As we look into 2022 and what the year may hold, it can be easy to get lost in the fog of the seemingly constant change and upheaval we’ve experienced for most of the past two years. I would encourage everyone, however, to see past the near-term and instead approach the coming year with a sense of plan and purpose. I understand that this may seem incongruent. You may ask, “How can I make a plan when so many things are changing seemingly daily?” It’s a fair question. The answer is, we must plan for what we know will be challenges and execute and adapt that plan as we roll with those changes we couldn’t see coming. Or, to put it another way: Strategic planning is even more necessary to weather the truly uncertain times.

So, how do we do this?

Well, we start by identifying what we know are going to be challenges in the coming year — indeed, these may be the items that are almost always challenging. For the leaders of most small law firms, we can quickly identify two such areas: Business development and the burden of administrative work.

This past fall, the Thomson Reuters Institute released its annual State of U.S. Small Law Firms report, which focused on the challenges facing the leaders of today’s small law firms and what they are doing to overcome them. This year’s report found some unsurprising consistencies with previous years, but with a decided twist. The top challenges faced by small law firm leaders focused on i) the burden of time spent on administrative tasks; and ii) the problems associated with acquiring new client business.

The twin challenges

Business development is a perennial problem that is not subsiding. If anything, the market is becoming more competitive among law firms, alternative legal service providers (ALSPs) and other competitors, such as do-it-yourself legal services. (Often, these DIY providers make pro se representation easier for specific more ordinary individual legal matters.)

Today, 75% of small firm lawyers report that finding new client business is either a moderate or significant challenge for their practice. Without new clients, law firms cannot survive, and lawyers nearly universally recognize this. Yet, business development remains an area in which many lawyers continue to struggle and, unfortunately, place little effort to improve. This is a topic we’ll address more throughout the year, as it deserves particular focus.

And now for the twist: for the first time this year, spending too much time on administrative tasks has taken over the top spot in terms of the number of lawyers reporting it as a moderate or significant challenge. This year, 77% of small firm lawyers say this is a problem for their firm.

Indeed, the administrative burden of running a law firm took over the top spot not because business development got easier — instead, running a firm is getting harder. A few short years ago, the average small firm lawyer reported spending about 60% of their time practicing law, the truly billable part of their job. And if you work the math on a lawyer working 60-hour weeks, 52 weeks a year, then that’s around 1,870 hours that a lawyer was spending on the practice of law.

In 2021, however, that percentage has dropped down to 56%. While 4 percentage points might seem like a small loss, based on that same work week numbers, that translates to roughly 130 fewer hours practicing law with these lost hours instead shifted to non-billable work. Take 130-times your billable rate and you’ll quickly get a sense as to why this situation is a steep financial challenge.

Recognizing the problems

Beyond the necessary administrative burden that business development creates, we see rising complications for those who run small law firms from the increasing complexity of technology — and these problems include collecting fees and managing a hybrid workforce (along with, of course, the attendant needs to shift to already existing legal technology to the cloud in order to make hybrid work happen as intended).

I’m sure each of you can think of numerous examples of how your firm’s day-to-day operations have changed, even in the past year. And clearly, you’re not alone.

While recognizing the challenges that exist is a critical first step, it’s just that — the first step. To prepare for the future, we need to move from awareness to action. And that presents a new problem. A majority of small law firm leaders recognize the problems posed by administrative burdens and business development, however, fewer than one-third have implemented any sort of a plan to address these problems.

And this is where I argue that we can make room for a plan, even in the face of today’s seemingly constant change. The problems that many small law firms face related to their business development aren’t new. (In fact, I’ve written about them for some time.) Likewise, a large administrative burden is nothing new for small law firms to face. Yet, what’s lacking isn’t the opportunity to address these problems, it’s the commitment to solve them through an intentional and planful process.

Throughout the course of this coming year, we will look at examples of other problems confronted by small law firms and how they were successfully met. We will also dive more deeply into the two key challenges discussed here, to more fully dissect the problems and the solutions that work.

This new year presents us with an opportunity to try new ways to solve old problems. Coming up with meaningful actions to address them will take time, energy, and money, all invested with the goal of a more prosperous and profitable future. It won’t be easy, but it will most definitely be worth it!

For more information, you can revisit some of my previous posts for tips on how to develop and execute a strategic plan.

I’ve also written about how small law firms need to develop a plan to through a process of strategic planning. But the rapid changes in the legal market over the past month due to the pandemic are forcing law firms to make these changes faster than any of us have ever thought necessary.

In my last piece, I wrote about the need for small law firms to .

Big law firms are seeing lawyers furloughed or even laid off because they practice in areas or industries that are experiencing dramatic downturns. Yet, this is another reason why lawyers at small law firms may be at a distinct advantage over their counterparts in large firms. There is much less institutional inertia at a small law firm to prevent determined attorneys from rapidly shifting the focus of their practice.

Now, let’s turn our attention to how the services you offer need to shift so you can best capitalize on emerging practice areas and opportunities, ensuring that you are well positioned for what lies ahead.

