Solo In Chicago…Grow Your Practice!

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I recently finished up Ken Gormley’s, The Death of American Virtue, an excellent and balanced analysis of the Clinton Impeachment saga. Mr. Gormley is the dean at Duquesne’s law school and a former biographer of Watergate special prosecutor Archibald Cox.  Just briefly on the subject of the book, it’s a wonderful, descriptive read dredging up those 1970s Arkansas land deals through the early and undisciplined Clinton Administration, the rise of Newt, appointment of Independent Counsel Ken Starr and the Senate’s failure to convict President Clinton of the articles of impeachment. Personally, I spent two years of my life working on Capitol Hill, 1998-1999 so I have more than a little first-hand knowledge of the initial Drudgereport leaks in January ’98 to Clinton’s “I have never had sexual relations with…that woman” and Newt’s subsequent demise after the November ’98 elections.

But why am I posting here about political trivia when Solo In Chicago is all about the practical steps necessary to grow a great law practice?

Two words:  Bill Ginsburg (Monica Lewinsky’s first lawyer). I wasn’t a lawyer back during my Washington years so perhaps I didn’t care about Ginsburg too much but now it’s a great and instructive point for lawyers everywhere. And that’s where this post’s title comes from. Ginsburg was one of the best attorneys in the business when it came to defending hospitals and physicians in nasty, high-stakes medical malpractice litigation (pg. 369). In early years of practice, he had defended swimming pool manufacturers in horrible death and accident cases, racking up an astounding won-loss record (pg. 394). So he was likely primarily a California state court litigator. But of course Monica was facing a potential federal, criminal indictment regarding her possible perjury in only the most publicized legal proceeding of all time.

But put aside the media maelstrom, and it’s the same decision we all face every so often…when to take and not to take that case that’s outside your “regular” practice area.  So what’s the answer…should you take that case? Consider 6 questions/factors:

• Would the case involve practicing in a totally “foreign” court/legal system? Meaning a different state/county or federal vs. state court or civil/criminal.  I think this might be the first level and most challenging hurdle and one that should be crossed most carefully. Personally, I do get to multiple counties although not too frequently…it’s awkward but doable since the underlying state law is the same but the different local rules and customs need to be known too. However, the federal to state court and criminal to civil practice (or vice versa) are far more challenging. I’ve handled 5-10 low-level criminal matters and even those have been dicey, not in terms of results but just the criminal procedures and proof standards and the potential criminal punishments/ramifications.
• Is the case/subject a logical or potential future extension of your current practice? If yes, I think this would be a great reason to take a case outside your regular practice area. For example, my practice is some 75% involved with parentage, divorce, and various modification/enforcement issues involving parentage and divorce cases. If someone calls about an adoption or child abuse related allegation to me those would be obvious extensions of “family law.” Further, our firm has thought about some non-family law areas of expansion such as elder and immigration law due to certain demographic trends. Again, new cases come in those areas, I’m takin’ them.
• What are the ramifications if you screw things up? It’s true and critical. I wouldn’t take on any felony level criminal matter because I don’t want many years in prison on my conscience for the next 40 years. A few years back I took over a real estate transaction for a friend of mine who been trying to handle it for a relative of his and he had really had not known what he was doing. So I picked-up the ball, there was a slight delay in the deal and because of the delay the Buyer (I had the Seller) got a $2,000ish price drop out of it, but the deal eventually closed uneventfully. Was it mishandled? Yes. Were the potential ramifications serious enough that he shouldn’t have taken on the matter? I think not.
• Do you have access to people/resources to help you? Here I think you need to balance the difference between the occasional question that you might pose to a mentor or an online group which we always have vs. the need for constant hand-holding which might be too much to expect. Second, simply how are your legal research skills and do you have access to the proper resources to handle the case? Just recently I’ve been dealing with a replevin matter and a rare temporary restraining order issue. And these weren’t issues I knew just off the top of my head but I did know generally what each situation involved and it was simple legal research within the Illinois Compiled Statutes so no biggie.
• Balance the Opportunity Cost. Meaning, we shouldn’t just look at the effort necessary to handle the new case outside of your regular practice area, no, we also must weigh the lost opportunity to work on other things that you can’t spend time on due to the new case. This is very unique to the individual lawyers circumstances both currently and her future plans. I think the primary consideration here is what are you giving up (if anything) to take on the new, unfamiliar case? Subject to some of the previous analysis above, simply, if you’re practice is less than full and taking on the new, unfamiliar matter would have no impact on servicing your regular practice areas, ya take the case. Conversely, if your practice is 110% full taking on one unfamiliar matter likely would take the time for more than one of your typical cases due to familiarity with the subject matter, you probably don’t take on the unfamiliar matter. My exception to that simple analysis would be any future expansion planning for your business. We want to grow into the elder law market so I would selectively take a case or two in that area as a trade for 3 divorce matters based on future planning goals.
• Can you help a client, former client, or referral source? Since this group is so critical to your business you should bend-over backwards for them. Personally, this ends up of being some simple estate planning in my practice. Of course the key word here is HELP not screw-up their cases.

