First and foremost, every law firm is a business, first, and a center for legal counsel, second. Although law offices are places to receive legal counsel, they are primarily businesses and must be treated as such. Many law offices, mostly solo practitioners, make certain business mistakes that can potentially have a huge negative impact on their practice. Upon researching and surveying seasoned attorneys, we spotted nine common business mistakes that can be easily avoided. These are the top 9 business mistakes made by law offices and solo-practitioners.
Why Law Firms Should Always Be Prospecting For New Business
Prospecting is often one of the most important contributors to the success of any business, and it is so often ignored. The issue is that many law offices depend on external factors that drive in business, but these factors are usually out of their control. Prospecting gives you control over finding new clients. Prospecting is very similar to sales, but it’s not quite the same. The difference is that sales depend on “closing the deal” with your prospect. I recommend “prospecting” over “sales” because even if your prospect doesn’t become your client, they might know someone that they would want to refer to you. On the flip side, if you hadn’t been prospecting, very few people would know of the existence of your law office, which would cut the stream of new clients and referrals. Prospecting allows law offices, especially solo practitioners, to create their own opportunities.
Not Having A Marketing Plan For Your Law Office
In a professional world as competitive as the legal industry, it is one of the worst mistakes to believe that clients will just walk into your office and hand their business to you. When you are competing against larger firms that have more “firepower” than you do, or solo practitioners who are ready to undercut you by lowering their price, you have to make sure that you stand out from the crowd. Not having a marketing plan can be as foolish as driving with blindfolds on! Start today if you haven’t created marketing plan yet. You don’t need to have a big budget for a massive advertising campaign. Start small, and slowly build on it. If you do have enough capital, then go all out and dominate the legal presence in your community.
For those who are starting off with a smaller budget, the best advice that I can give you is to think outside the box. Find out where your target audience likes to hang out and put your message there (such as: golf courses or your local chamber of commerce). Perhaps you can think of ways to let your presence be known by those who are in dire need of your legal expertise.
Forgetting About Your Online Presence And Reputation
The marketplace for products and services has been rapidly changing, especially in the past couple of decades. Buyers are becoming more cautious, and sellers are becoming more transparent. Buyers due their due diligence by reading reviews and testimonies, and sellers are becoming more aware of the power of a great online presence. It is no different in the legal industry. Nowadays, people choose which law office they want to hire based on the office’s online reputation, assuming that they aren’t being referred to any particular law office.
Establishing a great online presence takes time, but it can be the very reason why someone hires you. Your focus should be on collecting great reviews from your peers, current and old clients, and anyone that you’ve ever done business with. It’s as simple as asking them to write a review on Yelp. You should also maintain an active social media account, such as Facebook or Twitter, so that you can share news about your accomplishments with the world.
Large Overhead And Improper Financial Management Of Law Offices
Another huge mistake that law offices make is not having proper financial management. A law office, regardless of how small or big it is, is a business, and therefore, it should be treated as one. If you have an opportunity to reduce your overhead costs, then you must make it a priority to take that opportunity. By cutting costs, you are increasing your cash flow, and a greater cash flow can be used to grow your law office.
Focus on managing your monthly subscriptions. In many cases, you can save hundreds, if not thousands, of dollars every month by eliminating or lowering monthly subscription costs. If you’d like to read more about lowering monthly expenses, you can check out Law Firm Overhead Cost Reduction | 5 Great Cost Cutter Tips.
Not Staying Up-to-date With News Relevant To Your Practice
It goes without saying that experts in any field are the ones that expand their knowledge-base. In the case of attorneys, you are not selling a product. You are selling a service, and that service is your “legal mind”. People hire you for your legal mind and your overall knowledge of your practice area.
If you are an attorney who practices real estate law, you must stay up-to-date on the news about the entire real estate industry and other industries that directly impact the real estate industry. Subscribe to online newsletters and magazines that relate to your practice area and make a habit to read industry-related news every day.
Choosing The Wrong Legal Partner
Choosing the wrong partner will eventually lead to disaster. This applies to every type of partnership, not just legal partners. It is very common for law firms to split because of a difference in each partner’s vision. Before you choose to partner with anyone, you have to make sure that they have the same vision as you do.
You must really get to know the person that you are making partner, and you must set rules and limitations based on the dynamics of your personalities. Otherwise, as with many failed partnerships, your partnership will not last long.
Choosing The Wrong Clients
They say that the success of a business depends on its employees. Although that is true, one can also say that the success of a business heavily depends on having the right clients. This is especially the case for law offices. In a nutshell, having the wrong client will not only have a negative impact on your financials, but it will also negatively impact your passion of the law. The wrong type of clients are usually the ones that cost you time and money, an do not trust or appreciate your expertise.
However, this is a classic case of “which came first, the chicken or the egg”. Choosing the right clients depends on having the financial ability to pick and choose who you want as a client. When your law office isn’t financially-independent yet, you may have to accept the wrong type of clients to keep the lights on. You must slowly reach the point where you have stable clients, so that you can afford to turn down business from anyone who may cause you trouble.
Refusing To Outsource When You Need To
It is the nature of the entrepreneurial spirit to be very hands-on with every aspect of their business. In case you’ve missed the point of Business Behind Law, we believe that every solo practitioner or founder/partner of a law firm is an entrepreneur. However, what makes a great leader and manager of an organization is how you delegate tasks to other people, and if need be, outsource tasks to third-parties.
Refusing to outsource tasks when you need to will very frequently end up costing more time, money, and effort. For example, if you don’t understand how to optimize your website with SEO, then don’t waste your time on it and hire a professional who can help you
Avoiding New Technology
Technological advances are made to make life easier. Technology is meant to provide a solution to problems, especially in the workplace. In a mature industry, such as the legal industry, avoiding new technology might eventually end up hurting your law office. You can see how technology has improved the legal industry by just comparing the tools that are available now to the ones that were available three decades ago. Technologies, from basic computers to advanced legal research databases, have been created to help law offices serve their clients better.
I have to put in my plug now, because JurisCase is seriously one of those technologies that can help you save time and money. JurisCase is a legal research database that incorporates artificial intelligence to help attorneys save time and money, and more importantly, to improve the relevancy of their searches. It studies the search patterns of the researcher to present case law that is relevant to the researcher’s practice area. JurisCase provides users with access to both a vast legal research database and a private investigation database, allowing users to search for private information, such as: location verification, asset reports, bank and debtor reports, criminal history and background checks, and much more. Do a 3-day free trial of JurisCase and see what it’s all about!