Recently, my colleague Bill Josten wrote about a small Ohio-based law firm that’s executing exactly this kind of practice shift. The firm was experiencing a prolonged slowdown in their usual work due to the closure of courts and the temporary suspension of the school year that hurt one of the firm’s offices that primarily served college students. Rather than lay off the lawyers, however, the firm made the decision to pivot towards bankruptcy, a practice area that firm management believed would allow them to keep their attorneys and staff busy, if not possibly even create opportunities for growth.

Join ¶¶ŇőłÉÄę’ Mark Haddad for that offers a more in-depth exploration of some of these opportunities.

And the good news is that small firms are uniquely positioned to move towards these new opportunities with true advantage.

But which practices to look at? The answer to that depends on your current areas of expertise, the needs of the communities you serve, and the expertise of your staff, as well as their ability to pivot to new areas. All of that said, there are a few practice areas that are relatively safe bets — so, let’s explore a few that our data and clients are suggesting may be growing in strength.

Lobbying — Many law firms are reporting a tremendous uptick in lobbying work in conjunction with the current crisis. With so much emergency legislation and government regulations being worked out and so many industries being impacted, firms with connections in government or those with some experience in crafting legislation or regulations could expand on that experience to carve out a potentially lucrative niche.

Real Estate — Foreclosures are largely paused right now, but many businesses still face a pressing need to address issues with their leases on existing space. Landlords too are trying to deal with the possibility that they’ll soon hold massive amounts of excess inventory, particularly in areas where brick and mortar businesses had already been on the decline.

Tax — Filing deadlines have been delayed, the federal government is floating the idea of a payroll tax holiday, and capital markets are a mess. Tax, like law, is ubiquitous — and there are a slew of reasons why the services of a tax attorney will be in high demand amid the current upheaval in markets.

Labor & Employment — Almost every labor and employment lawyer I’ve spoken to since this crisis began has told me that they’re busier than they’ve ever been. Given the uncertainty around the federal Paycheck Protection Program, this trend is likely to continue and will most likely spike again as businesses reopen. Firms practicing in the labor and employment area will find plenty of business to be had on both sides of the downturn.

Bankruptcy — Here too, the uncertainty around federal loans is leading to a potential boom in bankruptcy-related legal work. And the longer the economic shutdown continues and the more uncertainty persists around loans to help business stay afloat, the more opportunity there will be for lawyers to potentially move into bankruptcy work.

Litigation — Many litigators are reporting work slowing down, but that’s not for lack of parties wanting to litigate. With courts closed, a backlog of cases is building. And specific types of litigation matters historically spike during and immediately after a recession. After the Great Recession that began in 2008, for example, federal courts saw dramatic spikes in a variety of matter types, such as foreclosures, consumer credit actions, truth-in-lending claims, fraud, claims involving the Fair Labor Standards Act and the Americans with Disabilities Act all saw large spikes in the number of matters filed. There is also a strong potential for class action suits against employers for their responses to coronavirus, as well as insurance disputes, and malpractice claims against doctors and healthcare facilities.

In short, attorneys will have many opportunities to win business in this coming “new normal.” The immediate challenge is identifying which practice areas are right for you and your firm to pursue, and then building and then executing a plan to move in that direction. More specifically, to create that revised strategic plan, be sure that you:

• • • Identify the practices you want to move toward. It may be one of the areas I listed, or it may be something else entirely. But you need to make a choice about your direction.
    • Consider what you need to learn. Many states have relaxed rules around online CLE offerings, and email inboxes are being bombarded with offers for webinars. Some providers offer checklists on how to intake clients for different types of matters or even what steps you need to complete to handle a new type of matter. The biggest challenge here might just be figuring out where to start looking.
    • Commit the time and resources. Adding to your practice area offerings is going to take an investment of time and money. But if you identify the right opportunities and fully commit to pursuing them, the payoff will more than offset that investment.

There is no doubt that a lot of lawyers are hurting right now as their practices suffer. But those who will be hurt worst in this crisis are those who fail to adapt.

Small law firm practitioners have a unique opportunity to utilize their resilience and agility to pivot in this new normal and strongly position themselves for what lies ahead.

Yet, fully report facing a challenge acquiring new business, and only a fraction of them are actually taking the step of even making a plan to improve this vital skill set.

Now, we’ve reached a point where you can no longer wait to improve. The world has rapidly shifted, and with it, the way potential clients view and consume information. We have been in the midst of a shift to an increasingly digital marketplace for some time; now, due to the global pandemic, we hit the accelerator last month. And I don’t think we will, or should, go back.

Nielsen reports that online streaming of television increased 85% in March. This news comes a year after the Motion Picture Association of America announced that streaming video had surpassed cable viewership. As of the end of 2019, 51% of people in the US reported having listened to a podcast, up 7 percentage points in just one year. That number is likely even higher now. Even before the virus lockdowns hit, YouTube saw an average of 2 billion active users every month, with 30 million people hitting the site every day.

Now ask yourself, how many of these digital eyeballs are you getting in front of as you try to market your law firm?

If you’re relying on outdated, analog business development efforts, the answer is likely zero.

