You’re losing business, and here’s why

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Last week I introduced a 10-part article that I’ll serialize in this newsletter titled “Nine Reasons You’re Losing Business“..

Here’s why you’re losing business…

1.     You aren’t creating value for your clients.

Let’s assume that you do good work from a substantive perspective and that you deliver that work on time every time. That’s a great start, but it isn’t enough anymore.

Historically, clients have measured value received from an attorney based on the successful outcome of a matter. Did you win the case? Did you get most of what the client wanted in the negotiation or contract? If you did, you delivered value, and clients would usually be satisfied.

Today, however, clients are more sophisticated than ever before. They’re often able to evaluate the cost of the successful outcome in terms of dollars, time, missed opportunities, and resources consumed. Whether that evaluation is correct isn’t the point. The point is that a good outcome is just the tip of the iceberg in value creation. 


Part of value creation is about money. Ask yourself:

  • Do you offer alternative fee arrangements that are a win for your clients and for yourself?
  • Do you look for ways to save your client money even if it means losing some income you would have received otherwise?
  • Are you implementing legal project management and other systems to streamline the business side of completing client work?

Money is an important part of value creation, but it’s only one part. To get a full picture, ask these questions:

  • Do you understand where the matter you’re handling fits in the context of your client’s life or business?
  • How often do you bring proactive solutions to your clients? Not the kind of proactivity that’s code for more work and more fees, but spotting issues and opportunities and trends, then delivering that “need to know” insight before your clients know they need to know.
  • Do you make it easy for your clients to work with you?

And the key question: can you identify right this minute exactly how you’re bringing value to your top clients? Doing the work well isn’t a good enough answer in this economy. Extra credit for those interested in growing your practice: how do you bring value to your top prospective clients and your key referral sources?

If you aren’t paying unwavering attention to creating value for your clients, you’re losing business as a result.

Nine Ways You’re Losing Business—and What to Do About It

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A longer newsletter than usual this week, with three important sections.

1. A must-read article for those of you working in large firms: Pay Gap Increases Between Equity and Non-Equity Partners. Two brief excerpts will show you why you can’t miss this:

“Equity partners averaged $971,000 in annual compensation, versus $338,000 for nonequity partners, according to MLA’s third biennial survey of what partners are paid at large law firms in the United States. While average pay for equity partners has risen nearly 20 percent from $811,000 since MLA’s first survey in 2010, nonequity pay has remained relatively flat, increasing just $2,000 over the same period.”

And

“The growing gap between equity and nonequity partner pay mirrors the disparate amount of business the two groups of partners bring to their firms. ‘The correlation between originations and compensation is getting stronger,’ says Alan Olson, a law firm consultant at Altman Weil Inc. Olson says firms are ‘rewarding and investing in those partners that can develop and maintain a remunerative legal business.”

I’ve suggested (and the data supports the idea) that nonequity partners are in a tenuous position unless they’re making a strong record of securing business. This article provides deep insight on this point and data on pay disparities.

2. This week marks the start of a 10-week series in this newsletter, titled Nine Ways You’re Losing Business—and What to Do About It. I’d originally planned to send it as a single article, but it’s nearly 15 pages long! This week starts with the premise of the article, and you’ll find the problems and solutions over subsequent newsletters.

 

Nine Ways You’re Losing Business—and What to Do About It.

Unless you’ve been asleep under a rock, you realize that the practice of law has changed significantly over the last six years. Unless you’ve been paying unusually close attention, though, you may not realize that the practice has experienced a quiet revolution in the last fifty years. That earlier revolution in many ways prompted the later one, by creating dreams of “wealth by JD”; an expectation of certain financial success simply by virtue of practicing the genteel profession of law.

Those expectations couldn’t be realized in a vacuum, however, and new pressures came into play for lawyers: the inception of the billable hours, ever-rising hours requirements, a relentless focus on profits per partner in larger firms, and a certain arrogance toward clients that was masked in the professional approach to dense problems that clients didn’t, perhaps couldn’t, understand. That attitude started to unravel with the advent of lawyer advertising, and the expectation of working hard for easy money started to crumble a bit over the subsequent years.

Like any balance beam, however, the weight has now shifted firmly to the client side. It’s a buyers’ market, and buyers have more options than ever: a glut of lawyers in most practice areas increasing competition, legal start-ups that challenge the notion of business as usual, technology and offshore personnel who can handle what used to be matters for lawyers, DIY solutions that appear just as good as the ones that come with a hefty invoice, in-house lawyers who capably handle much of the work that used to be outsourced, unbundled legal services, and fierce competition for a shrinking pool of clients.

It isn’t your imagination. Times really have changed that much.

And whether you’ve been practicing for five or fifty years, chances are good that your training has been pretty much the same: three years spent focusing on how to think like a lawyer and exposure to a variety of substantive areas of practice through a relentless series of cases and professors’ questions. If you were lucky (or paying unusual attention to the trends in practice), you might have had some exposure to the idea that practicing law requires more than being a good lawyer, but you probably didn’t get much (if any) education on how to run the business side of a law practice.

