Marking posts that will be copied to the blog at lawfirm500.com

How to Start a Law Firm

Starting a law firm can be one of the best decisions a lawyer can make.

Not only can you make more money as the owner of your own law firm but you can also enjoy the freedom to pursue the types of cases and clients you get energy from vs. working for a firm where your cases and clients may be dictated to you even if they’re energy vampires.

Good News:  Did you know that according to ABA statistics nearly 60% of lawyers in the US are actually solo practitioners?  And that’s not a recent statistic.  The fact of the matter is that the face of the most successful lawyers in the US has always been a solo practitioner.

More Good News:  Did you know that lawyers have been starting SUCCESSFUL solo & small law firms for more than 500 years?

That’s right, this is a very well-documented fact.  As business models go law firms are pretty well tried & true and you can make alot of money just sticking to the fundamentals.  Only trouble of course is that they don’t teach us the fundamentals of starting, marketing and/or managing a successful law firm in law school.  Which is why, sad to say, so many solo lawyers DON’T have “successful” law firms.

Zig Ziglar, a well known success coach said that if he was going to go into a new line of business he knew nothing about the first thing he’d do is study what the average person in that business is doing…and do the opposite!

Because if you do what everyone else is doing you’ll only get the results everyone else is getting.

The main reasons most lawyers who start a law firm don’t find as much success as they could are:

1. They don’t stop to ask themselves what it means to have a “successful” law firm vs. just having a law firm.

2. They don’t appreciate the difference between the job of being a lawyer vs. the business of running a law firm. 

One we are reasonably well prepared for by law school and subsequent years practicing law; the other we are not.  Because ten years of becoming the best lawyer in the world in your chosen practice area may expose you to little or no experience in how to run the business itself.

3. They fail to consider the opportunity cost of trying to figure it out themselves the hard way.

Figure if you’re good enough to pass the bar exam and choose a reasonably straight forward practice area, if you know what you’re doing when it comes to the management & marketing of your law firm you should be able to gross at least $100,000 in your first year.

If you’re already well-established in a practice area, have a book of business, contacts in the community etc. that number could be much higher.

But what if you waste the first five years of your practice trying to teach yourself how to start, market & manage the business?  That could easily cost you half of your time, energy, enthusiasm and creativity, couldn’t it?

Translate that into dollars and it’s easy to see why some experts estimate that lawyers who try to teach themselves how to run a law firm vs. pursuing a deliberate plan to acquire these skills could easily be leaving as much as $250,000 or more on the table in terms of opportunity cost.

In a future post I’ll outline the steps I recommend every lawyer takes when starting a law firm.  You can get much more detailed information that space here permits at: www.HowToMANAGEaSmallLawFirm.com

Don’t miss out on the chance to position your law firm as one of the BEST in the country! Take two minutes to apply to get your firm on the Law Firm 500 list. This is not just an award, it is a PROFIT STRATEGY! Click here to apply!

RJon’s Formula For Calculating Precisely How Much More Money You Could Be Making From Your Small Law Firm

How To Calculate Precisely How Much More Money You Could Be Earning From Your Solo or Small Law Firm

I’m always amused by the skepticism of some lawyers when I tell them about a program I have called “How To Double The Revenues Of Your Small Law Firm In 12 Months Or Less”.  But you really can.

And it’s not even that hard to do.  I’ve even devised a simple mathematical formula you can use to calculate how much more money YOU could be generating with your small law firm.

But instead of plugging their numbers in some lawyers prefer to make excuses.  In fact, here’s how it usually plays out…

I will invite a lawyer to listen to a free teleseminar.  I’ll promise that in about 75 minutes I’ll give them an overview of some of the steps you can take to easily and pretty reliably double your revenues in just 12 months.  I tell them ahead-of-time that, obviously, in just 75 minutes I cannot possibly tell you EVERYTHING.  But I promise I’ll share enough to prove it to you That It Really Is Possible if you follow a system I’ve created and that I back up with a 100% money-back guarantee.

“Impossible” they say!

“But what if it really was possible?”  I say “Would you give it a try knowing that I back it all up with a 100% money-back guarantee?”  “Just think of what it would do for your life if you could earn more money without even working any harder or longer.  In fact this system will even enable you to work less and have more fun and you’ll still earn more money at the practice of law”. I usually add helpfully, because I really do want as many lawyers as possible to discover how much fun and how profitable it should be to be a lawyer!

Of course, some lawyers have been so abused and so damaged and so scarred that they find it impossible to take this chance on themselves.  Even though they don’t have to risk any money.  And the potential for personal, professional and of course financial benefit are obviously great.

