Make More Rain : law firm bus model, marketing

Steering a Law Firm for Financial Success

Admin — Tue, 17 Jul 2007 16:55:07 GMT

Since 1984, law firm leaders have had the benefit of David Maister’s Law Practice Business Model that clearly identified the variables determining law firm profitability. Any firm that is not measuring (tracking) these key performance indicators in some form or fashion is engaged in wishful thinking. They are relying on accidents or events to determine their financial success or, more likely, financial failure. Maister expressed the model this way:

NIPP = (1 + L) x (BR) x (U) x (R) x (M), where,

NIPP = Average partner income

L = Leverage (ratio of associates to partners)

BR = the “blended” hourly billing rate

U = Utilization (client hours recorded)

R = Realization (revenues divided by “standard value” of time recorded)

M = Margin (partners' profits divided by revenues)

As noted in my prior post about Maister’s model, it doesn’t tell the whole story. In addition to leverage, price (“blended rate” in Maister’s model), productivity (“utilization”), realization and expenses as a percent of realized revenues (“margin”), law firm leaders have to be just as concerned about metrics that measure unbilled fees (work-in-process) and billed but uncollected fees (receivables). The managing partner has to be concerned about metrics that are not reflected in the financial numbers but will impact those numbers in the future. For example, are we opening new matters faster than we are closing old ones? Are the partners meeting their individual marketing goals? Is client satisfaction on track or veering off course?

For measurement to drive performance, you need to add targets (goals) to the process. Supporting those goals, you need strategies and programs on which you will rely to achieve the goals. You need to know who is responsible for implementing and supporting the strategies and who has assigned responsibilities for carrying out program plans. Your systems need to measure actual performance against those program plans. And, of course, for goals and measurements to pay off, you need to hold people accountable.

The question isn’t how do you measure all those things. That is what you have people and systems for. The real question is about you as a law firm leader. Given all the other things you have on your plate, how do you keep track? How do you gain the situational awareness you need to know when things aren’t going as planned? How can your people give you the actionable information you need to flip the switches and twist the dials to put things right?

The old tools—management meetings, wandering around and stale backward-looking reports—were dull instruments. Today, technology is providing business executives and law firm leaders with new tools, Dashboards. Dashboards can provide each member of the law firm with a total field of view over their particular area of responsibility. Each dashboard can be tailored to deliver instantly digestible information relevant to the individual’s position in the firm.

At the CEO or managing partner level, your law firm dashboard should deliver visual indicators as to the speed and direction of the firm compared to the plan. Your control systems should automatically notify you when things deviate from standard or expectations. For example, my car dashboard tells me nothing about the air pressure in my tires until that pressure varies from expectations. Then I’m alerted. That is the kind of exception information law firm leaders need.

But it is not enough to know when things are off course; the information delivered to you by your information systems should be actionable. You don’t want to just know that the air pressure is low. You want to know which tire is involved. It is not enough to warn you. You need to know what, when, where, how and who!

The information delivered to you as a number, a chart, etc. must be active. Active information is information you can navigate through or from to reach related information. You want immediate access to reach or collect everything you need to take action. Consider something as simple as a missing but expected material payment from a client. You should be able to click on the exception alert and get to the client contact information, the responsible attorney, etc. Likewise, if billable hours for the days or week are behind target, a click should identify the office, practice leader and individuals giving rise to the variance, etc.

If you don’t have the kind of breakthrough tools described above, where do you go to get them? The answer is your business system vendor probably already provides them; you just aren’t taking advantage of what is available to you. For example, law firms using Juris® can add the company’s optional MyJuris and separate Active Information Suite to gain all of the capabilities described. If your business software vendor doesn’t already offer similar capabilities, they probably have something under development. If they neither offer it now nor have it under development, then you probably have the wrong business software and should plan to change. There are at least two companies that offer cross-vendor solutions that can deliver some of the benefits described—Redwood Analytics® and Handshake Software.

Morepartnerincome.com is sponsored by Juris. For information about Juris® products and services for increasing law firm performance and partner income contact Juris National Sales Center:

877/377-3740, e-mail info@juris.com or go to www.Juris.com.

