I met with over 100 lawyers last year to discuss referrals and business expansion opportunities. In March 2020, we moved to become a tech company. We left the original law firm language below in the article.
This is to help law firms that want to grow. I’ve found most want to go it alone and start their own practice.
The risks are inherent: leaving an established law firm, building your business reputation, finding referrals.
Then there are the HR, accounting, and marketing functions – necessary, but time-consuming and sometimes tedious tasks.
Having your own practice allows you to do things “the right way.”
You need the right people
Decisions: Making The Right Ones, Righting The Wrong Ones by Jim Treliving, the Boston Pizza CEO made famous by Dragon’s Den, discusses the importance of working with the right people.
Treliving shares his experiences with failed business partners (and marriages) that eventually led him to his ideal partner. Together, they built a $445 million dollar company (TSE: BPF.UN).
Creating a successful business behemoth across multiple cities requires hiring and working with people you can trust. Trust develops by instilling fear or building loyalty.
You may be able to build a successful company either way, but your company culture will depend on the strategy you use. Making that decision is step one.
You need to be capitalized
In step two, consider whether you are going to offer partner buy-ins to associate lawyers. Or, perhaps, raise capital from non-lawyers. Over three years, I examined ways to raise capital.
I have tried many different business models. Once I found the right model, I was able to amass millions of dollars in new capital for business expansion.
What I learned along the way is to take care of your investors. It may seem trite, but investors can literally be your best friend or worst nightmare.
Honesty and integrity will garner their support when it’s most needed, such as offering recruitment incentives like a substantial bonus for a new lawyer.
Expect many angry phone calls and e-mails if you ignore their inquiries or withhold information. Treat your investors like partners. They are not a faceless bank.
Involve the law society
Law societies are appreciative if you notify them of your expansion plans. Therefore, provide open communication which can prevent misunderstandings and build trust.
Leaving the Law Society to uncover your plans on their own can lead to awkward and time-consuming questions.
4. Build a close relationship with a marketing firm
With business growth comes the need for effective marketing. Your law practice will guide the marketing strategy.
Common marketing spends include pay-per-click (Facebook and Google), search engine optimization, and social media. Google SEO is at the top of its field in that regard. Some law firms allocate their marketing spend on multi-media campaigns.
Billboards, radio, even advertisements on top of urinals at airports. This strategy can be effective for personal injury law, where anyone can be a potential client.
It may not work well for other practice areas. The lesson is, know your target market.
Know your numbers
Law school may not have prepared you to view operating a law firm like a business nor do all lawyers agree that it is one. Regardless, you need to know your numbers.
Growing A Law Firm | Lawyer Marketing
You should be able to calculate:
- Know how many inquiries you get per week (website and phone)
- How many of those calls turned into consultations It’s also important to understand how many of those consultations turned into files. Once you have done that, calculate the last two things:
- The cost of acquiring the client
- The average revenue per client.
For more on metrics you need to measure at your law firm, read The E-Myth Attorney: Why Most Legal Practices Don’t Work and What to Do About It.
Law Firms Need To Change
In some courts, 70% of people are representing themselves. I never understood why people would do something so crazy until I became a plaintiff in a civil matter myself. Right now, I wear two hats in the legal community. One hat is as the CEO of ClearWay Law, and the other hat is as a self-represented litigant.
Depending on which hat I am wearing that day it changes how I feel about lawyers and the services they provide.
Today I write this article as someone tired of seeing lawyers let clients and potential clients down. While I understand many lawyers will read this article, and they might not agree with everything I write, it doesn’t matter what they think.
The free market always votes with their wallets, and I know many lawyers who are struggling to earn an income.
There are some amazing lawyers out there, who care deeply about their clients. But these great lawyers represent around 20% of lawyers, and the other 80% are not great.
$600/hour on legal fees
If you can find one of the 20%, don’t self represent. But unless you can afford $600/hour on legal fees, I doubt you get an amazing lawyer. Some diamonds in the rough do exist.
I know some lawyers that charge $250/hour and provide better service than lawyers that charge $500/hour. Many people focus on how much the lawyer charges per hour.
But that is the wrong thing to worry about. The real question is, how many hours will your lawyer spend on pointless activities? Will they create issues instead of solving them?
From my personal point of view, 80% of lawyers cause more issues than they solve. “No problem can be solved from the same level of consciousness that created it” – Albert Einstein
Growing A Law Firm
From what I see in the legal industry, most lawyers won’t reply to someone who reaches out to them for help. If they do, the lawyer is feeling out if the client has money or not.
If the client has or needs financial assistance, good luck to them. Most lawyers won’t work with a legal aid client because the lawyer will end up making $40/hour when all the paperwork between the client, lawyer, and legal aid is considered.
Some lawyers find any excuse not to do legal work, so they waste time.
Hard time communicating
Even if the client has money, most lawyers will still have a hard time communicating and getting the client in to see them.
This is because most lawyers are unorganized and feel that responding to emails and phone calls is below them. They didn’t go to law school to be admin assistants. On top of all these issues, lawyers can be very manipulative.
I have seen lawyers claim that their regulator (the Law Society) told them to do something. When the client checked with the Law Society, it turned out the lawyer lied.
While old-school lawyers sit around all day thinking about law society compliance and ignoring the phone, legal technology companies are doing big things.
Legal Technology Is Going to Crush Lawyers This is because these companies are often not run by lawyers. They understand the disconnect between clients and lawyers. According to a legal tech company (Clio), 84% of legal professionals want to increase their sales, yet 77% of people with legal issues never ended up receiving help.
Clio just raised $250M USD to expand its business model and improve the legal industry. This is the first time in my five years in the legal industry that I have seen this big buzz around changing the law.
