Daily Dispatch

Getting a Grip, Part 1

Loss of Control: Lawyers’ Greatest Fear

By | Jan.06.16 | Daily Dispatch, Law Practice Management, Money, Professionalism

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When lawyers are surveyed about what keeps them awake at night, their top issue is almost always a feeling that their offices or cases are out of control. It’s not just a fear. In my experience, for far too many lawyers, it’s a true state of being.

Why is that the case, and how can it be fixed? Start by characterizing the problem.

Reason One: Understaffing

The typical law office — especially a smaller one — is woefully understaffed. Lawyers learn early in law school to simply “do what it takes” to get things done. So, they normally work abnormal hours — exceeding the hours in which they can provide their highest-quality work. That typically means that a lot of work gets done at the last minute, often by seeking delays or making excuses to the client. When a lawyer is working every day at 120 percent, it leaves little room for procedural, thoughtful handling of work, and certainly not much for unexpected crises. These lawyers are already too busy dealing with their own manufactured crises.

Reason Two: Lack of Management Skills

This second reason flows from the first. Most lawyers were never taught how to manage others, or effectively utilize team members. I’ve seen top-drawer lawyers in great firms with access to great staff and associate support grinding out 70 to 80 hour workweeks, largely doing work that could be done by a paralegal or associate, because “I want it done right. Nobody else can do it as well as I can.” The result is an overworked lawyer, living on the edge, with precious little time left for handling crises.

Reason Three: A Checkbook Mentality

In a small firm, a “checkbook mentality” can sound like “I can’t afford a paralegal.” While the truth is that a paralegal should be a profit center, not an expense, all the lawyer can see is the $40,000 or $50,000 salary to be paid out, not the $100,000 to $150,000 they should realize in paralegal revenue. A variation on this theme is the lawyer who hires a great paralegal, assigns bales of non-billable work, doesn’t set billing expectations and then complains that it was a bad investment. A good paralegal, well utilized, increases the capacity of the firm to take in more business, provides a higher level of client service, makes the firm more money, frees up the lawyer to do better work and have time to market and — for heaven’s sake — have a life.

In larger firms, the motivation goes beyond the checkbook mentality to, let’s say it: greed. “Why should I give it to an associate or paralegal when I can do it and bill it at my rate?” A myopic view at best, a disastrous one at worst, this is one reason for the profession’s high rates of alcoholism, drug abuse, heart attacks, divorces and suicides. Lawyers with this kind of attitude can allow the practice to consume them totally, with not-so-surprising consequences.

This checkbook approach to law practice also means the lawyer doesn’t have time to market — it just isn’t a priority until it is, and then it’s often too late.

Reason Four: Inadequate Management Tools

Most lawyers use inadequate tools to keep track of the status of every case. Most do it with stacks of files. One lawyer admitted, “I keep all my files close so I can smell the smoke when something starts burning.” Or they do it reactively — responding to a phone call from a querulous or unhappy client asking about the status of the case … or to opposing counsel setting a date for a deposition … or to discovering a court date on their calendar.

There is more than one potentially disastrous outcome to this lack of client communication or proactive case management. I’ve seen contingency firms with files that have essentially been forgotten until a statute warning pops up, because the attorney sent a demand or request to opposing counsel, and was waiting for their reply — which never came — as a prod to move the case forward. Firms that function this way, in “reactive” mode, are not serving their clients as well as they could. And they often have unhappy clients and face grievances and malpractice complaints.

Don’t despair. In the next couple of weeks, in subsequent “Getting a Grip” posts, we’ll walk through four powerful solutions to that feeling of falling out of control.

Dustin Cole is a business and marketing advisor for law firms with nearly 25 years of practical experience helping lawyers build better, more profitable and more satisfying businesses. He has presented practice management, marketing and risk management CLE programs for more than 70 bar associations, as well as hundreds of firms. He especially enjoys working with small firms. Learn more about Dustin at awww.attorneysmasterclass.com.

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One Response to “Loss of Control: Lawyers’ Greatest Fear”

  1. me
    6 January 2016 at 7:23 am #

    Yes, all of this is true, except the real problem is not mentioned: a lack of disposable income from most of the market (middle and working class clients and small businesses) that can afford to pay a profitable rate for legal work, whether traditional “hourly” billing or some kind of alternative fixed fees.

    When I left (involuntarily) the law firm world after the 2008 crash (law firm branch office closed and firm “reorganized” losing their name partner to an in house job at a hospital!), I went on a fixed fee, “lean” staffing model, with co-working (fake) office space for conferences and a top notch but outsourced “receptionist” firm to answer the phone (my biggest fixed charge, around $400/mo).

    Even this model is marginally profitable with me being very busy and working very hard. An anecdote will explain the problem: a client complained once that “no one was there” when he just felt he needed to “drop by” unannounced and physically drop off papers. I quickly noted that having the traditional secretary or receptionist to sit at a desk 40 hours a week would be $60,000 with salary, payroll taxes and benefits and ho hum unappealing “Class B” office space another $20,000. I pointed out the reasonable, under market fixed fees he was paying and asked him who he thought would be paying this extra $80,000 in overhead. He got it.

    I’m afraid for the vast majority of clients I serve in a small city, the old model with lots of staff to hand off work to won’t work, because the rates will be unaffordable and the old bugaboo of offering work on credit and chasing receivables and un collectibles won’t work.

    I’d rather tell impatient clients what my garage mechanic says: ” you can have work good, cheap or fast, pick two” then ever hear two things I often heard in my 30 years of being a law firm partner: “how are we going to make payroll this Friday” or “you have to call this list of your receivables and get some money in here”.

    Ultimately, taking the long view, I see this as part of the political problem of the hollowing out of the US middle class by the 0.01% elites and the transfer of effective tax burdens to the middle class. If it weren’t for credit card processors and other payment systems that allow for automatic withdrawals from client credit cards and bank accounts for the portions of their fixed fees that have to be termed (I allow up to 50% for those who cannot pay the full fee up front), I wouldn’t be in business at all.

    Yes, a paralegal would be nice, but I wouldn’t make any money, and the revenues can’t be increased to cover back office support staff. My business model doesn’t scale and I see no way around this until most clients have disposable income.

    Voting for Bernie Sanders is a small first step, but I don’t see a return to the economy of the 1960s again in my lifetime. I leave that, or an ugly revolution, to my kids’ generation.


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