Who decides what’s fair when it comes to attorney fees?

January 4, 2013 by
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So a law firm hires a contract attorney to do document review in a big securities case. They pay the contract lawyer $50 an hour and bill their client $550 for that hour. Is that fair? One lawyer says, “Contract lawyers feel more like a cost that should be simply passed through to the client.”

What say you?

Me? I say that asking if it’s fair is asking the wrong question. Fairness is not the issue. The issue is, “What is the client willing to pay?” Isn’t that the basis of capitalism? Willing buyer and willing seller at arm’s length?

If the client agreed to pay $550 an hour and the work performed by the contract lawyer is of no lesser quality than expected, then who’s to say the client didn’t get its money’s worth? And who’s to say the firm isn’t entitled to make a profit on what they pay outside attorneys? Don’t they earn a profit on work performed by their employees?

Since this was a class action, a judge is being asked to approve legal fees. I’m sure he or she will consider many factors in making that determination. The mark up on contract lawyers shouldn’t be one of them.

You’ll earn more and have happier clients if you DON’T bill by the hour. Find out why and what to do instead in The Attorney Marketing Formula.

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Filed Under: Fees and Billing, Legal industry Tagged With: ,

If Charles Darwin managed your law firm

September 25, 2012 by
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Some cynics contend that lawyers aren’t human. They say we are a different species who kill and eat our young and should not be allowed to mate and reproduce.

If Charles Darwin were around, he might point out that the traits that make us good at our jobs, i.e., skepticism, competitiveness, toughness, argumentativeness, etc., allow us to survive and thrive as a species. If that wasn’t true, we would have died out a long time ago.

So there.

There are parallels between Darwin’s theories and the management of a law practice. Darwin concluded that the species that fights for survival, or is adept at avoiding it, is the species that has the best chance of survival. In the food chain, there are those who eat and those who are eaten.

Lawyers aren’t allowed to flee. We have to stay and fight for our clients. By helping them survive, our practice survives. Our clients have more work for us. Other clients are attracted to the strongest lawyers.

Does that mean lawyers must be cutthroat? In the big firm world, I think it does. There are too few clients and too much jungle to cut through. For solos and small firms, there are more options, particularly for those lawyers who embrace Darwin’s other hypotheses.

Darwin said that the species with the best chance of survival are the species that have learned to specialize. There is less competition when you’re the only one with a long snout that can find ants buried deep in the ground. If Darwin were managing your firm, he would tell you to differentiate yourself from other lawyers and look for gaps in the market that you can exploit and dominate.

Sound advice, but advice few lawyers follow. Most lawyers follow the herd and thus, earn average incomes. Skepticism and risk adverseness may make a lawyer good, but it doesn’t make a lawyer wealthy.

Darwin’s theory of adaptation is another area where lawyers are weak. The theory says that to survive in a world of changing demands and conditions requires a species to adapt to those changes and evolve. Lawyers are famously not comfortable with change, however, and often find themselves playing catch up.

Change doesn’t mean recklessness. It means staying informed, being open minded, and willing to try. Lawyers who don’t have a robust Internet presence, for example, are clearly falling behind.

Darwin told us it is, “the survival of the fittest.” If he was managing your firm, he might say that while you may be ready for the competition, if you don’t specialize and you don’t adapt, you may still find yourself on the endangered species list.

If you want to learn how to differentiate yourself from the competition and not get eaten alive, get The Attorney Marketing Formula today.

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

Jay Foonberg asks: Is the practice of law a business or profession?

September 12, 2012 by
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Jay Foonberg is writing an update to his book, “How to Start and Build a Law Practice”. He posted the following on Facebook:

From the chapter “The Profession of Law is Not the Business of Law”

“In my opinion, those who call the profession of law a ‘business’ insult and demean the legal profession and you as a lawyer, in addition to simultaneously displaying their own lack of knowledge of the differences between a profession and a business”

Your thoughts?

