Solo Practice University® » Demographic/Economic Trends

Will 2012 Be The Year of The Legal Entrepreneur?

Susan Cartier Liebel — Tue, 03 Jan 2012 12:30:30 +0000

We all know that 2012 is going to test all solos, their creativity, their stamina, their ability to ‘keep it down’ when they want to throw up on the roller coaster ride known as solo practice…especially in the years ahead. Rather than prognosticate about all the changes which are definitely happening, I’d rather have you cogitate on this:

By 2019, forty percent of all American workers will be self-employed.
- United States Department of Labor forecast, as reported by Bloomberg BusinessWeek

Well, let’s do some basic math. Right now, all things being equal, there is a 40% chance you will be an entrepreneur. But wait. Lawyers already have a disproportionately higher number of self-employed, currently hovering around 50% depending upon who you’re listening to. The recent percentage being bandied about for the general working population for self-employed is around 30%. If by 2019 there will be a 33% increase in self-employed in the general working population and you simply (and unscientifically) impute the same 33% bump up for lawyers, you now have those self-employed in the legal profession at around 68% within the next seven years.

It’s time you ask yourself this singular, life-altering, tough question: Are you an entrepreneur?

We’re going to skip the simple-minded checklists which I find mind-numbingly meaningless. However, this 2008 edition of the National Post has a wonderful piece entitled, ” Understanding the Psychology of the Successful” which explains the traits and characteristics unique to the individual who becomes a successful solo entrepreneur. These traits and characteristics clearly are applicable to the lawyer who starts her own solo practice. ( I also discussed this back in 2008 but the topic is timeless).

A recent finding of interest is that contrary to the popular conception of successful entrepreneurs being solely independent, single-minded and devoted to their unique passions, they are also characterized by high levels of social competence and social intelligence, with an ability to build relationships and to connect with others on a social and interpersonal level.

As well, early research has indicated that successful entrepreneurs seem to think a bit differently from the rest of us, viewing the world and the potential risks in it through a different lens. For example, they often have a unique ability to see opportunities others fail to recognize. Or they may judge ambiguous business conditions in more positive, enthusiastic, and optimistic terms. One of the appealing notions of exploring these and other cognitive strategies employed by successful entrepreneurs is they are likely learnable skills that education, training and practice can improve upon.

***********************************

Additionally, evidence indicates startup firms that take advantage of resources such as mentoring, counselling and other small business development assistance have a better survival and growth rate than do their peers.

There is a growing body of work discussing what separates entrepreneurs from employees. There seems to be a unifying theme of creativity and commitment to the end goal, a global vision, and the stamina and endurance to do what it takes to realize the vision. In addition:

Nascent entrepreneurs are often relatively comfortable with ambiguity, uncertainty and risk, strongly influence events (what psychologists refer to as self-efficacy), and have high levels of work motivation.

******************************

However, another “type” of intelligence is even more important to the outcome of an entrepreneurial venture. Some blend of critical analytical thinking, creativity, and practical implementation of ideas, which psychologists often refer to as “successful intelligence” can also predict outcomes such as business growth rate.

Entrepreneurs with higher levels of successful intelligence are likely to be better positioned to navigate the environment they are in — an environment often characterized by urgency, uncertainty, insufficient resources and rapid change.

This is some pretty inspiring and heady stuff. It also explains why solos persist in the face of professional negativity:

Entrepreneurs with higher levels of successful intelligence are likely to be better positioned to navigate the environment they are in — an environment often characterized by urgency, uncertainty, insufficient resources and rapid change.

It really bore repeating.

In my experience, solo practitioners quite often exhibit these characteristics in abundance. They are disinterested in over analyzing and more committed to getting started. While they may do an informal calculus regarding possibilities, it is just that, informal. It is not meant to be a deterrent. It is simply an assessment of potential hurdles they must clear. But there is something else I am observing. It isn’t scientific. Therefore it falls under the title of ‘opinion’.

In my opinion, law school education has been designed in a way which deliberately suppresses creativity and spontaneity, the very qualities needed to succeed as an entrepreneur:

One of the appealing notions of exploring these (creativity and spontaneity) and other cognitive strategies employed by successful entrepreneurs is they are likely learnable skills that education, training and practice can improve upon.

Creativity is not rewarded as it should be nor is it enhanced through the current legal education model. So, the question becomes this – do students who go to law school lack creativity and entrepreneurial spirit or does the current legal education model suppress it to the point where graduates actually fear their entrepreneurial and creative sides? After all these years, I’m beginning to believe the high rate of depression in this profession is due to suppression of creativity and those who opt to go solo do so in order not to have their creativity suppressed. They no longer want to feel trapped within the profession’s arbitrary and unhealthy constraints. A little anecdotal proof? These same solos are the ones who embrace innovation more enthusiastically and, are in fact, quite often the architects of these innovations.

Quite often others will equate ‘creativity’ with the commoditization of the law because it challenges some of the traditional methods of delivery of legal services. I beg to differ. What should matter is not how legal services are delivered but how clients’ legal problems are resolved. And smart lawyers will never lose sight of this. The end game is the resolution of a client’s legal problems, not holding onto to rigid methods of delivery. But change has always been scariest to those who fear it most.

We are going to see a lot of unexpected changes in the profession born out of an overwhelming need for the majority of professionals to survive. I may be in the minority in this opinion, but I do believe (and have always believed) that we are entering a time when lawyers have no choice but to call upon their long-dormant entrepreneurial side in order to build a life and they will become surprisingly creative. Ultimately, I believe it will also change the profession forever and the change might very well be for the better.

So, where do you fit into all of this?

Written by Susan Cartier Liebel

The Millennial Lawyer. They ARE Our Future.

Susan Cartier Liebel — Mon, 29 Aug 2011 11:30:49 +0000

(This is a little long but I hope you’ll find it worthwhile)

In a recent article entitled “Startup Generation Ready to Fix Economy” we are learning that today’s millennial is not only not a slacker but those who are taking their job security into their own hands is increasing exponentially.

Forty percent of those in Generation Y, roughly defined as Americans born from the mid-1970s to mid-1990s, envision starting their own business, and about 20 percent already have, according to a report published last month by The Affluence Collaborative, a research partnership.

“They understand that if they want security and they want to be assured of having a job, now more than ever, it makes sense to create your own job,” Fenn said.

There has been so much discussion about the Millennial in the workforce and particularly in law firms. I need to weigh in yet again because I feel very differently then those in the legal community who have been quite vocal about their disdain for this generation and maybe it’s because I’m more involved with those who are actively looking to build their own practices and those who have started their own businesses. I view this generation much differently then many.

Maybe it’s because, even though I’m two generations removed from a millennial, I understand some of what they feel. I don’t believe the mindset of the Millennial is a new one. I think in large part they just harbor more entrepreneurial drive then previous generations….and I get entrepreneurial. They are not willing to put off starting their dreams. They are certainly less inclined to sacrifice unless their career goal is attainable within a relatively reasonable period of time. But they are very happy to sacrifice when it means working for those dreams. They don’t see their world segmented – work life in one corner and personal life in the other. They just see ‘life.’ And there is a stronger belief in one’s self but it has been nurtured on a fast food mentality. They are simply in the fast lane 24/7. It’s saying ‘no’ to the old model of doing business…not to a strong work ethic. And it is by saying ‘no’ to an old business model that some interpret them as arrogant, disrespectful and dismissive of those who did work within the old model to get where they are today. I believe this is what irks those who have trudged the more traditional path….barefoot through 10 feet of snow…to school…without a winter coat. We can’t be mad at an entire generation because they don’t want to play by the rules most of us felt we had to abide by or were forced to abide by.

Of course, there is much more (positive and negative about this generation) that can be (in)appropriately broad-brushed. Yet, as in any generation there are those who are driven to achieve who have a strong work ethic and those who are slackers. But for some reason, this generation is really getting slammed. I believe it is unfair.