So what about Attorney Ginsburg? I haven’t heard any of his personal analysis of his role in Monica-gate. Personally, even leaving aside the media glare unique to that case, I’d have a hard time taking on the case due to point #1 above. The jump from state/civil court to federal/criminal would be too big of a jump for me.

But, in general, my observation is that lawyers are too conservative in taking on new, less familiar matters. Don’t leave that $$$ on the table if you can put it into your pocket.

Know your research, be aware of the resources available to you, and be confident in your ability to solve problems and find solutions…that’s what lawyering is!

I hate to just be a re-poster but once in a while we’ll sacrifice originality for quality. The great Ed Poll tweeted this today from his LawBiz Forum, How to Get Paid:  It’s in your hands. Take a look at the full post, he’s got 9 golden nuggets that can each help put dollars in your pocket.

Some new-to-me billings ideas:

Have a high billable to collected ratio. In other words what % of the time you’ve billed to clients is actually getting paid. Interestingly, if you’re under 80% that’s a problem for sure, but also, if you’re over 95% that could be an indication of too low of billing rates.

Collection cycle management. See the full post…I actually implemented part of this that I had previously read in one of Ed’s book by shifting our billing cycle close date to the 24th day of the month from the last day of the month. Another idea he lists is breaking up the alphabet and billing different chunks of the alphabet say every week or 10 days, spread throughout the month. Perhaps when the number of bills I’m sending out each month gets larger this MAY be viable, but it sounds like a tad of a hassle to be doing billing 3/4 times per month.

Don’t ask for money yourself. Separate yourself from the billing function.

If necessary, use a collection service. I DISAGREE with this. From my experience collection agencies can be as much of a pain in the butt for the creditor as they can be for debtor. We used to use a collection agency as sort of our last resort. I soured on them because we had a client who we referred out to a collector who called then called him. Then we didn’t get immediate payment but we cut a deal with the client about how to proceed. But the collection agency would not stop contacting this person and it became a real problem between the client and I. I’ve sworn off collection agencies. It’s kinda like dealing with foreclosure law firms as part of a real estate transaction, they can’t unlearn the harassment habits no matter the type of scenario.

I picked-up up the above recently because I don’t love selling and although over time I have realized the central role of rainmaking in building a law practice, let’s just say I came to that realization reluctantly and a tad slowly. My experience is that most lawyers tend to fall in one of three categories when it comes to rainmaking:

*1. Lawyers who view “selling” as beneath them and “not something that Professionals do.”

*2. Lawyers who engage in rainmaking but approach it in an inconsistent and disjointed manner.

*3. Great, natural and consistent rainmakers.

So if you’re in category #3 you’re probably all good and if you’re category #1 I’m guessing you were graduated from law school prior to 1980 or you probably need a more fundamental shift than can be obtained from some 200 page marketing book. But if you’re in category #2 like me, I think The Reluctant Rainmaker can provide some smart, long-term organization to your rain-making efforts.

Author Julie Fleming is a former patent attorney and currently provides attorney coaching development over at Life at the Bar.

Here are my 5 favorite “take-aways” from The Reluctant Rainmaker (get the book for more!):

1.  The RIGHT Business Development Priorities. Meaning, what client prospects should be the focus of your Rainmaking efforts…a) Current clients; b) Former clients and referral sources; c) “Warm” potential clients and referral sources; and lastly, d) Strangers. Without being too emphatic it’s hard for me to think of a situation where small law firms should spend much time at all marketing to strangers. I ran an advertisement for some 6 months early in my sole practitioner days in a Chicagoland senior publication with the only return on that investment being one initial client meeting. The critical point:  It’s SOOO MUCH easier and more efficient (meaning cheaper) to generate new business from people who know you versus strangers.

