I’m often asked by lawyers looking to start their own practice, or those who have just gone out on their own, what it takes to establish a successful law firm. In law – just like any small business – there are three areas you must master if you want a successful law firm. These are:
Develop a Niche
Today’s general practice attorneys are barely scraping by. That is because today’s clients demand specialists. They don’t want a lawyer that has done a couple of cases in every practice area out there. They want someone who handles their specific problem. They want someone who has handled cases for clients just like them and have proven over and over that they can get the job done.
From a lawyer’s perspective, there’s only so much time in the day to learn new areas of law. It’s much easier to pick one or two topics and master those. That’s why it’s in your interest to specialize. Your clients expect you to know your area of expertise cold. They aren’t looking for someone who has dabbled in their problem area, holds a passing interest in this area of law, or will have to go ask someone else or consult a legal library every time they have a question. When you’ve become a master at something, you know it and can communicate it effectively to others without the legal jargon so that clients quickly understand.
From a marketing perspective, developing a niche makes it much easier to find clients. General practitioners that take any case that comes their way rely on chance – or hoping and praying – to get clients. They never know when their next prospect might call or walk in. That’s because anyone could be a candidate and their case could be on any variety of topics.
With a niche business, you define what types of clients you want to work with and what type of law you want to practice. Then, you create a strategy. Where would you find this type of client? Where have you found this type of client in the past? Once you have some idea of that, then you focus all your marketing efforts on places where those types of clients are likely to go – specific publications, networking events, seminars, websites, etc.
Develop Rainmaker Skills
Your clients are your bread and butter. They are what bring in cash to pay your monthly bills. Without clients, you don’t have a business. You have a money pit. That means that marketing and sales – or business development or rainmaking, if you prefer – are fundamental to your business. They aren’t simply something to do when you need clients. They aren’t one time events. They are activities you must do weekly to ensure that you always have a stream of clients coming in the door.
Why are marketing and sales so important? Because without them, no one would know who you are or what you do. Being good at your niche practice area isn’t enough. Providing excellent client service and doing a good job isn’t enough. You must also educate prospects, clients, and referral sources what it is specifically that makes you different from other lawyers and why they are getting tremendous value by working with you.
Every person you meet will have a different frame of reference and different expectations. Simply because you say you’re a “lawyer,” they will form a picture in their minds of what it is they think you do. Most likely, however, that perception of what you do differs dramatically from what you actually do. It’s up to you to bridge the gap by educating prospects, clients, and referral partners in each interaction you have with them.
That’s rainmaking – there’s nothing sleazy or unethical about it. Think of it as “helping others” because that’s what it is. You’re educating prospects on what the best solution to their problems would be – you’re not “selling others on services they don’t need.” That would be unethical.
Developing Financial Skills
Finally, to run a successful business, you must have a means by which you manage your finances. That doesn’t mean dumping a file full of receipts, invoices, and purchases on your accountant’s desk once a year when tax time rolls around. That means getting a program like Microsoft Money or Quickbooks and learning exactly what comes in and what goes out.
Cashflow is the lifeblood of a business. If you don’t have enough money coming in so that your income exceeds your expenses, you won’t be in business very long. By staying on top of your finances, you can watch for trends a number of trends like is our income increasing, steady or declining? Are our expenses increasing, steady or declining? Are certain months slow for us? When will we be able to hire a new receptionist or partner? Did that expensive ad campaign net us any clients? And so forth.
Establishing a successful solo or small law practice – just like any small business – takes time, effort and patience, but by understanding these three pillars, your law firm can become much more successful in less time.