What role has corporate America (you and me) played in this? Let’s see. These kids grew up:

watching their parents slave away at jobs only to be laid off over and over, again,
lose their pensions and health benefits to criminals like Enron, corporate shill politicians, and now to mismanagement of federal, state, and local government;
watching corporate America outsource their jobs overseas while stock-piling cash and NOT creating new jobs;
seeing a corporate culture change from one where employees were valued and shown appreciation to a culture of poor treatment and being told they should be grateful to have any job;
being told if they didn’t like ‘any job’ there’s ten one hundred more people who look just like them lining up to take their place.

The days of feeling proud for having given all your working life to one company and getting the gold watch and retirement dinner have disappeared. Today’s young worker sees working for another based upon the old model as indentured servitude on a path to nowhere with no realistic brass ring and they want no part of it. This is especially true after being told over and over again that their generation will be the first generation to not do as well as their parents. Now there’s an exciting future to consider as they carry $150,000 + in non-dischargable student loans.

So, if they want to do an end run around the old model because they think it’s broken can we really fault them? If they want to look up at the sky and see endless possibilities of their own creation rather than the big round butt of a middle manager who blocks their innovation and creativity can we blame them? If they want to try and figure out a new and better way that works for them should we tell them they’re wrong and publicly ridicule them for trying? Who are we to say what is best for them? Now who’s being arrogant, disrespectful and dismissive? What I have heard over and over, again, is, “I wish I hadn’t been so scared? I wish I had their guts.

Bravery, stupidity…call it what you will. But those brave or stupid people created Facebook, Twitter, Google, Zappos, Amazon, SurveyMonkey and today’s technology and smartphone apps we live and die by and so much more than we could ever have dreamed because they DIDN’T follow the traditional models and all of these new models are totally driven on customer service and regard for their employees.

In a recent article it was suggested that 65% of grade school children will work jobs that have yet to be created. Who will be creating of these jobs? Today’s millennial entrepreneurs, that’s who.

And for those who are in management at law firms, have you ever heard of ‘internal marketing?’ It is a wonderful phrase coined by Sybil Sterchik who discusses the concept during an interview with Toby Bloomberg at the very popular Diva Marketing Blog. She says that when you value your employees, your employees value your customers. Today, the law firms from solo to Big Law who put their client first will succeed.

Internal Marketing is a strategic blend of marketing and human resources focused on taking care of employees so they can take care of customers. While that still sounds warm & fuzzy, nonetheless it’s critical because if your employees don’t feel valued, neither will your legal clients!

Appreciation, involvement in the process, being part of a company’s dialog and success, the creation of a community, translates into loyalty by the employee and profits to the company.

And this is not a new concept. It is a forgotten concept, I know because I experienced it in the companies I worked for in the 80′s. I worked at not one, but two, companies who had office happy hours every Friday afternoon hosted by the president. One company president drove his motorcycle through the company offices giving employees rides. This same company handed out turkeys to every employee at Thanksgiving, held birthday parties for each employee. Ten year anniversaries were celebrated with a one week trip to London and a stay at their corporate apartment with show tickets. Was this a small private company? One was small. The other was the U.S. headquarters for an international corporation where I worked for 3 years. This was a time before executives took $50 million dollar bonuses while telling their employees the company can’t afford to give COLA raises while simultaneously reducing their health benefits. When I left the company with the motorcycle-riding president, it was the only time I actually grieved for ‘family” because the company invested in creating a culture within the workplace…a culture the employees didn’t want to leave.

And I believe the companies I worked for are being described by Ms. Sterchik when she states:

I find it ironic that many companies (law firms) who do Internal Marketing well aren’t necessarily aware that they’re using Internal Marketing. These are companies with a workplace culture and operations committed to the value of both customers AND employees. (and I’d like to add – living the company’s mission and workplace values)

If a company who has employees really believes they can skip this step and retain employees, either they are paying their employees so well they can’t afford to leave or they are deluding themselves.

Despite different generational attitudes in the workplace, companies will still need to engage their employees. And that’s where Internal Marketing comes in – enabling organizations to communicate and reinforce a sense of common purpose, a sense of belonging, and a sense of being part of something special, particularly in workplace that’s becoming increasingly insular. Internal Marketing will continue to be relevant as a ‘high touch’ people-centered management approach in a ‘high tech’ world.

So, you see this isn’t a generational mandate unique to the Millennial. This is just good business. And in these crazy times to hold on to quality talent even with unprecedented unemployment is still critical to growth.

This new generation can’t work within an environment which does not respect their goals and values, a management hierarchy which can’t conceive of, never mind nurture, a new way of doing things which actually benefits the company and the clients foremost. If law firm managers, even solos looking to hire an associate, choose not to recognize this and behave antagonistically, then they are going to lose the talent they have and certainly not attract new talent. If this talent strikes out on their own without regrets why are the law firms so mad? Why should these new lawyers have to take 20 years to figure out they don’t want to waste their time at that law firm? There is ‘paying your dues’ and then there is selling your soul out of fear. This generation didn’t create disloyalty. It was the previous generation of employers who were disloyal and dishonest and gave this new generation permission to say, ‘screw you.’

So, there are some mea culpas to be made by employers. There are some steps they have to take to create environments to attract today’s young worker and get the best out of them. Today’s generation is suspicious and self-serving to a degree because they’ve learned no one is going to look out for their best interests better than themselves (or their parents.) And yet, when it comes to fighting for real change and the welfare of others they are fearless and committed and do things we would never dare for their causes.

This generation grew up (and is continuing to grow up) connected to a vibrant and diverse community through technology and they can no more leave this connectivity when in the workplace then they can leave their left arm. To not capitalize upon this connectivity is just plain bad business.

Employers should capitalize on this connectivity and the freedom they, too, can experience released from the confines of the 9-5 workday and sterile cubicle and harness the additional strengths of the millennial worker instead of straitjacketing them. And when there is a strong work community it mitigates the need for a rigid caste system. The caste system is dead..at least for this generation.

That is why I believe, more and more lawyers will strike out on their own and invent the future law practice. Millennials will be more inclined to pursue their entrepreneurial bend, especially in the law. And you will see those who have worked so hard within the current system who get the boot or law grads who simply get no opportunity or document reviewers who are not rewarded in ways which are meaningful to them more inclined to become solo practitioners.

Then consider the economic times we are facing. In a time of uncertainty, the direction this world is going, extraordinary debt, health care in crisis, climate change, endless war…there is a certain ‘live for the moment’ feeling which propels them to say, ‘if this isn’t working for me, I’m outta here.’ They don’t just say, “time is precious.” They live and work knowing time is precious.

Rigidity and lack of consideration for the mindset of this generation is a recipe for economic disaster for businesses of all stripes. Law firms are definitely not immune.

As a solo, there may come a time when you may choose to bring on an associate. Remember this. And remember why you chose to go solo, the freedom to control your own time, your own destiny. You realized you’d rather be responsible for your own financial security and you have faith in your abilities to do this. And when you made (or make) the decision to go solo didn’t you, regardless if you are a Baby Boomer, Gen X or Gen Y, basically say the very same thing? I think the phrase was ‘screw you.’

Written by Susan Cartier Liebel

Are We In A Legal Profession (Pricing) Bubble?

Susan Cartier Liebel — Mon, 08 Aug 2011 10:30:24 +0000

Clearly with all the financial turmoil rocking our country, those who have been tracking why we are where we are today refer to the bursting of various sector bubbles. Some even refer to our economy as a ‘bubble economy’ driven by six major bubbles which include real estate, stock market, private debt, discretionary spending, government debt, and the U.S. dollar bubbles. They’ve historically not only inflated almost simultaneously but are linked. As such, it is responsible for the past decade’s earlier prosperity but is also the reason we are in financial decline. When one bubble bursts it puts downward pressure on each of the connected bubbles threatening to burst them all.

It’s also very hard to see a bubble while we’re in it and much easier to play Monday morning quarterback after one has actually burst. More importantly, it’s impossible to re-inflate a bubble which has burst.

What has this got to do with the legal profession? Well, I’m currently reading a book called ‘Aftershock’ discussing the future of our economy and as I was reading it I began to wonder if what we are witnessing these past couple of years is the bursting of the legal profession bubble? Here is how the authors describe the real estate bubble – which we should all be familiar with if not directly feeling its impact – and why it burst:

For example, real estate prices are typically driven higher by a growing population (increasing demand) and the growing incomes of home buyers (increasing ability to buy). When populations increase and incomes increase, home prices also increase. On the other hand, if you see home prices increasing, let’s say, twice as fast as incomes, then that could mean something unsustainable is happening to the value of real estate. Why? Because home prices that high are not sustainable without a similar rise in the ability of buyers to keep paying those prices.

