The Freedom of Being a Lawyer Entrepreneur
Imagine a world where you are free of any financial concern. You wake up every day and have no worries about paying the mortgage or rent. You have no car payments. You have no pesky credit card bills that multiply like rabbits in heat.
Suspend your disbelief for a minute and think about what it would feel like to have all of those worries taken away.
This feeling motivates most entrepreneurs. An entrepreneur understands that the road ahead of him may be rocky at times. But despite the knowledge that a challenging path lay ahead, this sense of freedom helps the entrepreneur press forward. This feeling is so powerful that it propels the entrepreneur forward into the lion’s den of risk at breakneck speed. Opportunity looms on the horizon – full speed ahead.
Most attorneys focus on the law and not on the dream of freedom associated with building a law firm. The attorney spends years and years learning how to think critically. They know how to analyze problems and break them down into manageable parts. Attorneys spend the early years of their career assessing risk, and then they graduate to advising clients on avoiding it. They feel that something may be ahead, but the picture is so uncertain that it is difficult for them to visualize a path toward freedom.
How does an attorney leverage the training, skill, and knowledge he has acquired and still embrace the entrepreneurial spirit necessary to build a practice that creates financial freedom?
There are three steps an attorney must take to make the transition from a practitioner of law to an entrepreneur.
First: Run Your Law Firm Like a Business
You work in the field of law to make money. You may have other motivation or a higher sense of purpose, but job one brings home the bacon. If a business loses sight of this fact, it is destined for terrible consequences.
To make sure you make a profit, you must choose your work and your clients carefully. Profitable businesses select good clients. This is critically important for developing a law firm (especially a solo or small practice). Clients will command a good deal of your time and expertise, and they should pay well to avail themselves of your resources.
In an entrepreneurial business, like a law firm, cash is king. Get paid in advance. Put in place excellent cash management practices. Complete monthly financial statements- even in the early days. This is a habit that will serve you well as your firm grows.
Only spend money on things that can be measured. Challenge yourself to find a return on investment from each outlay of cash, no matter how small. Even some of the seemingly intangible expenses should contribute to your financial well-being. If it doesn’t pay off, don’t invest in it.
Second: Spend 50% of Your Time (or more) Developing Business.
If you genuinely desire financial freedom, you must become an expert at business development. You need to be able to find new clients and deepen your client relationships. This is the single most crucial aspect of your business. If you have no clients, it does not matter if you are a great attorney.
It is no coincidence that the wealthiest attorneys are the attorneys who are experts at business development. They find a niche, and then they dominate their market. It is a simple idea, but it takes savvy to pull it off.
No activity in a law firm has a higher value than business development.
Remember that any problem that you can write a check to solve is not a problem at all.
Third: Hire the Best to Handle the Rest
If you are adept at originating client work and deepening relationships, you will be able to afford the best and the brightest lawyers to work with your clients. Hire smart people. Compensate them well and get out of their way.
Create standards and practices that your team can follow. Develop processes and procedures that work. Teach these processes to the people that you hire. Have everything documented so that there is little guesswork necessary.
Set up foolproof systems to keep in touch with your clients. Make sure that you never stop the communication process. Every month you do not stay in touch with a client; you run the risk of losing that client to someone else for their next matter. If you lose touch with them for ten months or more, you can expect to lose them forever. Frequency of contact increases trust.
It might seem like following this process is commonsense. It isn’t. Most attorneys hang a shingle on their wall, join the local chamber of commerce, and push their way into meeting new people they hope will become clients. This works for a handful of people. Then they live off of the referrals they receive from those clients for years and years – sometimes forever. And some of those attorneys live a comfortable life.
But those are the folks who have forgotten about the dream they once had. They have forgotten about the goal of having no bills to pay and the freedom to come and go as they please. They have forgotten about the promise of a destiny they control.
Freedom is closer than you think. If you embrace and cultivate your law firm’s entrepreneurial spirit, you will make more money while pursuing your goals in life.
The question you must ask yourself is:
“Am I willing to take the risk?”