Sadly, I cannot help those who are unable or unwilling to help themselves.  But if you’ll have an open mind and confidence in YOURSELF I can PROVE it to you in several different ways. 

But first here’s the formula I was talking about above

a.) Take your current 5 year average gross revenues and multiply that number by negative 1 to arrive at your “Baseline Potential”  (For example if your average is $250,000 x -1 =  Baseline Potential of -$250,000.)

b.) Multiply your Baseline Potential by the average of the grades you earned in all of the law practice management and law firm marketing courses you completed in law school.  So for example if you took a single 15 hour course on law practice management and earned yourself a “B”, and you earned an “A” in your law firm marketing course, the average of those grades is a “B+” or 3.5  to arrive at you “Adjusted Baseline Potential” (-250,000 x 3.5 = -$875,000)

c.)  Calculate the difference between your Adjusted Baseline Potential and 0 to arrive at you “Raw Potential For Growth Through Learning Everything They Didn’t Teach You In Law School About The Business Of Managing & Marketing A Law Practice” or “Raw Potential” for short.   ( -$875,000 + $125,000 = 0)

d.) Divide your Raw Potential For Growth by your Baseline Potential to arrive finally at your Percentage Potential For Growth.  ($125,000 / $250,000 = 50%)  That’s about the percentage of the potential additional income you could be generating from your small law firm. 

Not quite “doubling” is it?  But what if you never took even a single course in law school (or since) on how to manage or how to market a small law firm?  You took thousands of hours to learn how to practice law didn’t you?  But none, zero, zippo, zilch on how to manage & market the business of a law firm?  But you still doubt your own potential for growth & improvement?

“Of course not RJon!  Now that  you put it like that I’m really excited about my own potential.  How do I learn more about this free telseminar you were talking about!?!?”

Well, I’m glad you asked because HERE is  where you go to learn more!

RJON

p.s. I am the sole person responsible for creation of the formula above.  Do not make important decisions based soley on that formula without consulting with me first because its results must be interpreted in connection with another formula for calculating how much more FUN you could be having as the owner of your small law firm.

p.p.s. Don’t miss out on the chance to position your law firm as one of the BEST in the country! Take two minutes to apply to get your firm on the Law Firm 500 list. This is not just an award, it is a PROFIT STRATEGY! Click here to apply!

How Small Law Firms Can Profit By Helping Larger Law Firms

Caroline Elefant over at My Shingle recently posted a discussion about small law firms “joint venturing” with larger firms to help the larger firms get more business in RFP contests, etc.  The title of her post is “Could You Be A Front For A Firm?”

Here are some tips to keep in mind if you’re in a small firm and
you’re thinking about “cooperating” with a larger firm as Caroline
described above.

First of all it may give you some confidence to know that small and
minority law firms have actually been “cooperating” with larger firms
for a long time. There is no such thing as a “full service” firm. They
ALL have gaps. I once helped a small franchise specialty shop with deep
roots in the restaurant industry joint venture with a 50 lawyer firm to
go after and win an RFP from a major national restaurant franchise that
paid for my client’s kids’ college tuition with all the fees the
relationship generated.

Second of all, you can help eliminate alot of client confusion if
the larger firm will give you your own email extension that forwards to
you and your own extension on their pbx phone system. This gives
clients a HUGE sense of comfort.

Third, be sure you take the time to document not only the terms but
schedule an hour with the larger firm’s Administrator to work out the
mechanics of how the relationship is actually going to operate. For
example, will you be able to schedule use of the firm’s conference room
for client meetings? Will they assign you a cost code for the copy
machines,etc. and will the big firm’s copy room support you? Usually
it’s just a matter of asking to leverage their economy of scale and
they’re happy to accommodate us.

Don’t be afraid to bring RFP’s to a larger firm and suggest
cooperation. And don’t wait until they have an RFP to go over there and
suggest how you may fit into their strategy. 8 times out of 10 I find
the larger firms are very receptive to this “Integrated Of Counsel”
type of relationship with smaller firms with interesting niche
practices.

Don’t miss out on the chance to position your law firm as one of the BEST in the country! Take two minutes to apply to get your firm on the Law Firm 500 list. This is not just an award, it is a PROFIT STRATEGY! Click here to apply!

Do You Want To Be A More Profitable, Ethical & Professional Lawyer?

Note: This is a recycled article I said I’d post in response to some recent inquiries on the same subject from a couple of different sources.  Must be something in the air.

