April 25, 2017

How Should Small Law Firms Approach Business Development?

After a long, and sometimes painful examination of what I did or didn’t know, the answer is, it depends.

Imagine this scenario. You are either a student fresh out of law school or you have been working for Big Law and want to go solo. You know the law, but you don’t have the foggiest clue how to start a law practice. So, like anything else these days, when you want to find answers to your questions you turn to the internet.

how_to_start_a_law_practice

Amazing that in .18 seconds, Google came back with 74.2 Million pages that purport to help you understand “how to start a law practice”. That would be great if all 74.2 Million pages asserted the same thing, but they don’t.

No, it seems that no matter where you turn, you will find a passionate opinion about how the business of law is conducted and how the other point of view is the view of a dumb ass.

The reality is, it is truly difficult to know which way to turn. In the end, how you start your law practice will depend on your particular circumstances.

Real Quick, My Story

Two years ago, after several failed attempts to launch a business of my own, I made a shift and decided to offer sales and marketing advice to professional service providers. I decided to work with dentists because I have a background working with dentists as a CPA. (I am also married to a dentist.) I decided to work with CPA’s because I am a CPA.  And because I like the power of three, I added lawyers to the mix. The problem was, while I know a considerable amount about sales and marketing, and have an extensive background in business, generally speaking, I had no clue about the business of law. 

Being the naive tool that I sometimes can be, I thought how much different could running a law practice be from running an accounting practice? You do the work and you bill for time. Pretty simple. I even wrote a few really stupid blog articles to get things going that, after reading half of the 74.2 Million pages, I have since taken down for one reason and one reason only. I had it all wrong.

I had no clue what I was talking about as it pertained to the business or practice of law. The business of law is a thing of its own and it is something you either understand or you don’t. If you don’t, no matter how hard charging you are, which in my case is pretty hard charging, you are going to fail, and you are going to make a fool of yourself along the way, whether you are a lawyer or someone serving the needs of lawyers.

What do you need to know?

For the past few years I have read, I have engaged in conversations, I have observed lawyers both on and off line, and have discovered a few things about business development for law firms that you need to know if you are going to be a successful self-employed attorney. Here they are in no particular order.

  • The practice of law is a business
  • There are two types of lawyers. 
  • Ethics matter.
  • Profit should not be your primary objective, but it does matter.
  • Advertising is always marketing, but marketing isn’t always advertising.
  • Effective marketing starts with superior performance.
  • You need a plan.
  • The type of law you practice makes a difference.
  • Good old fashion face-to-face meetings still work.
  • Most lawyers have no clue what SEO is. 
  • Social Media is not a magic bullet, and neither is SEO.

Let’s examine each one of these things in a bit more detail with the hope of providing you enough insight to at least be able to take your first steps toward running your own law practice. Or, at a minimum, you’ll know how to interpret all the advice you are going to get from people on the web…all 74.2 Million of them.

Because A Small Law Firm is a Business

The fact that you are a lawyer doesn’t exempt you from the need for business development. How do I know? Because the practice of law, unless your practice is entirely pro bono, is an exchange of a services for money. By definition, that means your law firm is a business. From the IRS:

“The term trade or business generally includes any activity carried on for the production of income from selling goods or performing services.”

I am using the IRS’s definition because, well, they are the IRS. That said, because your law firm is a business, you need to determine what you are going to do to develop your business. This article is a collection of things that I have learned on my quest to understand the business development side of practicing law. 

Actionable Insight

The mind of a lawyer and the mind of a business person are different because they need to be different. Being a lawyer and running a business require different skills and priorities. To start:

  • Keep things separate in your mind. The easiest way to do this is to think of working in your business, as a lawyer, and working on your business, as a business owner.
  • If you haven’t already, take a course or two on the basic fundamentals of business and business success. Most people take for granted that running a business is an easy thing. It is not, particularly if you don’t have some understanding of the basics. For example, keeping up to date with your books matters and it matters because it impacts more than your ability to balance your check book. It will make and save you money over the short and long term.
  • Hire a CPA, not a bookkeeper, to work on keeping your books up to date. A qualified CPA, one who understands the business of law, will help keep your business on track so you can focus more on being a great lawyer.

Two Types of Lawyers

I am certain that there are more than two types of lawyers, but for the purposes of this article, you will understand why I am going with two.

  • One type of lawyer believes in the power of being an excellent professional. This type of lawyer believes, rightfully so, that being good is the best place to start as it pertains to getting a law practice off the ground.
  • The other type of lawyer isn’t as concerned with being good at what they do as they are with telling the world that they are good at what they do using legal marketing prestidigitation. 

It is important for you to understand that the first lawyer generally has no use for the second lawyer, and this will impact your success if you are not careful.

