How to Break Through The Time and Income Ceiling
How to Break Through The Time and Income Ceiling
Apr 21 2009, 01:40 PM
By Edward Poll
Reprinted from the Solo and Small Firm Practitioner Vol. 7, No. 1, published by the State Bar of California Solo and Small Firm Section
Bill Minyard, a young family law sole practitioner in California, always seemed to be exhausted. He was making a living, bringing home $50,000 a year, but he wanted to break through to another level of income and feel more secure about his cash flow.
During a recent luncheon conference, he asked me, "How do I walk the line between meeting the needs of my existing clients and meeting my needs to increase my income? How do I level out the peaks and valleys of my business? Since I'm dealing with individuals in my family law practice, once I solve their problem, I'm back to square one looking for new clients. I'm already working 16-hour days. What can I do to improve my situation?"
This attorney had found himself caught in the classic lawyer's time trap: doing a good job for his clients while at the same time trying to attract more business. An added problem of this constant stress of running to find new clients also brings lawyers perilously close to the point where distractions and errors can result in malpractice claims or disciplinary actions.
So I suggested two strategies -- planning and hiring support. Following these strategies should help this attorney increase his net income and provide for the safe continuation of his business. As described below, this advice can be useful to any sole or small-firm practitioner.
PLANNING AND GOALS
Like many attorneys, Bill Minyard didn't really have a business or overall operating plan for his law practice. He simply went day-to-day, doing the best he could. A sports analogy provides a good comparison.
Baseball legend Mickey Mantle said that every time he got to the plate, he had a target in mind. What was his target? The outfield fence. And his goal? To hit a home run. And partly because of that focus and that plan, Mickey Mantle became one of baseball's greatest home-run hitters of all time.
You can contrast that story with the lawyer who goes to the law office everyday to work on client matters without a target or plan for where he or she wants to be at the end of the month, the. year, or a career. Without an overall objective, you're only putting in your time, just like a baseball player who steps up to home. plate only thinking of making contact with the ball and nothing more.
Success requires more than that. Success requires a grand picture in your mind -- or a plan-- of where you're going and where you want to be at a certain point in time. Business planning is an idea and an action that can be accomplished regardless of the nature of the substantive area of your practice. This process applies to transactional work, as well as contingency litigation practice, such as personal injury and debt collection.
It's not uncommon for there to be a certain amount of fear associated with the thought of planning. But, rather than being afraid of planning, lawyers should actually feel confident, since they are. trained to think logically about problems and solutions. Planning is merely one form of problem solving, and like all problem solving, the business planning process has certain steps. Here. is an overview of the five business planning steps:
1. Prepare and Agree to the Plan
In a law firm, it is important that all the key players agree on the direction of the firm. If the partners are not clear about the overall goals as well as the specific objectives and strategies, then the planning process is bound to be sabotaged and of little use. Partners need to "buy in" to a plan. Solos are not immune from this requirement either. They must get a spouse or "significant other" to accept the general direction of the firm. That is why the. first element of any plan is to agree to make and abide by the plan.
To do so, you initially need to gather a certain amount of historical information so that you can analyze it and start thinking about realistic modification for the future. Plans for the future need not mandate growth. In a stagnating economy, planning to stay at the present level of revenue or size may be the most that a lawyer can expect. You will be primarily interested in marketing and financial data in the form of earlier checkbooks, accounts receivable listings, previous management reports, any other financial information available to you, and , when there is nothing else, your educated best guesses will have to suffice. All this data will give you a snapshot of you or your firm's marketing and economic health in the present. Once you can see where you have been, it is much easier to see where you can go.
2. Identify Goals
If you do not decide on your target income level and what type of practice you want, you will wind up with one reflecting whatever walks in the door. Serendipity or whim may make you successful, but it is doubtful. You need to decide what you want to be and what you want to do, both professionally and personally. Bill Minyard, as do you, needs to define not only his desired revenue but also the net income goal per year.
3. Create the Marketing Plan
Since your practice is dependent on customers, or clients, then getting them and keeping them is obviously critical to your success. A marketing plan helps you to see who these elusive people are and how to attract them to your door. Marketing is absolutely crucial to any business, and law practices are not exempt.
4. Create the Financial Plan
The financial plan is the culmination of all your earlier information gathering, thinking, and planning. The financial plan is the statement, in financial or monetary terms (the language of business), of your dreams and goals.
5. Evaluate and Revise the Plan
Good planning is not static; it is meant to be a guide that you can judge actions or outcomes against. If you begin to notice that a certain aspect of a plan is not working or needs some adjustment, change it. The beauty of a flexible plan is that it can be revised to better reflect the reality of your specific situation and to help you get to your desired outcome. Planning is an ongoing process. These five steps taken together make up a business plan or plan of operation, and the emphasis is clearly on the three that are the most important: setting GOALS, creating a MARKETING PLAN, and creating a FINANCIAL PLAN. Another way of saying this is: You need to decide where you are going and what you want to be (goals), you need to set into motion marketing actions to get you there (marketing plan), and you need to manage the financial resources to make it all happen (financial plan).
Attorneys should really only spend their time doing two things: one is lawyering, the other is marketing. If you're too busy -- and what lawyer isn't -- with one or more of the myriad of other law office distractions including human relations, hiring and firing, accounting, you name it, then it is imperative you consider bringing in help.
Even though you will initially feel that you're stealing from yourself to pay for even a part-time paralegal, secretary, or billing clerk, if you hire carefully and clearly organize this new person's job description, within a year you won't notice the outgoing salary. A paralegal, filing clerk, bookkeeper, go-fer, even a management consultant can do some of the paperwork and other tasks that will allow you to do more of the client or marketing work without running up against the danger of not properly addressing the needs of your clients.
The idea is that the extra business you will be able to bring in will more than pay for added salary, in addition to reducing your stress level. Your hired help can do some of the repetitive tasks so that you can break through the time and income ceiling an do both the marketing and what you were trained to do, the creative legal work.
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