Vol. 75, No. 12, December 2002

Run a Business, Succeed in Practice

by Ann Massie Nelson

Fear of failure drives lawyers to cut corners, race from crisis to catastrophe, and practice "threshold" law, according to a nationally known law practice management adviser.

"Whatever crosses their threshold with a checkbook, they take," says Dustin Cole, president of the Florida-based attorney training and development firm Attorneys Master Class. Cole was keynote speaker at a recent conference of lawyers' professional liability insurers.

Private practitioners, particularly those in small firms, are more tempted to accept marginal clients or practice outside their areas of expertise as competition among lawyers and other professional-service providers grows. Fear of failure, combined with lack of business savvy, prompts lawyers to take clients who, in the end, fail the cost-benefit test.

"Lawyers spend 80 percent of their time on clients who generate only 20 percent of their income," Cole says.

Cole advises lawyers who want to succeed financially, reduce malpractice risk, and rediscover their passion for law, to carefully select the clients and the matters on which they spend their time and energy.

1. Distinguish between the roles of legal technician and business owner. Law school teaches lawyers to be good legal technicians. Successful private practitioners know the law and business.

"Simply being a good technician is not enough," Cole explains. "The technician doesn't have a business. He has a job. The delivery of service is wholly dependent on the technician. The only way to earn more is to work more hours."

By contrast, the business owner creates the vision, sets the course, and puts people and systems in place to operate the business, even when she is away from the office.

"Very few lawyers have personal or professional goals, other than to develop 'a good practice.' They champion businesses every day, yet they have no picture of what it would be like to manage their practice as a business. They never received any training beyond 'be a good lawyer,'" Cole says. "Rather than plan their future and learn the skills to get them there, they just work hard and hope everything comes out all right."

2. Cull clients who don't make the grade. Cole recommends reviewing your client list and grading clients, based on profitability and other factors you value. "A" and "B" clients are the ones you look forward to meeting with. You find their legal questions interesting. You feel confident that these clients value your work. You know you'll get paid.

"C" and "D" clients demand an inordinate amount of lawyer and staff time, pay reluctantly (or not at all), and remain unsatisfied, no matter what the result. They're the ones whose file you can't bear to open. You put off calling them back. You secretly hope they will become disgruntled enough to fire you, which they might do: right before they file a malpractice claim or ethics complaint.

"Lawyers don't understand the hidden cost of 'D' clients," says Cole. "They literally fill up the practice so there's no time or energy left to do those things that are more valuable, such as seeking out more 'A' clients, taking better care of existing 'A' clients, learning how to manage the practice better, or going home to their families. They don't see the time that would be available to them if they expelled their 'D' clients."

3. Take charge of your time. If you routinely procrastinate until you are forced to move heaven and earth to meet your deadlines, look for less risky ways to get your adrenaline buzz and demonstrate your celestial powers. Missed deadlines are the source of about one-fifth of legal malpractice claims, Cole says, citing statistics from the National Legal Malpractice Data Center.

Learn to manage interruptions. Make sure you aren't unwittingly inviting people to interrupt or creating your own disruptions. Cole recommends that you create a schedule and block out times for placing and returning phone calls, responding to email, meeting with clients, and producing work product.

4. Cultivate the practice you want. When you establish goals, focus your attention on the clients and matters you enjoy, and take control of your time, client development becomes a pleasure, not a chore.

"Attorneys resist client development because they think it's sleazy or unethical. The message they got from law school is 'just do good work and the clients will find you.' But with so many lawyers in practice today, that just isn't true anymore. Part of running a successful business is learning to attract the kind of clients you want," Cole says.

From the old view, anyone who had to solicit business was either a bad lawyer or unethical. "Firms would bring in a hired gun - a nonlawyer marketing person - to do the 'dirty' work. This simply helped lawyers live the illusion that business skills were unnecessary. Unfortunately, when the hired gun left the firm, the business stopped coming in. The lawyers were back to square one."

According to Cole, good client development isn't complicated. Basic principles include:

• identifying your "A" and "B" clients
• building relationships and rapport with them
• fostering referrals to other "A" and "B" clients
• creating top-of-mind awareness with other referral sources
• being selective and saying no to "D" clients
• developing a personalized marketing plan that allows you to do things you enjoy and that fits your personality

"Lawyers tend to believe 'great practice or great life - pick one.' With the right skill set they can have both. They can spend their time helping clients they like, doing work they enjoy, and have a very successful practice," Cole says.

Dustin Cole can be contacted at dustin@attorneysmasterclass.com.

Wisconsin Lawyer