These legal technology companies see the opportunity to fix the broken legal industry and they have the money to do it.
Growing A Law Firm
So, what’s the disconnect? Old school lawyers. Law firms need to change. Innovation is the key to building a better law firm. Lawyers who care about their clientele are leading the profession.
People typically avoid lawyers because of their fees. They never know how much it will cost, the benefits outweigh the cost, or the cost exceeds the value of the process.
Lawyers on average charge $267, depending on the city, area of law, and how much experience the lawyer has. When the collection is factored in, they actually earn $184 according to Legal Trends Report 2018.
Intellectual property and business lawyers often charge the highest hourly rate. Personal injury and criminal lawyers are usually on the lower scale, but the personal injury also charges a contingency fee.
Innovation Around the World
There have been foresight in the legal field, and innovation has been encouraged. It just seems that now, with more people demanding strong services for a reasonable price, innovative firms are leaving the old standards behind. Lawyer Julia Salasky of London, UK created CrowdJustice in her kitchen in 2014.
She combined crowdfunding with the legal system to help those who can’t afford legal fees find justice.
Even earlier, in 2007, Jonathan Brayne, founder and chairman, Allen & Overy chaired the firm’s first innovation panel. Now, he chairs Fuse, the firm’s legal tech hub. Allen & Overy has won Europe’s most innovative law firm award six times.
Growing A Law Firm
In Spain, Jorge Badía, managing partner, Cuatrecasas, has led the firm to recognize young lawyers, and they have built a plain language reputation that increased business 25 percent.
The youth has also introduced digitized systems and has developed their own case management software. Under Badia, the firm has a culture of respect and gender equality. British software firm, Tikit provides seamless technology for law firms.
Developed specifically for lawyers, the award-winning software allows them to work and collaborate from anywhere in the world. This technology is also available in Australasia and North America. British law firm CMS, who installed Tikit in 2016 describes it as a leap into the future.
The history of law
To understand how the law got the way it is in 2019, it’s important to understand the history of law. The legal industry is thousands of years old, but even between 1900-1950, most lawyers worked in a solo practice.
The point of not working with anyone else (lawyers or non-lawyers) was to make sure the lawyer remained an independent professional whose judgement would not be compromised.
Lawyers wouldn’t sign partnership agreements or work under a brand. Growing a law firm is hard work is impossible to do by yourself.
I’ve spoken out against premium billing many times. Every time I write about it, I get angry messages from lawyers on Linked. This is a key thing that the broken law industry does.
Overbilling by Lawyers
I once hired a business lawyer who overbilled me by $12,000. When I complained he wrote the entire amount off. It’s important to note that sometimes clients complain about overbilling even when it didn’t occur. If a lawyer’s rate is $300/hour, and they work 10 hours, a bill for $3000 is the correct amount.
Just because it’s a large bill doesn’t mean it was dishonest. But with the lawyer that billed me $14,000 when it should have been $2000, that was very dishonest.
Growing A Law Firm
Most law firms have not grown with the times. ClearWay Law plans to take it to the next step with the first North American law firm IPO.
Canadian Examples Of Innovation
Canadian Lawyer Magazine’s Innovation of the Year for 2018 prize went to ATB Financial this fall. ATB’s Law Department reduced processes, such as preparing a non-disclosure agreement (NDA), from several days to 30 seconds.
Their template, which the customer can complete and print, doesn’t need to be seen by a lawyer.
This not only provides savings for their clientele but also frees up their legal staff to work on more strategic initiatives.
The Canadian Bar Association issued a paper examining various innovations in many Canadian law firms. The Legal Futures Initiative Report sites innovative ideas for service.
This includes everything from freelance lawyers to automated document providers, and from fixed-fee arrangements to cooperative legal services. Growing a law firm is hard work, so get help with marketing and sales.
Growing A Law Firm
ClearWay Law has virtual offices in Toronto Ontario. This provides staff with a better chance at work-life balance. It also reduces the cost, time, and stress of commuting.
The lawyer is safe at home, and there’s no impact on the roadways or the environment. Recent studies have shown that lawyers are susceptible to mental illness and alcoholism.
Calmer home life can reduce the stressors that cause these maladies. More time with their children is beneficial as well – for both parent and child. In addition, utilizing support staff who work remotely is a sizeable money and time saver.
These workers provide the services that lawyers aren’t necessarily good at for a fraction of the cost. These include:
- Processing client payments
- Preparing and sending invoices
- Networking to meet new referrals
- Updating the website
Benefits for the Client
These savings can be passed on to the client, who is often more comfortable in a home office setting anyway. People only need lawyers a few times in their lives and aren’t familiar with law firms.
They can also be nervous about finding and parking near a big-city office. The reduction in costs provided by virtual law firms allows them to offer flat fee services.
The law firm’s clientele will know ahead of time what their costs will be. If they cannot afford these services, they can choose to be coached instead.
This is an attractive option for those wishing to represent themselves, and they generally enjoy a better outcome. Consumers are now able to make a choice they can afford.
There are forward-thinking law firms that have the client’s interests at heart and are willing to help people through their legal challenges. Law firms need to change. ClearWay Law hopes to help the industry improve.
Growing a law firm is hard work, but keep going!
Growing A Law Firm
Are you tired of getting bad service at law firms? I get a lot of motivation to write these long articles when I see something broken. This is the part of law firm management people don’t talk much about.
Competitors filing law society complaints, threatened lawsuits, bullying, sexual harassment, and substance abuse.
A few things our lawyers want to know about clients before meeting are:
- We offer the legal assistance they require
- They understand ClearWay Law’s vision
- The client can afford $250-495/hour
- The client is reasonable and willing to listen to advice
Author: Alistair Vigier is the CEO of ClearWay Law