Actionable Insight

You always want to be the first type of lawyer because in the end, the best way to grow your law firm is to be a great lawyer. However, there are some things you can do to make sure you stay focused on your practice.

  • Take an inventory of your unique set of skills, but also your unique personality. Your strengths will determine how you take your practice to market. 
  • Follow what lawyers say about other lawyers online. It will inform you as to who might be doing it right and who might be making mistakes. Then you can act accordingly.
  • Don’t market your business the same way other successful lawyers do. If you are equally talented as your local competition, then you need to differentiate your services by presenting your firm in places and ways that your competition is not.

Ethics Matter

As a licensed CPA I am intimately familiar with what a professional code of conduct is. I am also aware of how important it is for the professionals in a particular profession to adhere to the code. In the practice of law, contrary to what many non lawyers may think, most lawyers are extremely ethical and respond harshly to peers when they are not.

In 1908, the American Bar Association (ABA) published “The ABA Canon’s of Professional Ethics“. In it, they included a Canon, Canon number 27 titled “Advertising, Direct or Indirect”. The purpose of Canon 27 was to inform lawyers practicing law that they were restricted from doing anything to promote their services other than being an exceptional lawyer. Here is the first paragraph that tells you quite a bit about how history views the promotion of legal services:

It is unprofessional to solicit professional employment by circulars, advertisements, through touters or by personal communications or interviews not warranted by personal relations. Indirect advertisements for professional employment such as furnishing or inspiring newspaper comments, or procuring his photograph to be published in connection with causes in which the lawyer has been or is engaged or concerning the manner of their conduct, the magnitude of the interest involved, the importance of the lawyer’s position, and all other like self-laudation, offend the traditions and lower the tone of our profession and are reprehensible; but the customary use of simple professional cards is not improper. 

So basically, back in those days, you had a business card, a nice suit and your excellent lawyering skills functioning as your marketing plan. That’s it.

Aside from minor amendments in 1937, 1943 and 1951, it wasn’t until 1972, as a result of attorneys John Bates and Van O’steen having their law license suspended for six months for advertising their legal services, that attorneys were able to promote the services of their law firm.

Since I am not a lawyer I will say only this. Bates and O’steen took their battle all the way to the Supreme Court of the United States of America and prevailed as it pertains to their rights to free speech. As a result, from that point forward, even though still heavily regulated, lawyers were able to promote their services using all forms of advertisements.

Each state, having its own Bar, also has its own code of conduct as it pertains to the advertisement of legal services. While each state is different, in most cases, there are some basic principles that all law firms must abide by.

  • You can’t brag about the services you perform well
  • You can’t brag about the services you don’t perform well
  • You can’t solicit business, ergo, SPAM people
  • You can’t lie about your performance record

The bottom line is, you can’t be misleading about anything you say in the promotion of your practice. Some states go so far as to restrict you from saying anything about your practice outside of your name and address. 

The main takeaway is, unlike other forms of business, where you can pretty much do anything to get attention, as a law firm, you are restricted by a code of professional conduct and really, in both your promotion and the performance of your duties, must always act in accordance with the code.

Actionable Insight

The good news about having to comply with a strict code of ethics is that content marketing is a perfect fit to develop the business of your law firm. The reason is that while boasting about your prowess will likely get you in some trouble, educating your target audience will not. And as it turns out, content that educates is a far more effective form of marketing than pomotional advertisements of any kind. Here are a few things you can do right out of the gate:

  • Find opportunities to give educational presentations to people who need to understand more about the impact of the law you practice. If you are a real estate lawyer, try to get in front of Realtors. If you are a family lawyer, try to volunteer your time at a community center to help families understand the nuance of family law. 
  • Start a blog, but do it not for the benefit of SEO. Write a blog to both educate and give insights to the audiences you are targeting.
  • Give presentations at your local bar association so that other lawyers can learn more about how you can complement their own practice. This will likely lead to a wealth of referrals as you demonstrate your competence in a particular area of law.

Yes, You are a Business, But Profit is Not Your Primary Objective

One of my clients is a CPA who happens to provide accounting and tax services to small law firms. She wrote, with my assistance, an article about making money as a lawyer, but from the perspective of Brian Tannebaum derived from is book, “The Practice:Brutal Truths About Lawyers and Lawyering”. (great book. you should read it now)

In Ann’s article, she quotes Gary Becker and Richard Posner, from their article, “The Professional versus the Business Model in Law and Medicine” … 

The traditional concept of the profession (the concept that is undergoing change) provides an interesting contrast to the concept of the profit-maximizing business firm. In the business model, the goal is profit maximization in a competitive environment that operates in a basically Darwinian fashion (survival of the fittest); risk is pervasive and both extraordinary profits and devastating losses are real possibilities. Employment and leadership in such an environment attract many and repel many. The people it attracts tend to be aggressive and daring. The ones it repel tend to be cautious and thoughtful. 

