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INCREASING PROFITS

Can every attorney in your office answer these 10 critical questions?

Want to see more profit next year? Get each attorney to draw up a practice plan for the year. A plan forces the attorneys to organize their work agenda by focusing on practice development, production, and self-improvement.

What’s more, it ensures that everybody does work that furthers the firm’s goals, it keeps the marketing focused, and it keeps the collections in line.

Use this 10-point format.

First are the hours goals

1 What is the number of hours you will devote to billable work?

This forces the attorneys to take a serious look at how they should spend next year’s time. It also forces them to look at their historical performance. It’s not reasonable, for example, for an attorney who has billed 1,400 hours for the past two years to plan to bill 2,000 hours next year. They also have to think about the non-billable work they want to do such as marketing and administration. If the attorney plans to spend 400 hours there, 1,500 billable hours of billable work is doable but 1,800 hours is unlikely.

2 What is the number of hours you will devote to non-billable work?

Here the attorneys have to estimate not only how much time they will have for non-billable work but the amount of time that work will take. An attorney who wants to do face-to-face marketing may realize that it will take 10 hours a week to do an effective job, and if the billable-hour goal is 1,800, that’s not possible.

More realistic might be five hours a week, which means the marketing will have to be spent on something less time consuming such as developing web content or holding seminars.

Next come the fee goals

3 What are your fee-receipt goals for 2018?

No attorney can expect to get paid for 100% of the billable hours. A 90% realization rate is more realistic. Here, the attorney needs to give specific dollar amounts. For example, if the billable hour goal is 1,500 and the hourly rate is $300, the attorney has to aim for 90% of that, or $405,000. Seeing the dollars makes the attorneys pay attention to the billing and also to the collections. As a result, they pay attention to client selection and to detailed and timely billing. They are also eager to follow up on their unpaid bills.

4 Give the percentage of fees you intend to receive from
a) referrals from referral sources,
b) clients developed by you, and
c) referrals from other attorneys in the office.

At least 80% of the fees should come from the business the attorney develops.

5 Give the percentage of fees that will come from
a) existing clients and
b) new clients.

Now the attorney has to revisit the marketing part of the plan. Somebody who wants to get more business from existing clients will need activities that develop the relationships with current clients and referral sources; somebody who wants new clients will have to focus on finding new business prospects.

And now the nuts and bolts

6 Describe how you will use your non-billable time in 2018.

This requires revisiting the non-billable hours section to see how to balance work such as marketing, administrative work, training, and mentoring.

7 Describe specifically the plans you have for attracting new business.

The attorneys have to explain exactly what they will do to achieve their marketing goals.

Somebody who is going to market to existing clients, for example, will have to decide on the when and where and how of meeting with the top clients to discuss their overall business needs. Somebody who is going to bring in new clients will have to decide on publications to pitch to, articles to write, speaking engagements to set up, and so on.

What’s more, the attorneys have to nail down the specifics. It’s not enough to say “write articles for trade publications.” They have to list the publications, the editors, the article ideas, and how they will pitch the articles. Or instead of “will contact current top 10 clients,” the plan has to list who those clients are and what the attorney will do to develop more business from them.

8 Describe your plans for cross marketing the firm’s other services to your clients.

This section is necessary for the health of the firm. The attorneys will have to plan for things such as giving the firm brochure to their clients and introducing their clients to the attorneys in whatever areas apply to clients’ individual situations.

9 Describe your other marketing plans.

Here the attorneys list general outreach work that’s geared to market the firm in general as opposed to bringing in business for themselves. These are things such as creating a firm newsletter, working on the firm’s website or providing staff or associate training.

10 Describe your goals to improve your skills and your ability to develop your practice.

Finally, the attorneys are forced to expand and improve their current skills and become even more valuable to the firm. Goals here include things such as getting continuing education in some area or learning about some new area of law that the firm could get into.

Approval plus continuing review

Each attorney’s practice plan has to be reviewed and also approved by the partners or section heads. That prevents anybody from going off on a tangent that’s not in line with the firm’s goals, perhaps targeting mom-and-pop clients when the firm is trying to move toward corporate work. It also prevents plan overlaps where two attorneys are targeting the same clients. Consider the example of one firm where the review showed that two partners were both planning to market to the same clients. Once they found that out, they decided to continue trying to reach those clients, but each would take a different approach.

And beyond that, the review and approval ensure that everybody’s goals are practical and reachable. If someone lists a vague goal of “marketing to larger clients,” the partner reviewer can ask “okay, so how are you going to do that?” Once the plan is approved and put into action, it needs yet more review—at least monthly, if not weekly—to evaluate the progress and also to see if changes need to be made. That way, somebody who has planned to spend 10 hours a week on marketing doesn’t slack off. Then to put some teeth into the plan, make reaching the goals part of the year-end review process.


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