Fear

Fear

It’s what screws things up for most lawyers who aren’t as happy with their law firms or their lives as they could be.

And fear has an ugly way of growing into frustration,  resentment, defensiveness, anger and worst-of-all the twin-devils: Justification & Compromise.

I say “happy lawyers make more money”.  So what happens to lawyers who make compromises with themselves and then turn their skills of advocacy in-ward on themselves to justify their compromises?

For one thing, they eventually become angry.

They also don’t make nearly as much money as they could.

That is to say, all things being equal, an unhappy lawyer could be a much more profitable lawyer if only he or she took the steps that would result in him or her being a happier lawyer.

What makes most lawyers happy? 

  • Is it a temporary bump in cash-flow?
  •  Or a victory in court on behalf of a third party whose case, cause or matter doesn’t really matter that much to you?
  • What about a nice stiff drink or some other “vice” like gossip or criticism of people whose own happiness shouldn’t affect you one bit, but inexplicably it still does!?!?

No, what makes lawyers happy is when we get to do what we love to do on cases, causes or matters or for people whose outcome resonates for us.

And what enables a lawyer to engage in these activities which make us happy?

Proper, professional and reliable “real world” law firm management.  Which such management includes marketing, sales, financial controls.  And policies, systems & procedures that work to protect us from all the b.s. we don’t like to do.

Because law school didn’t teach us anything about the business of running a law firm, did it?

Now, when I say “happy lawyers make more money” you can now recognize that it’s the law firm management that causes us to have the option of doing what makes us happy.  It makes the law firm more profitable too.

So why did I write “fear” in the subject line of this email?

Because fear, more than anything else is what prevents far-too-many lawyers from taking the steps that lead to being a happier lawyer with a more profitable law firm.

But it’s not fear of failure that gets in the way.

Of course that’s the “accepted” and the politically-correct explanation that all our friends and family and bar officials and CLE directors and everyone else is prepared to undertand and accept.

No-one challenges us on it when we give them these types of explanations for why we don’t do the things that must be done to find out just how great our law firms and our lives could be:

“I’m afraid if violating bar rules”

“I’m afraid of losing money”

“I’m afraid of getting a bar grievance filed against me”

 BULL SHIT!

You might as well add, “I’m afraid of being eatten by a crocodile” to the list because, afterall, being eatten by a crocodile is universally-accepted as a bad thing.

But what do any of these fears have to do with building a more successful law firm that enables you to explore your true potential?

I’ve been at this for more than 10 years now.  I have had the unique opportunity and the privlege of working with thousands of lawyers.  And I myself have had my struggles with my own fears too, both as a lawyer and an entrepreneur.

So I can tell you with a high-degree of authority that the fear that holds most lawyers back from doing what must be done to be happier and consequently more profitable lawyers is NOT the “fear of failure” .

It’s actually fear of success.

I’m going to let that sit with you for awhile.

And when you’re ready to talk-about, doing-something about it, you can decide for yourself which description resonates most with where you are today with your law firm or in your legal career and then schedule a call to speak with me at www.HowToMANAGEaSmallLawFirm.com

…sooner or later you sleep in your own space.

Originally broadcast to my ezine list 9/27/2011…

be·lieve

[bih-leev] Show IPA verb, -lieved, -liev·ing.

verb (used without object)

1. to have confidence in the truth, the existence, or the reliability of something, although without absolute proof that one is right in doing so: Only if one believes in something can one act purposefully.
Would you do something today, if you had absolute proof that it would bring more business to your law firm tomorrow?
 
