Thanking Clients Should Be Part of Your Closing Ritual

When was the last time you thanked clients for their business?  Asked for their feedback?  Welcomed their referrals?  Invited them to call you with questions or concerns in other areas of your practice?

All of this can and should be part of your file closing ritual. The work may be done, but your client relationship doesn’t have to be.

Your closing letter should cover the essentials, show appreciation, and cross-market your services

  • Inform the client that work is now complete and your representation is over
  • Return original client documents
  • Establish responsibility for current or future tasks
  • Advise the client of your file retention and retrieval policies
  • Answer final questions
  • Thank the client for allowing you to be of service
  • Invite the client to subscribe to your blog, YouTube channel, or social media posts
  • Educate the client about your other areas of practice
  • Let the client know you welcome referrals (see below)
  • Ask the client for his or her feedback (see below)

Send out surveys

A well-designed client survey will give you insight about what you’re doing right and what needs improvement. Increase your chances of getting a timely response by delivering the survey in a format suited to the particular client: paper, fillable PDF, or online via Survey Monkey or a similar service. For a side-by-side comparison of online survey tools, see The Best Online Survey Tools of 2016 from PC Magazine.

Sample Survey Language

The ABC Law Firm is committed to providing high quality service to all of our clients.  To help us achieve that goal, we would like your feedback regarding our services.  Please let us know how we are doing by completing the survey below.  

New to the process?

If you’ve never done a client survey before, spend some time doing a little research. Here’s a great post by Sterling Miller with his patented “ten things” to consider when creating, distributing, and analyzing a client survey.

Like to see a survey in action? Check out this example. Still not clear on what you should ask in your survey? Here is a list of 27 questions to include from Lawyers Mutual. Sample client surveys are also available on the PLF Website.  From the home page, select Practice Management > Forms > Client Relations.

Invite clients back and welcome referrals

If you perceive this as “trolling” for work, I hope you change your mind.  Letting clients know about your other areas of practice or inviting their referrals is perfectly professional:

As you may know, ABC Law Firm provides business, real estate, and land use services to a wide variety of clients.  If you know of anyone in need of legal services, I hope you will keep us in mind. 

Again, I thank you for your business and appreciate the opportunity to work with you.  If I can be of any assistance to you in the future, please do not hesitate to call me at (phone number). 

Automate first, then personalize

Client closing letters are “one more thing to do” in a busy practice.  I get it.  But don’t let them slide: your clients need the information and you need the protection that written disengagement letters offer.

  • Make the process easier by creating forms or templates.
  • If you practice in an area where your clients often have numerous tasks to perform, consider moving those items to an attached checklist.  It will make your letter shorter and the process easier for the client to follow.
  • Start using a file closing checklist. It will remind you to send a closing letter and take you through all the other details that must be tended to when a client file is closed. You can find a sample on the PLF Website.  From the home page, select Practice Management > Forms > File Management.
  • When you are ready to close a file, bring up your boilerplate. Modify it in a two-step process. First, change the form as needed to fit the case. Second, and more critical to your relationship, take the time to personalize your parting words to the client.

Find time to send personalized closing letters by delegating routine file closing tasks to staff, such as reviewing the file for documents that should be added to the firm’s template directories, adding additional names from the file to your conflict system, or entering the file in your closed file inventory.

Make thanking clients part of your everyday

Small gestures can make a big difference in client relationships.  Don’t wait until it’s all over to say “thank you.”   Express appreciation often: after visiting a client’s office or facility, for any kindness the client shows, in your holiday greeting, as part of your open house invitation, or in recognition of a long-standing relationship.  Remember: getting and keeping good clients is substantially easier than courting new ones.

All Rights Reserved Beverly Michaelis 2017

Choice of Entity for New Lawyers

coffee-cup-and-docs-bought-at-ssChoosing a legal structure and entity type for your law firm seems like an easy decision. But is it? Consider the following scenarios:

New lawyer establishes law practice with the goal of becoming an associate

If this is you, being a straight-up sole proprietor may be the best choice, assuming you have no employees.

A sole proprietorship is the simplest and most common structure chosen to start a business:

  • No formal action is required to start your business
  • It’s inexpensive
  • No papers to file
  • Nothing to dissolve
  • Simple tax preparation

When you’re ready to make the move from running your own practice to becoming an associate, the transition couldn’t be any easier.

On the downside, sole proprietorship means you have unlimited contractual liability and potentially higher taxes.

But how significant is the liability exposure?

