I hope you had a good Memorial Day weekend. I hope you were able to leave work behind for the long weekend and spend time with your friends and family. I hope you enjoyed good weather, maybe threw a ball around, grilled some steaks, and so forth. It was, after all, the Unofficial Beginning of Summer.
My long weekend was nothing like that. I spent it entirely inside, packing up the offices of Shepherd Law Group, preparing files for a storage facility, and boxing up the rest of the equipment and random stuff for my basement. For me it was, after all, the Unofficial Beginning of the Rest of My Life.
Let me explain: As you may have heard, I started a consulting firm called Prefix, LLC, to teach lawyers and other professionals how to price their knowledge. As a result, I made the decision to close my Boston employment-law firm after 13 years in business.
As I tape up my last box and peel away the sign from the office entrance, I thought I’d share with you some of the things I’ve learned running a small law firm. These are 13 things I wish I had known when I started.…
Before I give you my list of lessons, let me frame it this way. I’m proud of what we were able to accomplish over the past 13 years. I started the firm after four years of working in a similar boutique, learning the world of employment law and small firms. When I opened my doors (first as a solo practitioner), I had no money to speak of (a $13,000 investment from savings) and no clients from my previous firm (two followed me a year later). I had yet to establish any kind of reputation.
By the end of the 13-year run, clients large and small had spent millions of dollars to get advice and advocacy from us. Twenty different clients with revenues exceeding $1 billion each hired us to help them. Both my firm and I developed reputations for expertise locally in Boston and nationally (especially when we abandoned hourly billing in 2006). Thirteen different lawyers worked here (with six lawyers on board at its peak), as well as seven other team members.
With that context, here are 13 of the lessons I learned at Shepherd Law Group, one for each year:
1. Have a dashboard for cash and receivables. This is one of the smartest things I did. Every day, my assistant prepared a single sheet of paper that told me exactly how much cash we had, how much we were expecting in receivables, how much we owed in payables, and how we were doing for the month, quarter, and year. (As you can imagine, my dashboard said nothing about hours.) You should always have this information at your fingertips.
2. Have a top assistant. Speaking of assistants, as soon as you can afford one, get a good one. You need an assistant who will boss you around and tell you what you need to do next, and who will kick your ass when you’re not doing it. A good assistant is more valuable than a good associate. (That will raise some people’s blood pressure. But it’s true.)
3. Trust your people. They will not work as hard nor as well if they think you don’t trust them to do their jobs. My lawyers knew that I trusted them and that I had their backs. If they made a mistake, they owned it and took responsibility for it. With lawyers who had been micromanaged at their previous firms, this took some getting used to.
4. Hire slowly and fire fast. In a small firm, it’s critically important to have the right people. Take your time during the hiring process to make sure you find someone who’s going to be a good fit. Don’t worry about taking too long or having too many interviews. And make sure that everyone in the firm has a chance to interview the candidate. You can’t afford to have people not get along in a small firm. On the other hand, if someone’s not working out, don’t delay in cutting the cord.
5. Get your name out there and keep it out there. Publicity, both for your firm and for your lawyers (including you), is critical to marketing success. Remember: you’re building a brand. Too many small-firm lawyers don’t think about this. They think that if they just work hard and do good work, they’ll get business. Unfortunately, it doesn’t work that way.
6. Spend your money where it counts. In other words, spend it where it will make a difference. Good equipment, a good assistant, high-quality stationery and paper, a professional website or blog, classy marketing materials — all these expenditures make a difference. Expensive office space? Less so, especially if you don’t frequently have clients in to see it.
7. Only take A and B clients, not C and D clients. This is a tough one. It’s hard to to turn away potential clients. But your efforts should focus on getting good-quality clients: the kind you want to work with. Too many small firms use the pulse-and-checkbook method of client selection. The problem is, you then end up spending too much of your time working for clients who don’t appreciate you enough and whom you don’t enjoy. And this prevents you from going out and getting quality clients. It’s a vicious circle, and a common one.
8. Pay yourself first. It’s typical for small-firm owners to finance their firm by deferring their own pay. The problem with this is that it hides an important cost: you. If you’re not making enough to pay yourself — and pay yourself well — then you’re not making enough, period. And you need to figure out how to be making more. Now.
9. Treat your employees like family. I’ve said it before: a small firm needs to be like a family, and family members support each other. If you’re just coworkers and employer and employees, your firm will have a hard time becoming the special place you want it to be.
10. Don’t be afraid to grow. Many small firms are afraid of the changes that growth can bring. And growth does bring its own share of problems. But growth is important, because otherwise you’re stagnating or shrinking. Don’t fear it; make it a goal and prepare for it.
11. Market more. The best time to market is when you don’t have time to market. It needs to be a top priority for you. Think you’re marketing enough? You’re not.
12. Hire people who believe what you believe in. First, figure out what it is you believe in, and what your firm stands for. Then, find people who believe in that thing. They’ll be much more committed to working for your firm than people who are there primarily for the paycheck. Finding those fellow believers, of course, is much harder.
13. Close your office before you let your people go. That way, they can help you pack up. Otherwise, you’re counting on family and friends to give up their Memorial Day weekend. (D’oh.)
By the way, I’ll still be writing this column even though I no longer work at a small firm. It’s not as though I’m going to forget the things I learned over the past thirteen years, and I still have plenty to share with you. I just won’t be writing to you from my law-firm office. Instead, I’ll be in my basement trying to find which box has all the good column ideas.
Jay runs Prefix, LLC, a firm that helps lawyers learn how to value and price legal services. Jay Shepherd also spent 13 years running the Boston management-side employment-law boutique Shepherd Law Group. He writes the ABA Blawg 100 honoree The Client Revolution, which focuses on reinventing the business of law, and Gruntled Employees, a workplace blog. Follow Jay on Twitter at @jayshep, or email him at firstname.lastname@example.org.