In the traditional professional model, risk both upside and downside is trimmed by a combination of regulation and ethics both aimed at muting competition. With muted competition the lawyer or doctor can realistically aspire to a safe upper-middle-class income, but he is unlikely to become wealthy. The result, in combination with requiring postgraduate education and qualifying exams for entry into the profession and subjecting members of it to professional discipline, is to attract a type of person quite different from the entrepreneurial type—the latter a type exemplified by such extraordinarily successful college drop-outs as Bill Gates, Steve Jobs, and Mark Zuckerberg. The professional model attracts a more studious, intellectual, risk-averse type of person. 

In essence, what Gary and Richard are saying is that professionals have a higher calling than just making a profit. While making money is a good thing, it should really be done in the context of being an exceptional professional. The thing that separates the professional from the entrepreneur is that the professional is held to a high standard of professional conduct, and must work within those standards to make a living, modest or not.

The point is, your primary goal should not be to make a profit. Your goal should be to be a great lawyer. Money  and profit usually follows as a by product of being that good. And in fact, being good, correction, being exceptional is truly your best marketing or business development tactic.

Advertising is Always Marketing, Marketing is Not Always Advertising

I read a comment made by a lawyer on his blog suggesting that marketing has no clear definition. That is nonsense. There are several pretty clear definitions of what marketing is, but none, in my opinion, is more accurate than my own. Marketing is…

“Doing what you need to do in order to get found, chosen and referred.”

The 1972 case made it possible for lawyers to advertise, but up to that point, lawyers were always marketing. The reason is, being a good lawyer actually is marketing if it helps you get found, chosen and referred. 

This is an important distinction because it will help you, an upstart lawyer, make sense of all the opinions you will come across as it pertains to the marketing of your services. The lawyers who say you don’t need marketing, who at the same time tell you to go do some local networking, are contradicting themselves and confusing you. Networking, even the old school variety where people actually meet face to face, is marketing.

I love when I read that a lawyer doesn’t do marketing because they get all their business from referrals. Sorry, but you too are incorrect. What you really mean is you don’t do promotional marketing because, well, frankly, getting referrals is marketing. Because getting referrals starts by being referable. You become referable when your performance is superior.

Effective Marketing Starts with Superior Performance

All the promotion in the world isn’t going to amount to a hill of beans if you suck as a lawyer. Truly, before you pay for a billboard on the side of a highway, or have a Super Bowl commercial made boasting about your legal prowess, just get good at doing what you do as a lawyer. You will be surprised how fast your practice will grow when you get really good at what you do. In fact, I will go out on a limb, as a marketing consultant, and tell you that by and large, if you are superior in your practice of the law, unless you live in a cave and have an aversion to the phone ringing, you will be successful. The reason is, word travels fast when people who need you ask people who know you if you are any good.

The same holds true if you are a terrible lawyer. Not only will your clients beat the crap out of your reputation, but your peers will too, particularly if you suck and your advertise that you don’t. I have seen it, and it is not pretty. More on that later. 

One thing is for sure. The internet has made it extremely difficult for bad professionals to hide. Years ago you may have gotten away with being a tool for a period of time. Nowadays you have about as long as it takes to send out a tweet. That’s it. Damage done.

You Need a Plan

I realize that to some starting a business is pretty straight forward. You want your revenues to exceed your expenses. OK, that is fine. The question is, how do you make that happen? The best way is to create even the most basic business plan, starting with what kind of law are you planning practice based on the needs of the people in the community you plan to practice in. 

A plan will keep you on track and focused on building the type of practice you need to provide you the opportunity to practice the law you enjoy, on your terms making the kind of living you desire. The plan will establish:

  • The strategy you will use to differentiate from the competition (strategy is something as simple as a niche you plan to focus on)
  • The market you will target giving you the best chance of competing in your market
  • The realistic goals and objectives to keep you on track, without wasting time or money
  • The type of marketing you should do to reach your goals

Without a plan, again, even a basic one, you are likely not going to have a clue how to go about attracting the right type of clients to your practice, from whatever source you need.

The Type of Law You Practice Matters

Criminal defense lawyers, family lawyers, real estate lawyers, elder care lawyers, DUI lawyers, motorcycle lawyers, estate lawyers, tax lawyers, patent lawyers, etc etc all have different types of clients. As such, each type of lawyer needs to use different types of marketing primarily because of the way people buy the different types of legal services. 