Lenders, property managers, and others with whom you do business will typically require a personal guarantee for loans, leases, or other business transactions.  A personal guarantee means YOU are on the hook, even if you form a professional corporation or single-member limited liability company. As a result, contractual liability protection doesn’t count for much in evaluating whether to form an entity.

The real choice between sole proprietorship and forming a PC or single-member LLC comes down to taxes and the trade-off between potentially saving money (with entity formation) and simplicity (going with the sole proprietorship model).  Talk to a CPA so you can make an informed decision.

What if I’m planning to practice business law or intellectual property?

Why would your area of practice make a difference?  And didn’t we just say entity choice is driven by risk aversion – wreaking whatever benefit you can from contractual liability protection – and saving money – courtesy of a lower tax burden?  So what difference could practicing business and IP law possibly make?

If your goal is to help clients form entities and protect intellectual property, it could look a little odd that you haven’t followed the usual formalities in establishing your own business.

Fair or not, client perception counts.  So does marketing.  And part of marketing is how you brand your law firm.  Appending a PC or LLC designation to your business name may actually be an important part of how you choose to present yourself to potential clients.

If you plan to have employees …

This is an entirely different ballgame.  Without a doubt, form an entity. If you are a solo, choose a PC or single-member limited liability company (LLC).

Both entity types offer liability protection for non-professional torts committed by your employees.  The contractual liability protection discussed above will also kick in.  Talk to a CPA, but the likelihood is that forming an entity will also result in a noticeable tax savings.

If you plan to practice with others …

This is another occasion when forming an entity is a no brainer.  Do it for the avoidance of liability discussed in the preceding paragraph and for the limitation on vicarious liability.  The ideal structure may be to form a sole owner PC or single-member LLC that belongs to the firm’s entity. This may allow you, as the individual lawyer, to completely escape personal vicarious liability.

Multi-tier entities are complex, administratively messy, and no longer have the tax benefits they once enjoyed.  BUT avoiding vicarious liability is a big plus.  To learn more about this strategy, read Choice of Entity for a Legal Practice and Lawyers as PCs, LLCs, & LLPs in Oregon, referenced below.

Being fully informed in the premises

This post skates over some pretty significant content that deserves more in-depth thought.  Do your homework.  Recommended reading includes:

  • Sole Proprietorship as a business structure choice, courtesy of the Small Business Administration.  While you’re on the SBA site, poke around.  There is a ton of great content here.  And don’t forget about the help and resources available from the Small Business Development Center.
  • Law Firm Choice of Entity, from the ABA Young Lawyers Division.
  • Choice of Entity for a Legal Practice in Oregon, available on the PLF website. Select Practice Management > Forms > Entity Formation for Lawyers.
  • Lawyers as PCs, LLCs, & LLPs in Oregon, available on the PLF website.  Select Practice Management > Forms > Entity Formation for Lawyers.
  • Tax Considerations for Choice of Business Entity, Chapter 3 of the OSB CLE Seminar Handbook Broadbrush Taxation: Tax Law for the Nonspecialist (2015). Available in BarBooks behind the member login on the OSB website.

Most importantly

Talk with a CPA.  I can’t say this enough.  This is one of the best investments you can make in getting your practice up and running.  A CPA can help you determine whether forming an entity will result in tax savings.  He or she can also help you select an entity type – which is highly driven by tax considerations.

You’ll also learn about property tax, business income tax, business licensing, and other obligations you may not be familiar with – all of which are determined by where your business is located.

All Rights Reserved 2017 Beverly Michaelis

To Boldly Go Solo

How do you know if solo practice is right for you?  Do you have what it takes to organize, manage, and assume all the risks of running a law practice?

solo-with-laptop-cropped

As Bill Nye would say, please consider the following:

Independence

Solos get to call all the shots: client selection, case selection, setting fees, choosing a practice location – every decision that goes into running a practice.  The responsibility rests on your shoulders.  Do you find that appealing, daunting but doable, or overwhelming?  If you answer is appealing or daunting but doable, please proceed.

Are You a Decider?

Some people are decisive, others are not.  If you agonize over choices and normally poll multiple friends and family members before making a decision, solo practice will be difficult.

Solos need to make business and practice decisions every day.  Some of these decisions must be made under pressure with little time to reflect. The reward, of course, is that you get to decide.  You have the freedom and independence to use your creativity, knowledge, and skills to solve problems.

Are You a Self-Starter?

Solo practitioners must be self-regulating. Can you get the work out without someone supervising?  Give regular attention to administrative tasks like billing and bookkeeping? It will be up to you to meet deadlines, organize your time, and follow through on details. If you are a good planner and organizer, your solo practice will be successful.

