Transforming Your Law Practice into a Business and a Valuable Asset
Is your law firm a business or a job? It’s an important distinction, but do you know the difference? If not, you need to.
A business is a firm you (or your estate) can sell when you retire (or get hit by a bus). It doesn’t require your presence, at least on a regular basis.
A job is a law firm that, despite you owning it, is a place where you show up every day (sometimes including weekends) and work to provide legal services in return for a draw or paycheck. If you’re not there, the work doesn’t get done, the money doesn’t come in, and things come to a grinding halt.
As I’m sure you will agree, you want the former, not the latter.
The Team Approach
Turning it into a business requires you to have a team, not just employees. They need to be people who know what needs to be done on a file without you telling them.
With a team approach clients will know that the team as a whole is the provider, thereby generating the goodwill between the clients and the firm, rather than it being strictly with you, the attorney-owner. This will become very important if you decide to sell the practice and retire (or your executor winds things down after your death).
People buy businesses that generate profits and can be run with minimal effort like the conductor of an orchestra where everyone knows their part. The value of your firm is a function of the cash it generates (over and above what you draw off as your “salary”), and the likelihood that cash flow will continue after a transfer. If you’re looking to build a firm that is a salable asset, develop a team that can take over everything that doesn’t require your legal expertise.
But How Do You Do That?
First, you need to create systems. These are procedures and workflows that your team members can use to get the work done that doesn’t require you to do it. For everything that is done on a file, no matter the practice area, you need to write it down in a firm Operating Manual (or create instructional videos to walk team members through it).
These workflows are a series of tasks that are assigned to team members based on an event or completion of a prior task. Where we don’t have a workflow for a matter, we assign tasks through the practice management system rather than email.
All of this will train your current employees and help with onboarding of new ones. They don’t need you to tell them what to do; they just follow the workflow.
Here’s an Example
A colleague of mine, Ben Glass, a Virginia disability attorney who also runs a company called Great Legal Marketing, told me about how he created the “come watch Ben perform without a net, speakerphone policy.” Whenever he would have a client call (or for that matter, any call with an opposing lawyer, judge, etc.) he would take that call on speakerphone and invite as many of his team who wanted to listen in to join him in his office to “watch how Ben does it.”
One team member (usually the paralegal responsible for that particular case) would be appointed to take detailed notes. If he was speaking with a client, those notes would be “cleaned up” and emailed to the client within hours. Think of the advantages here! You don’t have to take any notes during the call, thus freeing up your mind to listen and create strategies or solve problems. Plus, the client is thrilled that they didn’t have to take detailed notes during the call either.
In addition, your team is learning how to do it themselves for calls that don’t need you on one end. This creates an “on the fly” training program for them. As he puts it, “My team will better understand how I think and handle client questions by being in that room than hours and hours of my teaching the ‘how’s and why’s’ to them in meetings.”
With the team in the room, listening, you can then have a brief two minute recap after the call. You can tell the team what needs to be done next and why, and, over time, that conversation can turn from you teaching what needs to happen next to them telling you what they are going to do next and you simply confirming their plan. This is what allows you to have a total replacement of YOU.
Although I got this from Ben, he admits that he ‘stole’ the idea from the medical field when he first noticed that the doctor wasn’t taking any notes, but his assistant was.
You Still Must Watch the Team
Second, you need oversight. You (and your malpractice carrier) are going to want you to oversee everything, so none of this is set-it-and-forget it. But that doesn’t always need to be you; it can be the person who buys your practice.
I recommend that you hold matter review meetings every Monday to catch up, discuss the pending and open matters, roadblocks, and things to be accomplished in the coming week. If an issue crops up after that, you can hold quick 15-minute daily meetings to address them.
Rolling This Out to Clients
As I said, the client’s relationship with your firm should be with your team, not you. This removes you to a great extent from the equation, and also frees up quite a bit of your time. Clients will know they can talk to a team member to get a case status or a few questions answered that do not require a legal opinion.
Each new client to your firm should be introduced to your team. “These are the people who will be working on your case. Feel free to reach out to them if you have any questions, and if you need to talk to me, they will schedule a call.” This should communicate to them that you work as a team, how best to communicate with you, and your overall process for the matter.
Building a business from which you could exit and a day to day business, while still being paid handsomely, opens up a lot of choices for you. It’s what turns your “job” into a business.
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