Your law firm needs to make a concerted movement toward digital channels. I wrote in December that and laid out what a proposed strategic plan could look like for improving your business development acumen. In that post, I touched on the concept of creating a more effective digital presence. But let’s dive deeper into some of the specific tactics and tools you should be strongly considering now.

Creating a Meaningful Web Presence

Yes, you need to have a website. But simply having a basic webpage isn’t enough — that’s just the basic skeleton. A truly effective web presence needs to be connected to a robust digital strategy that conveys all the essential information that potential clients will need to evaluate whether they want to hire you.

The site also needs to be optimized for online search using modern search-engine-optimization (SEO) techniques, relevant and insightful content, integrating clear, targeted social media strategies. It has to look modern and clean. And it has to have a way for you to facilitate lead conversion — to move a client from prospective to signed.

Think about it from your prospective client’s viewpoint. They have a legal issue, so they start running some searches online. How do they find you and your website? Once they’ve found you, what information communicates your brand effectively and tells them you’re the right lawyer for them? Do they have a way to contact you? Does that tool allow them to communicate their issue to you well enough for you to be able to effectively gauge whether they’re the right kind of client for you? Is there a way for them to provide preliminary documentation to you?

If you don’t manage these steps effectively, you’ll miss attracting a large audience and ultimately, fewer people who do visit your site will actually sign on as clients.

Beyond the Website

We’ve looked at one potential path that clients will take to your online presence, but your ability to reach them needs to expand beyond having your website show up in search results.

Here are a few suggestions of places to consider building a presence:

• • • Podcast advertising — More and more people every month are following podcasts. Podcast platforms give you the ability to place both graphic and audio ads. The former appears as listeners are navigating the app; and the latter can appear as a commercial before, during, or after a podcast episode, and often go with the episode if a user downloads it. The advertising teams on the various podcast platforms should be able to help you target appropriate audiences and types of podcasts that are most likely to have the kinds of listeners you want as clients. You can also target listeners geographically so you’re sure your message is reaching people who are proximate to you and thus more likely to hire you.
    • YouTube — With such a huge platform, YouTube is a logical place to build a presence. YouTube is not just for watching cat videos — it’s actually incredibly versatile and prime digital real estate for business. You can create your own channel with helpful videos that show off your expertise, and even provide valuable insights or how-to tips that demonstrate you really know what you’re talking about. You can also place ads on YouTube, targeted to catch the viewers you think are your most likely prospects. Nota bene: Be sure you deliver something impactful in the first six seconds before users get the option to click past the ad. Leading with “Hi, I’m a lawyer” will have them hitting “Skip Ad” very quickly.
    • Pandora and iHeartRadio — Lawyers have advertised on radio for a long time, but not as many have made the jump to advertising on digital streaming radio. Here again, you can target your audience for optimal impact. And contrary to a traditional radio ad, an ad on a digital radio service can enable users to simply tap and be taken immediately to your website, making the possibility of client conversion that much higher.
    • Local news websites — In our current situation, many people have become voracious consumers of news, not just from national outlets, but from local ones as well. As I think of the local media market where I live, I can think of at least 10 local and regional media outlets that all sell advertising space on their web pages. These sites are constantly trying to attract additional readers to their pages, and those eyes will ultimately see your ad, particularly if you can execute well on something that will engage readers’ attention.

This is by no means an exhaustive list. To figure out what’s best for your firm, think of how you used to reach eyeballs before and consider where those eyeballs are now. Billboards and bus ads help you reach people on the road. When no one is driving, those eyeballs are on screens. Get creative.

Ultimately, the effectiveness of all these efforts go back to your core digital presence, which is your website. A poor client experience on your law firm’s web page can ruin the effectiveness of even the most well-planned advertising campaigns.

Think of the worst online buying experience you’ve ever had; now, think of the best. Copy the latter.

If you’ve followed this blog series or attended one of the we have hosted, then hopefully you’ve gained an appreciation for how strategic planning for small law firms is a complex and in-depth process, but nevertheless one which can be simplified and made more approachable by taking an intentional, planful, milestone-driven approach.

I wanted to send 2019 off and welcome 2020 in with a brief recap of what this series has covered so far, and a preview where we plan to go in the coming year.

Strategic Planning Made Simple

In the first several blog posts last year, I laid out the basic steps for making a strategic plan that will help you and your firm find success. First, . This will involve some soul searching. You need to identify not only where your business performance is strong, but more importantly, engage in an honest assessment of the areas of your business where you can improve.

You must also consider the broader market: Which practices are growing and present opportunity for you? How can you uncover potential areas of risk that you must be sure to avoid?  And how best to identify trends that may influence what the legal industry will look like further down the road?

Then set about determining what you need to do and in what order. I recommend looking at goals as a time series. What do I need to do in the next 90 days? The next year? The next three to five years?

Which practices are growing and present opportunity for you? How can you uncover potential areas of risk that you must be sure to avoid?

First, the most pressing concerns for keeping your doors open and lights on go in the 90-day category. Then, the next year goals should focus on getting into something new, but feasibly accomplishable. And beyond next year, you need to be aware of what I call “megatrends” — disruptors in the industry that might influence what your practice will look like years down the road so you can start preparing in advance.

