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Articles
We're approaching the time of the year for resolutions – our promise to do something better. For most lawyers and law firms, better planning should be at the top of that list.
Businesses fail because the owners fail to focus their energy on the business; most business owners are technicians, not entrepreneurs, according to Michael E. Gerber, best-selling author of The E-Myth Revisited. Law is a business as well as a profession; in order to succeed, lawyers must act in a businesslike way. But Gerber may be right when it comes to lawyers. They tend to be technicians who want to do what they love doing, whether it's negotiating, drafting a contract, litigating, or some other task. They don't want to run a business, they don't want to spend time seeking new clients, and they especially don't want to do business planning.
Every "Fortune 500" company has a detailed business plan. Yet it's estimated that fewer than half of the "Inc. 500" companies do – and these are the most successful, fastest growing small businesses in the country. As this year that will forever be linked to Hurricane Katrina comes to a close, it's well to be reminded that the U.S. Department of Labor says most companies that experience a major disaster are out of business within five years, because only 25% of companies have a disaster plan.
Most lawyers begin to realize that they are in trouble only after the money ceases to come in the door. However, this is usually the last symptom of a downward spiral that started long before. A law practice is like an athlete who exercises in hot weather but doesn't drink adequate fluids; because the body's ability to detect dehydration is slow the athlete may continue on until dropping over from dehydration. A law practice works the same way. The point when cash stops coming in the door is much too late to start wondering if there is a problem. The seeds of the problem were undoubtedly sown months, or even years earlier. Like the overheated athlete, lawyers need to think about the business side of the practice before you run into problems.
A plan doesn't have to be complicated. In planning for next year, asking yourself the following questions will take you a long way toward sustaining success:
Develop specific answers to these questions, and you'll have a head start on a successful 2006.
Everything you read in the article above is only the starting point. To really ensure that your business is successful in '06 (and by successful, I mean two to three times as profitable), you need to put your thoughts and ideas down on paper - in the form of a written, air-tight business plan you can take to the bank.
Imagine the relief you'll feel next year knowing that every penny spent on marketing is bringing in a sizeable return on investment. Imagine the financial control you'll have when you're finally able to make all your advertising, hiring, and client retention decisions based on cold, hard facts.
Your firm will be one hundred times more efficient and cost-effective when you have a plan you can present to your partners and employees, so that together your firm can make smarter decisions about how and where you spend money.
"Who has the time to create such a plan?" You do, of course.
I have a created a workbook that makes the process so fast and simple that you can produce an air-tight business plan in just one day. It's called The Profitable Law Office Handbook: Attorney's Guide to Successful Business Planning.
This step-by-step, no-fluff guide is the next best thing to having me personally coach you through the process of creating profit-generating business plans. (And since I typically charge $500/hour, it's a heck of a lot cheaper too!)
All you need is the information about your business you already have at your fingertips. The Profitable Law Office Handbook is loaded with forms, worksheets, balance sheets, and surveys that make it easy for you to convert this data into a detailed, 360-degree analysis of your business. This will tell you exactly how your firm can pull more cash through the door and how to clamp down on cash flowing out!
The workbook also comes with a bonus Windows-compatible disk, so you can use these forms and schedules again and again with Excel, QuattroPro, and WordPerfect 5.1 formats.
The result?
The Profitable Law Office Handbook also shows you how to create a detailed, cost-effective marketing strategy, so you can expand your client base and generate a higher Return on Investment from your advertising and direct mail.
That means no more wasted marketing dollars - just campaigns guaranteed to make you money.
Wouldn't you like to ring in the New Year with the promise of new fortune for your firm?
Question: How do we get all the attorneys in the firm to buy-in and participate in creating both a firm plan and individual plans?
Generally, in my experience, successful planning is caused by an emphasis on the process from the top. The primary rainmakers of the firm, the management and managing partner all must be in concert: Planning is important and needs to be done by everyone in the firm. Start with small projects, perhaps even individual coaching, to experience success with the process. Then, everyone will buy into the process.
All of the key players should agree on the firm's plan. If the partners are not clear about the overall goals as well as specific objectives and strategies, then the planning process is bound to be sabotaged and of little use. Partners need to "buy in" to a plan. Solos are not immune from this requirement either. They must get a spouse or "significant other" to accept the general direction of the practice. That is why the first element of any plan is to agree to make and abide by the plan. The starting point is to gather historical information about the firm's business performance, analyze it and develop realistic modifications for the future. This involves marketing and financial data in the form of documents, statistics, reports, survey results, and, when there is nothing else, educated guesses. All this data will create a snapshot of the firm's current marketing and economic health.
Next, identify your goals. A firm that does not decide what kind of practice it wants will wind up with one reflecting whatever walks in the door. It is doubtful that serendipity and whim are the best paths to success. Set professional and personal objectives and stick to them. Create a profile of the clients and work you want and focus on them. You can increase your revenue dramatically by focusing on clients who will give you the work that you want.
Goals are meaningless if people are not held accountable for them. One forceful approach would be to determine compensation bonuses/rewards on the basis of plan development (a realistic and aggressive plan merits more compensation) and achievement of plan goals. Failure to achieve goals, however, should not be punished without consideration of the reasons for not achieving the goals: Personal illness, change of business conditions of clients, hard work but unrealistic goals, etc. Consider explanations, not excuses.
John Wooden, famed UCLA basketball coach says: "Failure to plan is planning to fail." For a lawyer or a firm, it's better to know where one wants to go. There, then, is a greater likelihood of achieving the goals
© 2024 Edward Poll & Associates, Inc. All rights reserved.
