This is the next article in my manifesto on how attorneys can build a multi-million dollar law practice. My last post discussed the need for lawyers to leverage technology in order to grow their law practice. A big point I stressed in that article is that attorneys need to nail down their internal processes and increase efficiency before they focus on growing their call volume. This is due to the fact that, if you have an inefficient operation, then you’re simply compounding those inefficiencies as you grow your caseload. These compounding inefficiencies will cause your profits to go down just like this:
Leveraging technology is crucial to getting rid of those inefficiencies which, in turn, can increase profits. In this article I’m going to
rant about discuss one of the biggest areas where attorneys err – their work schedules and hiring decisions. Let’s get to it.
Many solo practitioners, or small firm owners, fail to leverage their own labor
Here’s the part of this series where I’m going to be really blunt. The fact of the matter is that there are simply no
coddling polite ways to say these things.
I’ve talked to quite a few attorneys over the years who have every excuse as to why their firm isn’t doing better. These excuses include:
- My phone doesn’t ring enough
- My clients don’t pay their bills
- I can’t find the right employees
- About a million other reasons which I’m not going to include in bullet points
The one really common thing I see in unsuccessful firms, however, is that the solo practitioners/owners typically don’t work forty hours a week. This means that, while talking about the things they don’t have (such as “more calls” and clients who pay their bills), they’re failing to take advantage of what they do have – the value of their own time. Let’s look at what I mean by this through the power of mathematics (the favorite subject of attorneys):
Suppose Joe is a thirty-year old lawyer. Joe plans on working another twenty-five years and can average $100,000 a year if he works full-time for an employer. This means Joe’s future labor is worth a total of $2.5 million ($100k per year x 25 years). Joe owns his time outright and no one can take it from him. Leveraging this asset (meaning putting in the time at one’s own practice) results in not having to pay as much to employees, a better customer service experience for clients (which increases future profits), etc. If Joe leverages his time then he can get his practice into a higher gear much sooner. Once he has achieved that higher gear, he can hire people to handle lower value tasks so that he can continue to leverage his time towards higher value tasks.
Multi-million dollar law firms are run by attorneys who understand this principle. The attorneys who start such firms wont’ even consider outsourcing something (no matter how menial the task is) or hiring someone until they’re working more than full-time themselves. They then hire for, or outsource, the handling of their lowest value activities so that they may continue to work full-time at higher value work. This habit continues throughout the life of their firm. This, in turn, makes the firm grow for a variety of reasons (increased customer service which leads to more referrals, the more efficient handling of cases – which increases the firm’s bankroll, better supervision of employees, etc.). In short, multi-million dollar attorneys don’t put in the hours because their firms are successful. They’re firms are successful because they put in the hours.
This is a stark contrast to many, many, many, many (many) struggling solos and small shops. Again, I’ve talked to many attorneys who don’t even work full-time. Yet these lawyers have employees (often more than one) working for them, they bring on interns, and outsource other work. In other words, these lawyers are trying to utilize a business model in which they write a check to people to do work, and they then get a bigger check back at the end of the month. That never works. Another way to think about is that these attorneys have a pre-paid asset (their own labor) that they’re simply allowing to bleed away as their own time goes unutilized.
Here are a few key differences between those who will run multi-million dollar practices and those who won’t:
- Successful attorneys can tell you their typical office hours. They’ll say, for example, that they get to work at 8am and leave at 5pm or something of the sort. Unsuccessful attorneys, by contrast, answer the question of “what are your office hours” with an answer along the lines of “I typically get in between [time one] or [time two] and I usually leave between [pick a range of times]. Do you have set hours that you hold yourself to? If not then you’re failing to conduct yourself like a successful attorney.
- Successful attorneys never feel that they are “above” any particular task. When I started my practice in 2006 I made all my own copies, stuffed all my own envelopes, took documents to the court to file myself, etc. I didn’t even consider hiring a part-time assistant until I was already working over fifty hours a week on a very consistent basis. By 2010 I had a firm with over $1m in revenue. I talk to many lawyers, however, who pay someone to do work which they consider menial and beneath them, even though the lawyer isn’t working full-time. It’s your firm – there’s no task associated with that firm which you are “better than.”
- Successful lawyers work in their office. The “office hours” described above are in the office. I talk with many attorneys who spend a lot of time working at home if they don’t have an actual appointment on their calendar. In addition to the fact that this means any employees they have are essentially unsupervised (and are receiving the message that their boss doesn’t care about the business), these lawyers are around all the efficiency sucking distractions which come from “working at home.” Regardless of whether you are a one person operation, or if you have employees, you need to have set office hours in your office!
In short, multi-million dollar attorneys hit the time clock:
Want to be successful? It’s simple. Leverage the most valuable asset which you own outright – your own time and labor.
Successful law firms wait to hire people who are smart and hungry – not simply those who are “experienced” and “available”
One of the most valuable pieces of business insight I ever received was from the book “How Google Works” by Eric Schmidt. That insight related to the idea of hiring. Way too often, businesses (including law firms) hire someone based on prior work experience or some type of particular skill. They don’t stop to figure out, however, if that person is smart and hungry. Well, if someone is smart then you can teach them a skill. You can’t however, teach a skilled dumbass to be any smarter. Consider the following examples:
- Attorneys often hire a reception person or legal assistant who is experienced in working in law firms. That experience doesn’t mean that they’re smart, that they can think outside the box, or that they will go the extra mile. The things you need a legal assistant or reception person to do are easily taught. Instead of hiring someone who is “experienced,” hire the smartest person you can find.
- Law firms often hire an associate with experience in their given practice area. Again, that attorney may be “experienced.” He or she may also be frickin’ stupid. Hire the smartest lawyer you can find, regardless of their practice area, and train them to do the work.
In short – hire hungry bright people. Don’t jump to a hiring decision simply because someone has “experience.” The hiring of the brightest and hungriest minds is another common trait in successful firms. I can’t stress enough how important this is. If you interview a group of people, and none of them strike you as a true “A Player,” then keep looking. Don’t just hire someone for the sake of hiring them. Think of it like this – you can spend a little extra time finding and training the right people, in order to have a huge payoff at the end. Your other option is to spend a little less time on the hiring end, with little benefit afterwards. I pick the former.
Want to build a successful law office? Leverage your own labor and hire the brightest people you can find. If you don’t….then don’t.