Revenue per Lawyer

Admin — Fri, 08 Jun 2007 17:56:00 GMT

One of the metrics I haven’t spent a lot of time on is revenue per lawyer…not because it isn’t an important metric. It is very important. There are many experts who view revenue per lawyer as a better gauge of law firm financial performance than per-partner income. Revenue per lawyer is also one of the first things a potential acquirer looks at in considering a prospective merger candidate. If there is more than a 20 percent difference in revenue per lawyer, most experts advise the buyer (and seller) to look elsewhere for a match.

James Cotterman with Altman and Weil, Inc. has a useful summary of law firm metrics posted on the consulting firm’s web site. The document is titled Fiscal Metrics to Gauge Your Firm’s Financial Heath. In it, he identifies the normal range of revenue per lawyer as being from $375,000 to $575,000. The Juris Law Firm Economic Survey for the fiscal year 2005 indicated that the top quartile of midrange firms in terms of per partner income averaged $409,000 in revenue per lawyer. The next best performing group averaged $329,000 and its partners earned only half of the income of those partners in the first quartile.

Revenue per attorney is the result of a number of factors including pricing, utilization, realization and, to an extent, the mix of fee earners. But the primary driving influence is the firm’s price. It is clear that higher performing firms have higher prices. As you move from one quartile of performance to the next, the prevailing prices that law firms report declines. Pricing variances can be accounted for by regional differences and type of law. Remove those and you still find the same pattern of price differences across the quartiles of performance. One has to inevitably come to the conclusion that in most cases, one firm’s lower price exists simply because the firm started out with lower rates and, relying solely on annual increases as a pricing strategy, never caught up.

It gets worse. It is not uncommon to find law firms where 50 percent or more of the firm’s clients are being priced at substantially discounted rates from the firm’s target prices. The lower prices being billed to those particular clients is due to the failure of the firm to renegotiate or implement higher prices for those specific clients that would have kept them in synch with the firm’s general price changes. What counts is the firm’s “effective price”—the price the firm actually realizes.

Across the board, surveys indicate that higher performing firms in terms of partner income have higher effective prices. They have more revenue per partner. It is also noteworthy that they also spend more per lawyer. They take in more... They take home more!

The Juris Law Firm Economic Survey for 2006 is underway. You can participate by going to www.JurisInsight.com/2006Survey. Survey participants receive a free copy of the survey report, including comprehensive analysis and recommendations. The survey, one of the largest in the legal community, is unique in that it targets midrange-sized law firms, particularly those with 10 to 150 attorneys. The 2005 survey disclosed that partners in the top 25 percent earn twice the income of the next quartile and more than seven times the per-partner income of the lowest 25 percent. This year’s survey is expected to shed increased light on the behavioral differences that distinguish one law firm from another when it comes to the income their partners enjoy. Don’t overlook this opportunity to find out how your firm compares and what steps you can take to close the gap—go to www.JurisInsight.com/2006Survey.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income contact Juris National Sales Center: 877/377-3740, e-mail info@juris.com or go to www.Juris.com.

Managing Uncollected Law Firm Fees and Expenses: Work-in-Process and Receivables

Admin — Fri, 13 Apr 2007 17:21:00 GMT

Ed Poll, who hosts the blog LawBiz, had an excellent article on effective collections in the April issue of The Bottom Line, published by the California Law Practice Management and Technology Section.

He started his article with a reminder that when the 300-lawyer global law firm of Altheimer & Gray was forced into bankruptcy several years ago, the firm had $30,000,000 in outstanding accounts receivable. Their days to collect billed fees were almost twice the average. Ed doesn’t mention the amount of uncollected funds tied up in worked fees and incurred client expenses that had not even been billed at the time. Those unbilled amounts probably represented another $15,000,000 or more.

The danger of under-managing both work-in-process and accounts receivable exposes most midrange sized firms to an inappropriate risk.

