Published on 1/2/06
The premise of this weekly column is to focus on various aspects of what I refer to as "The Business of Law." I have long been a vocal advocate of the idea that running a law firm in a businesslike way improves the professionalism of the practice of law. The purpose is not simply to get more money for the lawyer; it also benefits the client.
Having been a lawyer for 25 years, and a coach or professional mentor and consultant for 15 years, I've observed enough along the way that I feel I can offer observations of value on specific ways to do that, and you've been kind enough to welcome my ideas.
However, this being the start of a new year, I'd like to step back and look at the bigger picture. Top 10 lists are an especially popular trend these days, and I have one of my own to share. Here are 10 things I deeply believe that every lawyer must do to be successful:
- Every lawyer must have a business plan. "Failing to plan is planning to fail." (John Wooden)
- Every lawyer must remember that the client comes first. Without clients, there is no reason for a lawyer to exist.
- Lawyers must sell solutions ("provide value") to clients, not sell time as expressed in billable hours. Clients don't care how long it takes to find solutions, but they want to know their problems are solved.
- Lawyers must begin each matter with an engagement letter - a written agreement outlining the scope and responsibility of each party. The client must agree this is a "two-way street" in which both the lawyer and the client have rights and responsibilities, including timely payment against benchmarks.
- Lawyers must prepare budgets for each matter: tasks, events, timing and resources to be used for the benefit of the client. This requires lawyers analyze matters in the early stages of representation and have clients sign-off on the budget, acknowledging consent to the proposed course of action.
- Lawyers must understand their inventory is not "billable hours," but the cash those hours represent. Focus upon collection of accounts receivable and maintain a high realization rate.
- Lawyers must practice effective cash flow management, getting funds into the bank as quickly as possible. Never allow payments to accumulate beyond the day's receipts.
- Lawyers must recognize technology - e-mails, blogs, cell phones and voice-mail - cannot replace personal relationships, personal integrity and rapport with clients.
- Working with a coach or mentor helps lawyers achieve business and practice success more quickly than they can on their own.
- Every law firm must have a disaster plan in place to ensure its survival. Business survival and succession cannot be left to chance.
Some of these we've discussed in recent months, others will be the topic of future columns. All are important. Together they show that successful lawyers must understand their practice as a business as well as a profession, and must take a businesslike perspective to providing their clients with value. Doing so will ensure their long-term future and success.