After you’ve determined your goals, you have to put yourself in a position to accomplish them. That means dedicating resources — time and money. Neither of these are necessarily easy things to commit; but beyond that, you must consider who should be charged with accomplishing the tasks necessary to your goals. This means looking at how you utilize your timekeepers and other staff, as well as how you optimally use each person’s unique talent.

Without a plan, you will not be prepared to confront the future. And the best laid plans will not succeed without the means — that is, clear resources committed within time intervals — to see them through.

A Few Key Commonalities

It’s a truism that no two firms will have identical strategic plans. However, it’s still worth noting that there are several areas of focus that apply to nearly every small law firm.

As I speak to small law firm leaders around the country, I often hear about many of the same challenges, often related to how they develop new business, interact with their clients, and efficiently manage their firm’s resources. I previously addressed each of these “core competencies” and why they matter individually, but I also thought it was worthwhile to spend a bit of time here discussing how they interrelate.

Let’s start with the internal stuff first — . This involves more than just allocating billable work to your timekeepers. It has much more to do with how you handle administrative tasks, the things that keep your business running but no one pays you to do. say they spend too much time on administrative tasks, and that’s time that can’t be billed to a client or spent landing a new one. So, you must carefully examine your process and procedures for steps that are unnecessary or that are being done by someone whose time and energy would be better focused elsewhere.

For example, if you as the attorney are the primary person answering the phones all the time or handling your accounts receivable, are you making the most of your time? Are you leveraging your available resources correctly?

This has a direct impact on the second core competency we addressed, which is . If you spend too much time managing the minutia of running a business, you will have less time to spend making sure your clients are happy. If your intake and billing processes are ineffective or inefficient, you are adversely impacting your brand and reputation, which undoubtedly will impact your relationships and ultimately, your finances.

I recommend looking at goals as a time series. What do I need to do in the next 90 days? The next year? The next three to five years?

These should not be the extent of your attention to your firm’s reputation, either. Some 85% of small law firms say that client satisfaction ratings are an important measure of success, but  track them. How do you find time to track client satisfaction if you’re spending too much time doing the mundane, time-wasting tasks in running your business? Streamlining your firm’s resource management creates more time to spend paying attention to your clients, employing the “soft skills” clients like to see, exercising your empathy with their situations, and focusing on managing your firm’s brand and reputation.

Of course, the ultimate goal of all of these efforts is to build a more successful and profitable practice. That requires . Think of it this way: Both maximizing the efficiency of how you manage your administrative tasks and improving client relationships are necessary components to sharpening your business development acumen. Indeed, both are necessary, but successful business development is more than that

It also depends on understanding who your clients are and where you can find them. There is a very small sliver of potential clients today who rely on billboards or yellow pages ads rather than digital media — this is true for finding everything from coffee to shoes to lawyers. If you do not have a robust digital presence, you’re going to miss some real demand clients. But it’s next to impossible to create the time necessary to build an effective business development plan that shows that kind of yield without creating that time from somewhere else.

Tying It All Together

It can be daunting to try and keep track of all of these subtle interconnections in your head. Reducing them to paper in the form of an intentional, manageable strategic plan is the key to understanding how they interrelate and what steps need to be taken in what order to order to accomplish the desired result.

You can see how these competencies connect:

• • • Optimizing your resources creates time to improve client relationships and business development planning;
    • Healthier client relationships in turn create new opportunities for business, and are fed by being easy for your clients to do business with; and
    • Better business development creates new clients whose relationships and outcomes will benefit from your focus on your administrative processes and client management skills.

The cyclical nature and inter-connectivity of these principles is not coincidental.

What to Expect in 2020

In 2020, a large part of my focus will be on helping to drive a deeper understanding of how the core competencies I’ve already identified can help move your business forward in 2020 and beyond. In particular, this will mean a much deeper focus on business development.

Firms that struggle to develop new business will ultimately struggle to stay viable. And this is definitively an appropriate focus given that the leading pain point for small law firms — with 69% of firms struggling in this area — is around business development.

Small law firms are becoming ever more adept at competing upward and staking a key corner of the legal market thanks to their in-depth expertise, breadth of experience, and agility in action. I look forward to helping these small law firms create even more success throughout the year.

To illustrate how common this problem is, say that they face a significant challenge in acquiring new business, while another . Yet fewer than 3-out-of-5 small law firms say they have either implemented or even crafted a plan to address their business development challenges, leaving much of this pain and need unaddressed.

Many lawyers will say that they don’t really understand business development, nor do they have time to learn it. Yet, the ability to effectively develop new business is an absolutely essential component to a successful law practice. Referrals and repeat business are important revenue streams, but they will not be sufficient to help you find meaningful, sustained growth.

If your law firm, like a large number of other firms, takes an antiquated or ad hoc approach to winning new business, you will struggle to grow your practice. Finding space for growth requires an intentional plan.

So, let’s talk about making a plan for improving business development acumen.

Throughout this year, we’ve talked extensively about for law firms. First, you must you need to accomplish in each phase of your strategy. Then, you have to dedicate the time and resources necessary to meet those goals. This approach is just as applicable to improving your firm’s business development as it is to any other core competency.

