This is the next post in my series on how one should start a law firm in 2015. My last discussion looked at how attorneys should market a new law firm. In that article I went over the need to invest in marketing assets rather than spending money on the assets of others. In this article I’ll look at another area where many attorneys, who are just starting up, get it wrong. When to hire employees.
Let’s make one thing perfectly clear. Starting a successful firm requires that you work hard. Many lawyers, who are not successful, make the mistake of thinking that running one’s own shop means that employees do all the work while the attorney plays golf. Taking such an approach will ensure that you wind up looking like this guy:
If you want to work for money, rather than food, then read why an attorney is his or her own most valuable asset. Those who understand this fact will be the one’s who wind up looking like this guy:
I’m assuming you would rather be the latter. Now that we’ve established that you’ll be putting in some time when you start your new practice, let’s look at when and how to hire people.
Attorneys should focus on efficiency gains before hiring staff
Here’s a news flash – the lower your overhead then the more money you make. This means you shouldn’t hire anyone until you need to. While this seems obvious, it touches on an area where many law firms get it wrong. If you’re feeling like it’s time to hire someone then take a step back and look at your practice. Are you doing things as efficiently as possible? If the answer is “no” then hiring someone would be a mistake. If you can increase efficiency then you will be able to handle more cases without hiring someone. This will preserve your profits and help you get ahead.
Let’s look at a few specifics. If you’re considering hiring someone then ask yourself the following:
- Have you adopted the O.H.I.O. (Only Handle It Once) method of task management? If not then read more about it here.
- Are you performing weekly calendar audits? If not then read this article about how doing so will increase your efficiency.
- Do you perform your book keeping and financial tasks on a daily basis? If not then you are creating headaches which will waste time. Staying on top of this may take minutes a day, but it will save you hours on the back end. Last time I checked it was worth to give up minutes in order to save hours.
If you’re not doing the above then it’s a mistake to hire someone. It’s silly to waste payroll just so you can keep wasting time through inefficiency. The moral of the story is that you may not need to hire someone after all.
Lawyers starting a firm should consider need and function before hiring an employee
Something I’ve seen law firms do on a regular basis is say “we need help” and quickly hire someone such as a paralegal. This is done, however, without taking a step back and saying “what is it we need help with?” Another question that’s seldom asked is “how would a particular person with particular skills fit into our work flow?” If you just run out and hire someone, without considering these things, then you take on payroll without getting as much of a return as you could otherwise. There are things which lawyers can do to stay out of this situation.
The first step in hiring someone is to take a look at your own workflow. Ask yourself what tasks are getting in your way the most, even though they can be performed by someone else. Are these tasks, by themselves, enough to justify an employee? If not then ask yourself if someone who has the skill set to handle those troublesome tasks can also handle other things which are getting in your way. Then sit down and consider what a potential employees work day would actually look like. These steps will help you ensure that the new employee will add value and improve the performance of your firm.
Taking the steps above will prevent you from hiring needlessly and, when you do hire, help you to hire the right people. Why do you feel so many firms err when it comes to hiring? Please chime in through the comment form below.