Are you barely covering the basics of your firm? Have you been unable to give your staff the bonuses or raises they deserve, or buy the technology you need to be more productive?
Ann Guinn works every day with underearning attorneys who want to turn things around.
With nearly three decades in the business of helping solo and small firm attorneys, the veteran management consultant shared some of her secrets for turning bad businesses into rainmakers during “I'm Not Earning Enough Money: How Attorneys Underearn,” a podcast of the ABA Solo, Small Firm and General Practice Division.
Guinn has identified nearly three dozen reasons why attorneys aren’t making enough money. Some may have ineffective marketing, procrastinate too much or focus on work that’s not bringing in the dollars.
But two top reasons she’s seen time and again are lawyers who don’t capture their time and those who undervalue their work.
“Every attorney in this country could be making more money,” Guinn says. “And it's not a matter of working harder – it’s a matter of working smarter and tightening up your management skills.”
First and foremost, record your time contemporaneously as you go through the day, Guinn advises, pointing out that those who don’t can lose up to 10%-15% of potential billable time. And track both billable and non-billable hours, so you can determine if you need to delegate the work that’s not generating money.
The daily discipline is part of Gwinn’s focus on helping solos think more like a business. That includes insisting on the basics like living within a budget, billing promptly, never letting account-receivables get older than 60 days and devoting at least 30 minutes every day to marketing.
For Gwinn, becoming more business-minded also means making sure attorneys are getting paid their just due.
Gwinn hears too many lawyers say, “Well, you know, I'm not going to bill for this. It only took me 20 minutes because it was no big deal. I just wrote him a quick letter.” Or, “Ah, I'm not going to charge them for that. That wasn’t worth it.”
“But the quick letter solved the problem for a client,” says Gwinn, recommending appropriate charges for phone calls and emails, too. These quickies can be negotiated upfront with a client in the fee agreement, she further notes.
“You are serving clients in a way that they can’t do on their own. You're helping them solve problems. You're helping them get justice,” Gwinn tells her solos. “You need to value yourself and you need to be paid appropriately for what you're doing.”
Gwinn has developed a seven-step plan to help turn money-losers into revenue generators, which she outlines in the podcast.
One exercise she shares promises to add thousands to your bottom line: Bill 15 minutes more per day.
“If you have to work to do it, make that choice,” Gwinn says, emphasizing that doing so requires lawyers to prioritize the practice.
“So, if you just bill 15 minutes more a day and you bill $200 an hour, that’s $11,000 more this year.”
But more important, she says, you are training yourself to be more conscious about how you spend your time – and that helps lawyers identify other matters that they haven’t been billing, even further boosting the bottom line.
Gwinn is the author of “Minding Your Own Business: The Solo and Small Firm Lawyer’s Guide to a Profitable Practice.”
“I'm Not Earning Enough Money: How Attorneys Underearn” is available for free to members of the ABA Solo, Small Firm and General Practice Division. Membership to GPSolo is complimentary for existing ABA members. Learn more about the benefits of signing up here.