For almost the past decade, we have seen tech companies blossom in Silicon Valley as investors flock like never before to hit it big with the next IPO or buyout. Not everything in the Valley is perfect, but the high-pressure environment produces a lot of information about what business practices work best - and shines a light on the really, really bad ideas as well.
The biggest lesson we can all learn from the tech industry is the overall fight you find in the most successful startups. Few things are more motivating than the opportunity to score a giant Series A funding round. Unfortunately, your law firm doesn’t have the advantage of attracting investment capital. Instead, you have to do things the “old-fashioned way” and build an actual business surrounding your legal services. But that doesn’t mean you can’t approach running your law firm like it’s a startup, even if you’ve been operating it for a decade or two!
Starting Fresh with a “Startup Mindset”
Imagine this scenario: you are three months out from launching your law firm. Right now, you have some time to think critically about what you will do when the doors open. You’re considering three important objectives:
1. What practice area will I focus on, since I know being a specialist is more attractive to potential clients than being a generalist?
2. How will I attract potential clients (aka leads) and convert them from potential to paying client?
3. How will I deliver the service I offer, including the people I need to hire to do the work?
Those three questions are the essence of what a startup founder needs to have before he or she launches or gets investors. Choose your product/service, identify your ideal client, and deliver the product/service to the ideal client. Seems simple, but it’s where you need to begin. If you leave out just one of those questions, the whole business falls apart. You won’t find investors putting money into a startup that hasn’t
Unfortunately, most law firm owners never took the time to think critically about these questions. The only thing that gets some thought is the first question about their practice area. Sure, there are some general thoughts put into the idea of marketing (“Well, I’ll ask for referrals from my network”) and delivering the service (“I’ll do the legal work for now and hire a paralegal when it gets overwhelming”), but those ideas are short-term. There isn’t a plan on how to scale up the law firm, starting with bringing in more revenue through more clients. Every startup has to deal with the acquisition of customers/clients. They pour resources (time and money) into their marketing and sales in order to build revenue. In the earliest days, they have to think critically about how they acquire those customers/clients. Their focus isn’t on “building a brand,” it is entirely on bringing in revenue. Building a brand comes later after the revenue starts to grow.
You can step back from your existing practice right now and reevaluate where it stands. You are allowed to reshape how it works in order to align your practice with your goals. This includes focusing on a specific practice area or niche within the practice area, rebuilding your marketing from the ground, and giving serious thought about if someone should be fired and/or hired.
Ask Yourself, “Would I Invest in My Practice?”
This requires some self-analysis, but it is a powerful way to view your law firm through an outsider’s eyes. If you had $500,000 to invest in a business (and you were an independent investor, not the owner of your practice), would you put that money in your law firm?
Investors look at metrics like the amount of revenue made per employee and the cost to acquire new customers/clients. They also want to see a business plan with projections about how the startup will scale up their operations. Where do you stand with your metrics and your plan? It’s okay if you haven’t thought about it recently - that’s why it’s important for you to read articles like this one!
If you’re not satisfied with the potential return on your investment in the law firm, it’s time to step back and figure out why you wouldn’t invest. Is the revenue per employee ratio too low? This often leaves little profit at the end of the year for the owner/investor (i.e. you). Has the practice stagnated without a marketing plan? That’s where an organization like Great Legal Marketing steps in to provide you with a path to follow.
Standing Out in a Crowded Market
There are plenty of social media platforms out there. The most successful ones and the ones that break through the noise are those that have a unique selling proposition. Think about Instagram and its focus on photos with filters or Twitter as a “micro-blogging” platform. Spotify focused on you creating playlists instead of listening to channels like Pandora.
What is your legal startup’s unique selling proposition (USP)?
It may seem like law firms are similar if they handle the same types of cases, but each one can stand out if it wants. You can be a law firm that provides a personal concierge to walk new clients through the bankruptcy process - it’s just a different way to phrase having a paralegal assigned to a file. You don’t need a proprietary way of doing business. Just provide better service and give that service a special name. Something as simple as a basic will can be relabeled as the “Tier 1 Inheritance Plan.”
Your ability to stand out is equal to your interest in standing out. The legal profession often casts a wayward glance at those brave enough to step out of the status quo and be truly original. Of course, those are the most likely to be rewarded greatly for their choices. Reward comes with calculated risk. Just like with startups.
Right now, you get a fresh start. You have my permission - not that you need it, of course - to mentally step back and retool how you want your practice to work. Once you develop a clear vision, go about executing it with enthusiasm and diligence. Don’t listen to the naysayers. They aren’t the ones writing the checks to support your family, your staff, and your firm.