Set Your 90-Day Goals

There are a few 90-day goals you have to tackle. First, you have to take stock of your current business development efforts. This includes all aspects of business development and marketing, including traditional advertising.

I’m frankly surprised by the number of attorneys who tell me that they have billboards or belong to listing services, but they don’t really consider that to be business development and have never considered the return on those investments. But if you’re spending hundreds or possibly thousands of dollars per month on a particular advertising or marketing effort, you’d better be expecting a return on that investment.

Sophisticated marketing and advertising professionals will tell you that a reasonable return on your investment would be a factor of 3- to 5-times your firm’s spend — that means for every $100 invested, you should yield between $300 to $500 in return. As you evaluate your current efforts, are you getting that kind of return? Don’t overlook expenditures because they are advertising; everything should fit into your strategy and has to make financial sense.

Another 90-day goal is to make sure you understand who your clients are and where they come from. If you’re like a lot of small law firms, a large share of your client base comes from the market as opposed to business or corporate clients. These potential clients, by and large, shop online for everything from shoes to lawyers. So, the natural question becomes: How is your online presence?

You catch the fish in the ponds that you fish in. For example, one criminal defense lawyer where I live in the Twin Cities has paid for the ad space on the Yellow Pages for years. This works for him because his potential clients are in jail without access to Google. But unless you’re trying to reach potential clients that don’t have access to a computer, the same strategy might not work for you. In today’s market, a marketing strategy that depends on something like the Yellow Pages is the exception — the rule is that you need to go digital because your potential clients are.

Indeed, your consumer clients’ behavior demonstrates their affinity for the digital market. Your efforts to create a digital presence should meet your clients’ expectations.

Identify Other Addressable Opportunities

The next phase of your plan needs to look beyond the next 90 days and focus on what opportunities you can seize over the next year, as well as the reasonable steps you can make to move you measurably ahead.

It is in this phase where you start proactively shifting your business development efforts into areas that will better reach your potential clients. You’ve already identified who and where they are and what you are doing today to try and reach them. Now start making the directional shift to address the gaps you found.

You’ve got to find new ways to reach prospective clients. Don’t continue the same old efforts just because it’s what you’ve always done. Tactics from 10 years ago won’t work on today’s clients because they are not the clients of 10 years ago, or even 3 years ago. Get serious about beefing up your digital marketing efforts. It’s not enough to just be online. You need to find ways to effectively reach your potential clients. Some options include:

• • • creating and maintaining a robust web presence that’s more than just a basic webpage;
    • writing articles, optimized for search engines, that show off your expertise;
    • investing in some pay-per-click strategies to help attract eyeballs and round out your “organic” efforts; and
    • implementing a lightweight, low-cost social media strategy using something as simple as a Facebook page for your firm — but make sure it’s professional.

Invest in creating digital channels for your practice that will hit the right potential clients at the right time so you can boost your “lead conversion rate,” the rate at which a client inquiry becomes a signed, paying client.

And remember, the hurdle here is to get to the requisite multiple of your marketing spend, that 3- to 5-times factor.

Long-Term Planning: Think Through the Megatrends

Megatrends are forces that will influence the market years down the road, such as changes in the law or regulatory environment, that can create opportunities for future advice and counsel. Understanding these megatrends can give you an idea of how to position yourself to meet future opportunities. There’s no better time than now to start building your understanding of what may influence your practice three-to-five years down the road.

And as I mentioned in a , this can be an excellent place to leverage your staff. Understanding the long-term influences on your practice is absolutely vital, but it doesn’t necessarily need to be the top priority of a billing attorney whose time could be better focused on creating revenue to keep people and bills paid.

That is not to suggest megatrends can be pushed aside. Today’s megatrends will help define tomorrow’s addressable opportunities. Don’t ignore them because you think you don’t have time.

One Bite at a Time

The well-known quote from Creighton Abrams states, “When eating an elephant, take one bite at a time.” Improving business development acumen can seem like quite an elephant to swallow, but when you put it into the context of an intentional, phased plan, it becomes less daunting.

Your business development efforts should be thought of as a portfolio of actions focused on lowering your potential risk, while improving your outlook and potential profit. Each portion of that portfolio should complement the others.

There’s little downside to making a strategic plan to improve your business development efforts. And the upside, both for your practice and for you personally, can be immense.

In simplest terms, it’s probably unlikely — but don’t feel bad, you are not alone. A full say that client satisfaction ratings are an important measure of success, but track them.

If it matters, then why aren’t they tracking it and managing it better? As you look at your own firm, do you recognize any aspects of your business in these stats?

As part of this on securing your legal practice’s future, I’ve focused on helping small law firms get better at building and executing their strategic plans. We started with the basic steps: , and then dedicate the resources necessary to accomplish them. In , we looked at how to apply these principles to the types of tasks that are central to running a law firm as a business, specifically . We also examined how the way you manage those resources can impact other strategic priorities, such as your relationships with your clients.

But I also believe that it is vital to have a well-planned approach around how you manage your client relationships of their own accord, not just as a consideration of other priorities. These relationships are a key source of repeat and referral business, upon which many law practices rely for existence. Not surprisingly, they need special attention.