The United States has lost almost every single job created during the housing bubble – no jobs, not much demand for homes. Source: Bureau of Labor Statistics Total Non-Farm Jobs 2000 – 2011

When the downward pressure is too great on unsustainable pricing (or another metric)…the bubble bursts. Well, back in 2009 when Big Law imploded it was just coming from an over-inflated pricing binge that was unsustainable. Associates were coming on board with annual salaries of $200,000. Partner hourly rates tipped the scales at $1,000. Clients were rebelling because of their inability to keep paying those dramatically increased fees relative to the value of the services received and what they could afford. The bubble burst. ( This, of course, was a smaller bubble linked to much larger bubbles within our economy). The principle, however, is the same.

Our clients live in this evolving economy. Traditional law firms (and law schools, for that matter) with pre-bubble- bursting pricing structures such as the billable hour are struggling against client rebellion (DIY’ers) and the rise of the Legal Zooms of this world because they have not recognized their pricing has escalated at an unsustainable rate relative to what their clients can afford (and are willing) to pay.

Also, if one expects the legal market to revert to what it once was, consider this: the only way a bubble can reinflate is if the previous drivers of that bubble remain ready, willing and able to do so. Those previous drivers are gone.

It is also why lawyers and law firms who recognize this and get creative will survive against the $69 wills currently being advertised by Legal Zoom in their latest TV campaign.

More than two years ago I wrote we are entering into a ‘new economy’* and kept insisting we are in unchartered waters. In Aftershock the authors validate my assertions:

We are not in a typical ‘down market cycle’. With so many linked bubbles now on the descent, the impact of their combined future collapse will be far more dangerous than any downturn or recession we’ve experienced in the past. Unlike in a healthy economy, in this falling multi-bubble economy, the usual strategies for returning to our previous prosperity no longer apply. We have, in fact, entered new territory.

What this means to lawyers is, if you believe we have in fact experienced the bursting of the legal profession bubble, it is now time to rethink your whole approach to building your practice including your pricing strategies. What other lawyers are doing in their practices (including finding out what they are charging to some extent) is less and less relevant to the foundational principles of how you create and build YOUR practice.

With a hat tip to Lawyerist, we’ve learned about one enterprising lawyer , Alex Bajwa, who took the unusual step of committing himself to one month of letting his clients fix their own fees and to determine if at the end of the representation they were even going to pay him. The reason I was so impressed with this is because he decided to cut through all the rhetoric and advice of others and talk directly to his clients. By doing so he in essence found out what was a sustainable price for his services based upon what his clients could afford. It was a one month focus group. This is how one should respond to a bubble-burst to build a sustainable solo practice for the future.

I have said numerous times that when things come crashing down it is a once-in-a-lifetime opportunity time to build upon the ashes of what was with something innovative and new. We all know we are in for rough times in this new economy yet in so many ways the playing field will never be more level than it is today. It will also unleash some of the most creative legal minds of the newest generation of lawyers and I can’t wait to read about their innovative practices.

We all know Legal Zoom looks pretty on paper but fails to deliver what the clients actually want and need. Take the time to learn directly from your clients what they want and what they need.

In a Special Report published in April (2009), The Economist looked ahead (to today) and saw that “In the next couple of years the businesses that thrive will be those that are miserly with costs, wary of debt, cautious with cashflow and obsessively attentive to what customers want.”

If these companies turn a mirror to their customers and prospects, they may see the exact same traits.

Once you find out what your prospective clients want and can reasonably afford, feel free to create a brand new way to deliver your legal services while building ‘the’ solo practice of the future. Remember, legal problems are not going away. There is plenty of work to be had. As a matter of fact the need for legal services is actually increasing because of this economy and because of the complexity of our lives. It is the delivery of these services which will be forever changed as well as the price clients are willing to pay.

The rules we are obliged to follow should be seen as a foundation upon which to build your practice, not a box to enclose and stifle your ingenuity. The sky is the limit.

If you’ve been innovative and seriously thinking outside the box, contact me at susan (at) solopracticeuniversity.com and maybe we’ll share your story!

*(If you’d like to catch up on my blog posts regarding the impact of demographics and the economy on the legal profession – particularly solo practice – you can do so here.)

Written by Susan Cartier Liebel

Your Troubled Neighbor. Your Troubled Client. Your Troubled Practice?

Susan Cartier Liebel — Mon, 25 Jul 2011 16:20:52 +0000

This post is long and filled with a lot of informative links. It also might be a wake-up call for those who have laid low for a while and tried to ignore the economy.)

Those who have followed me for the nearly four years I’ve been blogging know I have always drawn attention to the client’s perspective when one is considering creating, building, renovating and changing a solo practice. I’m personally fascinated (and we’re all impacted) by everything relating to global economics and changing demographics and I have had to exercise considerable restraint when writing on this blog so as to keep it in line with my readers’ expectations.

As a knowledge worker and one who serves individuals with services, the economics of this country and changing demographics profoundly impacts you and your law practice. If you are not consciously aware of what is going on around you, you can be left trying to sell sunscreen in a snowstorm and wondering why you’re starving.

Why 2011 Is Different – A Layperson’s (mini) History Lesson

With the threat of a default which many guarantee will not happen (and which, contrary to popular belief, has happened several times in our country’s history – 1779, 1790, 1862, 1934 and arguably 1971 when Nixon broke the link between gold and the dollar), there are numerous discussions about the fallout on the United States. Chances are good this will not happen. However, we are still in serious economic quicksand many have likened to the Great Depression. There are two things which are profoundly different than 1929, however, and which will dictate how Americans will come out of it on the other end:

1. During the Great Depression there was no middle class to destroy because a middle class did not exist. The middle class was a post-war phenomenon borne out of #2;

2. Post-Great Depression big money and corporations poured their wealth back into this country – not out of benevolence or patriotism – but because there were no other ‘emerging markets’ or an interconnected world allowing for less costly production of products. Cheap labor and other incentives to achieve a global position or record profits were not as readily available.

After the World War II we saw the creation of the middle class for many reasons. However, two events are particularly noteworthy:

1. The reduction in the production costs of food making us truly the land of plenty;

2. The abundance of jobs being created through manufacturing on our own soil which put millions to work.

With job creation and, for the first time, disposable income for a significant portion of the population, our economy boomed and the middle class was born.

This burgeoning middle class had money to pay for and sustain the livelihoods of knowledge workers….like lawyers.

Today, with the Great Recession quickly becoming the Great Depression, when we emerge from it life is going to be profoundly different and the distribution of wealth is going to be permanently altered.

1. The Great Recession and world events (including natural disasters) are now forcing our food prices (and other items we use on a daily basis) through the roof eating up our disposable income.

2. This Great Recession is seeing the destruction of the middle class which has fueled this economy for the past seventy years. It is forcing the majority of those once in the middle class to be top-tier lower class or poverty-stricken. The corporations responsible for breathing life back into this country after the Great Depression now have options to increase their profit outside our borders – overseas labor happy to work for pennies and more than three billion newbie capitalists on the other side of the world earning the money once ear-marked for our workers. And they are spending! Our corporations will ultimately build other countries while they become even richer instead of rebuilding the United States. The middle class will be but a memory.

I just want to share some statistics with you…not to depress you but so you can understand what is happening to your neighbor, your client:

#1 Only 58 percent of Americans have a job right now.

#2 Only 56 percent of Americans are currently covered by employer-provided health insurance.

#3 The median yearly wage in the United States is $26,261.

#4 The average American household is carrying $75,600 in debt.

#5 Only the top 5 percent of U.S. households have earned enough additional income to match the rise in housing costs since 1975.

#6 At this point, American families are approximately 7.7 trillion dollars poorer than they were back in early 2007.

#7 The poorest 50% of all Americans now own just 2.5% of all the wealth in the United States.

#8 According to one study, approximately 21 percent of all children in the United States were living below the poverty line in 2010.

