When lawyers go out on their own, either as a solo or small firm, the reality of starting your own law firm is that a firm does not generate revenues the day you hang out your shingle. In fact, some start ups don’t even rent office space, hire support staff, or a business manager to help them with “managing the business of practicing law®”.
These days many lawyers work from home, have a virtual office, use their cell phone as their office phone and rent space when they need to meet with a client.
The business part of managing a law firm is finally being recognized as an important part of a law practice. In spite of the realization that managing the business of practicing law® is a "thing", law schools barely touch on law practice management. In most law schools, it is an elective. I have been a guest speaker at a few of these classes. The true importance of how to manage a law firm - not just having a law firm that exists - is never taught to law school students. It is obvious when you speak to second and third year law students who believe that a website has to cost $5,000.00 and business cards need to cost hundreds of dollars. Clearly, no one has enlightened them on the much needed skills of managing a successful law business.
Recent statistics show that more law school graduates are hanging out their own shingle right after they graduate from law school because the job market is competitive. Even with some very low salaries being offered regardless of what school a graduate attended or where they placed in their class, there are 100 applicants applying for a job that they know will under pay and overwork them. Lawyers with 3, 5, 10 or more years' experience are leaving the stability of a bigger firm and a steady pay check to venture out on their own. Even these experience lawyers are not realizing that they are not equipped to actually grow a law firm into a self-sustaining business - not just a practice - but an actual business because in all likelihood they were never involved in managing the business of practicing law® at the firm they are leaving.
Here is the key element that all of these lawyers are missing: You cannot run a law firm like a mom and pop business where you are not looking out 1, 3 or 5 years ahead but instead worrying about paying the overhead this week. Lawyers were not trained to run a law business; they were trained to practice law. What does this mean in terms of sustaining a successful law firm? These lawyers are, in fact, standing in the way of their own success.
Before ever hanging out that shingle, your law firm needs a strategic business plan. I tell lawyers that a strategic business plan is their road map of where they want their firm to go, and how they plan to get there. No one today would take a road trip in their car without a GPS. Why start a law firm without a GPS for where you are going? A strategic business plan which encompasses all aspects of the planned firm from areas of specialty, to location, to fee structure, to attracting and retaining clients - anything you can imagine having to do with the business of the practice of law - needs to be addressed in that business plan. It is this business plan that you will use to create a successful law practice.
Once you have created the model for your successful law practice with your strategic business plan, the next thing you need to do is address the “business” part of the practice. This is where lawyers sometimes fall short in their vision. I have counseled many attorneys who tell me, “I can handle consultations, drafting pleadings and going to court -- but I didn’t realize there was so much other stuff to do that would take up my time. And I don’t even know what I’m doing”.
To name just a few, the things to be considered consist of:
· An office location that will work on many different levels: short commute, close to the courthouse, convenient for clients, no hassle parking, easy access.
· Website design and content writing (do not let someone with no legal experience write your website content)
· Client development/marketing and ROI of conversions of potential new clients
· Opening an operating and trust account
· Computer systems, software, email and telephone answering
· Accounting including billing software, collections, accounting, reconciliation of trust accounts, managing firm finances, cash flow analysis and budgeting
· Securing vendors: where do I get my paper from, what about a copier, printer, IT support
· Staff support - what are the options? Virtual, part-time, full-time?
These are but some of the things that many attorneys do not think about when they go out on their own. And how are you supposed to know to think of these things? You didn’t learn it in law school, and if you are coming out of a firm, you were probably not involved in the management of the business of the firm. Maybe that firm you left didn’t have anyone taking care of the business of practicing law either.
Once a law firm has been established - a successful law practice has been set up and someone is managing the business of practicing law then - and only then - is the firm stable enough to undertake the changes necessary to turn the firm into a 6 or 7 figure a year law firm. There is no point in trying to bring in that kind of business without the business foundation to support all those clients and get the work done.
Don’t make the mistake of putting the cart before the horse and bringing in business and THEN figuring out how you are going to get the work done. That is a business plan that will end in disaster for you and your clients.
A little secret that I am happy to share with you: there is no magic formula and no secret knowledge that will enable you to build a successful law business. The only real secrets are that everything cannot be done at once, and you do not have to go into debt to start or maintain a law firm. A firm needs to be nurtured and grown with a specific plan in mind and that plan needs to be implemented by someone with the experience in helping law firms grow their business.
The economy has changed in at least the past 10 years if not more. This has affected law firms the same as any other industry. Gone are the days even in large law firms where attorneys and staff worked in “teams” that consisted of 8 or 10 people. Usually this was 1 or 2 partners, 2 or 3 associates, 2 paralegals and 3 secretaries. Now a team consists of a lawyer with a legal assistant that they share with 2, 3, or was the practice in a firm I worked for in Montana, 6 lawyers to 1 legal assistant.
In keeping with the economic changes which have occurred, law firm are being staffed more economically. Rarely is a legal assistant assigned to just 1 attorney at a firm. Clients too have changed. They want value billing, flat fees and more value for the dollar that they pay to your firm. All of these things need to be considered when establishing the structure of your firm and how you will get the work done and pay the overhead to keep the firm going.
I am your law firm administrator, your business manager, your CEO, COO, CFO or whatever title you wish to bestow upon me as the person that you need to partner with to help your firm with managing the business of practicing law®.
My entire career - the past 40 years - have been devoted my work with the legal profession. Starting out as a legal secretary (before legal secretary was replaced with the more politically correct title of legal assistant), then a paralegal and then a legal administrator. With a strong foundation of the inner workings of a law firm and now working as an independent legal administrator, I help law firms morph into successful law businesses. More importantly, my work is not only coaching, or mentoring or consulting with my clients. I am actively involved in the day to day practices of the firm. I participate in decision making as the need arises. I step forward and speak up as changes within the business infrastructure are contemplated before they are implemented. I have a proven track record of helping attorneys increase their revenues, reduce expenses, improve client attraction and retention, and, triple gross revenues for firms in less than 3 years. What am I not? Your yes man. I am not the person who will rubber stamp everything that you think is a good idea and watch it turn into a disaster. I will not encourage client development/marketing without a strategy and a marketing budget. I will not tell you that you need a $5000 website, to pay $1,000 a month to maintain it and the fanciest office in town to impress your clients. If I see that an idea is leading the path of financial loss and disaster I am going to tell you. But then, no one has ever hired me to be their "yes woman".
In addition to my law firm experience, and being the author of a best seller on successful law business management, I have a BA in business administration and an MBA with a specialty in finance. My law firm experience and my education, especially the finance, enables me to be the “partner” your firm needs to grow your law practice into a successful law business.
A lawyer that I work with was kind enough to write an unsolicited recommendation of my services as an independent law firm administrator/business manager. There are a number of testimonials on my website (www.fromlawyertolawfirm.com) and in my best seller, “From Lawyer to Law Firm - How to Manage a Successful Law Business. Attorney John DeGiralomo, a Family Law and Civil Litigation Attorney in Tampa, Florida wrote the following:
Elizabeth Miller is a wealth of knowledge when it comes to transforming your law "practice" into a law "business." She has literally written the book on it (called From Lawyer to Law Firm)! My firm and I have personally reaped the benefits of working with Liz, and I am aware of more than a hand full of local attorneys who use her independent law firm administrative services to make sure their practice is running as a business.
Before you invest thousands of dollars a month, call me for a free consultation please contact me at 813-340-9569.
You can email me at: email@example.com.
Check out my website at: www.fromlawyertolawfirm.com