March 27, 2013 by
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I was reading some statistics about the failure rate of small businesses. The numbers are brutal. 50% fail in their first year. 95% are out of business within five years.

It got me thinking about the survival rate for a new law practice. I don’t know what the actual numbers are but it wouldn’t surprise me if you told me that 95% are still going after five years.

Then I got to thinking about why. What is it about the business model of a small law practice that allows for such a high survival rate compared to other small businesses?

If you’re thinking about starting a law practice, here are the pros and cons I came up with:

THE PROS

  • Lower start up costs. You have rent deposits, furniture and computers (which can be financed), but no inventory or expensive equipment, and you can start without any employees.
  • Lower overhead. Your biggest fixed costs are rent and insurance. As you grow, you can hire employees or outsource, unlike a restaurant which cannot operate without employees.
  • Lower marketing costs. You need a web site. You can bring in business by networking. You don’t need to advertise.
  • Higher margins. You don’t sell a $10 product, you sell a $5,000 product. You can break even with just one or two new clients a month.
  • Steady work (business clients). Business clients tend to have ongoing legal needs. (But see below.)

THE CONS

  • Limited time. There are only so many hours in a day available for you to produce work product. If you have employees, you must supervise them. You have to reach a certain size before you can justify hiring staff to manage staff.
  • Limited growth options. You can’t franchise. You can’t take on investors. Bank financing is more difficult without inventory or other assets as collateral. If you want to open additional offices, you must be willing to stretch your time even thinner.
  • Competition. There are more lawyers today and fewer clients (with money). You also have competition with legal form companies, paralegals, and legal plan companies.
  • Feast or famine. Business clients go out of business and take their legal work with them. Consumer clients hire you once and often never again.
  • Limited retirement options. It’s difficult to sell a law practice for a decent multiple. You usually have to carry a note and depend on the buyer’s ability to pay (and many of your clients won’t stay with the buyer).

So, what do you think? Did I miss any? Does it look like a law practice is a sound business model? Please share your thoughts in the comments.

Learn how to earn more than you ever thought possible in your law practice. Click here.

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Filed Under: Law office management, Legal industry Tagged With: ,
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