Specific measures and procedures need to be in place to assure that services and client expenses are billed promptly and, once billed, are subject to proactive and aggressive collection efforts. Collections should not be left up to the responsible attorney. Collections should be managed by the firm. The job of accounts receivable management should be clearly assigned and within the administrative or accounting area versus the professional side of the law firm. This subject has been covered in several prior posts including the post titled What to Do When Clients Don’t Pay?

While detailed procedures and policies should be in place for the management of both accounts receivable and work-in-process, law firm leaders should track key metrics involving these important (unusually off balance sheet) assets of the law firm. As with any key metrics, the firm should set targeted goals, track performance against the goals and against benchmarks for peer level firms. When the metrics vary from expectations, those variations should result in top management action.

Two important metrics are Days of Unbilled Fees and Expenses and Days of Billed but Uncollected Fees and Expenses. These two important metrics are also referred to as:

Unbilled Days , Work-in-Process Days, and WIP Days
Uncollected Days, Days Outstanding, Accounts Receivable Days and AR Days

Taken together, the aggregated is sometimes referred to as Fees and Expenses Not Converted to Cash.

Some firms and surveys will exclude expenses and report only days of unbilled fees and days of billed but uncollected fees.

The Excel® spreadsheet below illustrates the use of Excel to tract AR days. The average number of AR days (days to collect) for midrange sized law firms is 76 days according to the Juris Law Firm Economic Survey for the year 2005. All firms can increase income through faster billing and collecting. Click on the graphic below to download an Excel template should you wish to use Excel to tract AR days for your law firm.

For work in process days, the Excel sheet shown below illustrates how to compute and tract “Unbilled Days”. The average number of unbilled days for midrange sized firms based on the Juris Law Firm Economic Survey for the year 2005 was an astonishing 72 days. Every firm can benefit by making faster billing a priority.

Click the above model to download an Excel template should you wish to use Excel to tract WIP days for your law firm.

PS: The Juris Law Firm Economic Survey for 2006 is currently underway. You can participate on line at http://www.jurisinsight.com/2006survey/. Participates receive a free copy of the published survey results and analysis.

Morepartnerincome.com is sponsored by Juris, Inc. For information about Juris® products and services for increasing law firm performance and partner income contact Juris National Sales Center at 877/377-374,
e-mail info@juris.com or go to www.Juris.com.

It is all about Management

Admin — Fri, 03 Jun 2005 17:23:41 GMT

The statistics for mid-sized firms place the time managing partners actually spend on management at around 36%. Half of their time is spent on billable engagements. The managing partner chose law, not financial management, for his or her career. If there is one single thing that has the best probability of propelling a firm to the top tier in partner income and wealth accumulation, it is the addition of an effective professional business manager (CFO) to replace the part-time management model.

The right financial technology brings to the firm business intelligence and the information to measure performance, along with the tools to, also, improve performance. It takes professional management to get the most out of that information and those tools to keep the firm on track with, or above, the benchmarks for leverage, rates, utilization and realization.

Run the numbers in your own head. Part-time partner managers can shift most of that time back to producing revenue. Add to that just a small portion of the potential for improving income and it will look like a no-brainer. I call it “no cost management”. It is not only free, it increases per partner income.

Is There a BlackBerryï¿½ Coming Near You?

Admin — Thu, 02 Jun 2005 19:03:39 GMT

According to the Gartner research firm, it probably already has. The question is, when are you going to join the crowd?

A recent Gartner news release reported that worldwide personal digital assistant (PDA) shipments totaled 3.4 million units in the first quarter of 2005. That is an increase of 25% over the same period last year. BlackBerry shipments grew by 76%. The BlackBerry brand of PDA is now the market leader and it dominates the legal community.

BlackBerry provides an almost immediate payback of initial investment, and monthly benefits, quickly outstrip operating cost. Last Thursday, I had a meeting with the folks from NationsLink® and Canadian-based PensEra. NationLink® Wireless, an INC. 500 company, is one of the better groups to work with for the equipment and communication services you will need to go wireless. These are the folks who can set you up with the equipment and wireless communication services you will need when you decide to make the move to BlackBerry. PensEra is the developer of TimeKm Mobile™ for the BlackBerry.