To begin to improve your client relationships, you have to start with an honest assessment of your strengths and weaknesses in order to identify what strengths you can build on, and where you’re weak and need improvement. Let’s look at a couple of examples of areas that may be ripe for inclusion in many firms’ strategic plans to improve client relationships:

“Soft” skills

Most law firms don’t put enough focus on the “soft touches” that impact their relationships with clients. It can be tempting to get caught up in the legal issues at play and forget that you’re dealing with people who are most likely in a very sensitive and consequence-ridden time in their lives.

As you conduct your evaluation of your strengths and weaknesses, give yourself an honest score for how much effort you put into empathizing with your clients. Do you consistently make an effort to put yourself in your clients’ shoes?

Reputation

Another potential area for evaluation is how much effort you put into influencing your reputation in the community. Do you understand the network effects of a bad client experiences?

More than two-thirds (68%) of legal consumers consider “reviews from former clients” to be one of the most important pieces of additional information then can gather when considering an attorney. If two-thirds of your potential clients are paying attention, shouldn’t you?

Setting your goals

If you’ve read my , you know that I’m a proponent of time-phased goals. What would that look like in the context of managing relationships?

90-day goals

The immediate tasks you need to accomplish to improve your client relationships are relatively basic. First, the strengths and weaknesses evaluation I mentioned earlier. Have an honest conversation with yourself and your staff to evaluate how you currently focus on your clients.

Second, establish a baseline of what your reputation looks like today and be proactive about improving it. When attorneys request reviews, 98% of the reviews left are very favorable (4.5 or 5 out of 5). Getting involved in managing your reputation puts you in the driver’s seat. Even a less-than-positive review is an opportunity for you to respond and show potential clients what they can expect in terms of your service and your character when working with you.

These two steps form the foundation for everything that follows.

For the rest of this year

Goals for the rest of the year should focus on your genuinely addressable opportunities. These are guided by the ideas and priorities surfaced by your 90-day-goal evaluations.

Your goals will vary depending on whether you have determined if you do a pretty decent job of empathizing with your clients, or if it’s typically an afterthought. Similarly, if you have an existing reputational problem — while not likely something you’ll fix in a year — you can set goals that move you forward on addressing this problem in a meaningful way.

During this phase, consider implementing a program where you and every other attorney at your firm reach out to just five current or former clients every month to ask for feedback. It doesn’t have to be an extensive interview — but I would strongly suggest that you ask a few clear, open-ended questions and then just listen, closely. The mere gesture will make a large impact with clients.

What Better Relationships Will Mean

Improving your client relationships, while a worthwhile goal in itself, has a broader impact. Around 40% of lawyers in small law firms said that were a key factor in the success of their businesses over the past year. Similarly, was frequently identified as the single most important factor in increased success. This translates to more business for your firm, which we’ll discuss in a forthcoming post.

Until then, remember that the soft touch of dealing with your clients is probably the single most critical factor to . Treat your clients with white gloves — every one of them. We as lawyers need to realize and act like we’re in a people-centric business in all aspects of what we do.

Indeed, lawyers typically have an extensive skill set when it comes to reading people. These are the skills you employ whether arguing your case or negotiating a deal. Use those same skills of perception to treat your clients the way that you actually feel; that is, that you need and value them greatly.

It’s good business. And it’s the right thing to do.

For more insights on how to manage and improve client relationships, download the report .

All of this is essential background, but now it is time to turn our attention to practical applications of strategic planning that will move your firm forward.

It is crucial that we recognize a few realities. Running a law firm means owning and running a business. That, in turn, means effectively managing the resources you need to keep your business running — not just the ones you need to help you practice law. Everyday work like managing your calendar and client contacts, handling client intake, bookkeeping, and collecting accounts receivable (AR) all require attention and resources. This could be your time and energy, that of a member of your staff, or maybe staff you contract for the job. But these tasks have to be done, and you, as the owner-operator of the firm, need to deploy the right resources in the right way to optimize how they are done.

As I’ve stated before, many small law firm partners are reluctant business owner-operators. It’s a feeling I can understand, as I remember how little my own legal education prepared me to run a business. Yet, if you’ve hung out a shingle or are running a small law firm, you wear both hats — that of a practicing attorney, as well as that of a business manager.

Managing your law firm means more than just deciding how you allocate billable work to your timekeepers. The who say they are challenged by spending too much time on administrative tasks are proof of this. Indeed, administrative tasks are those pesky things most law firms don’t spend enough time planning for, but they’re necessary evils. We could write volumes covering the myriad functions involved in making a modern law firm run and all the various iterations of roles that can handle these tasks. But that’s overwhelming.

Instead, let’s focus on a couple, narrower examples. For a starter, how much time do you spend thinking about who answers the phones at your office?

This may seem like a trivial concern, but in reality, who answers your phone and how they do it is central to determining what marketers would call your “conversion rate” — the number of potential clients calling in who actually end up hiring you and ultimately writing you a check.