#9 Today, there are more than 44 million Americans on food stamps, and nearly half of them are children.

#10 According to Newsweek, close to 20 percent of all American men between the ages of 25 and 54 do not have a job at the moment.

(10 Facts About the Financial Conditions of American Families.)

Americans are also being told they need to accept that are going to suffer a decline in their standard of living relative to the rest of the world: (Of course, this comes from Billionaire Howard Marks but it doesn’t make it any less truthful.)

He says:

“In addition to balancing the budget and growing the economy, I think we have to accept that the coming decades are likely to see U.S. standards of living decline relative to the rest of the world. Unless our goods offer a better cost/benefit bargain, there’s no reason why American workers should continue to enjoy the same lifestyle advantage over workers in other countries. I just don’t expect to hear many politicians own up to this reality on the stump.

Read more: http://www.businessinsider.com/billionaire-howard-marks-us-standards-of-living-are-likely-to-decline-relative-to-the-rest-of-the-world-2011-7#ixzz1T91Cx3Qe

Where does that leave the lawyers who have traditionally built livelihoods servicing the middle class?

I was reading this article from the New York Times called The Start-Up of You which discusses the changed mentality one must have to succeed in this world while focusing on the growth sector of our economy – the Facebook’s, etc.:

Look at the news these days from the most dynamic sector of the U.S. economy — Silicon Valley. Facebook is now valued near $100 billion, Twitter at $8 billion, Groupon at $30 billion, Zynga at $20 billion and LinkedIn at $8 billion. These are the fastest-growing Internet/social networking companies in the world, and here’s what’s scary: You could easily fit all their employees together into the 20,000 seats in Madison Square Garden, and still have room for grandma. They just don’t employ a lot of people, relative to their valuations, and while they’re all hiring today, they are largely looking for talented engineers.

Indeed, what is most striking when you talk to employers today is how many of them have used the pressure of the recession to become even more productive by deploying more automation technologies, software, outsourcing, robotics — anything they can use to make better products with reduced head count and health care and pension liabilities. That is not going to change. And while many of them are hiring, they are increasingly picky. They are all looking for the same kind of people — people who not only have the critical thinking skills to do the value-adding jobs that technology can’t, but also people who can invent, adapt and reinvent their jobs every day, in a market that changes faster than ever.

(First, note that this growth sector has nothing has to do with producing widgets. It has to do with the ability to capitalize upon knowledge). These are powerful words for knowledge workers.

You have to be willing to adapt, invent, value-add to that which technology cannot do in order to survive ‘in a market that changes faster than ever’.

And our world is changing rapidly.

In addition, word came out today that Legal Zoom is positioning for an IPO. Legal services are always needed. Whether or not this economy will force more DYI’s is another issue.

I don’t have the answers. What I do know is this New Economy is going to shake up a lot of lawyers who are ill-prepared, rigid in their ideas or smug about the way they currently do business. It is also going to lay the groundwork for tremendous successes for those who understand what is happening and make efforts to be creative, capitalize upon technology and move quickly. Legal problems will never go away for your clients. The delivery of solutions is what is ever-changing. Understanding what you’re clients are up against is half the battle.

We can play the blame game but if you are reading this blog, you know I’m a firm believer in being practical. Casting blame doesn’t put food on your table, pay your students loans, or build a solo practice enabling a livelihood. Understanding what you need to do to compete and then implementing it as a professional does.

What strategies are you implementing to stay in the game and to stay in the game profitably? If you’ve read this post you will see all kinds of opportunities for your practice.

Written by Susan Cartier Liebel

With Walmart Offering Legal Services Where Will You Fit In?

Susan Cartier Liebel — Tue, 05 Jul 2011 11:00:11 +0000

(I realize the original title of this post did not really reflect the content and its importance so I changed it.)

I’m seeing the writing on the wall.

A friend of mine is very involved from a legal perspective with the Medicaid program. I’ll decline to say which company and which state because it is actually irrelevant but I was told a little story.

Traditionally, state’s pay insurance companies a capitation fee (call it a premium) per Medicaid recipient. This premium goes to the insurance company to cover the risk of a Medicaid recipient needing services the same as any other health insurance policy. The difference is the state is the premium payor versus you or I.

Insurance companies don’t always make money on such programs as you can get one or two patients, a baby that needs an extensive NIC stay which can run into the millions or a cancer patient in lengthy chemo, and profits are gone. Losses are common. Well, in order to reduce capitation costs, states are deciding to self-insure – willing to take the risk themselves (meaning tax payers bear the risk) and instead paying the insurance companies a greatly reduced capitation fee per Medicaid recipient to operate call centers and and claims processors. The insurance companies no longer bear the risk, you and I do. This cost savings may look good on paper for the first year because of the traditional length of time for an actual payout, but in the long run it will prove very costly to the states who opt to self-insure.

Now let’s take Legal Aid. Legal Aid is traditionally funded by states and is supplemented with a percentage of court filing fees and interest from IOLTA monies. When lawyers are struggling, interest on trust accounts go down substantially. In some states they have lost as much as 80% of their funding due to IOLTA drying up. This costs the state even more then to run a bare bones legal aid operation. It would be very attractive to states to outsource this function.

Now let’s get to Walmart, the largest corporation in the world. It was announced July 1:

For the first time in its history, the nation’s largest retailer Wal-Mart is providing free legal support for patients at the Arkansas Children’s Hospital, many of whom are from low income families on Medicaid.

This type of arrangement means Wal-Mart’s lawyers will be helping families as they struggle through Medicaid’s bureaucracy. The lawyers will also help families’ challenges with landlords and school boards in order to help sick children get access to programs, services and equipment that they have been denied.

This type of arrangement means Wal-Mart’s lawyers will be taking on the government and other entities in order to help sick children get access to programs, services and equipment that they have been denied.

As states go to self-insured status, as states run out of money for Medicaid claims because they underestimated the risk, as legal aid services are under pressure because of funding drying up, in steps the largest corporation in the world to take on legal services to protect the rights of Medicaid recipients. Walmart’s 142 lawyers are doing it pro bono…. for now.

Many have discussed large companies getting into the legal services business but envisioned lawyers working out of kiosks within the company such as lawyers available in Walmart or Sears or your chain supermarket. Did anyone envision this (brilliant) angle?

We all know Walmart is neither benevolent nor profit-averse. The question becomes as Walmart expands their programs to 50 states (which they will if all goes well), will this behemoth become the state’s choice as legal aid alternative by outsourcing their function to a private corporation? Will they be contracting with Walmart making them the preferred provider of legal services for the low-income of this country? And if they do, will they hire thousands of lawyers as payrolled employees or will there be a Walmart-branded network of solo and small firm practitioners servicing traditional legal aid recipients through Walmart legal services franchises? Will solos who traditionally handled legal aid overflow be competing against Walmart or be a contracted provider in their network receiving a flat fee for each case handled? Or will solos and small firms who have traditionally handled this work be shut out if they don’t agree to these fees from Walmart and simply can’t compete on price?

There are approximately 44 million low-income people, (many of them Walmart employees) including children and special needs patients. And this number will sadly grow over the next few years due to the state of our economy. You do the math. Walmart is run by very smart people.

If the pilot project with the Arkansas Children’s Hospital is successful, Wal-Mart’s Gearhart said it could roll out nationwide in partnership with other hospitals, companies and law firms.

In the meantime, if Medicaid families from elsewhere in the country approach Wal-Mart for legal help, Gearhart said the retailer will find a way to help them. ”The goal is to build a broader network”

Is this an opportunity for solos to reach out to Walmart now? Clearly they are looking to establish a network as they have proclaimed if any one in any state needs help, they will find a way to help them.

Will you be the first in your state to offer to supply these services (pro bono for now) to get in the door?

Written by Susan Cartier Liebel

What Role Does Your Spouse or Partner Play in the Success of Your Solo Practice?

