There is a reason most law practices fail, even those that appear to be successful for the lawyers that own them.
It’s not bankruptcy. It’s not the sudden loss of a partner or leader. It’s not fraud or malfeasance. It doesn’t even look like a regular business failure.
Failure, defined simply, is not accomplishing an aim or purpose.
So let me invite you to consider: What was the dream law career that inspired you to study for the LSAT, apply to law schools, work your butt off through the three years of classes and exams, and then take and pass the Bar?
For me, I truly wanted to make a difference in my clients’ lives, work a reasonable schedule, and be a trusted advisor for my clients.
What was your dream?
Now, look around you.
What do you see?
If you are anything like me when I first started out, your reality is far, far, FAR from the dream you once had when you went to law school.
Fortunately, if you’re reading this, it’s not too late to turn things around. And, you don’t have to leave the law to do it. Your law degree is truly your most valuable asset, when you know how to use it to create a life and law practice you love.
Most lawyers don’t.
In the space below, I’ve shared the four major warning symptoms of slow failure for a law practice, how you can spot them, and what you can do to turn your life and law practice around. Face and heal these symptoms and starting today, you can begin watching your law practice thrive for the rest of your life.
Failure for law businesses doesn’t look like failure in other businesses.
I believe it is our love for the law and helping people that keeps us in failing practices, for years — sometimes decades. Without that passion to serve our clients and create a more just world, any other business owner would simply close up shop and move on much more quickly.
But, typically speaking, we are fighters. We won’t give up. And, that’s good news for you because when you learn these 4 symptoms and see how easy it truly can be to fix them, you’ll do it and you’ll have a life and law practice you love.
This post is a warning shot across the bow. You may see yourself in this post. You may experience some anxiety, or fear. It is my hope that you leave inspired.
It’s a longer post, so print it out, or schedule time on your calendar to read it, or put your phone on forward and read it now.
4 Symptoms of Slow Failure For Law Practices and How to Fix Them Today
Slow Failure Symptom #1: You take whatever walks in the door on a one-off basis (hello, door lawyer) and every transaction is one-off.
A “Door Lawyer” is one who takes whatever walks in the door. You do it because you think you have to in order to keep your law practice alive. The truth is, if you’re a door lawyer, you are actually doing the exact opposite of what you need to in order to have a thriving practice.
You can’t possibly have any systems. You likely don’t have a team (or, if you do, you’ve got high turnover because it’s nearly impossible to train and retain team members without systems), and you are constantly starting every month over at zero.
Hello, stress city.
When all you do is create one-off wills and trusts for families, or entity formation documents for business owners, or handle a one-time divorce, or a single contract review, or one immigration matter or bankruptcy, or [fill in the blank with your one-time transaction] you must know you are leaving major amounts of impact and income on the table.
You are stuck on the cash flow roller coaster and the marketing treadmill of dread (if you are even doing any marketing).
Here’s the biggest problem with this insidious set of symptoms … the mentality that you think you need to compete with other lawyers in your town, or with online automated services, is the exact mindset that will keep you stuck exactly where you are.
Here’s the answer:
Stop waiting whatever comes in the door, and become THE go to lawyer in your community for a very specific type of person who needs and wants to hire you. Then, shift your thinking so you realize that the first thing that person comes in the door for is just the beginning of a lifetime relationship, which will pay you dividends in perpetuity.
When you make this shift, you are no longer competing. Instead, you will set yourself apart completely from all the other lawyers in your community as a true Trusted Advisor.
When you serve as a trusted advisor to business owners or to families in your community (think of yourself as a consigliere), clients will no longer see you and your practice as a faceless document factory that they can comparison shop based on price.
When people in your community truly know you have their best interests at heart, your clients will treat you like a partner in their families and businesses.
And when that happens, you are no longer competing with automated online services or other generic law practices in your community.
- You will command higher fees that your clients are happy to pay.
- They will refer all of their friends, family, clients and colleagues, significantly decreasing the energy you must put into marketing.
- Your clients will hire you repeatedly, increasing the average lifetime value of each one of your clients, making each marketing investment pay off many times over.
- And you will love your law practice again.
If you are taking whatever comes through the door, or doing just one-off transactions with your existing clients, stop the bleeding, and shift the way you practice law going forward so you never have to compete with technology or cut rate lawyers ever again.
Slow Failure Symptom #2: You don’t invest wisely in marketing because you don’t understand your numbers and/or the way you are marketing is wasted energy, oftentimes even marketing for your competition.
The world-renowned marketing coach for small business owners (and one of my former personal mentors) Dan Kennedy has a famous quote:
“Ultimately, the business that can spend the most to
acquire a customer wins.”
Learning this from Dan Kennedy was a game-changer for me. I went from thinking about how little I could spend on marketing – to considering how I could invest more than any other lawyers in my community on marketing.
And, I don’t mean just money. I also began to ask myself how I could spend more time, energy and attention on marketing than anyone else.
This comes down to getting intimate with your numbers. That can often be hard for lawyers to do. They didn’t teach it to us in law school, and if you are like me, you might have gone to law school because you didn’t like math.
But, once I began to pay attention to the numbers, I could see that before I spent another dollar or wasted another networking lunch, I had better change up my relationship with money math and start making better choices.
So I asked myself …
What would have to be true for me to get strategic about my marketing and want to invest in marketing the right way?
When I took a good hard look at my numbers (and I had to get help to do this because I did not know how to do it myself back then), I saw it so clearly.
I needed to have a system in place for engaging just about every person I talked with each month at an average fee of $3,000 each and I needed to talk to at least ten people a month.
I couldn’t waste my time anymore speaking to people who found what I said interesting, but were never going to take action – and if they did would end up hiring someone else.
