Solo In Chicago…Grow Your Practice!

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Because I know at least 2 things…

First, I’m not getting any younger, and, therefore (second) the time period between the present and my graduation from law school is NOT getting any shorter, SIC has started a little partnership with our friends over at The Law Street Journal. LSJ is a cool, newish blog authored by 4, 3Ls regarding general law school issues and those early lawyer years…great blog design! So we’ll see where this “partnership” is headed but it’s surely going to include occasional reciprocal guest posts and more. So checkout the first installment over at LSJ…

Why You Shouldn’t Start a Solo Law Practice Straight Out of Law School (and how to cope if you must).

Checkout Part I in case you missed it…

5.  Don’t Make Estimates; Make Promises! Meaning move away from just tossing out some hourly rate since there’s “no way to control a client’s costs.” The advice is to compartmentalize your legal services into ‘a la carte’  chunks and charge flat fees for each chunk. In probably 70% of the typical matters I handle I’ve moved to flat fee pricing…estate plans, landlord representation, real estate transactions, and even a lot of predictable in-court family law stuff. I still struggle with bringing predictability to longer in-court matters like an initial divorce or parentage case where it might drag on for a year or more. An idea I’ve heard discussed for longer in-court matters is flat charges for each task like per pleading or for a deposition, etc…need to puzzle on that a bit more. You can still have caveats in place that allow you to charge an hourly fee if something doesn’t go as planned.

6.  Time Blocking/Management. Schedule a block of time each day/week to focus on building your business. Determine the true value of an hour of your time and if there’s anything you’re doing that could be delegated for less than your hourly rate then delegate it. Check email only a few select times each day and do the most important 2-3 items for the day first thing when you arrive in the office.

7.  Strategic work vs. Tactical work. E-Myth says that tactical work (busy work) is all the work attorneys find themselves doing in a legal practice to avoid doing strategic work. Yet if lawyers did more strategic work and thinking they’d have less tactical work to do. Tactical work is all about answers; strategic work is all about questions. This thinking is consistent with the idea of working on the urgent at the expense of the important or Peter Drucker’s old activity versus accomplishment comparison.

8.  Create Your Story & Organize Your Practice to Breathe Life into Your Story. “Your story should be an idealized version of your legal practice, a vision of what the preeminent attorney in your field should be and why. Your story must become the very heart of your practice. It must become the spirit that mobilizes it, as well as everyone who walks through the doors. Without this story, your practice will be reduced to plain work.” (Pg. 165). I’ve been thinking about this one a lot recently with regards to what areas of law I’m really PASSIONATE about and also what is the correct % of one’s worklife that it’s realistic to aim for real thorough enjoyment. In my personal example, there’s a practice area that I’ve been thinking about moving into where I have background in the field and there’s accessible clientele that I know I could tap into immediately. But I do not have deep personal passion for this particular field and it would not “mobilize” me to go work each day and I think I’m going to leave that money on the table for someone else. Finally, I think you want to be upwards of 50% in terms of worklife enjoyment or you may want to re-consider your story. I’ve heard others suggest 70% as the ideal, meaning, work isn’t a round of golf or reading a book on the beach (100% enjoyment for me) because there will be the meetings and administrative work and personnel challenges but the central driving goal or story needs to something you’re passionate about pursuing.

I think The E-Myth Attorney is book worth buying…time to return this overdue public library version. Most critically I want the book to spur me to take the following action:

• Know my firm’s revenue number & keep looking at it monthly/weekly even daily. Where I fail too often in planning and goal-setting is not in doing it but rather once it’s done too often it’s forgotten rather than serving as a year long guidepost.
• Create a Business Plan.
• Create my Macro ‘System’ Categories, then, the Processes within each System. I’ll likely begin with financial management because it’s the most important system and my assistant is actually most involved with it currently so it has the most processes in place already. There was a great quote from my pastor at church last week that applies to law firm financial management and it’s simply, “If you don’t get this right it’s hard to get anything else right.” It’s hard to be a great attorney w/o adequate resources.
• Written Service Guarantee. I’m going to roll-out a 100% service guarantee where if a client didn’t think she got the quality and value of services that she’s being billed for each month she needn’t pay us. Simple and this happens once we’ll make some changes and obviously if it occurs regularly then the relationship likely needs to end.

Inasmuch as the great Father has given us this year an abundant harvest of Indian corn, wheat, peas, beans, squashes, and garden vegetables, and has made the forests to abound with game and the sea with fish and clams, and inasmuch as he has protected us from the ravages of the savages, has spared us from pestilence and disease, has granted us freedom to worship God according to the dictates of our own conscience.

