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Do you have what it takes to build a $1 million law practice?
As law firms become more business focused in response to economic, technological and other market forces impacting the practice of law, the ability to generate business is increasingly important.
Whether it’s $1 million, $10 million, or $250,000, most of us have a number that signifies success. Many lawyers don’t achieve this number because they lack the tools to do so or mistake financial return for purpose.
Numbers are important. They make goals tangible and provide metrics for measuring progress. But numbers alone are not good enough. There must be a business vision and a defined plan behind the number to achieve success.
Why do you do what you do?
A number is a great metric, but it is not your business purpose. Understanding why you do what you do provides the vision, values and motivation for reaching your goals.
Many people – including myself at one time – have underestimated the value of defining their purpose. They have mistaken their number for their why, making their quest for money passionless at best and unsustainable at worse.
The most successful lawyers have a defined reason for choosing the law as a profession and are able to use that motivation to achieve financial rewards.
What will you do to you achieve your business purpose?
To achieve your business purpose you need a means to do so. At a very tactical level, your “what” is the legal work you do in exchange for money. But there are strategic considerations as well.
From an internal standpoint, you need to determine what you need to do to reach your revenue goals:
- How many matters do you need?
- How many clients do you need?
- What resources and processes do you need to provide these services?
From an external standpoint, you need be able to identify and leverage business opportunities. This requires an understanding of a number of factors:
- How much demand exists for what you do?
- Who needs these services?
- How much are these services worth?
- Who else provides these services and how are you different?
The analysis will depend on the environment in which you work. There are different issues depending on whether you are a senior partner, a mid-level associate, or a solo practitioner. Yet armed with the right insight, you can realistically assess whether your number is attainable and, if not, adjust accordingly.
How will you do it?
This is the roadmap for achieving your purpose. The roadmap includes systems and processes that will allow you accomplish your “what” in an efficient and profitable way. Internally, you need an organizational plan that will allow you to provide your services efficiently and profitably. Externally, you need a marketing and business development plan that will drive business to you.
And then you have to take action. This is the hard part, but when you understand why and know exactly what you need to do, reaching your number not only becomes possible, it is achievable.
My husband ran the Boston Marathon on Monday. Even as a spectator, it was a pretty amazing experience. Steve finished with a PR of 2:50:26, placing him 646 overall out of 27,000 runners. He smiled the whole time he was running.
Training for the race was time consuming. He qualified last October at the Chicago marathon. Since then, he’s had a plan in place that included weekly running goals for mileage and for time, group runs with friends who have more race experience than he does, and weekly visits to an active release therapist to help keep him healthy.
He did this while balancing work and family obligations. It was hard work, but he set a goal and was determined to see it through.
One of the biggest excuses I hear about marketing and business development is that there is not enough time. I say excuse not because I don’t think people are busy. We are. We all have demands on our time and we have to prioritize.
But time is a funny thing. There is never enough of it. But when you really want something, you’ll find a way to do it. You can find away to make it to your kid’s ball game. You can find a way to write that article for an industry publication. You can find a time to take your client to lunch.
And once you do all of that, you can think about running a marathon. After all, isn’t that what life is anyway?
A great leader I know used to conclude his staff presentations by saying, “They say that showing up is half of life. I thank you for showing up today.”
There is a lot to be said by that statement. Showing up is important. It means you care enough to take time out of your day to consider, and maybe even engage, in important discussions. It gives your voice a chance to be heard. You can offer solutions. It beats doing nothing, but it is only half.
The other part requires you to roll up your sleeves and do the hard work. It takes time. It takes effort. It takes risk. It’s hard. But it is half of life. Too many people, lawyers, law firms only show up.
It’s a tough legal climate out there. The economy seems to be turning, albeit slowly, for the better. Opportunities appear to be on the horizon. For those that spent the downturn showing up to talk about what they needed to, it’s not going to be enough.
It’s time to put plans to action. It’s time to make the investment. It’s time to execute. Don’t let half your life go by.
By Debra Baker
I was reading in the New York Times last week about a website called StickK, where people share publicly their goals and resolutions, even putting money on the line in the event they fail.
The concept, according to the Times article, is that “people are more likely to achieve their goals if they stake their reputations – or their bank accounts – on success.” Apparently, if you fail to achieve your resolution, the money gets donated to a charity of their choice.
There are more than 63,000 StickK contracts with more than $5.9 million at stake.
It got me thinking about the challenges law firms face in developing business development programs that are acted upon in a consistent and ongoing way.
Part of the problem is that law firms don’t place as high a priority on business development as they do on billing clients. Firms may offer encouragement, have the best of intentions, even provide training. The breakdown comes with enforcement. What needs to be done to get the attorneys to act?
Maybe it is as easy as making their plans public and staking their reputations – and bank accounts – on success. Imagine that instead of sending practice group plans and personal business plans to an executive committee for review, plans are made public.