Are You a Marketer?

All lawyers in private practice are expected to develop business, but in a solo practice the pressure is greater.  You’re it.  Can you create your own networking opportunities and business contacts?   Devote time to blogging or updating your website?  Post to social media?  Speak at CLEs?  Write articles for bar publications?  Build business referral relationships?

Financially Speaking

What resources are available to you?  What financial demands and commitments do you have?  Is it possible (or desirable) to apply for a micro loan, regular loan, or line of credit?  Are you up for crowdfunding?  Start by reviewing your expenses, then prepare a start-up and monthly budget.  Read about other business/financial essentials here.

Drive, Stamina, and Work-Life Balance

Can you practice law, run a business, and keep it all in balance with your personal life? Are you strongly motivated?  Healthy?  Is your family supportive of your efforts?  These are all good markers.  Nonetheless, make a plan to care for yourself and manage stress.  If you are looking for ideas or resources, contact the attorney counselors at the Oregon Attorney Assistance Program.  Services are confidential and free to Oregon attorneys.

Final Thoughts

Solo practice requires a lot of time and work, but it also has benefits: no one looking over your shoulder, no pressure to take a particular client, freedom to work in the areas of law that you prefer, and complete flexibility in deciding when, where, and how to work.  Is it a match for you?

All Rights Reserved Beverly Michaelis 2017

Market Research for the Legal Industry

Last week’s guest post examined profitability of lawyer marketing ventures by using a cost-per-case analysis:

Total dollars spent
÷
New clients signed on because of the marketing effort

Another piece of the puzzle is understanding what market research tells us about our potential clientele. But where can we find this information?  Data about demographics, employment, supply, and demand can hard to find – especially in one convenient location.  But thanks to the hard work of Annette Shelton-Tiderman we have a resource!

In her post, Problem Solvers: Offices of Oregon Lawyers, Annette reports on the following topics:

  • Offices of Lawyers Reflect Oregon’s Diverse Population and Geography
  • Supply and Demand: Employment Reflects Changes in the Economy
  • Marshalling Problem-Solving Resources
  • Projected Demand Shows Change and Overall Growth

She includes interesting infographics on the statewide marketplace for legal services, employment growth rates, employment projections, and breakdowns on areas of practice.  Because the report relies in part on the bar’s 2012 Economic Survey, the data is a bit aged, but still helpful.

I first shared this resource three years ago.  Unfortunately, it was relocated on the Employment Department website.  It took some time to dig back up again, thus the repost.  If you’re looking for other ideas on market and economic analysis, read on.

More Resources for Market and Economic Analysis

Lawyer billing practices

Lawyer Demographics – County, Population, Age Group, and Trends

  • OSB 2012 Economic Survey – the main survey includes data on the future plans of survey participants (leaving the practice of law or retiring).  The Addendum has additional demographic data.
  • Learning the Ropes 2016 Program Materials from the Professional Liability Fund.  Locate page 264, “PLF Covered Lawyers — by County, Population and Age Group.”  From the PLF home page, Select CLE > Past CLE and find “Learning the Ropes 2016” in the alphabetical list of Programs.  Click the program link.  On the description page, locate QUICK LINKS (top right of screen).  Select the PROGRAM MATERIALS link.
  • Are you a member of the OSB Lawyer Referral Service (LRS)?  They gather data on supply and demand for all their programs.

Market Research Databases

Economic Forecasting

Occupational data and job listings (including Lawyers)

  • The State of Oregon provides data and occupation profiles on all occupations, including lawyers and legal staff, at this link.   You can also display statewide job listings. Alternatively, start at this location, then select the “Wage Data Tool” in second column under Workforce.  To give you a better idea of how this tool works, here is a snapshot from a recent search:

wage20tool

As you can see, it is possible to print a full report, custom report, or summary.  If you want to find career pathways, wage range data, or occupations with similar skills just be sure the appropriate boxes are checked.

Postscript

The Oregon Employment Department’s Web site is a helpful resource for businesses researching economic data, business indicators, and other information. There are 13 workforce analysts spread across the state who are responsible for assisting businesses with needed labor market information. This can include the demographics of a neighborhood – very helpful when a business is looking to relocate or expand. The Employment Department also tracks education levels, income, population data, and maintains a database for occupational and wage-related information that is easily accessed via its website. Services provided by workforce analysts are paid for by business taxes.  There is no additional cost to access their expertise.

All Rights Reserved Beverly Michaelis 2017

Cost per Case Analysis and Your Firm’s Marketing Decisions

The following is a guest post, courtesy of Deanna Powers, eGeneration Marketing.

