A few weeks ago, an attorney/client (a new lawyer and a solo practitioner) told me that they had decided to close their law practice. This attorney was a referral from someone who I know and trust as a good friend - also a lawyer. Since I have taken 3 clients in the past 3 years to a 7 figure income, and I have another that I project will hit 7 figures next year . . . well you already know what I am going to say.
There is a lesson to be learned from what happened with this attorney. When you open your own law practice, make sure you are doing so with forethought, a business plan in hand, and eyes wide open that the practice is not going to take off by itself. Although the ultimate goal is to have a successful law business that is efficient, productive and profitable - there is NO ONE who will tell you that it does not take work to get there. Yes, someday you can coast on your laurels. Someday might not even be that far away if you have someone giving you sound and practical advice.
As a law practice management consultant and independent law firm administrator, I assist attorneys with all aspects of managing the business of practicing law®: billing, collections, accounting, trust reconciliations, office automation, HR, managing finances, cash flow projections, marketing and client development - and the list goes on.
One of the most important things to do when you start a firm is to have a business plan in hand. And the other - keep your overhead low.
What went wrong here? Well, I’ll tell you. Spending money on marketing and paying several hundreds of dollars a month to every marketing company with a pitch that sounds so good is not the way to spend your marketing dollars. Throwing money around and hoping you get that million dollar client is not the way it works. You don’t sign up for 3 or 4 of these programs and spend $2,000 a month when you do not know when your first paying client is coming through the door. And if you do spend that money, you need to be sure to be on top of those marketing companies and make sure they are doing what you are paying for. I have signed attorneys up with publishing companies, under the no/low budgeting program. I am on those companies every minute making sure they are doing what they promised and tracking their ROI. I never let my attorneys get into an endless contract that they cannot cancel if the results do not justify the expense. If a publisher or someone is going to assist your admin person with marketing, make sure you have a 60 or 90 day out clause. If the company is unwilling to do that, run.
What is the other half of a successful marketing strategy? You better be available to talk to those clients, follow up, follow through, get them in for a consult and get them on retainer. You should know your marketing strategy does not end just because a client signed on the line. Your marketing strategy, if handled correctly, morphs itself over the course of the attorney/client relationship into a client retention strategy. Almost more important than marketing to get new clients. Happy clients will send you referrals. We all know what unhappy clients do.
You cannot open a practice and in less than the first year take 6 vacations - out of the country or purposefully unreachable. If you are not available to meet with potential clients, and you aren’t taking calls because you are on vacation there is no marketing strategy in the world that is going to work. You don’t ignore the clients you have and you do not miss deadlines.
You do not take out a $50k business loan and blow through it in 6 months. You do not hire marketing companies and everyone who promises you the next get rich quick scheme. Do not pay people to do things you have time to do yourself, because you have no clients. Do not take 2 or 3 weeks to get back to me on a blog that I wrote and want to post for you because you are on vacation or too busy. What attorney is too busy to take advantage of a marketing opportunity?
The list goes on. Make every mistake in the book and at the end of 6 months tell me you do not know what happened to $50k. I have clients and know attorneys who thought they needed a business loan to open their practice. I am a firm believer in being debt free. Every attorney I have discouraged from starting their law firm with debt has become successful and remains debt free.
The truth be told - I saw this coming. When the attorney told me this decision had been made, it did not surprise me one bit. In fact, I was going to suggest the same thing to the attorney but then thought, if I wasn’t being heard about what to do to make the law business successful, would I be heard that it was time to stop the bleeding and shut down? Probably not.
Wondering if this is a true story? Let me assure you that it is. If you are out on your own or going out on your own, please PREPARE A BUSINESS PLAN. Get someone to help who knows the profession, understands what it takes to attract target clients to a specific area of law and has a proven track record. Be prepared to make sacrifices.
And, if you have the foresight to retain the services of someone to help you set up and get your practice running - listen to their advice. Especially when by 2020, they will have taken 4 small firms to 7 figures.
I am a Law Practice Management Consultant, independent law firm administrator and author of the best seller, “From Lawyer to Law Firm - How to Manage a Successful Law Business”. I help attorneys with managing the business of practicing law® and grow their practices so they are sustainable, profitable and successful. You can reach me at 813-340-9569 or via email at firstname.lastname@example.org. Check out the testimonials on my website: www.fromlawyertolawfirm.com. You can buy my best seller there for $99.00 through a direct link at $50 less than what the publisher is selling it.