Category Archives: Mission Statements

COVID and Law Firms

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Consider these headlines from the ABA Journal:

May 2020 – Law firm revenue takes nosedive during COVID-19, new survey data shows

  • Roughly 81% of law firms have seen their revenues drop during the COVID-19 pandemic
  • 27% of firms experiencing loss of revenues saw business decline by more than half
  • Nearly 20% of firms have been forced to shrink their staffs
  • More than 60% said they believe it will take from four months to a year for their firms to revert back to their financial positions before COVID-19

June 2020 – Top law firms fared surprisingly well during COVID-19 pandemic, survey says

  • Demand for the first five months of the year was down only 1.4%
  • Cash collections were up more than 3% through May
  • Expenses were essentially flat as law firms reduced discretionary spending
  • 54% of the law firms reported increases in client requests for discounts in May, compared to the previous month
  • 52% reported more requests for extensions the same month
  • Lawyer layoffs have been modest
  • Layoffs of nonlegal staff members have been concentrated in jobs that don’t lend themselves to remote work
  • Transactional practices, such as corporate and real estate, were most affected by the slowdown
  • Practices have been active in bankruptcy, banking, labor, and employment
  • Liquidity is good, with almost 90% of law firms having the ability to cover at least three months of monthly expenses, excluding partner draws
  • More than 50% of the surveyed law firms cut or delayed partner contributions, which gave them more cash on hand

So… which is it?

Good question! There’s a difference between a nosedive and faring surprisingly well, although the devil is in the details.

The top law firm data is based on a survey of 52 of the nation’s top 100 grossing law firms and 20 midsized and regional law firms. Such a list would include very few, if any, offices with a presence in Oregon.

Additionally, the data was gathered four to five months ago. Measured in COVID time, which eerily resembles dog years, the survey feels outdated. Notice too that the firms judged to be “doing well” nonetheless laid off staff and reduced spending. Half received requests from clients asking for discounts and extensions, which were no doubt granted.

Either way we know our truth. Oregon is a state largely comprised of small firms and solo practitioners – lawyers who make a living but aren’t among the nation’s top money-wise.

So as we work to restore our livelihoods and practices, what should we keep in mind?

Five thoughts to keep in your head

  • We can and will bounce back.
  • Continue following COVID guidelines and don’t let your guard down. Staying healthy ensures that your practice remains open.
  • Deal in facts. Know the economic indicators for your firm.
  • If you have been neglecting marketing, you absolutely, positively must get going.
  • Make a plan and take action. Now might be the time to consider other practice areas.

What to do next

Work on your mental mindset

You are more resilient than you think.

Consider the tough times you’ve lived through. Losing someone you loved, struggling over student loan debt, or ending a relationship. It felt bad at the time, and I am not minimizing how bad. However, you did survive. You are here. You moved forward.

Furthermore, I am willing to wager that you had help. Someone supported you. Said something or did something that made you feel better. Reach out to those people today. Reach out to the attorney counselors at the OAAP for free, confidential assistance.

Your physical health

If you don’t take care of yourself, you won’t be able to help others.

You know what to do to stay physically healthy, so you won’t see it repeated here. Mental health is another matter. If you are struggling, pick up the phone and call the OAAP. They can help.

Just the facts mam

What are your outstanding accounts receivable? How many clients are 60 or more days overdue? When did you last compare your actual income and expenses against budgeted projections? Do you have a budget?

Financial management may not be fun, but we have to deal in reality. You can’t guess who owes you what or how much, you’ve got to know. Start now.

Begin by adjusting or creating a budget for the remainder of 2020. Yes, I know we only have four months remaining in the current year, so this is a task you could easily procrastinate about. Don’t do it. Face the numbers now while time remains to make a plan and take action.

On the expense side, ask for no-penalty extensions, negotiate new rates, request discounts, and get tough on discretionary spending. You may need to collect retainers for litigation expenses you previously fronted.

On the income side, get on top of overdue accounts. I’ve said it before: the most effective thing you can do is pick up the phone and talk to your clients. Screw up your courage and do it. Accepting monthly payments or a discounted amount due is better than no money at all. Offer contactless payment through your website or Square account, accept Zelle or Venmo. Be flexible. Find out what works best for clients.

Marketing

I devoted the month of July to marketing tactics centered around the new normal of COVID-19. If you didn’t catch those posts, or need a refresher, access my blog archives from July. From the home page, locate the sidebar on the right portion of your screen. The archives are midway down the page.

Make a plan

You are in control. Make a written list of what you will do differently, starting today and in the future. Be specific and lay out next steps. For example:

  • Read up on COVID and marketing. Identify 5 or more ideas you want to pursue. Set timelines for each and execute your plan.
  • Prepare a budget-to-actual comparison. Identify what you need to adjust, and act accordingly.
  • Review accounts receivable. Decide on a strategy for each overdue client and begin making calls.