Susan Cartier Liebel — Tue, 15 Feb 2011 16:33:49 +0000

This post was triggered by a very passionate argument about women’s contributions to the collective wisdom of the blogosphere between Crime and Federalism and MyShingle and morphed into Military Underdog’s smackdown challenging the idea that any specific genitalia has greater responsibilities to their children all while running their legal practices. While it was kind of devolving into a fist fight, no one threw a knockout punch nor could they. But the takeaway: for the most part, when it comes to parenting responsibilities, gender distinctions are so last century.

However, one message got lost in translation and needs to be broadcast:

The roles you and your partner (and increasingly, your children) negotiate within the family dynamic will increasingly play a major role in the success or failure of your solo practice.

Back in my consulting days one of the first things I asked a client was, ‘is your spouse or partner on board with your decision to go solo?” If they weren’t, this was a huge though not insurmountable issue. If your spouse or partner does not fully appreciate what is involved in you running a practice and the two of you have not redefined your family obligations accordingly, this can be a tremendous stress on the marriage and impact the children and prevent your business from healthy growth.

I cannot nor will I pretend to know the strains of a court schedule on a solo practitioner’s marriage or parenting roles because the majority of time I practiced I was unmarried. By the time I married and had my son my court calendar had been wound down very methodically and deliberately. That’s not to say my husband and I didn’t negotiate and renegotiate our responsibilities these past years since the inception, birth and growth of Solo Practice University. His support for the venture and his very hands-on parenting has played and continues to play a huge role. If anything, I irrationally and stubbornly keep trying to hold on to traditional ‘wife’ roles while he is more than willing to take them over. We’ve even had the conversation (more than once) of not falling into the trap of traditional household duties and defining them as male or female, husband or wife, father or mother. It’s hard as it is culturally ingrained. Plus, I enjoy some of them! All of this was and remains an ongoing negotiation but thankfully with very few bumps.

However, once you’ve negotiated with your spouse or partner, there is also the negotiation with your children, helping them to understand the constraints on your time when building your own business (or working for another, for that matter), enlisting them if they are old enough to participate and hopefully appreciate what you are doing. I know I am always seesawing between gratitude and guilt when it comes to my son. He thankfully seems to get it and that’s in no large part to my husband’s attitude about my work.

So rather than my going on and on, it would be great if you shared how you’ve negotiated with your partner on household and parental responsibilities in an effort to make creating and building your solo practice a little easier.

Written by Susan Cartier Liebel

NYSBA Acknowledges Times Are Changing – An Action Plan

Susan Cartier Liebel — Mon, 07 Feb 2011 11:30:50 +0000

This is an excerpt from the Future of the Legal Profession Report commissioned by Stephen Younger, President of the New York State Bar Association. It was meant to address the effects of the economic downturn as well as other issues impacting the legal profession:

“….private practice, one of the key engines of the profession, is under increasing pressure to valueengineer its services. New lawyers face mounting debt burdens and bleaker job prospects, which inhibits their development. And clients resist “on-the-job training” of new lawyers, which is necessitated by the dominant model in legal education. In response, lawyers have undertaken a better-faster-cheaper ethic, necessary both to differentiate themselves from their competitors and to satisfy clients. This leads to burn-out and the loss of human capital and expertise, placing additional economic burden on firms and taking its toll on individuals. Finally, technology drives many of these changes, affecting the traditional tasks associated with lawyering and how lawyers interact with their clients. In sum, the profession has changed in its demands of lawyers and how they provide their services. And it will continue to change, as adaptation feeds back against economic and social shifts already taking place.

And the following statement was made at the annual meeting of the New York State Bar Association held last week.

The future of the legal profession is brightest where forward-looking attorneys have the “energy, the optimism and the can-do attitude” to prosper in a shifting economic and technological age…

All I kept thinking was, ‘he’s describing solos!’ This is what solos do, stay optimistic and opportunistic, thriving when the landscape shifts because they are the most capable of clearly seeing what’s going on and adapting faster. They are the ‘forward’ thinkers

Some of the changes in the legal profession specifically noted:

“Aware of it or not, virtually every lawyer now operates in a globalized environment with increased competition. A solo practitioner in Elizabethtown, N.Y., can have a client with a legal problem involving a supplier in China. A law firm in Manhattan can send legal work to Bangalore as easily as it can to an associate on its 32nd floor. A solicitor from Toronto can represent a client with legal interests in Buffalo, just a few miles [kilometers] down the road.”

What I found especially interesting, however, was two-fold:

1. Open acknowledgment of the following:

need for technology
need for alternative fee structures
lawyer burnout is real and work/life balance issues must be addressed
how ill-prepared graduates are
willingness to participate in the national debate regarding student debt load
recognition legal services may soon be coming to a shopping mall kiosk near you
virtual law offices are here to stay
legal education must be overhauled
if delivery of legal services in this country doesn’t ‘shape up’ clients will continue to ‘ship out’ to alternate providers.

2. An actual responsible game plan to address all of these issues.

The article is so complete, no point in reinventing the wheel here. Please read the article ‘Lawyers Face New Challenges From Global Competition‘. And then take the time to read the actual report (110 pages but worth it.)

Now, one could argue they are a day late and dollar short for many graduates suffering from lack of training and crushing debt, they are way behind the curve in responding at all on alternative billing and virtual law practices, and this task force was necessitated not by genuine concern but grandstanding under pressure to address.

One could argue creating a task force to determine the pros and cons of closing the barn door after the horse has left is typical and that the NYSBA is so far behind other states who have already addressed these issues they should be given no brownie points.

I don’t have the answer and I don’t really want to form a judgment. What I am impressed with, however, are the particular elements of legal education and professional life chosen to be addressed. Whether anything of value happens and in what time frame has yet to be seen.

What do you think?

Written by Susan Cartier Liebel

How Major Changes In Our Daily Living Will Impact Solo Practices (Part II)

Susan Cartier Liebel — Mon, 31 Jan 2011 11:30:19 +0000

We are continuing to discuss the major societal and cultural changes coming to a head in 2011 and how your clients are going to be impacted by them. You can read the first two discussions here and here to catch up.

This third post is going to discuss changes in housing, $5.00 & $6.00 gas, newspapers, communications and social media.

How Is The Housing Market Going To Impact Your Practice Even If You Are Not in Real Estate?

By now most of you know the real estate market took a HUGE hit in 2008 – 2010. It is still in serious distress even though the talking heads think we have bottomed out. We haven’t. There is what is called the ‘shadow inventory‘ in the real estate market, inventory comprised of all the foreclosed properties still being held by the banks and not yet released into the market for sale.

A good friend of mine who personally knows V.P.’s and Presidents of banks because he has an extensive real estate practice was told by two bankers independently, ‘if we put all our foreclosures on the market today we could financially take down New York’s economy.’ And that’s just one bank’s foreclosed properties. Is this true? My friend heard the same from bankers in southern Connecticut. Again, exaggeration? Just a turn of phrase? Time will tell. What does matter, however, whether they are bankruptcy driven foreclosures or non-bankruptcy foreclosures, people are walking away from their homes in record numbers.

We have at least three takeaways from this:

Your clients still have to live somewhere.
This is a real boon for the rental market and landlord/tenant practices.
This will force very interesting migration patterns throughout each state, regions and the country.

How will you have to adapt your business? As people go to rental living, the transient nature of this lifestyle clearly will impact how people engage service providers as well as their long term relationships with these providers.

A transient and mobile lifestyle changes your client’s center of influence and stability. People go from choosing legal service providers based primarily upon their own geographical location to choosing their service providers in spite of their own geographical location.

Let me give you an example:

Nancy Nomad and her husband, Gideon Globetrotter, need a trusts and estates lawyer. They currently reside in Houston, Texas. Their home is foreclosed and Gideon’s new job takes them to Austin where they become renters.

Gideon is by no means secure in this new position. He has a one year contract for work but no guarantee of renewal. Nor does he and Nancy have a home they own. He is eying a job in Dallas which may provide him more pay and better security and will open up within the next year. They both had a previous relationship with an attorney in Houston and they really liked her. They don’t want to lose this relationship because of their move.

Providing the lawyer utilizes technology to keep the relationship, such as a Virtual (online) Law Office, they don’t have to. If the provider doesn’t have the means to address his clients’ new migratory patterns and transient living, he loses them. Chances are Gideon and Nancy will choose a lawyer who provides this connection and stability in their unstable world, a lawyer who can work with them wherever they locate.