In a buyers’ market, understanding the business of law is critical to building a successful law practice. If you don’t get that, you’re doomed to struggle. And you have to keep your eye on the trends and shifting pressures so you can adapt to economic, social, and business changes. That’s a tall order on top of other practice responsibilities.

There are nine key reasons why your practice is stagnant or shrinking. The good news is, once you understand this, you can make changes (starting with your own vision and understanding, then expanding to the way you practice) that will let you build the practice you’ve always wanted.

Next week’s newsletter will cover reason #1: you aren’t creating value for your clients.

What’s your vision for your practice?

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Last week, I attended a business seminar focused on hiring and managing employees. I was surprised that the program started by asking us attendees to identify our business vision and what we stand for. I was even more surprised to find how difficult that was to do!

You may have heard the distinction between working in your business as opposed to working on your business, popularized by Michael Gerber’s The E-Myth. The former is what you do to earn money, and the latter is what you do to design and build your business.

Lawyers, like other business owners, tend to spend your days working in your business: seeing clients, writing documents for client services, having meetings about client projects, and so on. And that’s good and important work, without which the business that is your practice would cease to exist.

 

Marketing lives and thrives, however, when you’re working on your business. That’s when you come up with a new way to talk about what you do and identify an under-served client sector that needs your services. That’s when you come up with a great idea for an article, you write that article, and you consider who might help you land a speaking opportunity to develop further and share what you wrote in the article.

So, here’s today’s question: how much time are you spending on your practice? And is the time you’re spending effective?

Effectiveness is driven by not just the degree to which you’re able to raise your professional profile and the business you bring in, but also by the number of smart ideas you have and implement. As Seth Godin writes, “Pretty good ideas are easy. The guts and persistence and talent to create, ship and stick it out are what’s hard.”

Take some time today to work on your business. If you don’t know where to start, start with asking what is your vision for your practice. Consider your practice area, your sub-niche within that area, the clients with whom you work, how you serve those clients, and your practice setting, for starters.

Consistency Makes it Simple

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I often enjoy the EarlyToRise.com  newsletter, which recently included an excerpt from Sharon LaBelle’s book The Art of Living, which distilled Epictetus’s The Virtuous Are Consistent as follows:

 

“To live a life of virtue, you have to become consistent, even when it isn’t convenient, comfortable, or easy.

It is incumbent that your thoughts, words, and deeds match up. This is a higher standard than that held by the mob. . . When your thoughts, words, and deeds form a seamless fabric, you streamline your efforts and thus eliminate worry and dread. In this way, it is easier to seek goodness than to conduct yourself in a haphazard fashion or according to the feelings of the moment. . .  

It’s so simple really: If you say you’re going to do something, do it. If you start something, finish it.” 

(Emphasis added.)


Consistency in any field builds on itself and builds momentum.

    And momentum creates at least part of the
    streamlining referred to in LaBelle’s summary of

The Virtuous Are Consistent.

it isn’t convenient, comfortable, or easy to carry through with the plans you’ve set for yourself? If so, what’s one step you could take today to shift that pattern? Can you… So here’s this week’s question: when it comes to business development, how consistent are you? Do you yield when

  • Make the follow-up call?
  • Start the article and lay plans so you’ll also finish it?
  • Finally launch that blog or video blog or podcast you’ve been thinking about?
  • Figure out what you’ll say when you introduce yourself, or when someone asks who your ideal client is?
  • Draft (or revise) your bio sketch so that it reflects not just what you’ve done, but also what sets you apart from others in your field?

Chances are that you have a list (at least a mental list) of those nagging tasks that you’ve allowed to slide through the cracks. A lot of mental and emotional energy goes into avoiding what has to be done, so stop dropping the ball. Here’s how:

1.  Develop a list of your must-do activities. They may include repetition or they may be one-offs, but you have to be clear about what’s included. Maintain the list in a form that allows you to add and remove tasks as necessary.

2.  Set a specific time for your business development activity. I recommend daily activity so that you w

on’t be thrown too far off track if you miss one appointment. Consistency, however, is the key.

3.  Keep your appointments with yourself. Even (maybe especially) when you don’t want to.

4.  Design accountability for yourself. You can buddy up with a colleague, share your promises with your mentor, use an app, or just use the Seinfeld “don’t break the chain” method on a calendar. How you do it is much less important than that you do it.

5.  Start small. Don’t decide that you’ll do everything on your list if you’ve been letting things slide. Pick one key action and do that consistently, then add on. Just like deciding to jump off the sofa and hit the gym for two hours every day when you haven’t done any meaningful exercise in three years is destined to fail, grandiose business development plans tend not to stick. 

What can you do today to develop consistency in actions that will build your practice? What are you waiting for?