Daily Dispatch

Getting a Grip, Part 2

Loss of Control? Four Solutions for Your Legal Business

By | Jan.14.16 | Daily Dispatch, Law Practice Management, Productivity, Professionalism

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A law practice in chaos is nearly every lawyer’s biggest fear. (As if you need to be told, right?) In the first post in his three-part series “Getting a Grip,” Dustin Cole explained how a law firm can easily slip a gear. This second post brings four powerful ways to regain control — and come back strong.

In Part 1 of “Getting a Grip,” I outlined four reasons lawyers often feel — and rightly so — that their offices or cases are out of control:

  • Understaffing
  • Lack of management skills
  • A checkbook mentality
  • Inadequate management tools

Here are four solutions to help overcome that feeling of loss of control.

Solution One: Adopting a New Perspective

The ground-level solution is to see your practice differently — not as a “practice” but as a legal business that needs to be managed effectively. In the most successful legal businesses, the lawyer spends the majority of her time managing people (staff and legal team, clients, referral sources) and the minority of her time doing legal work — and only the highest-level work no other team member is capable of doing.

For the lawyer who still believes “we’re professionals, not businesspeople,” here are a couple of thoughts: Can you really deliver your best “professional” services without an efficient, successful and profitable “business structure” supporting them? And, does an overworked, overstressed and underpaid attorney with insufficient support equate to great client care — or to a burning-out lawyer on the brink of malpractice?

“Legal business” encompasses both concepts — great work and client care facilitated by a great team and a happy, rested and healthy lawyer.

An underlying principle here is “leverage.” Work should be pushed down to the lowest level where it can be accomplished effectively. The reciprocal concept is that every team member, including the attorney, should be spending the maximum amount of their time doing work at their highest skill level, and of the highest value to the business. The result of building a good team is that you bill fewer hours on more files — thus the importance of marketing — and others bill at their appropriate rates on those matters. Another benefit is that matters tend to move faster, which is good for both client satisfaction and cash flow.

This approach cuts deeply into some notions that law school — or early years as an associate in the bowels of a firm — may have instilled in you:

  • “You’re not a businessperson — you’re a professional.”
  • “You make money by billing as many hours as you can.”
  • “More work means working more hours.”

But, properly executed, this approach also means that revenues go up dramatically — because you have a structure in place that will allow your firm to continue to grow. So the margin goes from 50 percent on, say, a half-million in revenue to 40 percent on $1 million. Acceptable? I think so.

Solution Two: Building the Right Team

Hiring cheap and not hiring at all are two of the biggest management mistakes lawyers make. Finding the right team members is one of those less pleasant unbillable management functions that is, nevertheless, essential. The governing rule in hiring is “hire slow, fire fast.” Find the best people by doing what it takes, rather than hiring reactively because you’re in crisis and they can fog a mirror. There’s a science to hiring right, and bad hires are the primary reason lawyers give up and go back to doing it all themselves.

Once you hire, don’t suffer fools gladly. Don’t tolerate mediocre or bad staff because “I just don’t have time to deal with it” or “I hate to fire people.” Too many lawyers end up carrying a mediocre person. Worse, once they finally fire that person, the lawyer discovers a pack of client files filled with time bombs.

The corollary to the “hire slow, fire fast” rule is “pay what you need to hire right.” A great paralegal is a profit center, not a cost — if you utilize them well. A great, non-billable assistant will free you from endless hours of detail and client communication, and organize your life so you can bill more hours, stay in better control of your files, and be a better team manager.

Solution Three: Increasing Team Capacity

Burnout happens when you try to do everything yourself — and when working at 120 percent capacity is the norm in your office. When you build a team that operates at 90 to 95 percent capacity, instead of 120 percent, it means you have to have the right leverage in place. Ideally, you want to be able to delegate everything that does not require your skills, so you can focus on the higher-level work, marketing for more work, client communications and managing the team.

Here’s my hierarchy of values for a lawyer in business:

1. Marketing. Without business, a lawyer’s skills are irrelevant.

2. Client relationships. Make sure clients are happy and well served, so they speak well to others about you — and pay their bills.

3. Strategy. Once engaged by a client, your first job is to lay out the strategy for how the matter is to be handled. Your continuing job is to provide guidance (let’s call it “wisdom”) to the team as the matter progresses, to assure the best and most efficient result.

4. Leading the team to get the result. Pursuing the client’s goals should be a team effort. It’s the responsibility of the team leader’s — that’s likely you, the lawyer — to make sure the matter is being handled as efficiently as possible and that all work is being handled at the appropriate level, with you doing the highest-level work. When managed well, the client’s costs for the matter may actually be less than under the old regime, which makes for a happier client and increases the likelihood that she will refer others to you. At the least, when you are efficient and proactively in control of the matter, the potential for grievances is dramatically reduced.

5. Doing the highest-level legal work. You’re not only the team leader, you are a member of the team. Sometimes, your highest value is being delegated to, when the work is above the skill level of all team members: critical drafting, key depositions, hearings and trial work. But you must remember the principle of leverage and assiduously push work down that can be accomplished by others. This is difficult for many lawyers who, after all, know how to do virtually every task from trial work to emptying the wastebaskets. You may think “it’ll take longer to explain the work than it would for me to do it,” but remember that explaining the work is mentoring and training — meaning next time the explanation won’t be necessary.

Solution Four: The Right Tools to Manage

Without the right tools, chaos, stress and confusion often reign. When I ask lawyers how many open files they have and they say, “Well, about …” I know immediately they don’t have the right tools in place.

Typically, lawyers hate to delegate because they fear losing control of the task. And without systems in place to help them remember their instructions or track progress, they should be afraid — they have no good way to check whether the work is really getting done. That isn’t delegation — it’s dumping. Too often, it’s done verbally, with insufficient explanation, so the lawyer must rely on the delegatee to remember to do the work, follow the scant verbal instructions and report back when the job is done. Imagine this scenario unfolding repeatedly in an understaffed office where everyone is already working at 120 percent.

The resulting chaos is a self-fulfilling prophecy. The lawyer says, “I knew I should have just done that myself; see, you can’t trust others to do a good job.” When really it was about poor management.

Unless your practice is completely transactional, with no more than a handful of files, there is no excuse for not using case management software. There are more than 30 providers of case management software, most online. They are user-friendly, with short learning curves and terrific ease of use. Virtually all of them also offer time tracking and billing systems that interface with standard accounting packages.

Next week: More about the key management tools to keep you a healthy and productive lawyer.

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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