The BlackBerry’s favorable impact on per-partner income is impressive. 94% of surveyed users reported that it helps them stay in control of e-mail. Imagine the difference of arriving in the office without that long list of unopened e-mail to attend to. 93% reported that the device converts downtime to productive time, waiting at the airport, riding the train, while you are in a taxi or limo, even time spent relaxing. E-mail and phone calls can be handled and the time worked captured and transferred to the firm’s billing system, all with one device that fits in your pocket or purse. Ipsos-Reid, one of the top 10 research firms in the world, reported that surveyed firms averaged 53 minutes per day of recovered productive time. Put that in your bonnet -- almost an hour per day per fee earner.

We talk about the value of anytime/anywhere and the value of capturing and reporting time as the work is performed. The BlackBerry is the best example around. If your firm hasn’t made the BlackBerry move, you need to give it a serious look. Contact your business system vendor. If you are a Juris customer, you can call 1-877-377-3740 or e-mail Sales@Juris.com. You can also contact NationsLink or PerEra directly at Info@MyNationlink.com and Info@Pensera.com.

Iezzi's Step-by-Step Guide to Profitablity

Admin — Wed, 01 Jun 2005 17:39:39 GMT

When I first picked up John G. Iezzi’s book, Results-Oriented Financial Management, with its Excel budget examples, sample chart of accounts, and sample reports, my initial reaction was I would rather be at the dentist. In fact, I did put it away. And while it wasn’t the dentist, I pulled it out of my briefcase during a long visit to my doctor.

I was wrong about the book. The material is well written and has a down-to-earth quality that can only be written by someone who has been there. It is a practical how-to and how-not-to guide that belongs on the desk of every partner involved in management. The book is available through the abanet.org.

Iezzi doesn’t mess around. In chapter one, he lays out the unique management issues for law firms in their various life phases. He covers the issues involved in the formation and early life of the firm -- a period of time he calls the “Planning Phase”. Then he moves to the issues dominating the growth or maturing period and wraps up with an important discussion of the issues that may eventually lead to a trouble phase.

Understanding the financial and managerial issues during these phases can save partners a lot of pain. Knowing how to deal with those issues can be the difference between survival of the firm and its dissolution. He even deals with the hot potato issue of terminating an owner partner. He does it all in the first chapter.

Rule-Based Docketing

Admin — Tue, 31 May 2005 19:20:00 GMT

I was once asked what I liked most and least about traveling as much as I do. What I like most are the friends I’ve made all across this country. Not only among law firms but, also, within the community of vendors and consultants serving law firms. Among my favorites are the folks at CompuLaw®. The CompuLaw team reinvented Docketing and has set a standard that no one else has matched -- or even come close.

Docketing is a mission-critical application for a law firm. Failure to properly calendar critical legal dates associated with changing rules is one of the leading causes of legal malpractice suits against attorneys. Most vendors of law firm business software offer their clients a Docketing option including the ability for the law firm to define rules that explode an event into multiple Docket entries -- one for each critical date. Of course, the law firm can get it wrong when defining rules for a particular jurisdiction and important rule changes can go unnoticed.

CompuLaw changed all of that beginning in 1980. Since the 1980s, CompuLaw has offered the only library of rules databases written and edited by attorneys. CompuLaw is an official publisher of rules for courts throughout the United States and it monitors its rules databases for changes on a daily basis. New rules databases are added regularly. Compulaw's Vision system dominates the market for rule-based docketing applications. For that reason, most leading legal software vendors have an allied or partner relationship with CompuLaw. Juris,Inc. for example, offers its clients a “CompuLaw Aware Module” that detects the presence of the CompuLaw system and automatically modifies the operation of Juris® for a seamless integration.

Today, law firm’s have a new alternative. CompuLaw has created something entirely new, “Deadlines On Demand™” -- a pay-as-you-go service over the Internet. Deadlines on Demand is a CompuLaw company. With Deadlines on Demand, law firms can take advantage of the same reliable Compulaw rules over the Internet without purchasing additional software.

