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Pushing Past the Million Dollar Law Firm Choke Point

Many attorneys open their practices as true solos – it’s just them, no staff. They may draw upon virtual assistance (paralegals, receptionists) on an on-demand, as needed, basis, but that’s pretty much it. However, there are a couple of transition points that they will encounter along the way that must be navigated successfully in order for them to move forward.

The True Solo Tipping Point

As your firm grows, you will find at a certain point that this “true solo” model is no longer sustainable. Unless you maintain very high profit margins on your fees, and are able to leverage automation to get more done in less time, you will need to add permanent part- or full-time staff to help get the work done, and slowly but surely grow a team. But once you get to about the $350,000 mark in gross receipts, you may find it difficult to grow further without hiring an associate as well.

Now you may not want to do this. You may be comfortable with the income you are generating for yourself and not want to grow further. Instead of hiring more staff, you might want to raise your fees, or be more selective about who you take on as a client. If so, that’s great! No need to move forward (or read further).

But on the other hand, if your goal is to become a seven figure, million dollar plus firm, then things will have to change.

Building the Million Dollar Firm

If $350-400,000 in annual gross receipts is in your rearview mirror, and you have your first associate and a couple of full time staff, your next challenge is going to be when you surpass the $750,000 annual revenue point. This is where your entire mindset about what it means to be a leader of your team and your firm will have to change.

Believe it or not, you can easily become your own worst enemy. As attorneys, we are by nature control freaks, and it can be difficult to delegate to someone else something you have always done yourself. If you are at this point, you have gotten past the initial resistance to delegate, but you may find yourself stuck in another way entirely.

Why is this happening? Well, generally it is because you as the firm leader are generally unwilling to either

    1. Give up the lawyering part in order to do the CEO part, or
    2. Are unwilling to hire anyone who appears to be smarter than you are.

The first one is basically the ultimate in delegation. You may have been able to delegate some of the work in the firm, but you still want to have a hand in the services that are provided. After all, it’s your firm! But there’s a reason why larger firms have managing partners.

The second one is understandable. As entrepreneurs and successful businessmen, we want to be the smartest person in the room. But that can’t continue past this point, because there’s no easy solution for this kind of stuck.

In short, you need to become the conductor of the orchestra, not a first chair musician.

Become the “Acquirer of Talent”

You need to understand that your role at and above seven figures is to be an acquirer of talent, not the smartest, hardest working lawyer at the firm. But what kind of talent, and how much? Well, that’s the key part.

It’s all about knowing your numbers. Ask yourself: At this point in time, with this annual revenue number, is your current staff working at capacity to get you that number? If not, you can grow a bit more before adding staff. If a team member isn’t pulling their weight, you may have to replace them.

Also ask yourself: How much do I want to make in the next 12 – 24 months – and more importantly – what talent do I need to add to my team to get me there?

But acquiring the best talent isn’t easy because – if they’re good enough to work for you, they are probably currently employed. They are not sitting around at home checking out Craigslist, LinkedIn or other job sites. So what do you do? In order to acquire the top-level talent, you need to be constantly:

    1. Defining what that looks like for your firm and
    2. Sending messages out into the world about who you are looking for. Indeed and Monster don’t have all the people.

Then Acquire It

Get granular and specific with who you are looking for. What skills and talents would the ideal team member have? Keep an active pipeline open for talent. I recommend that you at least do the following:

    1. Add a careers tab to your website to broadcast your intention of hiring more people (same for LinkedIn)
    2. Always have at least one job ad running for a regular position, such as for a paralegal in a law firm.
    3. Ask talented people you meet about their career aspirations, keeping your eyes and ears open for the next great hire.

Always keep your ear to the ground and be aware of opportunities. Don’t be afraid to hire someone who’s smarter than you; they may be the key to explosive growth. Also don’t be afraid of removing yourself from most of the practice of law. That can well become the key to making your firm a valuable asset.

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Steven J. Richardson

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