Steve Adams, criminal defense/DUI attorney and author of Practice Law Like an Ironman: Unbeatable Checklists for any Lawyer Creating a Solo and Small Practice, recalls when he started his practice almost two decades ago. In just one year, he made the leap from earning $42,000 a year as a county prosecutor to making more than $240,000 as a solo lawyer.
“I executed a game plan,” he explains. That was, essentially, reaching potential clients via direct mail. He knew the precise zip codes to draw in the clientele he wanted and it worked – so well, in fact, that within a couple of years other attorneys saw his success and followed his lead. (By then, he moved on to other ways to target his marketplace.)
However, earning nearly $200,000 more annually meant more responsibility and expenses – like significantly more taxes.
“I was like, ‘Holy cow! I made it!’” he laughs. But he also learned he needed an accountant and a bookkeeper if he was going to continue his success. “I knew law, what I didn’t know was metrics. But I didn’t want to fly by the seat of my pants. To run a successful practice, you need to know what’s coming in, what’s going out, and how you’re making money.”
That’s why, after that first year, Adams has made it a point to meet with his bookkeeper weekly. (That was a smart move, considering there’s a lot more money to track today – in 2016, he grossed more than $1 million.) They review his revenues, where he’s making his money, and where he’s spending it.
“She helps me set my weekly and monthly goals,” explains Adams.
We’re very goal-oriented around here, because we practice law like an ironman, and to do that, you’ve got to be big-time into goal setting. You must be focused on your long-term goals, but to achieve that, you have to set a lot of short-term goals, track them and meet them, too. Knowing your metrics makes that happen – you know where you’re on track, or what you need to change to get there.
An easy way to track and understand your firm’s metrics is through financial performance data available in Firm Central law practice management software. Firm Central, in addition to automating your matter management and invoicing processes, provides real-time reports on the financial health of your law firm. With an easy to read financial performance dashboard you can quickly see at a glance your revenue, current work-in-process as well as billed and collected dollars. You can also easily keep track of your aging accounts receivable and understand your top revenue generating clients and practice areas on the dashboard.
Adams confesses that to emulate his success, you must be a good lawyer and a good businessman. What Adams never wants to be, however, is a bill collector. So, he’s thoughtful about who he represents, and even then he collects about 90% of his fee upfront. For the remaining 10% he’ll do a payment plan over the course of two to three months, and always has a signed fee agreement in hand before moving forward. Of course, sometimes clients do end up owing money. He’s glad those are very few and far between.
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Amy Larson is a Director in Small Law Firm Customer Marketing and Firm Central at Thomson Reuters. She has over 17 years of experience in technology marketing with extensive focus on learning how technology can meet the needs of attorneys. Amy has been involved in numerous product launches throughout her tenure, public relations efforts, interviewing customers and telling their stories, and often writes and distributes information on legal practice management.