Wednesday, July 11, 2018

10 Observations from the first half of 2018

As the CEO of NexFirm, I see the good, bad and the ugly when it comes to law firm management, as I watch from the cheap seats my clients around the country brave the trials and tribulations of law firm entrepreneurs.  NexFirm's clients skew to corporate practices with experienced attorneys that have AmLaw 250 pedigree.  They grow quickly and are quite profitable.  Even as the elite of the industry, they have their challenges.

1) Biz development works- for anyone.  It's a simple formula- Time and energy yield results.  Those who cop out with "I am not good at it" are hurting themselves professionally, and needlessly.

2) Hiring wrong eventually comes back to bite you.  When my clients lose a great employee, we typically find that the reason is bad communication at the time that they hired them.  Being thoughtful about compensation, and creating a career path for all on your team is your primary job as a law firm partner.

3)  Partners should "re-marry" every few years.  I see too many successful practices break up because of disputes that could have been avoided.  We encourage partners of new firms to talk exhaustively about expectations, to avoid disputes.  Time is the enemy of the understandings they arrive at before the launch of the firm.  It is important to sit down periodically and check in on goals, expectations, and perceptions of partners as they relate to the practice.

4)  If you are not hosting events, you are crazy.  There is no better return on investment than an event that puts you in a room with your clients.  Host a lunch or dinner.  Take a group to a ball game.  Present a CLE.  Just get yourself belly to belly with your clients.  The results will please you.

5)  Don't ever say no to a new matter; but use price to make it worthwhile.  If you like matter but are not sure about the client, increase your rate instead of passing.  And get paid in advance.   My clients are rarely correct when they pick and choose, and at least when you are unpleasantly surprised, you get paid for your time.

6)  Don't ask, don't get.   Insurance carriers said yes to price increases from clients who haven't seen them in years, because they asked.  Be sure to increase your rate every year, or at least try.

7)  Retainers are easier than collection agency.   I see so much wasted time, trying to collect unpaid bills.  Do the hard work up front, and don't waste your time if you are not going to get paid.  The time you save not doing unpaid work can be used in wonderful ways that can improve the success of your firm.  

8)  Trees don't grow to the sky.  When things are good, build up your cash- there is always a possible down cycle is coming.  A strong balance sheet, both personally and at the firm, can make the difference when the slow times inevitably arrive.

9)  If there is one thing that can put you out of business overnight (and I have seen it happen), it is a data breach.  Spend what is costs to be on the leading edge of data security.  You don't want your reputation hurt by this.

10)  Make your team a top priority.  Employees leave if you don't value them, especially when the labor market is as tight as it is now.  When you have a resignation, will you ask yourself if a gift card have made the difference? A dinner, a pat on the back, any sort of acknowledgement.

With half of 2018 still ahead of us, there is still time to focus on improvement and make this year the most successful your firm has ever had.  Just remember, doing the same thing over and over again and expecting a different outcome is the definition of insanity.


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David DePietto is the founder and CEO of NexFirm. He can be reached at 
ddepietto@nexfirm.com

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