A law firm can access Deadlines on Demand, enter the information for a particular case and then download the results into their Microsoft® Outlook® calendar component.

More than two decades of experience, as well as strategic alliances with today's foremost legal vendors, have made CompuLaw The Court Rules Company^SM. Now every law firm can take advantage of CompuLaw rules by going to www.deadlines.com.

P. S. What I like least is the fourth day. By the fourth day, I’m ready to go home.

Trust but Verify

Admin — Fri, 27 May 2005 21:54:00 GMT

A reader posted the following comment to the May 12 entry titled: Client Satisfaction Questionnaire:

“Client satisfaction surveys are important not only to measure quality at your firm - but to also measure quality of firms to whom you may regularly refer your clients……… “

Great comment -- why didn't I think of that? Firms practicing the "rule of the fewest” and "concentration" will refer existing and prospective clients to other law firms when the prospect has needs outside of your firm’s areas of concentration. When you do, you are going to be judged by the company you keep, i.e., the firm to which you refer the prospect. You need to inspect with respect the job they are doing. A modified client satisfaction survey is an excellent way to demonstrate your continuing concern that the client’s needs are being met to his/her satisfaction.

You build your relationship when you place the client’s interest above those of the law firm. That is delivering superior value. However, if your referral turns sour, then your credibility will sour with it. So follow Regan’s rule, “trust but verify”.

The Likelihood of Full Collection Decreases With Age

Admin — Thu, 26 May 2005 17:58:00 GMT

Since I have been on a soapbox about the 138 days (4.6 months) that the average law firm takes to bill and collect for work performed, Beth Keno shared some of her research with me. Beth Keno is a Juris representative in the Michigan and the greater Chicago market areas. Her research is in connection with a speech she will be making at a regional bar association conference.

As a reminder, the typical law firm takes 78 days to bill for services performed and another 60 days, on average, to collect that bill. In addition to excessive investment in uncollected services, long delays result in unnecessary adjustments, write-offs and bad debts. Statistics show that an invoice over 60 days has only a 70% chance of being collected in full. After 90 days, the chance of collecting the invoice in full drops to 45% and after 120 days, it falls to 20%.

The average overall realization (the percent of services rendered that actually get collected) for US law firms is 91%. 9% of the firm's revenue goes down the tubes and most, if not all, is a result of the long delay between rendering that service and collecting for it.

The 2.8 months of unbilled fees results entirely from a combination of inadequate tools and procedures, plus a lack of management discipline and enforcement. In short, you can fix it and it is easy to do. The additional two months it takes to collect the bill can be shortened, but is beyond the total control of the firm. However, one of the things a firm must understand is that if you are going to take almost three months before you bill your client, that client is not going to have a sense of urgency about paying the bill.

Speeding up payment starts with faster billing, followed by implementing procedures that create a sense of urgency for payment.

Don’t wait for bills to become past due. Have a member of the administrative staff call and confirm receipt of the bill. The engagement letter should clearly set out payment terms and provide that payment does not waive the client’s right to dispute charges later.

Invest in the right tools. Collection software will track all collection activity between the firm and its clients. That software will let you know when payment promises have not been kept. When integrated with your client accounting system, collection software will automate dunning communications, lowering cost as well as shortening collection time.

Days to Bill

Admin — Wed, 25 May 2005 18:27:00 GMT

Hardly a day goes by without a discussion with a law firm partner about funds tied up in unbilled and uncollected fees. While those partners can't put their finger on the exact number, they understand the long delay results in unnecessary adjustments and write offs.

I find it hard to understand why the typical US law firm would allow 78 days to go by before issuing a bill for services performed. Or the fact that, on average, it takes an additional 60 days to collect that bill. That is 138 days or 4.6 months. Iezzi uses 4.7 months in the sample business models included in his book Results-Oriented Financial Management.

