A colleague once told me that when it came to growing my practice, I could either spend money or I could spend time. What he failed to mention, however, was that sometimes spending time could cost more than spending money.
This was a lesson that I would have to learn on my own as my solo practice grew.
I started my legal career as a “tall building lawyer” (aka Big Law associate). So I was accustomed to getting a paycheck every two weeks – whether my billable hours were stellar for that pay period or not. When I began preparing to work for myself, I was concerned about what to do if I did not have clients or if clients did not pay my fees.
When I went solo, I did it with a vengeance. I went on a drastic budget determined to save every penny in an effort to ward of the dry periods. After my first major client stiffed me on her fees, I became loath to spend a single red cent unless it was absolutely necessary.
I quickly became the ‘solo’s solo’ and took the DIY (Do It Yourself) mentality to a completely different level. If something had to be done, I told myself that I was going to learn out how to do it on my own. I figured this would be more “cost efficient” (that is “cheaper”) than hiring someone else.
Thus began my travels down the road towards becoming a penny wise and a pound-foolish solo.
Lesson Number One
It started out innocently enough. The first time my printer broke I spent several hours learning how to be a printer repair woman. I recalled my days as an associate at my old firm. At that time, if my printer broke I simply called down to IT, explained the issue and 15 minutes later a new printer magically appeared and I got right back to work.
But that was then.
As a ‘solo’s solo’ I threw myself into the repair project. More than 2 hours later I discovered my printer had an extra tray I never knew about and learned more about ink and toner than I knew existed. Then I realized that my printer was still broken and I had to buy a new one anyway. So on top of loosing more than two hours earning my “printer mechanic in training” certificate, I still ended up coming out of my pocket.
Lesson Number Two
Next, I joined a lawyer’s online marketing group. One of the goals was to learn how to blog, maximize my online presence and figure out how to develop a website that was search engine friendly. As a committed member I threw myself into building up my website – though I knew about as much about building websites as your average snail.
Instead of recognizing that the group was comprised of members who were far more tech savvy than I was, I repeated my mantra: “spend time, not money.” I poured hours into learning how to create my own site. When I wanted to quit, I reminded myself that I was “saving money by spending time.”
Technically I was in fact saving money and had not shelled out one cent. At least that is what I thought before I realized just how much my “spending time” mentality had cost me.
Lesson Number Three
Until earlier this year I used a virtual office and worked primarily from home. I decided to use a virtual office because it was cheaper than renting an office space. On dates when I had to meet with clients, I would either meet with them at the virtual office, a local café or even at their home.
Having a virtual office was cheaper by a few hundred dollars. The savings came to approximately three and a half of my billable hours each month.
With a virtual office there is not a whole lot of room for error. Since I used the conference room on an appointment basis, I had a strict rule against “drop-in” appointments and I rarely had a problem. That is – until my client base began to grow.
The more clients I had, the more traveling I had to do. Which meant I spent a lot more of my time in transit. This made for much longer workdays in order to make up for the time that I lost in travel. Then one day the inevitable happened. I just so happened to be wrapping up a meeting with a client in my virtual office when the front desk called to let me know that my next client was there.
Next client? As far as I knew I did not have any other clients that day.
When I stepped out to see what they were talking about, a prospective client who I’d met with weeks before was sitting in the lobby. She told me that she had decided to hire me and she was ready to pay today.
Right then. At that moment – when I had absolutely none of the documents that I needed in order to hire the client or take her payment.
I told her I was with another client and asked if she could come back in about an hour and a half. I reserved the conference room for later that day, threw on my sneakers and literally ran all the way to the train station, took the train back home, grabbed the documents I needed for the new client, ran from my house to the train station and made it back to the virtual office in time to process the new client.
It was one of those days when the rush of adrenalin just does not seem to stop.
When I took the new client’s payment – I realized that she had just paid me for approximately 4 billable hours. Then I began adding up the time I had spent on the train, traveling from meeting to meeting that week. I was shocked to realize that I had spent an average of nearly 3 hours per day going back and forth from client meetings, libraries and my home office.
That’s when it finally hit me.
I had “saved” 3.5 billable hours worth of time each month by choosing a virtual office. But I had “spent” nearly 3 billable hours each day by traveling to meet with clients.
I was the walking definition of “penny-wise and a pound-foolish.”
I moved into a lawyer’s office suite a few days later. By spending the extra money for a permanent office I have saved more than 12 hours of travel each week. The time I save each day is now spent working on client matters. Which means I am able to process cases more quickly and now have more time to take new clients. I now get referrals from the other lawyers in my suite and business is growing at a much steadier pace.
The Moral Of The Story
When you are engaged in personal services, your time is your money. The time that I have to service my clients is a set amount. I get the same number of hours each day. If I “save” a few dollars by trying to fix my own printer – but that savings costs me 2 hours of my day – I have to determine is that exchange worth it?
Here’s a simple formula: (TASK) X (HOURLY RATE) = COST
Let’s say you charge $250 per hour and it takes you two hours to fix that printer.
(2 hour repair job) x (2 billable hours) = $500.
You may not have taken money out of your wallet to pay that fee – but you just spent $500 worth of time. And if you discover that your repair job was not so great and you have to buy a new printer after all – add that $500 in time to the fees for the new printer.
I guarantee that you can find a new printer (with warranty) for less than $500.
As solo attorneys – it can sometimes be difficult to determine how we should spend our time. Sometimes we rush to put out the next fire without considering whether or not we are best equipped to handle that fire. The next time you decide to “save money by spending time,” do yourself a favor and count the cost. If you are like me, you may discover that sometimes it can be cheaper to pay someone else than it is to spend your own time.
All opinions, advice, and experiences of guest bloggers/columnists are those of the author and do not necessarily reflect the opinions, practices or experiences of Solo Practice University®.