Back to Basics for Lawyers: January 2012
Welcome to the January edition of Back to Basics — a Business Briefing for Lawyers and a belated Happy New Year to all my readers.
This month the focus is on taking action.
Even the best laid plans depend of solid action to make them happen but how many times have those best laid plans come to nothing because of your own inertia.
The best way to get to your objective is to actually do something about it.
We will see in this edition of Back to Basics that even the smallest of steps are important.
Any journey must start with a single step—don’t let your hopes and ambitions be thwarted by failing to put one foot in front of the other!
If you need any help with your plans or putting them into action, please get in touch with me—I’d be delighted to help.
Brian O’Neill LL.B MBA
t. 07855 838395
I’ve got the plan……how do I start?
In the December issue of Back to Basics we looked at Forward Planning and made some recommendations of what to do and where to start. You’ve all don’t that….right?
January gives everyone an ideal opportunity to throw off the old and look to the new. It’s a new year with a whole twelve months to look forward to. If you’ve really taken time to think about what you’d like to do in 2012 and how you’d like to achieve it, then taking action is the very first step to achieving your objectives.
It doesn’t matter whether your plan is written on a single sheet of paper or is a professionally bound and presented plan – without taking that first step you will never achieve anything.
All the best plans depend on action. If you’re travelling to your destination, you need to start somewhere. You might not be able to see your destination but you usually know how to get to the end of your street. Start with the end in sight and take those small steps that will lead to achievement of your goal.
January last year saw the first publication of Back to Basics for Lawyers. I had had an ambition for quite a long time to produce such a publication—short sharp management tips and recommendations that take up no more than two sides of an A4 sheet of paper (for those of you who print this off). I planned out the topics for the first twelve months, I spoke to some colleagues and asked if they would contribute occasionally (and to Simon who I asked to contribute in every edition) and then went about listing the things in each topic that I wanted to cover—and the list grew and grew and grew……..but I still hadn’t achieved anything. I didn’t actually achieve anything until I typed my first word—then my first paragraph and, finally all the words for the first edition. I then assembled the Briefing into the style of publication you are now reading and incorporated Simon’s piece. At last, Back to Basics for Lawyers was born—and here we are, 12 months and 12 editions later in a brand new year and yet another edition of Back to Basics for Lawyers.
All this couldn’t have happened without those first words. All the planning in the world wouldn’t have achieved anything and it would all still have been a dream.
If you truly have done some work in setting your objectives, start to realise them by taking even the smallest step that will help you on the way—and if you haven’t yet started—don’t you think it’s about time you did? Nobody else is going to do it for you!
Growing your business – January 2012
In last month’s article my main point was this – it is possible for any business to grow in this economy. It requires thought, it requires knowledge of your clients, it requires the ability to put yourself in the client’s shoes and imagine a better buying opportunity. I asked you to think about why your client is your client. Hopefully you have had some quiet time to contemplate this.
The potential for a law firm to grow is different for each firm. A sole practitioner is different from a chamber practice, which is different from a corporate law firm; so the strategies have to reflect this. But the principles for increasing turnover are the same – these I also talked about last month – attract more clients, or, increase the amount each client spends (ideally both).
Attracting more clients – promote yourself. It’s tremendously effective when carried out well. Doing it well means being clear about the message and the benefits, and, targeting this at the right recipients. Here are a couple of examples – having thought about things over the break you may feel that at this time of the year a good message to target your existing clients with is – the importance of up-to-date Wills and the benefits of Powers of Attorney. An alternative plan could be one that says – we need to remind our clients of the range of services we provide. The former plan is value based; it offers some information and advice up front and persuades the recipient that there is some knowledge and potential advantage to be gained from further investigation – when done correctly it also achieves the second plan’s aim. Embarking on the second example is not necessarily a bad plan, but it is difficult to establish a ‘call to action’ with it, i.e. give a reason for the recipient to contact you. You could put an ‘offer’ into the message, for example a free or discounted will with every purchase, but in my opinion the overall message is weakened by being price led as opposed to quality led. Now that you have spent some time analysing your clients – come up with the best plans that cover all types of clients so that everyone gets at least one message this year.