If their Houston lawyer can service their legal needs in Austin or Dallas, neither the lawyer nor Gideon and Nancy have to lose the relationship with the other. A transient client wants the stability of the same service providers just like their phone, cable, and electric. The want portability. Legal service providers are no exception. Stability and long standing relationships will come to mean much more in their unstable world.

Let’s add another statistic into the mix: 27 % of people in the United States have no landlines in their home and are strictly cell phone/smart phone users. How many of you have already made the switch from landline to cell phone for both home and office? (and look at the ethnic breakdown possibly further supporting transient behavior and maybe a socio-economic reality.) My husband insists we keep a land line and I don’t object because it’s part of my cable/internet bundle. However, my business is strictly computer and smart phone and I know many others are switching to smart phones.

So, let’s go back to Gideon Globetrotter and Nancy Nomad. He’s transient with his job and residence. What are the odds they are going to hook up a landline and spend this extra money with every single move… unless it’s part of their cable/internet bundle? And even if this were the case, they don’t really want a new number with every move. It showcases their lack of stability with the job search, too. The only consistent number is their cell phone.

This switch to strictly cell phone/smartphone is going to increase. Why is this statistic important to you? Because without landlines, people are not part of any phone book. If they are constantly moving, they are certainly not part of any geographical based phone book. They don’t need the phone books or any type of paper directory, either. If they have smart phones they are quite capable of accessing any information they require through their data packages available through their smart phones. It is reliable, updated and a constant in their unstable lives.

Where Will Potential Clients Find You?

Less and less in any paper directory or publication.

If they are going to learn about something or someone they are going on the internet, asking family and friends, going to their connections on Facebook or Twitter for referrals to help them get started with their search. They will read your blog, websites, online reviews about your service. You should also note: while they’re looking through these reviews they are getting hit with targeted advertisements for other similar products or services such as yours. The internet has become one constant in their ever-changing world.

What About Print Newspapers?

The majority of young people don’t get a delivered print newspaper. Will they read the print edition online? Yes. Right now it’s free but may not be for much longer. Will they pay for a print edition? Quite possibly.

I’m not going to jump on board with ‘all electronic news will be by paid subscription.’ That’s not a sure thing by a long stretch and if the majority were to go paid, the breakouts that stayed free would grab a lion’s share of readership while supported by advertisers. There will always be checks and balances in delivery of information.

There is, however, something much more telling in this demise of physical newspaper readership. If the physical newspaper is gone, where will lawyers place their traditional print advertising dollars? On line, of course. But how?

Answer: There will be regional or national news delivery agencies which will create hyperlocalized editions of their internet publications. Their advertising will be targeted to a specific demographic community and the advertisers will benefit from this more defined audience. Even if it’s not lower in cost for the advertiser (which it really should be given the reduction in costs to produce) it can still be worth it because the advertiser pays only for the audience they specifically want. (And in doing so, they hasten the demise of the print publication.)

I experienced this recently when I responded to an online contest for my son. I was asked for my zip code. I was then brought to my state senate seat’s voting district’s online news edition created by a national news agency. (How interesting they divided the editions by voting district.) The vendors supplying the prizes for the contest were local to the voting district. Every district edition had the same contest for their local vendors. It was hyperlocalized targeted online content.

Hyperlocalization of online newspapers will be very big. While I’ll miss my Sunday paper, I have already transitioned 95% to online news anyway. The rest of the country will simply be forced to whether they like it or not. So, I ask you rhetorically, where are you going to spend your advertising dollars if the physical newspaper no longer exists? If Nancy Nomad and Gideon Globetrotter are your potential clients and they are transient within your jurisdictions(s), they’ll be accessing hyperlocalized online newspapers and content to learn what is available in their ‘new’ (albeit, temporary) home. They will not be subscribing to print newspapers and canceling and resubscribing with every move. Their trusted companion is their smartphone supplying the information they need when they need it and traveling with them wherever they may reside.

Gideon and Nancy will also be accessing Google Places – the internet equivalent of the yellow pages. Google Places works off of the key word search and is analogous to you looking for ‘plumber’ in the yellow pages then scrolling down to find a plumber based upon the plumber’s proximity to your location. As a solo, you should seriously investigate Google Places and do so soon.

More food for thought: if your potential clients are increasingly giving up their landlines and going with smart phones which allow them to access the internet for contact information, to receive and send email and texts while avoiding voice mail (the average voice mail sits for more than three days before being heard), how do YOU plan to reliably communicate with your potential clients going forward? I don’t have the answer for this right now because there are many confidentiality issues to be worked out. Obviously, one serious choice is through a client portal within a virtual (online) law office.

What you must consider is this: what we’re professionally comfortable doing may be trumped by our clients’ needs and technological capabilities. They may prefer texts over phone calls and e-mail over regular mail simply because they don’t have a landline or a permanent mailing address or the post office has switched to alternate day delivery thereby rendering it untimely. (Note: our post office is not delivering our mail due to massive snow piles blocking our mail boxes. The physical post office is overwhelmed with everyone in town trying to get their mail. Do you want your critical legal documents and invoices to be part of this weather-driven fiasco? Neither do your clients.)

Bottom line: If you don’t have a smart phone which has all these communicating abilities, I suggest you start shopping for one. Also be prepared to create policies regarding confidentiality and texting with your clients. Remember, it’s not just about you saying, ‘I have an office line and I’m not giving out my cell phone number.’ It’s about what the client uses to communicate and how they expect to communicate with their attorney! Younger lawyers may be very comfortable with this development. However, other lawyers need to give serious thought to this, too. You may have to consider getting a separate smart phone just for work so you can give out the phone number while preserving your personal phone! Sounds far-fetched or not feasible? The tail wagging the dog? We’ll see.

What About $5 and $6 per gallon gasoline?

Forget that it adds to an already over-burdened household budget, but your clients are going to be less inclined to come to your office unless it is absolutely imperative. They are going to be budgeting their travel because of the cost of gasoline and parking as well as the cost in time they can ill-afford to spend on non-income producing activities. If they can handle a matter over the internet with a lawyer who provides this option, they are going to be much more inclined to do so. The price of gasoline must be factored in to your decisions as a legal service provider because this problem is not only not going to go away, it’s going to get worse. Of course price due in part to market manipulation. However, there is also a much bigger factor at play – other emerging markets are demanding oil and and they are going to get it. We’ll be paying a premium for a more limited supply and there’s no getting around this. Then add on increased state taxes on gasoline to cover budget shortfalls and you have a serious problem. Your clients are going to demand you make working with you much easier or they will find someone who will.

What About Social Media:

Social Media is no longer about what you choose to do or choose not to do. It’s about where the potential client expects to find a service provider when they look for a service provider.

Years ago, before the internet and cell phones, if you were in a reputable business customers expected to find you listed in the Yellow Pages. It gave your business the perception of legitimacy. Every home had their local yellow pages. So, Yellow Pages sales representatives offered you one line in the phone book for free when you secured your business phone number and this helped their cause which was to promote they had everyone and every business listed which in turn generated more paid advertising.

Today, the internet is the Yellow Pages. Your web presence is your Yellow Pages listing, a must have which gives your business the perception of legitimacy. But that’s not all. Potential clients expect to find you listed on all reputable sites, including Facebook. Do you remember years ago progressive companies listed their website URL along with their regular contact information? I remember thinking, ‘what is this?’. Now those same progressive companies no longer feature their website url prominently but feature their Facebook page url prominently. The goal is to drive customers to their highly interactive site within a community where their prospects congregate. There they can learn more about people who have expressed interest in their product/service and interact in real time. And it’s a great advertising tool (which is for a separate post). It is all about engagement. Facebook is still young but even in its relative youth it has managed to change how we are conducting business and engaging our potential clients . It offers a different type of legitimacy in this ‘connected’ world. It would be wise for you to have a facebook page for your business and to learn how to use it correctly.

One Final Thought:

It’s a sweat equity marketing world we now live in. Get ready to sweat if you want to grow your business.