One attorney said, “I strongly agree! We are here to find justice, or help a person in need.” Another said, “I agree with Jay Foonberg. I also think being a Human Being is not a business. Socrates, General Patton, Einstein, and Mother Theresa weren’t in business. But they advanced the human race.” Another commented, “If you want to sell stuff, go sell houses, or coffee, or cell phones.”

My comment:

“It’s both a profession and a business. If you are self-employed, you (the professional) work for the business (practice).”

That’s what I said, but what I wanted to say was, “are you nuts? Of course it is a business, and it’s naive not to recognize that reality.”

It’s a business because you sell services, pay your expenses, and earn a profit. If you don’t earn a profit, you’re out of business. You’ll still be a professional, but broke and looking for a job.

It’s a business because you have to bring in clients and if you don’t know how to market your services, you’re not going to make it, no matter how good you are as a lawyer or how selfless you might be.

It’s a business because you have to hire and manage employees, stay up to date with technology, and keep your expenses under control. If you don’t, there won’t be enough left over to pay yourself a draw and you’ll have to fire yourself because you can’t afford yourself.

You know what’s insulting and demeaning? Telling new attorneys that it’s not a business. Letting them think that all they have to do is hang out a shingle and be a good professional and the world will beat a path to their door. If they put other people’s interests before their own, their rewards will come.

That’s the wrong message.

When you’re on an airplane, the flight attendant tells you that if there is a drop in cabin pressure, you should put the oxygen mask on yourself first. Then, you can take care of others who might need help. You can’t help anyone if you lose consciousness, you have to take care of yourself, first.

That’s reality. On an airplane or in the business of law.

I went to law school to make money and to help people, but you can’t do one without the other. You can’t practice your profession unless your business is successful.

Many of the other comments agree that it is a business and a profession. And to his credit, Jay is seeking our feedback and “Liked” my comment.

The world was a simpler place when Jay wrote the first edition of his book. Today, we’re on a plane and losing pressure fast. We should all do our part to make the world a better place, but first, we have to pay the bills.

If you want to earn higher profits in your “business,” pick up a copy of The Attorney Marketing Formula.

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Targeting the Hispanic market by going in the side door

August 22, 2012 by
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In most of the many offices I have had in my legal career I have had Spanish speaking employees. This only made sense in a city like Los Angeles.

According to this article on the dramatic growth of the U.S. Hispanic market, today you might want to have Spanish speaking employees no matter where you practice. But there’s another way you can leverage this growing market.

The article lists seven industries that will benefit most from the growing Hispanic population:

  1. Residential buying, food (grocery and restaurants)
  2. Retail (especially clothing and electronics)
  3. Education (higher education and technical schools)
  4. Financial services
  5. Transportation (automotive and airline)
  6. Entertainment
  7. Media

Legal is not on this list, but it doesn’t matter. You can leverage the growth of the Hispanic population by aligning yourself with professionals and businesses in these industries who already target the Hispanic market.

Let’s take financial services, for example. By networking with bankers, brokers, financial planners, and CPAs who target the Hispanic market, you can grow with them.

What this means is that you don’t have to re-brand yourself for the Hispanic market in order to benefit from its growth. You can piggy-back on the influence of business owners and professionals who have already established themselves in that market.

Of course this is good advice in any market. When I moved out of Los Angeles and started over in a city where I didn’t know anyone, I didn’t merely hang up a shingle and try to compete with already established firms. I hired someone who had a lot of contacts in the market I chose to target and through him, met many professionals and business owners who already had influence in that market. My practice grew quickly because I wasn’t really starting from scratch.

The next time you want to get into a new market, try the side door.

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

Marketing insights for sole practitioners

June 25, 2012 by
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My post on going solo brought emails from lawyers who appreciated that I didn’t varnish the truth about how hard it is.

If you are a solo or thinking of opening your own office, I recommend you read Philly attorney Jordan Rushie’s candid post about his experiences in staring his own practice. It’s interesting reading if you want to compare notes, required reading if you’re about to open that office and need to make a shopping list.