The person answering the phone has to be able to:

• • • Communicate your expertise — This helps a potential client understand why they would want to meet with you or hire you. If this isn’t communicated effectively, you could end up missing an opportunity for work.
    • “Qualify” the person on the other end of the phone — You need to know how serious the caller is about seeking legal help, whether their issues are those that you can competently handle, or how likely the caller is to actually meet with you and sign on. Without that information, you could end up wasting your time with a “prospective client” that never really met that definition.
    • Articulate the value and brand of your business — There should be something about who you are and how you practice that makes you unique and gives you a competitive advantage in the eyes of potential clients. It’s more than just your expertise; it’s the benefit the client will get from working with you that they can’t get anywhere else. It’s your brand and value proposition. If your potential clients don’t get a sense that working with you will be better because of what you offer, they may keep shopping.

Let’s look at another example of a seemingly tactical thing that can have a much broader impact: how your firm handles collecting your accounts receivable (AR). Here again, there are very particular skills that must be managed.

• • • Provide good service by focusing on “soft touch” skills — The person collecting your bills represents you. How will how they do their job impact your clients’ perception of your business? In today’s world, bad reviews travel fast and at scale. A bad client experience with your firm’s AR staff could cause a serious hit on your reputation.
    • Actually collect the money — It might seem obvious, but if you can’t collect the money you’re owed, you won’t stay in business for long. Think objectively about how well you understand your AR cycle time. If your collections process is inefficient, you’ll lose money and possibly more than that.
    • Most of your business is repeat or referral business — Our research shows that small law firms rely on repeat and referral business as a key source of new work. How you treat your client today determines whether they will give you more business in the future.

So why talk about such seemingly tactical considerations when we’re discussing strategic planning around resource management?

Because these resources — you, your time, your staff, and their time — are the most valuable resources you have to manage. Mismanagement of even seemingly mundane work can cause a ripple of inefficiency throughout your firm, a problem that plagues .

To address these challenges, begin by looking at who is doing these things today. Can they handle the tasks mentioned? These can be relatively easy hurdles to conquer, yet they’re vital to how you earn the money you need to keep operating. In this sense, I would characterize looking at these types of staffing questions as a .

Less time spent on administrative tasks leaves more time to serve your clients, earn a living, or find some work/life balance. To learn more about how better allocation of firm resources and improved efficiency can benefit your firm, I encourage you to download the white paper, .

The sooner you can identify where you have an imbalance in how you are utilizing the resources needed to run your business, the sooner you can improve your firm’s business model and profits.

A strategic plan requires that you clearly specify your goals and carefully align the resources needed to achieve them. In fact, it can and should be a series of goals based on a progression of priorities: What do I need to do now, for the rest of the year, and beyond, to build a more successful practice?

Setting realistic, honest, and attainable goals is a vital first step. But it’s only the first step.

Setting goals is meaningless without the necessary resources dedicated to achieving those goals. Strategic planning requires alignment of resources with an eye toward achieving the aspirations our goals set out for us. It’s this alignment of resources that moves us from the aspirational to the accomplishable. This necessarily means expenditures of both time and money. If you aren’t willing to dedicate your capital — both financial and human capital — in support of your identified goals, then what can you realistically expect to accomplish?

The first key question to ask with regard to resource allocation is, “What’s it going to take in terms of time — both mine and my staff’s?”

Allocating the Time & Money

For many lawyers, allocating time toward strategic objectives can be a difficult commitment to make. Most lawyers recognize the immediate needs associated with running their practices: What is it going to take to keep the lights on and my expenses paid? And many lawyers stop there, essentially allowing the tactical to interfere with the strategic. Or, to put it another way, day-to-day concerns overshadow steps that are necessary to plan for the future.

But as you formulate a strategic plan, think of it this way: Do something for today, and do something today for tomorrow.

It is simply not possible, however, to prepare for the future without investing time to set goals for your practice’s future and to work toward achieving them.

That’s not to say all of the energy has to come from the lawyer. Leaders of small law firms with staffs should consider whose time is best suited to accomplishing a certain task. In some cases, it might be the lawyer because of the level of expertise required, the network that needs to be built, or the level of decision-making authority that is required. But other tasks can and should be completed at a more appropriate work level. For example, you could ask a staff member to prepare periodic legal market updates on the megatrends that may be influence your practice longer-term. This type of intel is vital, but it does not necessarily need to be part of the rainmaking attorney’s workload if there are other options.

There is no one-size-fits-all formula for making decisions about what tasks are most appropriately done at what level — the answer will vary based on the focus area and the make-up of a particular firm. But having the right people doing the work is vital to making meaningful progress.

It’s also important to remember that effectively implementing a strategic plan will require a financial commitment. In previous posts in this series, we’ve discussed examining your firm’s marketing or your personal network as areas that may be ripe for development as part of a business plan. These types of improvements will require some investment. That might mean investment in association memberships, travel expenses, enhanced technology, or outside expertise, in addition to the investment of your energy and time.

As part of your assessment of resources, you must identify what resources you need to acquire to accomplish your stated goal, then dedicate the financial means to accomplish that goal. Here again, be careful to not let the tactical interfere with the strategic. Just as paying your staff and lease are part of your monthly calculus, you should also include the expenses to see your plan through as part of your regular budgeting process.