Two hundred and sixty years ago we were a new country. Ninety percent of all businesses were sole proprietorships. There were no large employers. Entrepreneurs flourished as they created their own prosperity by innovating, filling a void in the community, solving problems with hard work – sweat equity. No one could write a check to have someone else create a persona for them. People had to market themselves to their neighbors by being honorable, doing good work, delivering promptly on a contract, having reliable products and services and when they handled their business well, it often led to prominence and respect in the community. There was no outsourcing of one’s reputation. Today our world is demanding we sweat again, as we can no longer avoid engaging personally when building our practices. We must use the tools available to us and we must engage the way our potential clients want and need us to engage.

We are also going through a major societal change: millions employed to unemployed and then a large percentage to self-employed. And when someone becomes self-employed they rarely return to working for another. This is a radical change. It will forever impact how business is conducted.

While change is nothing new, the speed with which change is happening today is new. What is changing and the scale of the change is new. There is no running from the change taking place. There is no hiding, either. All we can do is anticipate it, embrace it, and run with it. Maybe some think they can stand still and continue to grow. I beg to differ. Welcome to 2011.

What do you think? How are you adapting your practice? Have you considered working with clients online, even just a small percentage of your client base, to get ahead of the curve?

Written by Susan Cartier Liebel

How Major Changes in Our Daily Living Will Impact Solos (Part I)

Susan Cartier Liebel — Mon, 24 Jan 2011 11:30:14 +0000

(Another long post but I think you’ll find it interesting!)

My last post frightened quite a few of you. I’m glad. I did my job, then. We can’t live in a bubble forever. Things are clearly changing in our world which means things are changing for your potential clients and how you will interact with them in the future. (And for those who want a more lawyer-centric post on change, here is another interesting piece from law.com)

On a side note, it even triggered a Twitter debate about the value of technology in practice. When you are client-centered, technology is a critical component of practice. It impacts your overall ability to service your client efficiently. Efficiency is a component of effectiveness. (Think computers, smart phones, e-mail,etc.). Advocacy skills and technology skills are not mutually exclusive. Technology doesn’t necessarily create a thriving practice but not keeping up with effective use of technology can certainly destroy a practice or prevent it from growing or even getting off the ground today.

My focus is on your clients and how societal and cultural changes will impact them. While the reason for a lawyer’s existence is ethical and competent advocacy, the key to a solo practitioner’s success is how quickly and deftly they create or revamp their solo practices, shift gears and make adjustments in their personal and professional lives in order to service their clients. But a solo will only limp along if he doesn’t stay very tuned-in to their potential clients’ economic challenges as well as changes in their spending habits, buying habits and lifestyle choices. Make no mistake: staying sensitive to and adjusting for these changes before the next lawyer are the keys to profitability and success.

In 2011 and going forward we will begin to see the mainstream application of what has so far been ‘fringe’ technologies. We will also see the beginning of a decade of major cultural and societal changes. The majority of Americans will have no choice but to alter their lifestyle and spending patterns permanently. Moreover (gosh, that word annoys me), consumers of all products and services are so much more sophisticated, skeptical (and scared) and heavily reliant upon information they gather from their online and in person social networks. Legal services are not immune from these changes and legal service providers would be smart to pay attention.

How will the wholesale adoption of certain technologies and the rather rapid demise of major cultural traditions impact all our lives? How will we approach building and marketing our practices with these traditions scaled back or gone? Hopefully, I’ll be able to identify them, how they are tied together and then give you ideas on what to consider when creating a long term business and marketing strategy for your practice, specifically from the client’s perspective.

The United States Post Office Is Almost on Life Support.

The post office is in VERY serious trouble. On CBS news today it was announced the USPS is discussing closing thousands of unprofitable post office locations! I’m not sure it will die but it will certainly have to change it’s current practices and offerings or succumb. If you look at your own habits you can probably see why the post office is under assault not only from competitors like UPS, FedEx and other shippers but also from how their customers use technology: E-vites, E-holiday greetings, text thank you notes, online direct billing and bill payment, e-filing of taxes, shopping, and much more. These behaviors have all conspired to deliver a fatal cut to the USPS’ jugular – first class mail.

Here’s the salt in the wound. Did you know with every one cent bump up in gas prices it costs the USPS eight million dollars more per year to run their trucks? And gas ain’t headin’ downward. There have been serious discussions mail should only be delivered three times a week as a means of reducing costs. The other: raising rates on first class postage and other services. With first class postage prices rising it impacts all businesses. Major cell phone carriers, cable providers and other monthly service providers are e-mailing their customers incentives to receive their monthly bills online. I just got my $10 rebate for going paperless with my cell phone provider. I also just signed up for auto-pay to avoid the monthly postage costs and late fees. Case in point: with the snow storms in the northeast my snail mail check payment took two weeks to get to AT & T. I was charged a late fee. They waived the fee (probably because they don’t want to lose me to Verizon as I have an iPhone). The question remains: why should I have to deal with this kind of costly unreliability – late fees, lost payments, stopped-check fees, etc? Translation: Why should you as a legal services provider not make it as easy as possible to get paid? (We’ll discuss in more depth later.)

As this trend continues it means the only pieces of ‘mail’ the majority of postal customers are or will be receiving in their mailbox will be unsolicited junk, some bills and the occasional greeting card from Aunt Sallie because she still believes in Hallmark. Therefore, even if you’ve created a magnificent marketing mail piece, if mail only gets delivered three times per week and the recipient wasn’t expecting it, it will be deemed unsolicited junk and go right into the shredder. Not the wisest use of your limited marketing dollars. The mail box no longer provides the excitement it once did. It’s a relic of days gone by in so many ways.

Bottom Line: Plan for a future where your use of USPS services are less and less relevant to your practice because the USPS is becoming less and less relevant to your client.

Consumers Pay Online Bills Faster

Well, if the USPS is going to become less relevant to your client for all the reasons listed above how are you going to get paid? Right now most of you send out monthly invoices, don’t you? And they are received in that nasty ol’ mailbox. It gets put in a pile of other bills to be paid once a month and forgotten. Then you send another one a month later gently reminding your client of payment. It requires the client to sit down and do the dreaded bill paying and feeling guilty they didn’t already pay you. They have to write a paper check and put an overpriced stamp on it and go to the post office at the same time they are rushing to Johnny’s daycare and mostly likely they forget to mail it. It sits on the dash board until the next trip. Then the next ‘more urgent’ bill demands immediate payment and they rip up your check, write a new check for that more urgent bill. Then your next bill arrives stating they are now 60 days past due. The cycle repeats itself and the client ends up disliking you! It’s not only costing you money but creating an (undeserved) attitude towards you and your services. Not good business.

Check out this survey:

    -- A growing number of consumers are turning to their computers, rather
       than their checkbooks, to pay household bills.
    -- Paying bills online has become a mainstream activity among U.S.
       households.
    -- Western states, followed by the South, have embraced online bill
       payment faster than other regions, which may be driven in part by
       higher broadband penetration rates and online banking use in these
       regions.
    -- Paperless bills appear to be catching on as consumers recognize their
       convenience, security and environmental benefits.

It’s all about cost and convenience and this above survey was done four years ago!

I don’t know about you but when I get an invoice online I pay it much faster than a paper bill because there are less steps in the payment process and an ‘ unreal’ quality about it. What do I mean by unreal? When I write a check, I am strangely more invested in the invoice and attached to the money then I am when I pay for something on line via credit card. Make no mistake – this is not lost on the credit card companies and successful merchants. They know this detachment is real, too, which leads to faster payment for online merchants. Consumers find fewer steps and no costs associated with making online payments very attractive. In addition, a payment made on line with a credit card is also fast payment to the merchant yet delayed withdrawal from the customer’s checking account. Sneaky but falsely satisfying to the customer and very profitable to the merchant and credit card company. This phenomenon should not be lost on legal providers either.

Bottom Line: If the USPS continues its descent into irrelevance and clients pay online invoices more quickly because it is easier and they are more detached from the process, you will be wise to establish a system to invoice and collect payments online now.

The Demise of the Paper Check

If the above information doesn’t convince you to think about online invoicing then maybe this will. You and your clients may not have a choice for very much longer when it comes to online payments. Did you know that the UK is ‘outlawing’ paper checks by 2018? Even though the U.S. does lag behind the UK on this issue I do believe it will happen in the U.S. sooner rather than later. It is simply cheaper to keep banking transactions online.