Rushie agrees that going solo is almost a crazy idea–a lot harder and more costly than some would have you believe, far more work and far less income than you can imagine. Although he acknowledges that it’s never the “right time” to go solo, if you have a choice, wait until you have the experience, money, and contacts to be able to do it right.

Rushie’s has some interesting comments about marketing for the new solo. Actually, his advice rings true for just about any attorney. He says you don’t need:

  • An expensive, fancy web site. I agree. You need a place to send people to get information about your practice and how to contact you. You can add more content and make things look nicer later on, after you’re making money.
  • A logo. Right again. Although you can get a decent one designed for a few dollars to a few hundred dollars, you’ll waste too much time deciding on the right look. You don’t need a logo, you need clients.
  • “SEO Optimization”. Rushie suggests that more traffic won’t necessarily bring you good clients but that it will certainly bring you tire kickers. You can set up mechanisms to screen and filter out the low-quality inquiries and, therefore, get some decent clients, but the time (and money) you will spend are probably better spent elsewhere. Put this on the list for later.
  • A marketing/PR firm. I agree with this, too. Even if you could afford the cost and could find a firm that really knows what they’re doing (many don’t), you’re better off building relationships. Rushie says, “take potential clients to a ball game,” family, friends, and other lawyers out to dinner. No question about it, you will get far more business by leveraging your existing relationships for business and referrals than you will get hiring a marketing firm. I’m not saying you don’t need marketing information and advice. You do. But you’re better off learning it yourself so you can do it yourself.
  • Social Media or a social media consultant. Rushie says he doesn’t rely on social media to build his practice. He gets about 5% of his work from Facebook friends, “but they are usually people I knew from high school who would have called me anyway.” I know there are exceptions, but I hear something similar from a lot of attorneys. Don’t ignore social media but don’t depend on it, either. Use it as an excuse to connect or re-connect with real people because the magic happens when you talk to people or meet with people in the real world.

Rushie says not having a plan on how to grow your practice is a big mistake and of course, I concur. The good news is that the plan is a lot easier, less technically challenging, and less costly than you might think. Build your practice by building relationships.

Unfortunately, unless you know a lot of (the right) people, building relationships may take up a lot of time. Fortunately, as a new solo without a lot of clients or work keeping you busy, you have time to go meet some new people. Unless you’re too busy learning how to practice law.

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Filed Under: Career satisfaction, Inspiration, Legal industry, Marketing legal services, Relationship marketing, Social media, Social media marketing Tagged With: , , , ,

Thinking of going solo? You must be crazy.

June 20, 2012 by
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I was reading an article that had questions you should ask yourself before you go solo. Questions like, are you self-disciplined, can you financially and emotionally handle not having a steady income, and do you like wearing many hats because in the beginning, you’ll be doing everything yourself.

If you are a sole practitioner, you may have asked yourself these types of questions before you took the plunge. If you’re thinking about going solo, you may be going through this process right now. But if you’re like a lot of attorneys today, you may not bother asking these types of questions, you’re going solo because you have no choice.

Maybe you’re fresh out of law school and you can’t find a job. Maybe you got laid off and know that the odds of replacing the job you just lost are very slim. Or maybe you just can’t stand what you’re doing and you need to be on your own.

Solo practice sounds exciting. No one to report to, make your own hours, do your own thing. In reality, sole practitioners put in longer hours and have far more pressure on them than their employed counterparts.

You have to bring in the clients and do all the work, and since most newly minted sole practitioners don’t have employees, you have to do all the ancillary chores as well. There are no benefits, paid vacations, or sick days. And when you’re the only one who shows up for work every day, it can get lonely.

A solo practice is actually a very poor business model.

And yet, many attorneys make it work.

I wasn’t one of those who was ideally suited to being a sole practitioner. I just knew I couldn’t work for anyone else.

I had worked for my father for a year out of law school and then opened my own office. I must have been crazy to do it. I had no clients, no money in the bank, and very little experience as an attorney. On top of that, I was 24 and looked 20.

