At the beginning of the year, we shared big ideas from Ann Guinn: Infographic: 9 Ways to Run a Small Law Firm as a Business. More recently, she presented these insights during a webinar titled: The Happy Lawyer’s Guide to Running Your Firm like a Business.
While much of her discussion covers the 9 keys to running a firm like a business, what stood out in addition to the practical business tips she shares, were the anecdotes she used to bring them to life.
Take for example, these real-life scenarios, which provide a cautionary tale about what not to when trying to get a successful solo or small firm off the ground.
she hadn’t billed a client in 18 months, the entire length she had been in practice
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When describing the importance of getting control of law firm billing and finances, Ms. Guinn shared an anecdote about an attorney who hadn’t billed his client for $7,000 of completed legal work. At the same time, the attorney was headed into trial for the same client and realized he needed to secure an additional $7,000 to cover the trial expenses.
Instead of asking his client for the full $14,000, he offered his client a deal he couldn’t refuse— he waived the original $7,000 and asked the client for just the $7,000 to cover the trial. Of course, his client was happy to oblige, says Ms. Guinn.
When the attorney explained the situation to Ms. Guinn, she asked him the million dollar question – why did you discount the 7K? Did the client complain? Where the legal services rendered under par? He answered no to all of her questions. Rather, he said, “it just felt greedy to me.”
Don’t try to get into your clients’ heads, cautions Ms. Guinn. In other words, don’t let your clients determine the value of your work.
“It’s a dangerous place to be in,” she adds. Instead of worrying about what discounting legal fees will mean for your client, think about what it will mean to you as a small business owner.
No Legal Invoice for 18 Months
Another story she shared was of a solo attorney who came to her with an unusual situation. She explained that she hadn’t billed a client in 18 months, the entire length she had been in practice.
Ms. Guinn said the attorney’s response “floored her.” Naturally she asked why she hadn’t billed a client in 18 months. The attorney responded that her assistant felt bad asking clients to pay for bills. Her justification – since they paid for a portion of bills in advance, that was enough.
Ms. Guinn told her she had two options:
- Have a talk with her assistant or, better yet, find a new one.
- Be out of business.
Roughly two years later the same attorney approached Ann about working together again. Ann admits after they met the first time she worried the attorney might not make it.
Fast forward to present day and the tide has turned. Today, the attorney employs a staff of two people, including a full-time attorney and is considering bringing another one onboard. When explaining the turnaround of her company, she credits Ms. Guinn her for giving her the best four words of advice in her legal career— bill clients, get money.
“Bill Clients; Get Money”
Who knew these four simple words would have such a profound impact on an attorney’s career. Ms. Guinn says the message is that simple. Make sure to bill clients regularly, at least monthly or even twice a month, if clients are amenable to it.
If you’re interested in hearing more interesting stories and useful insights, have a listen to the happy lawyer webinar.
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