Criminals, the big money variety, generally don’t search Google to find a lawyer. They either ask their criminal friends, or they ask other lawyers. These are big cases that often take a long time to process. The lawyer generally doesn’t care about volume. 

Contrast that with the average real estate lawyer who does residential home closings. This type of law practice is a high volume practice that requires an entirely different approach to marketing than the criminal defense lawyer.

The biggest gripe I have, with both legal marketing and other types of marketing is, most of the advice you get is given as if there is one size that fits all. In truth, for any industry, one size does not fit all. You have to consider the variables of your specific situation starting with the type of law you practice and the type of clients you want to attract.

Old Fashioned Face-to-Face Meetings

I love the internet. I love internet marketing. I love to meet people on the internet. You know what I love even more? Meeting people in real life. Why? Because you simply cannot make a deep enough connection to build a meaningful relationship with the right types of people using a Tweet. Search engines are great, but they don’t buy legal services from you. People do. The best way to get your practice started is to get out of your chair and get out into your community, and mix it up with a variety of people.

  • Other lawyers
  • Other professionals
  • Non Profits
  • Other businesses
  • Schools in the area
  • BNI
  • The local Bar Associations
  • Other professional associations

Get out, give your time, give your expertise, start a conversation and meet people. There are a number of reasons you want to do this, one being, people don’t buy from people they don’t trust. Since you don’t sell pencils, a sale which requires little trust, and you sell legal advice, a sale which requires an enormous amount of trust, you need to start building trust. People generally trust people they meet in the flesh more than they trust people they meet on Twitter. So, go. Make your way away from your computer, and get in front of some flesh and bones.

Most Lawyers Have No Clue What Good SEO Is

I am certain that saying that most lawyers have no clue what good SEO is will irritate many lawyers who think they do. I am sure you think you do but rest assured, you don’t know as much as someone who actually is an SEO. In fact, I will go one step further and say that many of the SEO’s you buy services from don’t really understand how to make SEO actually work for your law firm. 

Now, I am not going to go into a lengthy narrative on what is or is not SEO, primarily because I am not an SEO. I do however work with the top SEO’s in the world who tell me one of the biggest mistakes people make is thinking SEO is all about ranking on page one of the search results.

The truth, no, the secret is, rank alone is not relevant. Conversions are. And in order to get the right kind of conversions, you need to understand your market, and your markets buying habits on the internet, if they even buy your service because of what they see on the internet.

It may be that your worst clients come from the internet, and you have no use for online marketing. It may also mean that your online marketing sucks ass and you dont know how to attract the right type of clients from the web. Either way,you need to know, no matter what you do, if its done wrong, it isn’t going to work. You also need to know, based on the type of law you practice, that SEO may really not be for you, even if it is done properly.

So, my advice is, don’t listen to anyone who says the one of the following two things:

  • SEO is the holy grail to grow your practice
  • SEO is a SCAM and all SEO’s are a waste of time and money

Both are not only wrong, but are disastrous pieces of advice until someone knows more about who you are and what you want to get done, and with who.

Social Media is Not a Magic Bullet

Actually, SEO or any other form of marketing is not a magic bullet. There are no magic bullets in any form of business. I will even go so far as to suggest that even being a great lawyer isn’t a magic bullet, but it is as close to a magic bullet as you will ever find.

As for social media, it is very simple. Take this down. Social media is social networking. All you need to know is that what you do offline can now be done online. My point here is, social is all about being social. It isn’t about being a lawyer. It is about meeting and greeting and getting to know the people that matter.

That said, it can also be the biggest waste of time in your professional career. Be careful that you don’t get caught up in the social web hype. Your main goals with social networking when you first get started will be:

  • Follow people who have a clue about practicing law
  • Don’t follow anyone who says they are a social media ninja
  • Don’t every do a “paperli is out ” on Twitter
  • Don’t just talk about the law
  • Be yourself unless you are a jack ass
  • If you are a jack ass, don’t do social networks
  • Don’t use fake “Top 100” accolades in your social profile
  • Don’t use real “Top 100” accolades in your social profile 
  • Don’t try to generate business
  • Just be human

Conclusion

You are smart. You spent years learning how to be a lawyer. You have everything you need to be successful. You shouldn’t let a silly thing like business development get in your way. 

Just remember this, hot air balloons eventually run out of hot air, and come crashing to the ground. Don’t let hot air be the defining feature of your business development plan. Just be good. Be real good. And the rest will likely take care of itself.

If not, you can always become a marketer for lawyers.

Additional Resources

Anything by Carolyn Elefant

The Practice by Brian Tannebaum

This post by Nicole Black

This post and comments by Nicole Black

Resources for Solo Practitioners

Great Article and Comments on Legal Blogging

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