I couldn’t afford 2-hour networking meetings and handing out a bunch of cards.
And, I couldn’t afford to spend all day in my office answering phone calls from opposing counsel, prospects who didn’t respect my time or weren’t going to move forward.
You can’t either.
Instead, you must start by having a system in place that guarantees you’ll engage near 100% of your qualified prospects. And you must engage clients at higher fees – between $2,500 and $5,000 – which is paid upfront, every time.
That starts with you truly valuing the service you provide, knowing how to talk about it in your community, understanding how to package your services, and quote your fees.
And when you are successfully engaging every prospect at average fees of $2,500-$5,000 each, marketing becomes a whole lot more interesting.
However, if you aren’t successfully engaging clients consistently, each dollar or hour spent on marketing or networking is do or die, and that’s terrifying.
It’s simple math.
In fact, I advise every lawyer — until you’re engaging at least 80% to 90% of prospects who you talk with AND have a follow-up system set up to keep in touch with anyone not ready to hire you right away, stop investing any money on marketing your practice — immediately.
You can and should be using free resources to educate your community while you are getting your engagement rates and fees up and building your consistent communication system, but until you’ve got systems in place, no more investing money in marketing. Instead, use your time and money to create replicable systems that will pay you back many times over.
If you want to grow a sustainable, healthy practice, you need to setup a consistent, predictable, reliable engagement system so that more than 90% of the prospects who call your office (or that you meet through networking or referrals) end up as paying clients.
And you need to create packages for your fees and a fee quoting system that allows your clients to choose their own fee, how they work with you, and keeps you healthily profitable because you know and understand the key numbers of your practice.
Once you know that you can engage just about every person you talk with at an average fee of $3,000 or $4,000, you’ll want to look at your numbers and determine exactly how many clients you want each month and exactly what you need to do each month to bring them in consistently.
In fact, putting money into marketing at that point is like putting money into a magic money machine that spits out $3-$7 for each dollar you put in.
Slow Failure Symptom #3: You’re trying to grow your practice out of revenue instead of strategically investing for growth.
You’ve invested at least three years and anywhere from $20,000 to $100,000 or more to get your law degree. Me too.
Then, you get out of law school and either get a job with a 5 or 6-figure paycheck (most of which goes to taxes, insurance and student loan debt) or you start your own practice, and likely you struggle every step of the way to do it.
People think lawyers are rich, but you and I know the truth – most lawyers aren’t making (or keeping) much money at all.
And how many lawyers do you know who are still saddled with huge amounts of student loan debt?
So, feeling not very rich, you try to scrimp and save, building your law practice out of revenue as it comes in the door, and terrified to invest for growth.
I get it. I was there myself.
Three years out of law school, I had left the 6-figure paycheck to start my own firm. My husband and I had no savings in the bank at all – and I was the sole income-earner.
I didn’t leave myself any choice – I had to make it work.
I was terrified to invest in my practice.
I wanted to make it work out of revenue.
Fortunately, I got a serious wake up call early on in my practice and I saw that not investing in my practice would actually be the exact thing to force me back into a job and us into the poorhouse.
I’ve made a video for you to show you what I mean. I think taking a look at the numbers together would be highly beneficial for you.
Slow Failure Sign #4: You’re going it alone — without asking for help and support from a coach or mentor or leveraging economies of scale
As I was making the huge investments in building systems for my law practice and testing out marketing and hiring consultants and marketing firms, I remember thinking to myself, “What are you doing, Alexis? These are huge risks you are taking just for your little old law practice.”
Then I realized, I wasn’t just doing it for me. I remember that feeling that “no one should ever have to reinvent the wheel like I am. I will share these systems with other lawyers one day so they can have the turnkey practice management system I wish I had.”
Today, that is exactly what I do because I don’t want you to have to go it alone like I did.
Running or starting a law practice means you must think like a business owner — something you simply didn’t learn in law school.
This is where most lawyers I know get tripped up. We think our years of study, work ethic, and dedication to the field will be enough for our lives and law practices to succeed. Simply, not true.
Instead, when you actually seek what it takes to run a law practice — let alone have it succeed — what you find is this:
What you see here is everything you need to be tracking, tweaking, and optimizing as the owner of a thriving practice.
Does it look overwhelming?
To me, it does. And back when I owned my practice, which I built into a seven-figure business within three years, I couldn’t have survived without asking for help — and lots of it.
Back then, when I tried to find other successful lawyers to learn from, what I found was even the most successful lawyers were operating in an outdated business model that didn’t truly serve them or their clients.
They looked successful on the outside. But inside their offices, they were just as nervous and scared about survival and finances as I was. AND they had to work 50, 60, sometimes 80 hours a week just to stay afloat.
It wasn’t a life I wanted to create for myself, so I had to stop learning from the lawyers that were leading me down a path to exactly what I didn’t want.
So I looked outside the law business and hired the best business and entrepreneur coaches I could find.
Asking for help is what saved me.
I credit the business and entrepreneur coaching investments I made to turning around my law practice – from struggling and barely surviving, to bringing in a million dollars a year each year– within just three years of opening my doors.
The best part is that in my fourth year, I only had to go into my office 3-4 days a week, at most. And that freed me up to write the best-selling book on legal planning for parents and start doing lots of media to educate people about legal planning. (Just search ‘Alexis Neely Good Morning America’ on YouTube and you’ll see.)
Going it alone is a huge mistake. You simply cannot know what you don’t know when it comes to building a successful life and law practice.
Curing this symptom is easy — find the people who have done what you want to do already and leverage their systems to create economies of scale and don’t reinvent the wheel.
Want to Learn More?
Download our Law Business Manifesto below to find out how you can start serving clients and creating a practice you love.
Read Part 2 Here