Practicing law is your profession, but your law practice is a business. Wise business owners periodically review their businesses and make any appropriate changes. For instance:
- Which products or services are the most profitable?
- Which products or services are the least profitable?
- Should any new products be introduced?
- What should the business look like years from now?
I suggest that you make an objective review of your current practice and then, if appropriate, upgrade your law practice to one that is more profitable and better suited to you.
First you need to understand the law practice you currently have. You may think you know, but many attorneys are surprised when they really explore their practice. These steps will help you determine your current law practice:
- Make a list of all of the types of files you have handled during the past year. For general practitioners this should be relatively simple. If your practice is more specialized, break down the cases as best you can. For example, a litigation practice may have commercial, real estate, labor/employment and personal injury cases. A family law practice could have uncontested divorces, contested child custody, contested property division and ad litem appointments.
- Count the number of files in each category. Are there enough to really call this a practice area? If not, do you want more of these cases?
- Determine the percentage of billable time represented by each type of case. Examine whether some case types typically involve substantial non-billable time. If so, factor the non-billable time into your calculations.
- Determine the percentage of gross income derived from each case type. Take into consideration non-recoverable costs that may skew the numbers.
Now, compare the time invested vs. the income for each case type and ask yourself:
- Are low profit cases taking up too much of your time?
- Does the 80/20 rule apply? Is one type of case providing 80% of your income?
Often attorneys accept any case that comes in the door because they feel they have to. And they continue to accept the kinds of cases and clients that make the practice more work that it should be. It doesn’t have to be like that.
You should now have a good understanding of your current law practice. It is time to do some thinking about how you want your law practice to change. Envision your ideal practice 5 years from now, then 10 years from now. What do you see? In order to realize those goals you need to become clear about what you want.
There are two steps to the process:
- First, determine any changes to make in your current practice areas. For each practice area ask yourself whether you really want to continue or not. What is it exactly that you like or dislike? Be specific.
- Ask yourself: What is the income potential, degree of self satisfaction, challenges, competition and stress level of that practice area?
- Often it is helpful to set up a matrix to grade each practice area.
- Are there any current areas of practice that do not justify your continued efforts? If so, eliminate them. Be ruthless, it’s your law practice and your life.
- Focus on what feeds you and makes you happy. Of course you have to pay the rent so you need to be reasonable but, if the practice area is a bad fit, you won’t enjoy the work, you probably won’t do your best and chances are that the area won’t be that lucrative for you.
- Second, consider any new areas that interest you or that you believe have potential.
- Make a list of the candidates. Don’t self-censor or make assumptions. If it is a possibility, put it down.
- Review the list over a few days to be sure you have covered all possibilities.
- Next, investigate each area to determine whether it will work for you. Research will include online research but, in addition, you should talk to attorneys who actually practice in the area. Most lawyers are more than glad to share their experiences. If it would be awkward to talk to an attorney in your geographical area, contact someone out of the area who would not be a competitor. Learning all you can about a potential practice area is vital. Don’t shortchange yourself here.
Now you understand the practice you have and have determined the practice you want. The next step is to bridge the gap. Let’s take a fictitious example: Jim Jones is a partner in a small law firm. He is totally in charge of developing his own law practice. Jim has evaluated his practice by looking at the cases he has handled over the past year. The breakdown of Jim’s current practice looks like this:
- Family Law 60%
- Business Transactional 20%
- Probate & Estate Planning 10%
- Plaintiffs Personal Injury 10%
- Here is what Jim wants his practice to be:
- Family Law 25% (with no child custody cases)
- Business Transactional 20%
- Probate & Estate Planning 20%
- Personal Injury (Plaintiffs & Defense) 25%
- Social Security Disability (a new area) 10%
Jim needs a written marketing plan. If it’s not written down, it isn’t a plan. Let’s examine the areas one at a time as each is a separate profit center and will likely require a different approaches.
Family Law. Jim wants to eliminate handling child custody cases. He also wants to reduce the total amount of time he invests in this area by 35%. Since he is going from more to less, eliminating custody cases will help. Jim can also raise his fees and limit the types of family law cases he accepts in order to achieve the reduction.
Business Transactional. No change is in order. Jim only needs to maintain his current marketing effort to keep the percentage the same. I have worked with a number of clients who were unaware of the amount of business they had in a particular practice area. This resulted in wasted marketing effort. For example, one client was focused on increasing the amount of truck accident defense work. He had joined organizations and written papers in an effort to increase his business. Through this exercise we learned that he already had more of this type of work than the percentage he wanted.
Probate and Estate Planning. Jim wants to increase this practice area from 10% to 25%. In his written marketing plan, he needs a strategy to increase this business by150%. Jim needs to determine how many new cases this represents. If we assume that the number is 15, Jim needs to set a goal of getting 15 new cases by a date certain, say 90 days. With a goal that is specific and a time frame to work within, Jim can develop a strategy to achieve his goal. The marketing tools to employ will often vary from practice area to practice area. For this area he may consider conducting an estate planning seminar, networking with other attorneys for referrals or investigating court appointments.
Personal Injury. Jim wants to increase his PI business from 10% to 25% of his practice and he will add defense work. Again, he needs to set a specific goal, develop a written plan and follow it. Assume his goal is 5 new plaintiffs PI cases and 10 defense cases. Different strategies will be used. The plaintiffs PI marketing plan might include advertising and networking with doctors. The defense work marketing plan could include joining insurance industry organizations and networking with insurance adjusters.
Social Security Disability. As this is an entirely new practice area, Jim needs to formulate a strategy to develop business. There are similarities to plaintiff’s PI cases and some of the same marketing methods could be used. Seeking referrals from other attorneys would also be a good option. In addition, Jim needs to educate his past and present clients about his new practice area. Again, a written plan is in order. Since he is starting with no cases to work on, Jim needs to commit a set amount of time to develop this practice area. For example, Jim might commit to spending 5 hours of his week exclusively marketing for SSD cases.
Upgrading your law practice consists of understanding the practice you have, determining the practice you want and taking the actions necessary to bridge the gap. It’s not rocket science but it does require analysis, visioning, investigation and strategic planning. Creating a written marketing plan and following it consistently will make it happen. Have a great law practice!
Daniel Roberts is the founder of Coaching for Lawyers. He coaches attorneys to achieve greater career success.