Now I, your magistrate, do proclaim that all ye Pilgrims, with your wives and ye little ones, do gather at ye meeting house, on ye hill, between the hours of 9 and 12 in the day time, on Thursday, November 29th, of the year of our Lord one thousand six hundred and twenty-three and the third year since ye Pilgrims landed on ye Pilgrim Rock, there to listen to ye pastor and render thanksgiving to ye Almighty God for all His blessings.

William Bradford
Ye Governor of Ye Colony

Here’s an informative video from LawBiz’s Ed Poll on this important topic. As usual some useful takeaway points from Ed. So he says NEVER do not charge for the initial consultation. But his advice on what and how to charge for the initial consultation is a new-to-me concept (at least the “how” part of it). Here’s a previous post I wrote on the subject, Initial Client Prospect Meetings:  A Third Way, with some questions I consider when deciding whether to charge or not charge.

That was the compliment paid to me today by a client of ours which was immediately followed by his handing me 5 new cases and several thousands of dollars in new legal work.

Granted, this was someone who already knew us pretty well but he worked with several attorneys on different aspects of his businesses. And the comment above didn’t come after some huge court victory. Nope, it was the client’s response while discussing the billing practices of another firm he was firing.

Why?

Legal bills that lacked requisite detail. It may not be sexy but you’ve got to have the most detailed, descriptive legal bills possible. This was ingrained in me at my first lawyer position and I’m glad it was. If you’re on the consumer side of legal services, would a bill that said pay $500 (assuming this isn’t a flat fee matter) for legal services rendered how would you feel? I get bills from service providers all the time and although there are times I’m unhappy with the service or think the price is too high, it’s seems like it’s only with lawyers where I hear of instances of consumers not even knowing what they’re paying for.

Let this not be you.

Today marks 8 years since I joined some 1,500 of my closest friends down at McCormick Place in getting sworn-in as an active Illinois attorney. It wasn’t the most memorable of experiences with such a large group…I rose from my seat, took the attorney oath and that was about it. Although I do recall a nice dim sum lunch in Chinatown with my parents after the swearing-in ceremony.

I wouldn’t say that “time flies when you’re having fun” applies here but the last 8 years of my professional life have included many high points and surely have been instructive and filled with constant learning. And frankly much of “Lawyerland” is pretty whacked!

So without further adieu, here are my 8 observations from 8 years as an Illinois attorney:

There are too many unhappy lawyers. I suppose this might be something like the chicken and the egg, meaning, what came first becoming a lawyer or the unhappiness but either way it can’t be too healthy. The work we do is serious work but too many lawyers take themselves way too seriously. If you’re working in a practice area that’s not meaningful to you, change; if you think being generally belligerent and treating everyone badly helps your clients’ cases you’re WRONG!

I observe too many lawyers who prey on clients during life’s darkest times. This bothers me greatly and motivates me to be different. Specific to my practice I see this a lot in divorce matters…the “simple” divorce that turns into a $30,000 lawyer debt. I had one of my contempt defense appointed cases recently for a young guy who had some clear mental illness and some of his past lawyers had just strung him along to the tune of many thousands of dollars in legal fees in a case where clearly he wasn’t going to be winning custody and there wasn’t much of a marital estate. BE DIFFERENT!

Client education & massaging client expectations may be the most important things I do. Plus, incessantly pushing clients to solve their own problems, particularly in domestic relations matters. Steering client expectations toward reality is probably the greatest wisdom that comes from my vast 8 years of experience. As with most things, you as a lawyer aren’t evaluated by some perfect/objective standard rather you’re evaluated against the client’s lawyer expectations (make sure they’re realistic).

The Circuit Court of Cook County’s antiquated technology = Injustice. I commented to my wife at dinner last night that if you want to experience information technology circa 1985 just walk into a Cook County Courthouse (seriously, where else would you see carbon paper?). I was looking at an archived 1985 divorce court file in Daley 1113 yesterday and it didn’t look any different than the 2010 version. But the fundamental problem is that the antiquated technology leads to unjust results as I’ve written about here & here.

What’s the deal with “Status Reports”? For anyone outside Cook County, Illinois, “Status Reports” are the most popular type of court date where ostensibly you’re coming to court to update the judge on the current status of the case. Plus, these are almost all set at 9:30 a.m. Problem #1 is that most judges I’m before don’t keep track of each case’s “status” themselves so what’s the point? A handful of judges are starting to have a computer up on the bench to keep detailed notes much like the minutes of a board meeting so at least their “status” is being measured. And there’s 8 hours between 830am & 430pm (hours courthouses are open) so why are 90% of cases set at 930am? The elevators at the Daley Center between 920am-1020am are the most needlessly stress-inducing part of my law practice.

