October 23, 2012


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Differentiate! The Law Firm Marketing Strategies Issue

 Table of Contents | Features | Frontlines | Technology | Business

September/October 2009 Issue | Volume 35 Number 6 | Page 60



There's an old saying that you can't fix the roof when it's raining, but when it's not raining the roof doesn't leak. Lots of repairs don't get made for just that reason. Similarly, when the economic picture is sunny and worries about take-home pay are nowhere on the radar, you don't worry much about your finances. For many lawyers, alas, the situation is changing.

In this issue’s Trends Report, our fellow columnist Bob Denney notes that there has been an increase in the number of lawyers who are forming their own firms, either in response to the layoffs and hiring reductions at existing firms or for other reasons. (See “Can You Spot Which Developments Will Continue?” by Bob Denney in this issue.) Since there are so many lawyers who are starting up their own practices today, we got to thinking about what makes the difference between success and failure in these ventures. We realized that there are really seven essential actions that you need to concentrate on in order to be successful. Here they are:

  • Plan
  • Communicate
  • Implement
  • Monitor
  • Follow up
  • Renew and learn

Let’s look at the first three actions in this installment. Then in the next issue, we’ll wrap up our collective series of Profitability tips by covering the other four to make sure you get, and keep, your practice on a healthy and rewarding road.


Planning is, in its essence, not just knowing where you want to go, but also being prepared for obstacles that may be thrown in your path on your way there. The Boy Scouts’ motto is “Be Prepared,” and we couldn’t say it better.

Accordingly, well in advance of opening your office doors, you must take the time to prepare a business plan for your practice. Detail in writing what your practice will look like at start-up and for (at least) the first couple of years afterward. What and where is your target market? How will you reach out to these clients? Most lawyers when they open a new practice assume that they have to take whatever matters come in the door. However, it is actually better instead to focus on a niche area or two, as niche practices generally have higher margins that can be achieved with a lower number of overall clients. If you are not (yet) in a position to launch a niche practice, you should at least shoot to grow one by actively taking steps every day to take you, bit by bit, toward that goal. Furthermore, this will assist you in determining how to organize the business side of your practice toward your stated objectives.

  • In addition, your plan must address how you will finance your practice, not only from a start-up perspective, but also from an operating cash flow perspective. You need to have a budget that outlines your projected setup and operating costs and the income required not only to stay solvent, but also to meet your personal earnings requirements. Most importantly, you need to know how many billable hours you must work every day to generate the cash flow required to stay afloat.

As we’ve discussed in prior columns, the average lag time between rendering an invoice and receiving payment is 105 days—which can and does cause cash flow difficulties for new and established firms alike. Make sure your budget reflects this lag time, allowing you to plan out your cash flow to pay bills that have a 30-day payment window while you wait for payment from clients.

Of course, planning also extends to office and technology systems as well. In particular, your network and information technology should support the production of excellent legal work and also the recordkeeping and financial program in the firm. Good integrated legal and trust accounting software will help you start out right, especially if it is matched with an experienced bookkeeper, someone who can both maintain your financial systems and provide valuable feedback on your fiscal health.

Starting out right means planning for success on the files of each of your new clients, in terms of both a good legal outcome for the client and a good financial outcome for you for handling the work. To achieve this, at the beginning of every engagement you want to outline the expectations you have for the client in meeting your financial terms for doing the work. Incorporate those expectations in a written retainer agreement (signed by the client) together with the terms for an up-front retainer (“earnest money”). Make it clear to all clients that continuing the legal work is dependent on their upholding their financial side of the agreement. Anticipate how you will end the relationship if clients cannot keep up their side of the file and put those terms in your retainer agreement as well.


In founding your own law practice, you are becoming a leader. Your staff as well as your clients will be looking for you to demonstrate that you have planned where you are going. While you should trust in your staff to achieve the goals that you set out for them, you must be the one who knows what the game plan is and bring people into the solution. In the sage words of Dwight Eisenhower, “Leadership is the art of getting someone else to do something you want done because he wants to do it.”

Set daily, weekly and annual goals for yourself and hold yourself accountable for your actions (or inactions, as the case may be). Draw people into your vision and keep describing where everyone is headed. Most importantly, hold yourself to a higher standard than you hold anyone else. The staff will recognize this and appreciate it. Leadership is a learned art, so watch others and learn from their example.


  • There are so many aspects of the practice of law that depend on effective communication that it is difficult to know where to start. But probably the most important quality of communication is listening. The most effective lawyers know when to stop talking and to actively listen to the client and absorb not only the verbal messages being delivered, but the nonverbal ones as well.
  • Throughout the intake process, the client feel genuinely understood is the keystone to establishing the appropriate goals for the file as well as building the kind of strong lawyer-client relationship that keeps more business coming in to you.
  • Your retainer agreement is an exercise in communication. It should not only lay out the necessary legal items, but it should also shape client expectations, establishing your road map for the file (the anticipated legal steps to be taken) and reinforcing the subtle message to your clients that there are expectations for them to meet to keep the file moving.

In addition, your invoices and letters to clients are all communication tools, so in them you need to clearly set forth the results that you have achieved for your client and your value as a lawyer.

Of course, communication extends far beyond just the lawyer-client relationship. Good communication is also necessary on a daily basis with your partners, associates, staff members and others. Among other things, do your compensation agreements communicate the goals that are to be met by rewarding the right behavior? Many firms do not reward knowledge sharing, mentoring or firm governance in their partnership compensation agreements—reinforcing the negative message that these goals are not important to the firm when, of course, the exact opposite should be true.

Lastly, effective communication is at the heart of successful marketing and business development for any law practice. In all your marketing efforts and materials, you need to think through the underlying messages you’ll be conveying, particularly ones related to the leadership, planning and communication you will take with your clients. (The feature articles in this issue will give you a raft of great ideas for how to achieve your objectives!)

Stay tuned for the next issue, when we will conclude our series of Profitability columns with best practices pointers on how to implement, monitor, follow up, and learn and renew for long-term success.


About the Authors

David J. Bilinsky is a practice management consultant who focuses on enhancing law firm strategy, finance and technology initiatives.

Laura A. Calloway is Director of the Alabama State Bar’s Practice Management Assistance Program.