Welcome to part 10 of a 10-part series, Nine Ways You’re Losing Business—and What to Do About It.
Next week, I’ll summarize the entire series and show you some next steps so that you can go into 2015 from a position of strength instead of trying to play catch-up.
Reason No. 9: You’re renting your practice, not owning it.
Are you renting your practice? I’m not asking whether you’re renting office space. And I’m not asking whether you’re an associate or junior in practice. This question is about your attitude and your approach to your practice. Are you building your practice based on what you want your practice to be, or are you “paying your dues”? Compromising? Accepting what isn’t ideal but might be good enough for now? Waiting until something changes?
If you aren’t actively and strategically growing your practice on a consistent basis, you are renting your practice. Even if you’re a sole practitioner, renting your practice means you have a job, not a career. As we learned during the recession, lawyers can lose their jobs when firms fail or as a stopgap measure designed to avoid failure—or even to increase profit.
“Career” non-equity partners (meaning those who cannot or will not advance to the point of attaining equity partnership, as distinguished from “transitional” non-equity partners who are working to become equity partners) are at special risk. These lawyers typically have strong skills but relatively high salaries and relatively small books of business, meaning that they represent a drag on the firm if work dries up and they can’t bring in enough new work to support or significantly defray their expense.
If you only rent a practice, you have few transferable assets other than skill and experience, which is many cases isn’t enough to distinguish you from a sea of talented lawyers. As a result, you have fewer professional options, and you may find it difficult or even impossible to find a new job.
“Owning” your practice means taking responsibility for your own success and not depending on others to provide work or opportunities to you. It means looking at the assets and liabilities in your practice (financial and otherwise) and determining how to harness the assets so that you can grow your practice. It’s putting in consistent and strategic activity to grow your practice. It’s looking at engagements as relationships, not transactions—even one-off engagements can yield referrals with the appropriate effort.
Renting vs. owning a practice isn’t purely a financial question: depending on the circumstances, a lawyer with no clients at all may own her practice with a lawyer with a $250,000 book of business may only be renting. While results certainly do matter, what distinguishes two similarly situated lawyers is action and attitude. A 2009 New York Times Op-Ed piece summarized it this way:
A Washington lawyer friend recently told me about layoffs at his firm. I asked him who was getting axed. He said it was interesting: lawyers who were used to just showing up and having work handed to them were the first to go because with the bursting of the credit bubble, that flow of work just isn’t there. But those who have the ability to imagine new services, new opportunities and new ways to recruit work were being retained. They are the new untouchables. . . Those who are waiting for this recession to end so someone can again hand them work could have a long wait. Those with the imagination to make themselves untouchables — to invent smarter ways to do old jobs, energy-saving ways to provide new services, new ways to attract old customers or new ways to combine existing technologies — will thrive. (Emphasis added.)
The legal market has shifted, and it will continue to do so. Clients have more options and are making new demands in terms of the cost, efficiency, and structure of engagements, and there’s no hint of abatement. Instead, we can expect to see more changes and more significant changes in the way that lawyers and clients work together.
Today’s economy calls on you to become an entrepreneur at law. Stop following the tired old rainmaker model of getting the work, then doing the work, rinse and repeat with an ever-growing focus on bringing in more and more work. That model, when successful, leads straight into the feast/famine cycle. Instead, determine your brand as a practitioner and how you can express that brand in your practice, then find how your brand and the skills encompassed in that brand can intersect with what reaches and influences your ideal clients. Build relationships based on trust, and look for ways to create value for your clients. Re-imagine how you can work with your clients, letting your clients’ needs and wants guide your innovation.
If you’re doing the same old, same old, you are losing business. The new economy calls on you to take ownership of your practice, to explore new ways to find, engage, and serve your clients, and to seek continuous improvement in what you do as a practitioner and how you do it.
Step up, or you may be pushed out.