Law Practice Management
20 Law Practice Empowerment Tips
At the American Bar Association’s annual GPSolo National Solo and Small Firm Conference in October, practice management experts Peggy Gruenke and Alan Klevan presented “60 Practice Empowerment Tips in 60 Minutes” — focused on the nuts-and-bolts of running a successful law practice. We asked the pair to zero in on their favorite practice-boosting pointers.
1. Write a simple business plan — for you, not the bank or a potential business partner. The goal is for you as a business owner to see the big picture and understand exactly who you are, why you’re unique and who you are best equipped to serve. Creating a plan will help you answer questions like:
- Do I have a profitable business?
- Am I making money?
- Am I spending too much?
- How can I get more clients?
2. Build a budget. If you don’t have a budget, you are flying blind. Create some basic financial spreadsheets so that you can keep an eye on (a) where you are spending money and (b) how much money is coming in. If clients are paying but your bank account remains low, it’s a sign to look more closely at your monthly expenses and cash flow. Don’t get bogged down in the details or try to re-create past accounts — that is paralyzing. Starting today, add a column for the current month and begin entering the money you spend and the money you receive. Your financial spreadsheets will evolve over time, but at least you now have a place to keep track of your business.
3. Know how much money you need to make each month to keep the doors open. You should know this number by heart. (If you don’t, go back to tip 2.) Write it down and put it where you can see it every day (e.g., on your wall or computer monitor). Put a picture of your family or next vacation spot next to it. Every day, write down how much money came in. Keep a running total so you can see how close you are to reaching your monthly “need to collect” (or “monthly nut”) number. Any amount over that is yours to take home.
4. Know where your good clients come from. This means asking them how they found you. Most really good clients will come from one of three sources:
- Your really good current or prior clients.
- Other lawyers or referral sources whom you know and trust.
- Your family and friends.
These sources have three important things in common: They know you, they like you, and they trust you. This is your gold mine — tend to it and mine it often. You can’t buy “know, like and trust.” You earn it over time.
5. Don’t pay good money for bad clients. When you spend money on advertising and marketing, keep close track of how many new clients are coming from these sources and whether they are good or bad clients. The good ones pay on time and say good things about you. The bad ones don’t pay on time and make you very grouchy.
6. Take care of your referral sources. When you get a new client from those good referral sources, what are you doing to thank them? Here are a few ideas that have some “stickiness.”
- Send a donation to a charity they are involved in and let them know you did it. Use LinkedIn to get this type of charity information.
- Pick up the phone and call — now, not next week. Let them hear the excitement in your voice for the new client you just signed up. You will be less likely to make the call a few days later and the excitement level will be lower.
- Send them a gift card to a local coffeeshop. If someone is sending you referrals, you can bet that person is doing some networking and can use the card.
- If you recently read a good book you think they would enjoy, send them a copy and ask them to pass it along when they are done.
7. Make sure your client service is exceptional. This sounds so basic. But step back and look at all the ways your clients are interacting with your firm. Your website. The initial phone call. The first visit to your office. Email conversations. How they get documents from you. Interactions with your support staff. Returning phone calls. Pretend you are a client working with your law firm. Critique each interaction and grade yourself and your staff.
People remember good client service, but they will talk about exceptional client service. You want to be talked about the next time your client is out with friends — and you want it to be because you did something exceptional.
8. All businesses need systems — what are yours? If you haven’t already read the books “Checklist Manifesto” and “The E-Myth Attorney,” add them to your holiday wish list. Once you’ve read them, you will start to understand the power of building processes to increase efficiency and deliver a better product. Within your practice, you have tasks you do repeatedly. Documenting what you do — the steps you have to follow to file a bankruptcy or handle an eviction, for example — opens up a window to help you see how to improve upon it. There is power to writing down your processes.
9. Remember, you’ll never find new clients sitting behind your desk. Get to know different types of referral sources, then get out there and leverage your networking activities.
- Referral resources are people who respect you enough to be willing to open doors for you, as well as knowing others’ needs and what it takes to address them.