Does it make any sense at all to let 78 days go by before billing a client for work performed? It doesn't. Unlike 60 days of billed services tied up in fees receivable, "days to bill" is 100% controllable by the firm. This is a management problem. It results from defective procedures and/or inadequate tools. The truth is this is a problem that is easy to fix. All it takes are the right tools and management's determination to solve this problem with a no-return policy. It takes a top-down, or collective, determination not to accept lax billing practices:

It begins with client intake and the engagement letter:
- Negotiate trust deposits and/or prepayments together with minimum trust deposits
- Agree on billing frequency/monthly or every two weeks
- Set the billing period to end one to three days prior to the billing frequency. For example, to be billed on the 16^th and the 1^st of each month for the service period ending on the 15^th and the end of each month.
- Document payment terms
- Agree as to E-bills vs. paper bills
- Identify the person to receive bill
- Identify the person to contact to confirm bill receipt and payment schedule
- Agree that on-time payment does not waive client's right to dispute charges
- Provide for penalties for late payment
- Negotiate progress payments.
It depends on consistent internal discipline:
- Fee earners are expected to submit time accurately with correct spelling and grammar. In short, editing should not be required.
- Get the right tools to timekeepers and insist on zero tolerance that billable information has to be tracked and reported as worked. Having your time in on schedule, daily, weekly, etc. is a job requirement, period.
- Pre-bills have to be distributed by 10:00 a.m. for the day following the end of the service period.
- Pre-bills must be returned to accounting by the day following distribution. If not returned, bills will be mailed or e-mailed as is.

If as a result of management's determinate, time to bill is reduced from 2.6 months to 1 month, it would mean that a firm with $12,000,000 in annual fee revenue would have a one-time increase in revenue of $1,600,000. That freed-up cash becomes available for distribution to the partners and/or for a reduction in debt with a corresponding decrease in interest expense.

If "days to bill" is 100% controllable by you, why let this money remain beyond the reach of partners? Why not fix the problem?

Tracking time

Admin — Wed, 18 May 2005 17:52:28 GMT

Yesterday, I was having a discussion with the president of Juris, Inc. concerning spoilage in a law firm.

If the business end of a widget factory is widgets, then the business end of a law firm is billable hours. The more you produce the more units you have for sale. It follows that if a law firm decides to increase its revenue, it will need to produce more hours. One of the first things it can do is eliminate or reduce spoilage--time that gets worked but not counted.

Many fee earners still record time the old fashioned way - handwritten notes given to accounting or to a legal assistant to decipher and manually enter into the firm’s billing system. What is wrong with this tried and true method? You are guaranteed to under report billable time. It is the classic scenario of working hard and not getting paid for it.

A busy fee earner, without the tools to easily track time as worked, overlooks short, unplanned phone conversations with clients, opposing counsel or others regarding a billable matter.
The manual method tends to focus on blocks of time spent on legal matters. Time spent reviewing bills or other case-related administrative efforts go unreported.
After-the-fact methods of recording time, as opposed to as-worked methods, usually result in under-estimating the actual time devoted to the task preformed.
Under-reported time increases when work is performed out of the office. Phone calls and e-mail still reach the fee earner and time responding to them is often overlooked.

If an attorney billing at $200 per hour neglects to capture 15 minutes of billable time each day, it translates roughly to $250 per week. The 15 lost minutes daily can add up to about $12,000 a year per lawyer. In a firm with a leverage of just 1 to 1, that adds up to $20,000 or more per year in per partner income. My experience is that the actual unreported billable time in most law firms is much higher.

Timekeepers need the tools to easily record and report time as work is performed. They need to be able to do that anywhere and at anytime. Management needs the tools to monitor reported time against timekeeper targets. They need that information in time to change the outcome.

Is your firm overselling itself?

Admin — Fri, 13 May 2005 18:16:19 GMT

In the INTERACTION section of the May 2005 Corporate Legal Times, Nat Slavin tells readers, "Don't Be Fooled by Law Firm Hype".

Slavan writes, “…the most important question is the one that you should be asking yourself: Is the firm overselling itself? Most likely the answer is yes. Law firms of all sizes are under intense pressure to create a one-stop shop for their clients. And they will do anything to portray themselves as such.”

