Mar 28, 2013
What a Lawyer Can Learn From an Entrepreneur
I am in awe of my clients.
That’s why I chose to represent small business owners exclusively. Because I get jazzed talking to entrepreneurs. Because I adore talking about the issues and practicalities and triumphs and failures these small businesses encounter every single day.
I learn more about business from my clients than I ever could from a CLE class on business law. And there is plenty to learn. I’m getting a street-level MBA!
It’s a Numbers Game
My clients taught me that running the back office is just as important – if not more important – than being good at the job. You can always hire another technician to do the work product and provide service to customers, but someone has to take responsibility for operations behind the scenes. Payroll. HR. Accounting. Billing. Business planning. Marketing. Those are the underpinnings of a successful business. Any successful business. Yes, you can hire someone who can handle the bookkeeping and accounting and even the marketing, but ultimately you are responsible for the numbers.
I have a client that can quote to me, on an hourly basis, his restaurant’s cash flow. Money in and money out is the key to survival in any business, but particularly in a business like a restaurant. Or a law firm.
Those who have been following this blog for a while know that I started out in Big Law, moved into a two-person business partnership, then went solo. I learned from that partnership in the middle of my career that a good friendship (I adore my former business partner) does not always translate into a good business partnership (we nearly killed each other). So basically, all that taught me was what not to do.
My clients taught me how to pick my partners. No, I have not joined with another firm – I’m still solo. I mean “partnership” in the loosest, least-legal sense of the word. My clients taught me that my “partners” include everyone who is involved in running my business. My assistant. My Of Counsel. My bookkeeper. My accountant. My IT guy. My answering service. They all have an impact on how well I am able to serve my clients. My clients have taught me not to “partner” with anyone without a contract (duh!), and not to partner with someone who isn’t on the same page as me.
Don’t Wear Too Many Hats
My clients taught me that every business needs three people in management: a Visionary – the person with the ideas for making the business better; an Operations Manager – the person with the ability to keep things running day-to-day; and a Numbers Guy – the person who knows what the bottom line is and can manage to that. You can be any or all three of those people at different times. Note that none of those three is a Lawyer – the person that cranks out work product for the client. These are the different roles of the business manager(s).
They also taught me that you have to know your strengths. You probably are not as capable at one or more of the managerial roles to wear all of the business manager’s hats. If you lack the knowledge, skill or desire to manage all aspects of your business, educate yourself or hire people who can fill those roles and let them manage you. I watched many small businesses fail because the owners insisted on absolute control, even when they knew they were not good at one of these fundamental roles. I watched many small businesses succeed because the owners were smart enough to get help when it was needed.
At Big Law, the firm’s managing partner was a helluva Visionary and a decent Numbers Guy, but he was not terribly good at Operations. He needed a firm administrator to keep things running. Today, I know that I am a good Visionary and Operations Manager, but not enough of a Numbers Guy, so I have a bookkeeper and an accountant to keep me straight (see above re: being responsible for the numbers).
You Are Your Brand
I do trademark transactions all the time, so I thought I knew everything about the subject. Hah! I had much to learn.
For example, my clients taught me that the “goodwill” that lawyers always talk about being invested in a trademark or brand comes from within your business. It’s corporate culture that dictates when and how calls get returned, the level of service clients can expect and what price they will pay for your services. It’s the way you and your employees represent your firm to your clients and potential clients. It’s the way you appear to the court. It’s the way you appear to opposing counsel. It’s if and how you advertise your firm. Those things form the consumer perception of your business. In short, as a solo attorney you are your brand. How people see you is how they see your business.
One client that stands out is a local wellness center that is involved in every networking group and chamber of commerce in town. The owners are great guys: fun, laid back, friendly. But when they are out representing their business at a networking function, they come across as caring and warm but passionate about their business and always 100% professional. Make that 110%. I pray to come across that well someday .
Don’t Expect the Competition to Give You Business
I used to spend a lot of time at lawyer-only functions. But my clients taught me that networking with potential clients and referral sources outside of the legal industry are a better way to build my practice. A wedding planner gets her business referrals from florists and photographers, not other wedding and event planners.
So don’t expect to get business law referrals from the members of the business law section of your local bar association. Of course, that doesn’t mean you shouldn’t GO to the business law section meetings – just don’t expect to build a referral base there. I focus instead on networking with other business-to-business service providers, like CPAs, insurance agents, marketing agencies, financial planners, etc. And when I do hang out with other lawyers, I work to create a broad network of peers: I get a number of referrals from friends who practice family law, estate planning, and employment law.
Don’t ever forget that a solo practice attorney is an entrepreneur first. You are no different from any other small business owner in most respects. You are just selling a different product.
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®.