Commit by scheduling out each planned activity. Allow adequate time to get tasks done and don’t overcrowd your calendar.

Scheduling isn’t busy work. It protects your intentions to follow through on your plan and increases the likelihood you won’t brush tasks off.

If you really want to ensure success, find an accountability buddy. Another lawyer is nice, but not necessary. Anyone who is willing to partner with you in goal setting will work. The purpose is not to critique, but to incentivize you to follow through because you’re answering to someone other than yourself.

Once you have a buddy, schedule weekly phone appointments. You won’t be sharing confidential client information. This is a “how did you do this week?” type of conversation and it doesn’t have to be a major time suck. If you want the exchange to go a bit deeper, obviously it can. You can ask for feedback and offer suggestions. It’s up to you.

All Rights Reserved 2020 Beverly Michaelis

An Oldie and a Goodie: Empowering Law Practice Management Tips

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Whilst strolling through the Internet one day, I came across this post by Peggy Gruenke at Attorney at Work. Twenty simple ideas that are timeless and critically important if you want your law firm to succeed. Here are a few of my financial-themed favorites with thoughts of my own.

Peggy’s five financial tips – greatly condensed

  • Write a business plan
  • Create a budget
  • Know your overhead costs
  • State your fee with authority
  • Bill early, often, and strategically

Money and goals

As the business owner, your goal is to see the big picture.  Who are you? Why are you unique? Who are you best equipped to serve? This is the purpose of a business plan, according to Peggy Gruenke.

My input? Don’t be intimated! Your business plan does not have to be a magnum opus. You can get it done in a few pages. Creating a business plan will give you:

  • Clarity about what you want to do
  • Control over your own fate
  • A strategy for staying organized and on track
  • Accountability
  • A way to measure and monitor your progress
  • A path to help you move forward

Want help? See my business plan checklist – originally designed for law students, but easily conformed to active law practices.

Budgeting and costs

Budgeting can be as simple as a basic spreadsheet. Track what comes in and what goes out. Don’t bother with incorporating prior years (unless you have a driving reason to do so). Just start now. Toward year-end use your 2018 data to create projections for 2019.

As Peggy says, “You should know (by heart) how much money you need to make to keep the doors open.”

To get started, revisit this article by yours truly, Dee Crocker and Sheila Blackford.  As motivation, consider this excerpt:

Every law office should have a budget. Without one, it’s easy to overspend and hard to plan for future purchases. Knowing your overhead costs will help you decide how much revenue you need to make and how much you need to charge to bring in that amount. Failure to budget can cause financial problems. Lawyers with financial problems may take on new clients who have money in hand, leaving the work for existing clients unfinished. This can lead to disciplinary complaints from clients whose work is not completed.

I guarantee that your monthly “budget to actual” report, which compares actual spending against budget projections, will become your new best friend.

Stating your fee with authority

When a prospective client tells you that Lawyer Smith is willing to do the same work for $2,000 less, tell the person kindly that he can then retain Lawyer Smith. When you reduce your fee, you will have lost the trust of your prospective client. Odds are, in time, that client will leave Lawyer Smith and retain you to handle the mess that Lawyer Smith made.

Set a fee and stick to it! I know this can be hard, especially if you’re new to solo practice. Know in advance what you propose to charge, don’t make it up on the fly. Be matter-of-fact, business-like, and deliver the number without hesitation. You’re always free to make adjustments with the next case, but don’t waiver with the client sitting in front of you. For help in getting started, see this post.

Bill early and often

When you are ready to bill, issue invoices as soon after the event as possible: “As each day passes after an event, the perception of your value is diminished. If you send out the bill even two weeks afterward, the client won’t perceive the value to be as high.” (Peggy’s words of wisdom.)

There is no reason you can’t deliver your final bill with transactional documents. Take advantage of the arc of client gratitude while it is still in your favor!

Looking for more billing tips? Check out this resource.

All Rights Reserved 2018 Beverly Michaelis

The Importance of Following Up

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Today’s post is inspired by Ben Schorr, technologist and senior content developer with Microsoft, who has “been in this business long enough to remember when Al Gore invented the Internet.”

Being the all-around smart guy that he is, Ben recently posted:

Follow-up is one of the most important skills you can have in business.

Ben couldn’t be more right, and let me tell you why.

Clients

When is the last time you checked in with your clients? Asked how they are faring? Provided them with a status update?

Nothing is more aggravating to clients (and more damaging to client relations) than failing to follow-up. Avoid this trap by establishing an office system that reminds you to reach out and make contact.  It can be as simple as a tickler system or reminder app. Consider the advantages of interactive web portals that offer clients 24/7 access and apps like Zipwhip that let you send scheduled texts and auto-replies to clients.  Are phones overwhelming you? Worried about missing client calls? Start using Call Ruby. (Discounts are available to Multnomah Bar Association members.)