There are more than 12,000 attorneys in the state of Oregon. Many firms, particularly small firms or solo practitioners, may not be able to hire someone to handle all marketing efforts. If you’re in charge of marketing for your law firm, it may be challenging to know which channels are most profitable. TV ads usually lead to a lot of claimants calling your office, but is this marketing option overall more profitable than simply spending more time optimizing your firm’s social media pages?  Fortunately, there is a way to accurately compare every marketing venture to one another. A cost per case metric will help your firm make better-informed spending decisions by examining the profitability of all current marketing efforts.

What Is Your Cost Per Case?

A cost per case (CPC) analysis examines the profitability of a particular marketing venture by taking the total dollars spent on that advertising effort divided by the new clients signed because of that effort.

Marketing Effort Budget ÷ New Clients Signed = Cost per Case

It’s unlikely that your marketing channels will all yield the same CPC. Some new clients will have a CPC of $0. This happens when past clients refer your firm’s services to their friends or family members.  This is perhaps the most beneficial marketing avenue for your firm, since it cost you nothing in terms of advertising dollars.

Unfortunately, no matter how strong your firm’s reputation, not all new clients can be signed from referrals. A CPC metric gives you the data you need for a thorough analysis of every paid marketing effort, which in turn puts stronger marketing budget decisions well within your reach. Some profitability can be calculated for you—Google AdWords gives your firm a wealth of data on how your campaigns are performing if you use PPC ads. Unfortunately, non-digital marketing efforts are a little more challenging to evaluate, but the CPC calculation still comes into play. We can use billboard pricing as an example as how you would calculate your firm’s CPC through a traditional marketing channel.

Billboard Ads: High Exposure Generates Greater Leads

When considering marketing avenues for law firms, high exposure is a key factor. Many firms choose to use billboard marketing because it gets you the most views for the lowest price. Outdoor ads have a crucial place in a well-devised marketing strategy according to the Arbitron Out-of-Home Advertising Report, a national survey that examines advertising and spending habits in relation to the increasingly mobile lifestyle of Americans. According to this report, eight of 10 Americans make buying decisions while out of the house and many of these decisions are made in the car. About 75% of travelers see billboards, and about 50% internalize the messages viewed, often later acting on them.

Lamar Advertising, one of the nation’s biggest billboard and other outdoor advertising firms, offers a range of marketing locations in Portland, Oregon and the surrounding communities. Prices vary, based on ad size, location, and whether messages are static or digital, but this means your firm has ample choices for remaining within an established marketing budget. For example, Lamar offers a billboard on Mt. Hood Highway, near Haley Road, which receives more than 92,000 views during an average week. This 14’ x 48’, permanent billboard rents for $7,500 per month.

It’s very hard to know how many clients you’ll sign from a billboard, as the overwhelming majority of commuters won’t need your legal services. Conversion rates for billboards can be as low as 0.002%, and this is simply the number of people who call your firm, not the number of cases you take! You may only think one of 10 claimants who reach out to you have a pursuable case. If you sign a respectable two new clients per week due, your CPC for this example will be $938.

Is This a “Good” Cost Per Case?

Some firms may be thrilled with a CPC of $938, while others will be horrified. It all depends on how much return you’re expecting from your claimant.

If your firm specializes in divorce and family law, for example, then you’re likely to see fees of $10,000 or more per complex case, which would make the spend of $938 for signing a new client profitable. On the other hand, if your firm specializes in Social Security disability law, then the $750 spend might be a bit steep. The average Social Security attorney only receives $3,000 per settlement, with a maximum of $6,000. The profit margins would be too slim for Social Security attorneys to pursue any marketing channel with a CPC that high.

Ultimately, if your firm realizes a CPC of about 15% of the fees earned per claimant, then the marketing effort is considered a profitable advertising venture.

Getting the Facts Needed for CPC Analysis

A CPC metric only works if you have the appropriate data to complete a reliable analysis. With many of your online advertising efforts, you can easily determine how and where clients learn of your firm. When a new client calls or walks through your doors though, you’ll only discover the data you need if you pose the appropriate questions, and the most important one is:

“Where did you hear about us?”

A new client’s answer lets you construct a reliable CPC. This in turn allows you to evaluate accurately your current marketing efforts. It additionally offers the data necessary for developing profitable marketing plans for the future. Regardless of whether you use TV ads, billboards, digital marketing, or are simply working to build a name in your community, calculating your CPC can all you to pinpoint your marketing inefficiencies and invest more into your most successful campaigns.

Deanna Power

eGenerationMarketing