Have I repeated myself enough times? Good. I’m going to do it one more time.

Bottom Line: As the banking industry forces our hands to go to electronic payments this will put the nail in the coffin for the post office. Psychologically consumers pay on line invoices faster because it is easier, cheaper, secure and environmentally friendly. They are also psychologically less attached to the process. Connecting these dots is not that hard. Get your billing and invoicing online.

There are many companies already providing excellent services for online billing and payment. I also believe any state still creating road blocks with out-of-touch rules will be forced to accommodate this reality. You would be wise to start investigating these types of services sooner rather than later. Check with the antiquated rules of your jurisdiction for a lists of dos and don’ts.

Next posts: The changing housing market, cell phones, newspapers, television, five dollar gas and how this will affect your practice.

If you are currently collecting payment online, let us know how it is working for you.

Written by Susan Cartier Liebel

What’s Happening To Your Client in 2011?

Susan Cartier Liebel — Tue, 18 Jan 2011 11:30:28 +0000

(This post is not for the faint of heart.)

Last week I posted that I had SO much to say that it literally rendered me incapable of posting anything. And my friend, Jack Newton posted a 2011 Prognostication Roundup on Slaw. It was very lawyer/law firm-centric. My thoughts, however, were elsewhere. What is happening to your client in 2011? What changes are going on in his life (and yours) which will impact how we deliver services? What cultural institutions are threatened which will impact how we reach our clients to let them know we exist? There are huge changes afoot, insidious changes that have been taking place over these past three ‘transitional’ years that are going to accelerate this year and decade.

If you’ve been following this blog you know I often write about economics, both national and global, and demographics because you can’t build a business without knowing what’s happening outside your little bubble. Nor can you turn a deaf ear. Well, you could but you’ll go out of business. Plus, I have a family and business like everyone else. It matters to me. It matters to you.

So, let’s dig in.

I follow someone who posed these two questions to his readers.

What cuts in government services are you hearing about in YOUR area?

How do you and your family plan to cope with them?

He got over 1,000 responses. This is a sampling of those responses:

Jody F. from North Carolina notes that the state’s Mental Health agency went bankrupt. And worse: “One of my friends who worked there had just had surgery for breast cancer,” she says, “and the health insurance was bankrupt and could not pay her bill.”

Tim W., a resident of California, says “Fresno CA has released hundreds of prisoners in an early release program. Many of those released are rearrested within days on new charges. Makes us feel safe and warm all over to know that you can now commit crimes in Fresno and be released with a hand slap.”

Linda C. writes that, in her area, they’re closing libraries, reducing bus schedules and jury-rigging the property tax rules in ways that overstate the value of each home in order to pump up revenues.

Al is worried that, in his state, budget shortfalls are seriously interfering with infrastructure upgrades and threatening to leave citizens in the dark sometime in the next three years.

His reaction? “I’m upgrading my property with a 4.1 KWH solar array with battery back-up to provide power in the event of a shutdown in the grid.”

Marvin J., a retired police officer in Kansas, reports that Wichita has eliminated Community Police Officer positions and removed all uniformed officers from public schools.

“I’ve been receiving retirement checks for the past 18 years,” he says, “but I’m beginning to wonder how long that will continue.”

Robert L. says that “Colorado Springs has turned off many street lights and gotten rid of its police helicopters.”

Ken writes that New York City is avoiding any real cuts like the plague. Instead, “The government has increased property taxes, the water bill, mass transit, tolls on bridges and all sorts of fees, including a recent rise in the sales tax.”

George B. reports that in his area, they’ve seen city attempts to get the local fire and police — both unionized — to take 2%-3% pay cuts, but they are fighting it tooth and nail.

If you’re practicing in Illinois, they were particularly incensed:

Jack E. writes, “The [Illinois] state legislature is using a lame duck session to pass massive tax hikes to pay for their past sins.

“On the local level, we have seen firefighters and police officers laid off. Public works budgets and employees are suffering. By far the most ominous layoffs are in the ranks of teachers.”

Dean H., who also lives in what he calls “the disaster-zone otherwise known as Illinois” — reports:

“Over the weekend, the speaker of the Illinois house — and one who is considered the most powerful politician in Illinois — Mike Madigan — held ‘closed-door’ meetings with other top politicos said to be addressing the budget shortfalls (mildly put).

“The bitter irony of the outcome of these meetings is that NONE of them included belt-tightening, or any reduction in funding of state services. What has been leaked is a planned SEVENTY-FIVE percent increase (yes, that’s 75%!!) in state income taxes to help cover the shortfall. (Ultimately, they passed a 66% increase in state income taxes)

“Notice again that not a SINGLE plan that’s come out of the meetings have suggested CUTS of anything!!!”

Here are a few more startling 2010 statistics for you to think about:

#1 An all-time record of 2.87 million U.S. households received a foreclosure filing in 2010.

#2 The number of homes that were actually repossessed reached the 1 million mark for the first time ever during 2010.

#3 According to the American Bankruptcy Institute, approximately 1.53 million consumer bankruptcy petitions were filed in 2010, which was up 9 percent from 1.41 million in 2009. This was the highest number of personal bankruptcies we have seen since the U.S. Congress substantially tightened U.S. bankruptcy law several years ago.

#4 At one point during 2010, the average time needed to find a job in the United States had risen to an all-time record of 35.2 weeks.

#5 The number of Americans working part-time jobs “for economic reasons” was the highest it has been in at least five decades during 2010.

#6 The number of Americans on food stamps surpassed 43 million by the end of 2010. This was a new all-time record, and government officials fully expect the number of Americans enrolled in the program to continue to increase throughout 2011.

#7 The number of Americans on Medicaid surpassed 50 million for the first time ever in 2010.

#8 The U.S. Census Bureau originally announced that 43.6 million Americans are now living in poverty and according to them that was the highest number of Americans living in poverty that they had ever recorded in 51 years of record-keeping. But now the Census Bureau says that they miscalculated and that the real number of poor Americans is actually 47.8 million.

Today, I heard for the first time a well known food chain is going to have its first losing quarter due to customers not buying as much food in part because of skyrocketing food costs (commodity prices on such staples as wheat, sugar, cocoa and coffee have gone through the roof) and their reduced income.

There has been legitimate discussion of $5.00 gas which has less to do with price manipulation and more to do with China growing and demanding the resource in greater quantity.

On a personal note, I know many people who have lost their jobs, have had to take on second jobs and lost their homes. I’m sure we all have seen it or felt it firsthand. This is the client of your future.

There are two take aways from these comments and statistics:

Self-employment and start up businesses are going to skyrocket. (note: the referenced blog post was written 3 1/2 years ago when times were good, real estate prices were high, etc.) So, knowing this I expect the self-employment startup market to double!! And once you work for yourself, if you succeed you seldom go back to employment. This is a HUGE societal shift
Your ‘average Joe’ law client is going to have fewer dollars to spend on needed legal services and the need for unbundled legal services is going to explode. because not everyone will want to be a D-I-Y litigant.

Some of you may say you knew that. The reason I used this excerpt, however, is each and everyone of these people sounding off on this blog and all of the sobering statistics showcase your potential client ‘today’. It’s not coming from some talking head with a cushy job reading off a teleprompter then flying off to Belize for vacation away from the unwashed masses as they tell you the economy is improving.

This potential client is literally frantic about how the things they have little to no control over in the economy are going to impact their everyday living. Some will end up under your local highway underpass. But most will find a way to put food on their tables. Most will hold onto their hard-earned dollars, too. They will be skeptical, scared and nervous as everything they thought they could rely upon, everything they ever knew to be right is challenged. They will only spend on that which is truly important and no longer spend on anything which is inconvenient and doesn’t save them time and money.

I’ll be writing more on major societal and cultural changes in coming weeks. The questions I leave you with are ‘how are you making changes in your practice to address clients’ economic stresses? Are you changing the method of delivery of your services? Are you transitioning to unbundled services? Are you changing how you market to these clients? Or is it business as usual?

Written by Susan Cartier Liebel