2. Create Your Business Development Plan. Creating this sort of a roadmap for your marketing efforts is likely what most of us stuck in category #2 are missing. Checkout The Reluctant Rainmaker Business Development Plan Generator.

3. Make a Great Biographical Sketch. Why is it that something like only 15% of attorneys have real client-friendly/focused biographies whether on the Web or in written materials? When I get a new case or transaction I’m always curious about the opposing counsel and checkout their profiles on the Web and I sure think potential clients are doing the same before retaining counsel. The Reluctant Rainmaker suggests including a photograph, areas of practice, wide-ranging narrative (including things like practice area description, special skills, leadership roles, and personal interests), and a separate section listing representative clients, articles written and/or speeches given, and bar/industry/community memberships.

4. A Simple Classification System for your Marketing Activities. So is what you’re planning and doing a high/medium/low yield activity & is it fast or slow yield? For example, a law review article may be high but slow yield whereas a “legal update” newsletter to your list of clients/former clients/referral services is probably high/fast yield. And you probably want a mix of high yield slow and fast since like in the example above although your legal update might bring in some business quickly a law review article likely has more staying power and reputational benefit long term.

5. 5 Great Elevator Speech formats. This is golden and something every lawyer needs a better grasp of…the big 5:  a) The benefits-focused description; b) The practice, client-centric description; c) The Unique Selling Proposition intro; d) The provocative statement; and, e) The “you know how” introduction.

And don’t forget this recent post, Why Don’t You Write More, inspired by The Reluctant Rainmaker…because every lawyer has some text sitting around waiting to be re-packaged.

Pick-up The Reluctant Rainmaker today!

Or if you don’t, these are some great insights into how to better compete with other attorneys.

The headline stems from this article here, How Do Lawyers Get Away With This Stuff?, that I read recently in the NYTimes’ Small Business Blog – You’re the Boss, The Art of Running a Small Business. As an aside that blog gives some of the best, consistent small business advice that I’m aware of…most of the columnists are small business leaders.

First let me summarize and extract some quotes directly from the article. Notably, the author of the piece is Jennifer Walzer, President of Backup My Info! which I think has gotten a fair amount of publicity as a hot, up-and-coming business in the fast growing online/off-site data backup marketplace…I mention that because when you hear her complaints about lawyer service I would think she and her company would be pretty welcome clientele for 90% of lawyers out there. The background of the article is Ms. Walzer hired a lawyer to review a new lease for her company and the article describes her experience in dealing with the particular lawyer/firm. This opening ‘graph is great:

At my company, we try so hard to provide great customer service that I sometimes forget that bad customer service exists. And then I hired a lawyer.

First…

We sat down to talk, and I explained that I had a relatively straightforward sublease agreement but wanted to make sure that I was protecting myself. The lawyer said he was happy to help and asked for a $2,500 retainer fee, explaining that based on what I had told him, the total fee probably wouldn’t exceed that amount. Fair enough. I sent the check and the agreement for him to review. I had enough on my plate and wanted to trust him and his firm.

It was another lawyer from the firm who got back to me. He informed me that the agreement was relatively standard but needed a few changes. I reviewed the comments and my impression was that some of the changes he made were a bit of a stretch, but again, I wanted to trust their judgment. I let them make their changes. I had paid for $2,500 worth of service, so I figured I might as well let the lawyers do their thing. And did they ever …

Okay, sounds pretty routine, and next…

I had a few more conversations with the first lawyer in which we discussed forgoing the good guy guarantee versus providing a larger security deposit to the bank (I didn’t like the idea of having to personally guarantee the rent for four years). That prompted them to send me an additional bill — for $1,450. I wasn’t thrilled, but I figured it was O.K.  because I’d raised some more questions. At that point, the deal was pretty much done, so I paid the bill and called it a day.

And, finally the REALLY GOOD STUFF…

Imagine my surprise when a few weeks later another bill arrived. This one was for approximately $2,500. It contained a long list of itemized charges that made little sense to me. I checked my phone log to try to match the calls with the charges, and the numbers weren’t there. I assumed there must be some mistake.

