Businesses fail because the owners fail to focus their energy on the business; most business owners are technicians, not entrepreneurs, according to Michael E. Gerber, best-selling author of The E-Myth Revisited. Law is a profession; in order to succeed, lawyers must act in a businesslike way. But Gerber may be right-lawyers tend to be technicians who want to do what they love doing: negotiating, drafting, litigating, etc. They don't want to run a business, they don't want to spend time seeking new clients, and they don't want to do business planning. Anything but planning.
As famed UCLA basketball coach John Wooden said, "Failing to plan is planning to fail." Or as it says in Proverbs, "A people without a vision will perish." Or as Yogi Berra says, "When you come to a fork in the road, take it."
The planning process is the business owner's job, although the technical tasks may be the medium of interaction between the business and the customer. In order to exceed the expectations of clients, lawyers must plan their businesses to include service elements and procedures that will encourage consistently high standards of client interaction, such as the following:
The Warning Signs
Most lawyers begin to realize that they are in trouble only after the money ceases to come in the door. However, cash flow cessation is usually the last symptom of a downward spiral that started long before.
An example of warning signs can be taken from the world of sports: Your law practice is like an athlete who is exercising in hot weather. Hydration-maintaining adequate body fluids-is critical to an athlete's performance and health. In fact, dehydration can lead to serious medical problems such as heat exhaustion, heat stroke, and ultimately death.
Unfortunately, the body's ability to detect dehydration is slow. There is a lag between the time the body becomes dehydrated and when it sends the thirst signal to head to the nearest water supply to do something about it. Knowledgeable athletes anticipate this problem by drinking plenty of fluids before and during exercise, even if they are not thirsty.
A law practice works the same way. The point when cash stops coming in the door is much too late to start wondering if you may have a problem. You do. The seeds of the problem were undoubtedly sown weeks, months, or even years earlier. Like the overheated athlete, you need to think about the business side of your practice before you run into problems.
Planning is important not only for cash flow but also when dealing with a banker about a loan. Bankers normally request a business plan in order to facilitate a loan. Even if you have "challenges" in your business, you need to address them in a plan.
The Five Planning Steps
You need to gather a certain amount of historical information so that you can analyze it and start thinking about realistic modifications for the future. You will be primarily interested in marketing and financial data in the form of documents, statistics, reports, survey results, and, when there is nothing else, your best guesses. All this data will give you a snapshot of your or your firm's marketing and economic health in the present.
© 2017 Edward Poll & Associates, Inc. All rights reserved.