This article continues my discussion on the building of multi-million dollar law firms. My last post looked at the work schedule and hiring practices of successful attorneys. One of the main differences between the million-dollar lawyers, and those who are less successful, is that the former has a set work schedule which they stick with. They also prioritize intelligence and ambition, over experience or a particular skill, when hiring employees. The reason for these hiring practices is simple – you can teach someone a skill and they can gain experience. You can’t, however, make someone smarter. Recognizing these concepts can help a lawyer to look like this:
While their competitors keep on looking like this:
I’m guessing that you would rather look like the former.
In this post I’m going to discuss a topic which simply has to be addressed, and which many won’t want to hear. That topic is the fact that building your business, and life for that matter, is about choices. Making the right choices means being successful. Making the wrong choices means being the typical, and struggling, solo or small firm. So……let’s have an awkward conversation about the choices many make.
Million dollar attorneys choose to see themselves as “business people” and not as “lawyers”
How many times have you head someone say “I’m a lawyer, not a business person.” The people who continue to say this are going to face an unfortunate truth. That truth is the fact that, as the attorney bubble continues to unwind, those who see themselves as a “lawyer” won’t have to worry about being a business person. That’s because of the fact that they’ll be out of business so fast that the problem will take care of itself. Successful lawyers, who see themselves as business owners, do two things very differently from other attorneys. First, they don’t forego revenue opportunities. Second, they manage their firm’s finances accordingly. Let’s look at each of these in turn.
I previously discussed why successful lawyers don’t follow the typical law firm business model. The reason for this is simple. The typical model is fundamentally broken. Successful lawyers, instead of focusing on trying to find ways to get more “billable hours,” focus on ways to get more business in areas which are scaleable. Examples of such business areas can include the handling of record expungements, for a flat fee, by criminal attorneys. They can also include the handling of uncontested divorces by family law firms, etc. This is work which can typically be churned out and, if done in volume, can be performed at a very high profit margin. Successful firms obviously take other cases, but growing these scaleable areas is a top priority.
I talk to way too many attorneys who don’t want to focus on scaleable areas. These attorneys may say things like “I don’t want to just sit around sealing records all day” or “I don’t want to push paper for uncontested divorces all day.” These attorneys will take that type of work, when it comes in, but they don’t make it a priority. Well, there’s a simple answer for these people. If you don’t want to seal records “all day” then go work at the public defender’s office where you’ll litigate to your heart’s content. The same goes for other areas – if you don’t want to focus on your firm as a “business,” which needs revenue, then it’s probably best that you go get a job. If you choose to be a “lawyer” and not a business owner, then you’ll never see the big profits. If you’re interested in being successful, then identify the activities which pay the most, per unit of input, and bust your a$$ to grow those areas.
Successful attorneys also take their law firm’s finances seriously. This means that they regularly perform the bookkeeping, or they have someone do it on a regular basis. They can always tell you how much their firm brought in during a given month and, more importantly, they can tell what their profit is at any given time. They also pay themselves a set salary and give themselves periodic bonuses (whether it be monthly, quarterly, etc.). These attorneys do not treat their firm like a piggy bank which they can simply take money out of whenever they please. Unsuccessful attorneys, by contrast, typically have messy financial accounting, can’t actually tell you what their profit was for a given month, and don’t make keeping up the books a priority. These lawyers also raid their firm’s bank account whenever they feel like it. This raiding of the coffers sometimes comes in the form of taking out extra cash or by paying for items through the firm. Can you imagine if the CEO of a publicly traded corporation treated the company’s finances this way? They’d be fired. Well, unless your prepared to fire yourself, start managing your firm’s finances in the way that multi-million dollar attorneys do.
Attorneys can choose to manage their affairs in the way that successful lawyers do
Way, way, way, way……..(way) too often people think that successful people have some type of inherent ability which others lack. To this, I call bulls#!t. The difference between the successful and unsuccessful is much more about choices than it is about talent. Consider the following:
- Warren Buffett, Michael Jordan, and the average homeless guy all have twenty-four hours in a day
- Jeff Bezos (the owner of Amazon) and a broke person both have access to the same public libraries, the same search engines, and to other sources of information
The difference between the successful people I just mentioned, and the unsuccessful ones, is what they choose to do with their time and available information. Do you choose to spend your daily twenty-four hours engaging in productive tasks that build your business? Do you choose to spend your free-time improving your skills in areas where you are currently deficient? For the unsuccessful, the answer to these questions is “no.”
If you want to grow your practice then choose to put in the hours and to have financial discipline, as described above. Also, and importantly, choose to improve on the areas which are currently your weaknesses. Such as:
- Attorneys are notoriously bad with computers and technology. Improved literacy in these areas can greatly increase your productivity. Instead of simply saying “I’m not good with this stuff,” use your free time to educate yourself through free online resources
- Instead of saying “I’m bad at business,” choose to spend some of your spare time reading the following:
At the end of the day, someone can choose to work to improve at the areas which they know they are bad at. This can turn those weaknesses into strengths. The bottom line – the things you choose to put your time into will determine your level of success.
Why do you feel that attorneys make some of the choices typically seen in law firms? Please chime in through the form below.