Are you doing the things that make you the most money? It’s a reasonable question that I think most solo and small firm attorneys are already asking themselves. By the way, if you’re not asking yourself this question start doing it today, not tomorrow. You can only answer the question if you already determined what directly makes you money and what doesn’t. For most attorneys, there are two ways you make money, and they aren’t at all the same. One is creating new money, and the other is maximizing existing money.
So creating new money is in the process of getting a new client. That’s a big process that encompasses a lot of items, but for simplicity sake, it’s fair to say a new client makes you new money. Conversely maximizing existing money is the process of making a client you already have worth more. Successful negotiations or litigation can be the source of maximizing existing money. Upselling, generating a referral, better fee agreements, all also help maximize existing money.
Now running a profitable business includes a lot of activities that don’t directly make you money. Lots of those activities can’t be left undone. This would leave you in a pickle if every day you only did the things that directly made you money. So you have to accept a certain reality, you will be doing things that are indirectly related to you making more money. You could separate activities by degrees. The degrees from which things (activities) put dollars in the revenue category of your profit and loss statement.
Take answering doing intakes for example. Our receptionist gathers case information, reviews the basic facts (5th degree), and then immediately declines the case, refers the case or passes the decent stuff onto a claim specialist (4th degree). Another paralegal hunts down medical records and gathers the relevant documents (3rd degree). The specialist then finalizes some extra details with the client and prepares a demand package for submission to the insurance company (2nd degree). Now with the approval of one of our attorney moves the case forward to negotiations with an adjuster or perhaps filing suit - where you should be involved (1st degree). When you start out, you should be on a mission to be at the point of making money everytime you touch a case. Move closer and closer to the 1st degree every year, better yet, every quarter.
You can move quickly along this continuum, much quicker than most realize, by outsourcing to the right vendors, hiring cleverly, delegating intelligently, and by creating dynamic systems.
Remarkably many of us achieve the status or success of having the opportunity to avoid all the activities that don’t directly make us money. And in spite of this, we find ourselves doing tons of stuff that doesn’t make us money. We do stuff even worse than gathering medical records like ordering supplies, getting status updates from clients, scanning lawyer forums or Facebook, or hitting the 24-hour news cycle. That’s why you always have to be asking yourself if you’re doing things that make you money because everything around you by their very nature pulls you away from it. Can you always be doing things that directly money? No, but you can always do better than you did today.
Solo and small law firms that suffer are the ones that have high-value employees or business owners collating paper, calling an accident report, or ordering soap for the restroom. Get employees or tech to do those things for you while you do things that make you money.