Every week I speak with  attorneys who have trouble reconciling the conflicts in the relationships they  have with clients: Creditor and Advocate.   They call me on the telephone and they invite me into their offices for  on-site consultations.  They tell me  of their troubles and ask me for help.   I am a Practice Management Advisor with How To Make It Rain.com and these are my stories:

I visited “John” in his Orlando, Florida office.   He called me to ask for help. He was working harder than ever but never seemed to take home enough money.  He thought his expenses were  too high. John was even considering letting a secretary go whom he was sure, was  taking office supplies home for her kids. (Office supplies typically represent less than 1% of a law firm’s annual budget.)

ACCOUNTS  RECEIVABLE: Clients pay us to solve their problems, we are not supposed to pay for them!

Once John understood the  importance of screening Prospective New Clients in a systematic and professional manner to weed out  the potentially bad ones, he was ready to think about business.  The first thing we had to address was  the ridiculous level of old & dusty accounts receivable that were indirectly costing him money each month.

One of the reasons for John’s  unhappy condition were his conflicting feelings.  These feelings were never discussed in his professional responsibility course during  law school.  Instead, John learned the hard way how really difficult it is to serve someone as both their creditor and their  advocate.  These two roles have  inherent conflicts.

John eventually decided to require all of his clients to make a lump-sum deposit to his trust account to cover the entire cost of his services, up-front.   He discovered that more clients than he had expected, actually had the money to do this & for the others he now offers them the option to pay by credit card.  Now John can fight like crazy to advance his clients’ interests and protect their rights and he let’s Visa or Master Card  worry about being their creditor.

Not only does this arrangement remove the inherent conflict, allow John to do a  better job for his clients and eliminate costly accounts receivable problems, it  even makes the client’s life a little easier.

Attorney  Tracy Griffin, President  of  Attorney Card Services (727) 341-2323 ([email protected]) observes:    “Contrary to what many attorneys think, clients who have not paid their bill do feel uncomfortable communicating with their attorney/creditor.  It’s no fun for either the attorney or  the client to talk about a case or matter when they both know about, and are  trying to politely avoid the subject of past due bills.”

Accepting Credit Cards Will Make Your Firm More Profitable

When  John decided to get serious about wanting to be a more profitable, ethical and  professional lawyer he made the decision to focus first on properly managing his  law firm.  John realized that  despite what he had been hearing and repeating to others for years, it really is possible  to budget a case or matter ahead of time with an adequate degree of  accuracy  in all but the most  complex contentious cases.  Better  yet, John realized that if he over-budgeted he could always impress the client when he returned some of their unused money. 

Case-budgetiung puts John much further ahead of the game than when he used to ask for retainer deposits at random.  Best of all  though, by investing the time to budget a case in the beginning, John now finds that  he is able to be more pro-active in case or matter management and he has virtually eliminated the worst part of being a lawyer: Collections.

In the beginning it was a little scary for him, but today, John recognizes that requiring clients to make a large lump-sum deposit into his  trust account to cover all anticipated fees and costs has the effect of  dramatically increasing firm income for three main reasons:

  1. There  is less tendency to write-down the bill when you already have the money sitting  in your trust account.
  2. There  is less tendency for the client to negotiate down the bill after it’s already been paid.
  3. Collections  are far more timely, i.e. reduced (or eliminated) accounts receivable.  This improves firm cash flow and  actually reduces firm overhead.

Think  about it:  You have your own credit  card bills, car loan, line of credit or home mortgage all of which are charging  you every day for the use of their money.   If your client owes you $1,000 for three months, you are in effect  borrowing money from your own highest interest rate creditor in order to be able  to afford to loan that money to your client at no interest!

In  the past, John would do the work and send a bill to the client at the conclusion  of the representation.  After three  months, he would often end up writing the bill down 10%  from $7,500  to only $6,750 just to get some money  flowing in.  After three months, the  $6,750 really ended up benefiting John the equivalent of only $6,402 after the  discount and interest expense.    $7,500 vs. $6,402 = $1,098 or 15% reduced revenue.  If John let this happen in only half of  his cases each year and he regularly collected 1,500 hours per year, John could  have taken a entire month off of work and still had the same income had he  simply gained control of his A/R.

p.s. I am investigating another credit card processing company that offers very low sign-up, no monthly commitment and a very low monthly minimum fee – like $5.  Send me an e-mail if you want me to let you know if/when I am satisfied with how they deal with important trust account issues.

p.p.s Don’t miss out on the chance to position your law firm as one of the BEST in the country! Take two minutes to apply to get your firm on the Law Firm 500 list. This is not just an award, it is a PROFIT STRATEGY! Click here to apply!

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