Increasing the client spend – this often requires some even smarter thinking as there are a few strategies you can examine. There is the discount store scenario – how much can you deliver for a set fee. This is often useful for conveyancers, particularly those that perceive the market is price led. Understand what you can deliver for the market rate and call this the Bronze Standard, then create 2 higher levels of service, the Silver Standard and the Gold Standard and specify what you will provide and a price for these. When someone asks for a quote, offer all 3. The questions that follow tell you all you need to know about the prospect and how to handle them in terms of whether they are truly price driven or if they might appreciate a little more by way of service and fee. These are the clients that you must identify, across the board. Those that appreciate a little more and understand that they need nurturing; they appreciate the concept of value, so mark them out for this because you can provide them with more services. These are your good clients not the ones that buy on price.
All firms must be able to identify and send messages to their good clients. Use your Practice Management System to flag these clients and keep their details up-to-date. Regularly correspond with them, 3 or 4 times a year, without fail. It’s no use just doing this sporadically. It must be regular and reliable, in order to build a relationship and persuade these clients that you are interested in them and that you do have their best interests at heart. Don’t expect massive results immediately, just because you send 1 letter. But by the end of the year you should be able to see the difference, easily.
Have a good 2012 by making it a good 2012.
Simon Greig is Sales Manager of LawWare Limited, Edinburgh. Contact Simon at email@example.com
I make no excuse for revisiting this topic over and over again. You might have the most complex and detailed plan and be desperate to put it into action but you will never ever achieve it unless you have the funding to make it happen.
In any plan, you need to carefully set out your projected revenue and expenditure—what income you calculate you will generate when you carry through with your plan and how much you will need to spend to achieve your objectives. It is incredible the number of legal firms that do not have even the most basic financial projections and yet still expect to be successful year on year.
Why is it that in any business plan, a large portion is taken up with the financial aspects? Simple really. Without the right funding any plan is doomed to failure from the start.
Review your plan in conjunction with your financial projections—your Profit & Loss and, most importantly, your Cashflow Projections. It is surprising how many lawyers still struggle with projections and have difficulty explaining the difference between profit and cashflow only to find out the difference late in the day when they are showing decent profits but have failed to collect the cash due to inadequate credit control policies!
As Mr Micawber in David Copperfield famously said “Annual income twenty pounds, annual expenditure nineteen, nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery”.
Make sure your plans are properly costed out and if you’ve not yet done that, this is one of the very first things you need to do.
Sit down, work out what you and the other fee earners in the firm are likely to generate in the coming 12 months. If you’re really stuck, have a look at what was generated for each fee earner last year and consider whether there is likely to be an increase or decrease in that level. You should know your business and the challenges in the market, be able to take into account what impact your plans will have and come up with figures that you can support.
From an expenditure point of view, take each of your expenditure headings and really challenge yourself on whether you need to spend this money or not—you might want to spend it on this item or that but you might not need to spend it—know the difference and discipline yourself to spend only what you need to spend. Do not trust your finances to luck—the odds are always stacked against the gambler!
Don’t wait to get it perfect
If you really want your plan to fail, then try to get it perfect. Learn quickly that there is no such thing as the perfect plan—it simply isn’t achievable.
Now, I’m not saying that you shouldn’t aspire for excellence, but if you’re trying to create something that’s perfect, you’ll spend so much time trying to create that perfect plan that you’ll never get round to putting it into action.
Consider what options are available to you. Ask your partners colleagues and staff. Make sure you have a common understanding of the problems and when you gather the information from these sources you will have a list of what’s available to include in your plan (there is a specific workshop that I run that helps you with this part of the process). This will help you develop a plan that is robust and resilient and up to the challenges you are facing.
Every plan has some sort of shortcoming or defect and you’ll usually only find that out when you start to put it into practice. That doesn’t mean that you shouldn’t start until you’re sure or that you need to think through every conceivable option.
You should strive for excellence and part of that exercise is setting down the actions you intend to take—what comes first, what’s next and what’s after that. And so on and so forth. You’ll learn fairly quickly what’s working and what’s not and which of your assumptions (and you will need to make assumptions when putting your plan together) work and which don’t.
Think about it this way:
You need to be in motion before you can change direction. If you don’t like the direction your business has been going or the results you are getting you need to do something about it. You can only do that something if you are in motion—and they way to get into motion is to make a start. Once you’ve build up some momentum it’s likely that you’ll realise that there are opportunities available to you that you might not have thought about and because you’re in motion you may be able to avoid some of the threats that are out there.
If you are standing still when the threat comes along it can be very difficult to avoid it and that can have a disastrous impact on your business.
Make sure your plan is fundamentally sound and not fanciful or over-ambitious—remember the SMART objectives we looked at in January 2011 edition. Get up and running and follow your plan and fine tune things as you go.