From day one it was a constant struggle to survive and it was five years before I actually had anything resembling a successful practice.

I went solo because I had to. I survived because I had to.

If you’re thinking of going solo, do it because you have the experience, the clients, the financial staying power, and the temperament to run your own show. Or do it because you have no choice.

When you have no other options, you keep going. You figure it out. You do what you have to do.

One more thing. When everyone says you’re crazy for doing it, just keep thinking about how good it will feel when you prove them wrong.

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

The magic of practicing law

June 6, 2012 by
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I live in a gated community and this week the streets are being re-paved. Our community is a labyrinth of cul-de-sacs and there is only one way in and out. Our street is partially blocked right now and we have to take a circuitous detour to get to and from the front gate.

The contractor has had to coordinate the closing of alternating streets to allow egress and ingress. There was a resident meeting explaining the schedule and a color coordinated street map and the schedule for paving them is posted on our community’s web site.

One street is finished and it is beautiful. The worn pavement and faded markings have been replaced with a smooth, deep black finish and crisply drawn lane lines and cross walks. Everything is new and pristine, a first class job through and through.

I enjoy watching the work being done almost more than the finished job. I grew up in a newly developed community and as a kid, loved watching the construction workers and their machines. Part of it was knowing that the workers were doing things I couldn’t do. I marveled at how they took truckloads of raw materials and out of chaos created finished buildings. As an outsider, I could only watch and appreciate the magic.

I had some of the same feelings as I watched the workers and machines paving our street. They poured the asphalt, rolled and smoothed it, and painted the white and yellow lines. I have tremendous respect for the professionals who planned and are executing this job. It is as much art as engineering. And yet to them, it’s just another job. It’s what they do every single day and there’s nothing artistic or magical about it.

I couldn’t help thinking that most people don’t know what attorneys do or how we do it, and that while few want to watch us at work, what we do is indeed magical. We are artists, engineers, and builders. With our words and ideas, we change minds, we help people prosper, we fight for freedom. Without us, the wheels of civilization would stop turning.

Never take your skills for granted. Most people don’t know what we do or how we do it, but what we do is magical.

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Filed Under: Inspiration, Legal industry Tagged With: ,

How many lawyers really work from home?

June 4, 2012 by
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According to the latest US Census, 2% of lawyers now telecommute. That’s up 166% in the last ten years and it’s one of the fastest growing categories. But it’s still a small number.

I’m guessing that most of these lawyers don’t see clients. They write, research, and perform other functions that don’t regularly require meeting people in person.

I’m also guessing that if The Census had used a different word than “telecommute,” the results would have been different. I think a lot of attorneys do at least some of their work from home. They don’t call it telecommuting, however, a word that is not usually associated with professionals.

I also think a growing number attorneys, sole practitioners primarily, work almost exclusively from home. They see clients at an office suite where they have so many hours a month available for that purpose, or other arrangements, i.e., using a conference room or spare office in another attorneys suite.

I work from home. When I “see” a client (lawyer), it’s done over the phone. My overhead is a fraction of what it was when I had an office and I love not having to commute. If I was practicing today, however, I would still have an office.

For one thing, I got a lot of walk-in clients in my practice. Existing clients would bring their papers to the office when it was convenient for them and if they needed help with those papers, someone needed to be there to provide that help.

In addition, my clients needed to see me in person, even if it was only greeting them before turning them over to a member of my staff. They needed to see me wearing the uniform (suit and tie) and to see that I was successful (i.e., nice furniture, etc.) Most of all, they needed to see that I was physically present, committed to the community and niche market that I served.

Over the years, I’ve talked to attorneys who have an office in their home and see clients there. I think this is a mistake. Clients have expectations about what an attorney does and they expect attorneys to have an office. When you deviate from what they expect, they get nervous. They may not say anything but they are surely wondering why you can’t afford a real office.