I called and left a polite message for the billing manager, asking her to call me back whenever it was convenient. Instead, the two lawyers called me together on speakerphone, addressing me right off the bat in a hostile tone. They demanded to know why I had an issue with the bill, which caught me off guard. I asked if we could review the bill since it wasn’t adding up for me. They immediately became defensive and asked me to prove to them which charges were inaccurate.

I picked an e-mail from the list. I had been charged for 0.2 hours at $300 an hour ($60) for one lawyer’s reply to an e-mail I’d written letting him know that I was not going to be available and would review his comments when I was back in my office. I wrote this as a courtesy to let them know my status. It demanded no reply, but I got one anyway. It said: “I hope everything is O.K. Take your time.” I thought it was nice of him. It never occurred to me I would be charged for it.

Flabbergasted, I asked how they could charge me $60 for a courtesy e-mail. The answer left me even more flabbergasted. “Jennifer,” said the first lawyer, “your e-mail took me away from a multimillion dollar agreement I’m working on, so if I have to stop what I’m doing to view and respond to an e-mail, then I have to charge you.”

That’s an incredible tale at one level but sadly so NOT surprising on another level. Particularly in some of my court-appointed contempt work it’s eye-opening at some of the lawyer treatment and lawyer billing I hear and see first-hand when I take my first meeting with these clients and also review the court’s case file and see huge fee petitions against former clients with very little having been accomplished.

Why does this sort of thing exist with lawyers and what to do?

There’s likely many reasons but I tend to think that older generations of lawyers say the 50+ crowd who are managing many firms these days are relics of an era where the legal field was rather immune from competition. In other words there were way fewer lawyers out there and thus less competition. The last 15 years or so has seen a huge increase in the number of practicing lawyers. Lets face it, there are surely aspects of legal services where the offerings are commodity services where there’s virtually no difference from one lawyer to the next, at least on the substance of the issue. Whether it is or not, I would suggest really competing with the mindset that the legal services you’re offering are a commodity and you’ve got to hustle, be innovative with alternative billing, and provide great customer to win business. I mean McDonalds isn’t going to get away with the crap that was described above, right? I’d just go to Wendys.

How might you compete with the sort of billing and customer service practices listed in the article above?

Billing Clarity. Surely there’s probably some “back story” to the article above but from what you read the client was quoted $2,500 flat-fee for a commercial lease review and she ended up being charged some $6,000. She seemed to be satisfied when the bill was at $3,600 since she had raised some issues that hadn’t been discussed up front. But however the client is being billed why not just be clear about an hourly rate, a specific flat-fee amount, or extra charges. If a client is unhappy with a result or your services that’s not totally unavoidable, but “billing surprises” are avoidable.

Billing Alternatives. A commercial lease review seems to me that it should be something a lawyer should charge either a flat-fee for or perhaps a combination hourly rate with a “fee cap” on the top end. I’ve done this sort of thing a few times in my career and I don’t think it’s too different than the sort of negotiation that occurs in buying a home…there’s a sort of set time for some negotiations of fairly standard things and then you get to an agreement and you’re done. So on the lawyer side it’s pretty predictable in terms of lawyer time needed. Why surprise a client if you don’t have to and create the potential for client ill will? Even with hourly billing a fair, honest thorough bill need not surprise a client…it sounded like there was some old fashioned “bill padding” going on in the example above. My firm is getting ready to start offering a flat-fee monthly billing option for even some unpredictable practice areas such as dissolution of marriages where someone will have to use an automatic payment option like a credit/debit card and then each month they’re charged somewhere in the $250-$750 range regardless of the amount of work done that month. I have a few final things I need to figure out about this before it’s a “go” but in other words we’re trading the potential for higher fees in some months for promised consistency and client won’t need to bring a big retainer in up-front and there will be no “billing surprises.”

No Charges. Do you ever use these on your bills? You should (I probably use them too much). The $60 e-mail above being a perfect example…doing work for a client and listing on your bill but not charging for it. I do it when someone calls for something like when is court tomorrow or that sort of purely logistical kind of thing where I’m not giving legal advice at all. I’d be pissed too for getting charged for the $60 e-mail listed in the article above.

There are great opportunities for lawyers to boost business big-time by focusing not on legal substance but rather customer service and billing innovations!