Either you said “no” in which case we should probaby talk about how to manage your law firm more effectively.  So that you’re not afraid of more business.
Or you may have said “no” because the business you’re attracting isn’t the sort of business you want, not the sort of clients you enjoy, or requires you to do work you don’t find particularly motivating or stimulating.  If this is the case we should probably talk about how to manage your law firm more effectively.  So you can attract better business.  Marketing, afterall, is a critical area of management’s responsibility in a law firm.
Or you may have said “YES!”
If you did say “YES!” then I want to remind you that I’ve already shared two very simple, very inexpensive, and very-well-proven things you could have done last week to get more business coming into your law firm already by this week.
Did you implement either of those suggestions?
Why not?  Either it’s because you don’t REALLY want more business, or more likely there’s something keeping you “stuck” isn’t there? 
OK, so I’m going to share one more effective, and reliable “button” you can push today, that can generate more business for your law firm as soon as tomorrow. 
Remember: action talks, and bullshit walks. 
Keep that in mind as you begin to formulate excuses or explanations for why you’re postponing or even avoiding doing something so simple, so proven and so profitable, to bring-in more business to your law firm tomorrow.
Members of my coaching programs have the benefit of an easy “score keeping” tool that we use to measure progress and diagnose problem-areas and opportunities. 
We embrace reality and don’t make excuses.  Because reality doesn’t care about any of our excuses.
“We can evade reality, but we cannot evade the consequences of evading reality” – Ayn Rand
What are the inevitable consequences of your current growth trajectory? 
Hopefully the inevitable consequences are that you’re going to be doing GREAT!  If that’s you I would encourage you to investigate our “Find Your Freedom” coaching program, or even our “Play A Bigger Game” group may be just what you’ve been looking for.
If the inevitable consequences are that you’re not going to be in a place where you’re going to be happy about being, then our “Get Out Of The Weeds” program may be able to help you. But only if you have the personal courage to deal with the reality of your current situation.  Not everyone is.
So ultimately, “the” question is, do you believe in yourself?
“…sooner or later you sleep in your own space.  Either way it’s okay to wake up with yourself.” – Billy Joel

Do This Today, Get More Business Tomorrow:
1.)  Pull 25% of your active files, conduct a 5 minute file review and “drop-in” on those clients with a telephone call to let them know you’ve been thinking about them and have a few ideas about their case you want to discuss with them. 
-or-
2.)  Go to www.HowToMANAGEaSmallLawFirm.com/Appointment to schedule a call with me to discuss where you are today, where you want to be tomorrow and what’s keeping you from getting there.

be·lieve

[bih-leev] Show IPA verb, -lieved, -liev·ing.

verb (used without object)
1. to have confidence in the truth, the existence, or the reliability of something, although without absolute proof that one is right in doing so: Only if one believes in something can one act purposefully.

 Do you believe in yourself enough to take action and do something about it?  I hope so.

~ RJON

How to Start a Law Firm (part 2)

Steps

  1. Define your goals:
  • Financial – How much money does the firm have to ‘gross’ in order for you to ‘net’ enough to live the way you WANT to live? ;
  • Personal – How many hours do you WANT to invest on a daily, weekly and monthly-basis?;
  • Professional – What types of cases, clients do you WANT to work with in your practice?  Remember starting a law firm is an opportunity to create the life you WANT.  Don’t settle.

2.  Inventory your skills and resources.  If you know a particular practice area very well that’s probably the best practice area to concentrate on in the beginning rather than having to learn a new practice area at the same time you’re learning how to run the business of a law firm.

  • What kind of hands-on business management & marketing skills do you have?
  • What kind of budget do you have to cover living expenses while the firm gets established, working capital for start-up and operating expenses and to invest in educating yourself about the business of how to start, market & manage a law firm so you don’t waste years of your life & career learning these critical skills the hard way

There are many free resources available to help you.  Including many provided for free by me.

But consider the hidden ‘cost’ of free in terms of the time required to piece everything together vs. just enrolling in a course.

Imagine the difference between the student who chooses to enroll in a well-organized course in law school with discussions lead by a supportive and experienced professor vs. the law student who simply takes the course syllabus and endeavors to spend the whole semester on his own looking up and studying all the cases in the library by himself or with a few of his buddies.  Who is going to do better on the exam?

3.  Make a plan and put that plan to budget and time-table to acquire the skills you find yourself lacking in.

Do this BEFORE you start trying to follow anyone’s advice about writing a business plan or how to create a law firm website that actually generates business, etc.  The root cause of the successful law firms isn’t what you can see from the surface from a casual conversation with another lawyer in passing, or in a blog.

Warnings

If you’re reading this and you’re a lawyer I’m going to assume you’re a pretty smart person and you want to be successful.  So I’m going to skip the usual and obvious warnings here.  Instead, the biggest danger to look out for is advice from other lawyers.

  • Some aren’t nearly as successful as they’d like you to believe.
  • Some are in fact very successful but may not have traveled a deliberate and replicable path and so their well-intentioned advice can be a real distraction.
  • And sad to say, some lawyers are just jerks who would rather have company in their misery and can be quite persuasive in their efforts to recruit you into their merry band of losers.

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

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.

p.s. Don’t forget to sign-up for my upcoming FREE teleseminar entitled “How To Double The Revenue Of Your Small Law Firm And Play Golf Every Friday

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 Orland, 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 committment 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.

end