Without an office, it’s more difficult to attract clients. There are exceptions–entertainment law, for example, where working from (an expensive) home may actually provide even better posture. But for most attorneys, not having an office, in my opinion, costs more in terms of lost business and referrals than the amount saved by working from home.

I would probably have a smaller office today, however. You don’t need as much space today because a lot of work attorneys need done can be outsourced to virtual assistants or employees who work from home. I talked to a secretary for a California attorney recently. If she hadn’t told me, I would never had known she lives in Florida and works from home.

How about you? Do you do some or all of your work from home? Do you have a smaller office than you had in prior years? Let me know in the comments.

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

The future of legal services: demographic trends you need to know about

April 11, 2012 by
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Most lawyers have it backwards. They say, “Here’s what I do, world–call me if you need my services.”

Instead, they should look for a market that has a problem or a desire and present their services as the solution. Yes, they should “find a need and fill it.”

One of the ways to identify future needs is to look at demographic trends. In this article, the author identifies three “hot” demographics for businesses. Guess what, lawyers? That includes you.

The three groups are “Children,” “Twenty Somethings,” and “Seniors.” As I read the article, I couldn’t help thinking about how attorneys could simply re-focus their marketing messages to target these groups. You don’t have to offer new services, or change anything about what you do. Re-focusing means

  • Positioning what you do in a way that is attractive to the people who occupy these demographic slots, and
  • Identifying and networking with professionals and businesses who target these demographics.

For example, in the category of Seniors, the author notes that, “in-home medical or nonmedical care to assist with activities of daily living,” will be a growing market for the next 20 years. Where could your practice fit in? If you handle estate planning or elder law, the connection is obvious. But with a little bit of effort, you could find a connection for just about any law practice, business or consumer.

I suggest you read this short article with pen in hand or your note capture tool launched, and brainstorm ideas.

Also, do some additional reading. You may not know a thing about “in-home care” but a few hours online could not only educate you about the trends in the industry but also identify key people you could contact: start-up companies, mature businesses in the chain of distribution, bloggers, consultants, and professionals who already have a presence in the market.

A simple way to grow your practice is to align yourself with growing markets. But don’t just offer them your services. Find out what they need and then show them how your services will help them get it.

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Filed Under: Legal industry, Marketing legal services Tagged With: , , , , , , , , , , , , , , , , , , ,

Are you paid enough for the risks you take in your law practice?

April 6, 2012 by
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“The choice isn’t between success and failure; its between choosing risk and striving for greatness, or risking nothing and being certain of mediocrity.” — Keith Ferrazzi

Every day you make decisions in your law practice. You’re usually right but sometimes you make a mistake. It’s okay because when you make a mistake, you can usually fix it. If you can’t fix it and your client suffers a detriment, you have insurance.

Your clients pay you to make decisions. It’s what you do. It’s what you get paid for. Every time you make a decision, however, you take a risk. But are you being compensated for those risks?

In business, the bigger the risk, the bigger the potential reward. When you are the principal, your fortunes rise or fall on the outcome. As advisors, however, we are paid by the hour or the case or the work product. Other than contingency fees, our compensation is almost never commensurate with the risks.

You prepare a “simple” will. You get paid a few hundred dollars. But what if the client needed something different? What if you leave something out? Hundreds of thousands of dollars could be are at stake, but you are paid a few hundred dollars.

It seems to me we should be paid according to the risks we take in our work. Our insurance carriers are. Our business clients are. But we are not and we probably never will be. We can’t charge thousands of dollars for a simple will.

But while we probably won’t get paid more for taking risks in our legal work, we can get paid more for taking risks in our marketing. Ironically, these are risks most attorneys avoid.

If you want to reap bigger rewards in marketing your services, you need to take bigger risks.

Time, money, ego–invest more, risk more. Yes, you might waste that time or money, or take a big hit to your ego. But you might also get rich.

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Filed Under: Attorneys fees, Fees and Billing, Law office management, Legal industry, Marketing legal services Tagged With: , , , ,
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