Attorneys are assigned roles based on their interests and needs. Those charged with overseeing the plans are required to make quarterly updates to the partnership. They report on activities, what’s working, what isn’t, how the plans have been adjusted and for what reasons. Those that don’t keep up get fined. The money can even go to the firm’s charitable contributions.
It’s February 1, 32 days into the new year. How are those resolutions coming?
I found an old email this morning that references a 2009 McKinsey Executive Insight report about challenges facing corporations coming out of the economic crisis. I no longer have a link to the year-old report, but the excerpt from the email reads:
“Companies need to integrate marketing and sales function into the day-to-day operations of the organization and apply the same rigor to defining commercial processes and systems that they have long applied to manufacturing and other operational processes and systems. This “commercial transformation” can take many forms and involves 1) a concerted, multi-year effort to substantially upgrade the effectiveness of a company’s marketing and sales processes, including aligning top management around a forceful transformation theme; 2) driving performance improvement programs around 2-3 carefully selected commercial levers and striving to lead the industry on these levers; and 3) embedding the change through a comprehensive commercial operating system, comprising not only processes and tools, but also IT systems and performance management.”
If you filter through the jargon and are not put off by words like “commercialization,” “operational processes”and “sales,” there are some salient points from which law firms could benefit, particularly those that have made a heavy investment in marketing but are not sure they are getting the results they want.
First, law firm management and their marketing departments need to be directly aligned. Many firms still fail to give marketing a seat at the executive committee and make the much needed connection between strategic growth and market position.
Second, the old adage, “If you can’t measure it, you can’t manage it,” remains true. Law firm marketers need benchmarks around which they can measure their success. Real process needs to be put in place to evaluate return on investment.
Finally, IT and marketing can no longer work independently. Technology needs to be an integrated into law firm marketing strategies. There are far too many law firm marketing directors out treat technology like a “project” that can be checked off on a things to do list. Technology is a part of doing business. Combined with the right people and processes, it is a tactic for raising awareness, a tool for developing credibility and the centralized resource for tracking results.
This is not to suggests that law firms need to undergo a “commercial transformation” at the expense of professionalism. But the economy has changed and the drivers for legal services are different today. Firms need to take a disciplined approach to the way the do business in addition to the legal work they provide clients. They cannot afford reactive marketing where there is a constant state of motion and very little measurable progress.
In 2007 I left my position as firmwide marketing director at Heller Ehrman. At the time I certainly knew the firm was in trouble, but I never once believed the challenges it faced would be insurmountable.
I feel like Pollyanna saying this now, but I believed in Heller’s core values, in the integrity of the partnership. At the end of the day, I thought that would be enough to turn the firm around. Lest anyone say differently, it was a good firm made up of high-quality people.
Heller’s unfortunate legacy likely will be how its implosion served as the first tremor of a seismic shift across the legal industry. In the three years since leaving, I’ve watched from the sidelines as Heller closed its doors. I saw other law firms around the country struggle to stay afloat. I’ve witnessed the layoffs of thousands of lawyers and professional staff during the toughest economy of my lifetime.
Leaving Heller also gave me a new perspective on the legal industry, enabling me to regain the objectivity I once prided myself on in my first career as a legal journalist. Based on my own experience, as well as in conversations with partners, knowledge managers and marketing executives from law firms and legal departments around the country, several themes emerge:
1. Inefficiencies are rampant throughout all functions of law firms. Silos across firms result in duplicative efforts among individual lawyers, offices and practice groups.
2. Corporations are more sophisticated buyers of legal services than they have ever been in the past. As evidenced by initiatives such as the ACC Value Challenge, clients are leveraging their buying power by demanding more from their outside counsel.
3. Disruptive technologies will force law firms to change their business model. In-house lawyers understand this, but law firms are late to the game.
Even today the economy shoulders most of the blame for the struggling legal market. But for law firms, the financial crisis is merely symbolic of Dorothy pulling back the curtain on a weak wizard trying to keep his reign over a kingdom transforming before his eyes. The wizard behind this curtain is a business model that promotes inefficiency, fears innovation, and denies a client base demanding service levels few firms are able to meet.
To be sure, exceptions exist for every rule. A number of firms do address these challenges head on, but it is a slow process.
For all these reasons, Law Firm Transitions was born. My company, Legal Vertical Strategies, believes value-driven legal service models are the future for law firms.
As a principal at LVS, I have the unique opportunity of working with both buyers and sellers of legal services—law firms and legal vendors.
I plan to draw upon that experience to help drive the needed dialogue to define and implement these changes. Along the way, we’ll talk about best practices for driving revenue and growing client relationships.
I certainly don’t have all the answers and hope you will join the conversation to share your thoughts and advice as well.
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