- Centers of influence are leaders in their industry, or within your community. They make things happen.
- Connectors are people who delight in bringing like-minded people together. You can find and connect with them on LinkedIn.
10. Follow-up and consistency are the cornerstones of a strong business. Often it’s the little things in life that count. Clients will remember that you follow up, ask good questions and regularly keep in touch. You are creating the foundation for great client relationships when you focus on these behaviors. Be sure to create a good system to help you remember to follow up.
11. Sit next to a stranger. The adage is, “There is no such thing as a stranger, only a friend you haven’t met.” The same holds true for lawyers and prospective clients and referral sources. The next time you’re at a social event, get out of your comfort zone. You have your “power talk”; the best way to perfect it is to keep using it, and there’s no better way to do than by expanding your circle of contacts.
12. Volunteer. Nearly everyone is engaged in some sort of civic activity, be it an educational, religious or social group. All of these organizations need volunteers to do some work. Why shouldn’t that person be you? All it takes is a small amount of time weekly or semimonthly, and it will open the door to “sitting next to a stranger” and getting your word out.
13. Make it all about your client. When you meet a client, prospective or existing, turn off your mouth and let the person talk. As a lawyer, you are skilled in your field, but your clients don’t want to hear about that — they want to know what you can do for them. If you want to gain their trust, let them tell their story.
14. Learn to say no. There must have been a class in law school that purged the word from lawyers’ vocabularies. Just because a prospective client walks into your office, you don’t have to accept the case. Be mindful of the “80/20” rule. In this case, 20 percent of your clients will cause you 80 percent of your headaches. Which leads us to the next tip.
15. Know your ABC’s. Think about categorizing your clients from “A” to “D.” The “A” client appreciates your work, calls only when there is something relevant to discuss, and is a good source of referrals. Typical “D” clients only care about how much they are paying you, call incessantly, and will either not tell the truth or withhold information. Get rid of your “D” clients.
16. Set the rules. When meeting with a client for the first time, provide a road map for how you expect the case to proceed and have an honest discussion about the result they can expect. If it is a litigation matter, lay out the steps for preparation and trial.
17. Look them in the eye. When explaining fees and payment to clients, be it contingency or retainer, be confident. Look them in the eye. This will be the first indicator of whether or not your retainer will be regularly replenished. If they look down or away, be wary. If they nod their head or smile lightly, history has shown that not only do they have the ability to pay, they understand your ground rules.
18. Do not negotiate your fee. When a prospective client tells you that Lawyer Smith is willing to do the same work for $2,000 less, tell the person kindly that he can then retain Lawyer Smith. When you reduce your fee, you will have lost the trust of your prospective client. Odds are, in time, that client will leave Lawyer Smith and retain you to handle the mess that Lawyer Smith made.
19. Bill early, often and strategically. Clients appreciate the services you provide, but it is the value you are providing that is most important. To that end, bill when your perceived value is the greatest. As each day passes after an event, the perception of your value is diminished. If you send out the bill even two weeks afterward, the client won’t perceive the value to be as high.
20. Say goodbye with affection. The end of the case shouldn’t mean the end of the relationship. Your current clients are your absolute best referral sources, especially immediately after the matter is closed. Always conduct an exit interview, and when you send a closing letter, consider it a marketing letter, too. Ask for a review on one of the relevant sites, like Google or Avvo. Remember, though, the goodbye should be all about them. Follow up (see tip 9) to keep the relationship alive!
Peggy Gruenke is Chief Operating Officer at Hengehold Capital Management, as well as a law firm management specialist in operations, online marketing, technology and accounting at LegalBizSuccess. Peggy is active in the ABA GP Solo Division, a frequent ABA TECHSHOW speaker and she writes on productivity and profitability for Attorney at Work. Read more or her articles here.
Alan J. Klevan is President of Law Practice Strategies, a firm dedicated to consulting with small law firms and sole practitioners on how to use technology to build more efficient and profitable practices. He also practices personal injury law. Follow him on Twitter @AlanKlevan.