Getting rid of a physical/permanent office (and associated costs) and going solo were my best decisions. These are 2 things I probably could not have envisioned 8 years ago that, currently, I’d have a hard time returning to their alternatives (single bricks/mortar location & being someone else’s employee). I’ve made the statement many times that the worst decision I’ve made as a solo practitioner was over-spending on office space…that’s still true. Using Regus for our client meetings allows me & them great flexibility and I’m never commuting somewhere simply for me to work at an office. And building a business is simply very satisfying (not easy, but satisfying).

Client payment security is my most critical issue. I was going to say something about too often allowing myself to compete on price and the negatives associated with that decision (which is generally a no-no). But even when I have likely charged a rate too low, I can make a nice living from the clients who are paying like clockwork. The practice killer is inconsistent income & I must solve this problem. Our early payment option to clients has been effective in 2010…clients get a 5% discount when they pay by a certain date. I think the other solutions to “client payment security” are using “Evergreen Retainers” (never allowing a client to have a zero retainer balance) and securing client payment plans (when necessary) firmly with a credit or debit card.

I need HELP with the business of law. Both law schools and bar associations are deficient. There is the occasional good program regarding “Law Practice Management” but there’s never adequate discussion about MONEY & PROFIT. I brought just north of zero business experience to my law practice when I began in April ’05. So I’ve finally retained an outside lawyer/business coach for year 9 & beyond.

I’m not thrilled with the candidate choices but this is a critical election tomorrow here in the Land of Lincoln considering our government’s dire financial circumstances. And don’t forget to checkout Jack Leyhane’s For What It’s Worth blog for the best coverage of local judicial elections.

Although I read a LOT (outside of work-related stuff) I must say that I take a generally dim view of business books. Why? 3 reasons:

First, too many business books are not engagingly written. If the 9/11 Commission Report can be engagingly written and nominated for a National Book Award more business books can be written like a novel too. Second, as a lawyer I find that most “business books” aren’t written for or are not particularly relevant to professional service providers. Finally, most law practice management-type books are unoriginal. I surely haven’t read everything and mean no offense but what’s the last LPM book you’ve read that really made you say, “Wow, that’s something new/different”?

The E-Myth Attorney confounds all of the above, written much like many of the Ken Blanchard books (The One Minute Manager, etc.), E-Myth is a quick and easy read using real world and parable-like examples. Also, the book is written with alternate chapters authored one by primary author Gerber (non-attorney) touching on more general entrepreneurial principals (the “E” in E-Myth is short for Entrepreneur Myth) with the next by two attorney co-authors who discuss the application of Gerber’s principles to their law practices and to lawyers generally.

These were the high points I’ll take away from E-Myth:

1. Your Legal Services Business’ Equity & McDonalds. Equity is the financial value placed on your practice by a prospective buyer of your practice. In non-legal circles it’s every entrepreneur’s dream to get the big buyout but you don’t hear much of that thinking regarding law practices. Yet, I think the majority of states (including Illinois pursuant to Rule 1.17 of Rules of Professional Conduct) allow for the sale of a law practice. The McDonalds reference ain’t about a Happy Meal rather it’s the broader concept of working ON your business more than working IN your business. Akin to McDonalds’ franchises, it’s critical that you build a legal services business that works every time and the value of your equity is the effectiveness of the processes and systems you have put into place (it’s the systems not the people that are critical).
2. Know Your Number. When I first heard “Know Your Number” all I could think about were ING’s television ads regarding retirement planning that seemed to run every 10 minutes during CBS’ golf coverage this past summer. The E-Myth meaning is the specific monetary goal you have for your business and then drilling down so that you have a specific, daily revenue goal…every day you’ve either hit your revenue goal or missed it. So set your annual revenue goal, decide the number of days that your business will be open each year and then do the simple division -  total revenue / business days & there’s your daily revenue number. This single number can become a rallying and focal point for the entire firm.
3. 3 Plans. The E-Myth suggests the use of a planning triangle consisting of…a Business plan, Practice plan, and a Completion plan. The Business plan is your firm’s constitution, outlining in business language your vision and laying out in detail the market and strategy you’ll implement as a business enterprise. The Practice plan addresses the “what we do”  and “how” specific to a legal services provider and the processes/systems necessary to get quality legal work done. Your Completion plan is the operations manual…it is a guide to tell the people responsible for doing that work exactly how to do it.
4. You NEED Systems. Buying into the book’s “systems” focus might be the best take-away from E-Myth. It goes back to the McDonalds example of some hard-copy operations manual that defines how everything gets done so even a place with high employee turnover like a fast food restaurant keeps quality consistent and measurable. And just thinking of my small firm this isn’t that big of a change…I have “systems” in place simply most of them are in my or my assistant’s head. But that’s the idea…first, get your processes (file opening, telephone answering, new meeting scheduling, etc.) on paper/electronic document, second, be consistently reviewing and managing these systems. Now there’s a legal services business beyond yourself!