6 LAW FIRM MANAGEMENT FAILS YOU NEED TO AVOID
not actively cross-promoting other
services your firm offers, and not staying
connected with former clients. Be sure
to put processes in place for each of
these important disciplines so nothing
falls through the cracks.
Here is a list of the essential things you
need to do to run your law firm like what
it is…a business:
Never forget you are running a
business. This means you need to
keep your finger on the pulse of your
practice’s financials. If you do not have
a good financial background and don’t
know a spreadsheet from a bedsheet,
then take a financial management
course at your local community college.
Have a business plan. The discipline
of actually writing a business plan
forces you to put some serious thought
into how you will grow your firm for
the future. You need to outline your
practice area geographically, define
your target audience, detail the
competitive landscape and calculate
your expenses.
Develop a good banking relationship.
Most of us do our banking online today,
but there will come a day when you
need the help and/or advice of a banker
and you need to develop a personal
relationship with the management of
the branch where you bank so you
have someone to call on for help and
guidance. This can help tremendously
when you need to establish a line of
credit.
Hire an accountant. Even if you are
just starting out as a solo practitioner,
set some money aside to hire an
accountant to set up your books and
counsel you on taxes and other financial
issues. This is especially important in
the beginning, when you have no idea
as to your cash flow for your practice.
Build without debt. This is easier
said than done, but try to avoid debt
as much as possible. You can only
do this if you have a good handle on
your monthly expenses and a tracking
system that will alert you early to
potential problems. You also need to
have good invoicing practices in order
to keep your cash flow positive. And
you need to have systems in place that
automate as much as your business
processes as possible to keep your
team lean and mean.
Sign all your checks yourself. When
you’re starting out, signing every check
is a good discipline to make a habit
of so you can monitor your monthly
expenses. I did this for my business
until last year, when we grew too large
and my travels became too frequent
to efficiently handle the paperwork.
However, I still review every transaction
so I know where the money is going.
Safeguard your IOLTA Account. Being
rigorous about protecting your IOLTA
account is vital to maintaining a good
business and a good standing with
the bar. Be sure you keep separate
trust and operating accounts for your
law firm. Keep a strict accounting of
client deposits as well as client funds
from settlements, real estate or other
transactions. Balance your accounts
every month. Never, ever use trust
account funds for operating purposes
or personal expenses.
Be
selective
when
choosing
clients. Yes, it is tempting to take
any business that comes your way —
especially when you’re just starting out
— but you have to discipline yourself
to take on clients who are willing and
able to pay you at a profit. Defining
your ideal target client will help you cull
the tire-kickers and price-checkers who
will waste your time and deplete your
resources.
4. Failing to hire the right people.
product suffers. If your attorneys suck,
your clients will leave you.
You have a limited number of positions
to fill in your firm and you can only afford
to retain superstars in every position. If
you find a position filled with someone
who is “good enough,” either eliminate
the person or eliminate the position.
You set the standard. You raise the
bar. Excellence is the only attitude you
should allow.
5. Failing to invest in technology.
Can you imagine practicing law without
a computer or the Internet? In 15 years,
you will be saying the same about
financial management and marketing
technology. For the 21st century law
firm, you must take advantage of
advanced technologies that make you
more efficient and effective.
The competitive edge that small firms
have is the ability to give clients more
personalized attention, yet you are
unable to do this unless your firm is truly
efficient. And there is a simple solution:
putting practice management systems
in place to improve efficiency and
reduce time spent on administrative
tasks. You’ll cut costs as well.
6. Failing to track the ROI of your
marketing programs.
With the increased competition and
level of sophistication in the legal
marketing industry, to get ahead you
must be faster, smarter, and more
effective than your competitors. Your
ability to leverage digital and social
media marketing and automate your
marketing system will allow you to
dominate larger firms with bigger
budgets; however, every dollar must be
accounted for and every effort must be
measured for ROI.
Superstars are the currency of the new
economy. If your intake person sucks,
your lead conversion rate suffers.
If your paralegals suck, your work
National Association of Consumer Bankruptcy Attorneys
Winter 2018
CONSUMER BANKRUPTCY JOURNAL
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