This is another bit of evidence that there are two certainties in life and business - change is constant and we are always judged by others. His comments also reflect a natural tendency of your competitors to develop the Maximizer Weakness that Peter Drucker anticipates. The maximizer law firm tries to specialize in so many different practice areas that its operating cost becomes too high and its expertise too low compared to more narrowly focused law firms.

It also validates the Rule of the Fewest that I will discuss in a few days. Here is the rub. You can’t try to be good at everything without becoming just competent in a lot of things. When you try to promote your firm as a “one-stop shop”, experienced consumers of legal services (corporate counsels) see right through it and your credibility takes a dive.

Slavan's basic message is that bigger isn’t better. Contrary to the one-stop shop image, law firms want to portray, there is a long history of specialization in this profession. It is the rare firm that can be the perfect fit for every need. Acquisitions and expansions aren’t always good. Don’t believe the hype! Ask concrete questions about the law firm’s experience and successes dealing in the new area of corporate need. If you can’t get the answers, then go hire the firm down the street.

Your law firm has to pick its areas of concentration and those areas have to be limited. They need to be the right areas (in demand, profitable, etc.). You can add and drop areas based on emerging opportunities and changing trends but you risk your core business if you try to be all things.

Excellent law firms concentrate. They practice the rule of the fewest. They know the practice areas where they can deliver superior value to clients and they know when to recommend other excellent law firms. You build your relationship when you place the client’s interest above those of the law firm. That is delivering superior value that will keep you in the ballgame and will have the corporate world recommending your firm.

Mining for business

Admin — Thu, 31 Mar 2005 18:36:56 GMT

It is easier, and more efficient, to earn an additional dollar of new revenue than it is to cut a dollar from operating cost.

The first place to look for new revenue is among existing and prior law firm clients. Most law firms do little to proactively mine new business from their firm’s client list. Individuals who have used your firm in the past for other matters still need living wills, revocable trust, irrevocable trust, and wills. With an aging population, former clients are going to need assistance handling the estates of parents and relatives. Given the divorce statistics, you have the opportunity to remind individuals that you offer family-related legal services. People run into tax problems requiring legal council. Businesses with whom you have worked have continuing needs, and so do the individuals in those firms with whom you have worked.

The first marketing program you should have in place is a marketing program that targets current and previous clients. The old saying “out of sight out of mind” applies. To mine business from your current and previous relationships, you have to stay visible with continuing communications via mail, e-mail and/or phone.

Your most valuable resource is your client list. Use it. Your business system should help you by tracking anniversary dates, birthdays, family members, ages, interest, target dates for review of wills or other documents, etc.--anything that gives you a reason to communicate with your client.

Power of Relationships

Admin — Thu, 24 Mar 2005 22:49:22 GMT

I previously shared with you “Client Intake” advice from my younger brother, J. Steven Collins, partner in the Knoxville, Tennessee, firm of Burroughs Collins & Jabaley. Today, I want to pass along some marketing advice from my other younger brother, Michael E. Collins. Consider the following advice from Mike and then I will tell you why his advice is worth considering:

“To grow your business, you should spend more time nurturing current relationships than prospecting for business. We experience the power of relationships when clients come back to us or they send us referrals. Never underestimate the power of relationships.”

Mike is a recognized business development expert. He is a CPA and his early career included Price Waterhouse as did mine. Today, he is the CEO of 2^nd Generation Capital, LLC. Many law firms know Mike and his company because of the company’s work in litigation consulting, and as an expert witness. Mike’s most recent engagement as an expert involved the Medtronic lawsuit resulting in a 400 million dollar punitive damage award in favor of Mike’s client.

2^nd Generation is a Private Merchant Banking Firm active as an investment principal, placement agent, and advisor. 2^nd Generation’s work on behalf of law firms involves fairness opinions and other business valuations, alternative dispute resolution cases, and as an expert witness. You can learn more by going to www.2ndgeneration.com.

P. S. If you are wondering, Steve is youngest, Mike is next and yours truly is the oldest of the Collins brothers. We are all outranked by an older sister.