Tasks and Deadlines

Always create follow-up reminders for all outstanding to-dos and deadlines – particularly those that require action from someone else.

  • Include everything to ensure you get what you need to complete tasks on time and avoid a potential malpractice claim.
  • Include everyone who owes you information, documents, or an undertaking. Clients, co-counsel, opposing counsel, associates, staff, medical providers, investigators, and process servers are the tip of the iceberg.

Staff

Staff also deserve follow-up. Brief weekly meetings can cover a lot of ground: staff workloads, pending projects, your schedule, and responding to staff questions. For tips on working with and delegating to staff, see Revisiting Smart Delegation.

Finances

It’s been almost 7 years since I penned Accounts Receivable Do Not Improve Like Fine Wine, but the advice has not changed. You simply must follow-up on your finances:

Marketing and Business Goals

Follow-up is key when it comes to goal setting. Start by quantifying what you want to achieve, then be accountable (that’s the follow-up part). Whether it’s a business plan or a marketing plan, you are only cheating yourself if you don’t take the time to measure your results.

I’ve written extensively about marketing this year and prior years, both incidentally and deliberately.  If you’re looking for social media tips, resources for market research, how to calculate your marketing costs per case – you’ll find those posts here.  Use the Search feature at the top of my blog or under Categories choose “Marketing.” Whatever you do: follow-up!

All Rights Reserved 2017 Beverly Michaelis

I Don’t Want to Create a Business Plan!

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I get it.  I really do.  They involve work and you’re busy.  And if you’re not trying to sell someone on why they should give you money to start or grow your law practice, why would you bother?

Because, my friends, every once in a while you should be selfish and do something for yourself.

client-meeting-cropped

Six Good Reasons Why Every Lawyer Can Benefit from a Business Plan

Everyone can benefit from the business planning process, especially startups.  But existing businesses need a vision too.  Creating a business plan will give you:

  • Clarity about what you want to do
  • Control over your own fate
  • A strategy for staying organized and on track
  • Accountability
  • A way to measure and monitor your progress
  • A path to help you move forward

For associates in law firms, creating an annual business plan is the only way to build a successful strategy for bringing in business – something all associates are expected to do sooner or later.

For partners, annual business planning is likely to be more about reflection: now that I’m an experienced lawyer with a book of business at XYZ Law Firm what do I want to do? If the answer is: make a lateral move, creating a business plan will likely be required.  If the answer is: something else entirely, then time spent reflecting and planning will help you ferret that out.

Why Lawyers Don’t Write Business Plans

Aside from the obvious excuse that creating a business plan is time consuming, you may also perceive it as too difficult.

But there is an even better reason not to write a business plan.  If you don’t put specific goals and objectives on paper you can’t fail.

Here’s What You’re Really Missing Out On

The problem with avoiding failure is that you also set yourself up not to succeed. And you miss out on the other benefits that go along with creating a business plan.

Create a Direction and Lower Your Stress

When you know what you want to do, where you want to go, and how you’re going to get there (the specific objectives included in your plan), it lowers your stress level. There is no more floundering or misdirection.  Having a plan means you’re back in control.

Doing What You Want to Do For People You Want to Work For Means Reduced Exposure to Liability and Ethics Complaints

There’s a huge difference between practicing door law because you’ve always done it versus purposefully choosing a niche.

The door law route exposes you to greater risk of malpractice claims and ethics complaints.  Keeping up with a few areas of law is hard enough.  Trying to keep up with five or ten is bordering on ridiculous.

Imagine instead that you are working in one area, or a handful of areas, that you know well or can master.  With a focus, you can target clients deliberately and work for a client base that you truly want to represent.

You’ll Also See Gains in Efficiency, Money, and Resources

You are a resource.  Your staff is a resource.  Spend your resources on meaningful, designed goals.  This is what creates efficiency.  And with efficiency you can’t help but save money.  Or at a minimum, experience a better return on your investment.  You know it, you can see it, you can measure it.

Business Plan Checklist and Resources

If I’ve convinced you, contact me.  I’m happy to send along my business plan checklist and a list of resources for creating a plan.  Do what you want to do.  I am.

All Rights Reserved Beverly Michaelis 2017

How to Succeed in Practice

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Succeeding in practice requires momentum, courage, and hard work.  No one knows
that better than a solo practitioner or small firm lawyer.Motivation1

Whether you’re starting out, retooling, or want to make a change, consider this sage advice from Ann Guinn, one of the presenters at the Oregon State Bar Solo & Small Firm Conference.  She may just motivate you to get moving!

All Rights Reserved 2016 Beverly Michaelis

Postscript

For related content with a greater focus on the financial side of practice see this post.