The Ingredients for Success

Finally, as you set your goals and allocate resources, you must also consider the dependencies in your plan. By that I mean: What needs to happen in order for this plan to be successful?

This can take a couple of forms. First, in what order do things need to happen? Second, what must I accomplish first in order to accomplish the broader goals? And ultimately, what are the three to five larger items I need to accomplish to succeed at my stated goal?

Combining all of the elements we’ve discussed to this point — the goals you want to achieve, the resources you need to accomplish those goals, and the dependencies that need to align — is the essence of an effective strategic plan. You need to be realistic with yourself about what you’re trying to achieve, but don’t be afraid to be aspirational.

In future installments in this series, we will examine this strategic planning framework in the context of some essential core competencies that small law firm leaders should consider, such as resource and staff management, client relationship management, and business development.

When you think about it, it’s surprising that more lawyers don’t incorporate really solid strategic planning in their practices. Lawyers are skilled at applying reasoning, logic, and deduction — the raw ingredients of effective strategy — to their everyday work. Strategic planning for law firms requires essentially the same skillset.

I think many small law firm leaders are reluctant business owner-operators. Consequently, they may not have placed the same emphasis on developing their business management skills that they placed on building their practical lawyering skills. But we know they possess all the necessary foundations.

Improving your business requires an ability to improve upon core skill sets with a reasonable amount of effectiveness. That begins with identifying the goals you need to accomplish at intervals, then dedicating the resources necessary to meet those goals.

Identifying Your Goals

Identifying your goals can and should be more than one thing. In fact, I advocate setting goals in intervals, with no more than two or three discrete goals per interval. Each of these intervals begin with a question.

What do I need to accomplish for my business in the next 90 days?

Often, this interval focuses on “How do I deliver the revenue I need to stay in business?” That is, “How do I keep enough cash on hand to meet my budget, cover my expenses, and pay myself?” This interval also requires you to run the math and allocate sufficient resources to ensure that your collections against your accounts payable will allow you to meet your immediate needs, including a reasonable salary for yourself.

Most law firms understand this interval, but too many stop there. A planful approach to running a law firm requires more thought and planning, over longer intervals.

What do I need to do to be successful for the rest of the year?

This interval should bring your focus to “How do I get into something new?” That is, what should I be doing from a prospecting or business development perspective to drive growth in my book of business for the rest of the year? It could be targeting a new potential client or obtaining a new piece of business from an existing client. A good question to ask yourself at this phase is “What are the more addressable opportunities out there that I haven’t chased?”

For example, have you tried to meet people in the industries or businesses in which you want to become involved? Strategic plans during this interval should look at logical extensions of your existing practice that will help create a runway for your firm’s growth.

Your goals should be measurable and attainable. Perhaps you set a goal of making a certain number of new connections per week or of attending one relevant bar association or industry event per month. Remember, effective goals are SMART: Specific, Measurable, Attainable, Relevant, and Timely.

What long-term trends might influence my practice three years out and beyond?

When looking three years into the future and beyond, examine the megatrends in the legal industry. Where is the law going? What does the regulatory environment look like? Where is there likely to be opportunity in the future to provide needed advisory and legal counsel? Then apply those same questions to your target clients and their industries.

For example, the opioid epidemic regrettably shows no signs of abating. There will undoubtedly be no shortage of legal work to be had, and this could influence the long-term direction of your practice. This may be an area ripe for the type of high-volume litigation practices we have seen with similar large-scale product liability issues in the past. What can you do to potentially position your practice to serve clients with these kinds of needs while at the same time evolving the way you practice to improve profitability?

Asbestos litigation presents another example of a shifting megatrend that may impact a large number of firms. While it has been lucrative in the past, it is now showing signs of dwindling. Future success may depend more on increased specialization. Being an asbestos litigation firm may not be specialized enough but being a niche expert who specializes in asbestos cases against government contractors, ship builders, or some other subset of potential defendants would allow you to position your firm for more business.

Here’s another way to think about longer-term goals: are there goals that would require you to take risks that might be a model-breaker for you? Those types of paradigm-shifting goals are the types of goals to focus on for three or more years in the future.

Be Honest with Yourself

For every phase of goal-setting, you have to be brutally honest with yourself. Don’t just look to shore up things you think you already do well and don’t give yourself credit for being better at something than you really are. Don’t be afraid to identify and address weaknesses.

Remember — the point of your business plan should be to make your business better. And in making your business better, you make yourself better. After all, you are the business and its growth and yours are closely linked.

Generally, small law firm lawyers do a tremendous job of developing and running their practice. After all, this is why you went to law school, to be a practicing lawyer who helps clients solve their legal problems.

But it’s almost equally universal that small law lawyers are reluctant business owners. A great many of us don’t have business backgrounds, and very few of us went to law school with the intent of starting our own small business. We went to law school to build a law practice to help other people lead their businesses and support their entrepreneurial spirit and enterprise. That’s what we’re good at.

But small law lawyers are increasingly coming to the realization that they are, indeed, business owners, and that they need to improve their business management skillset. And growing, disruptive technologies and ever-evolving dynamics in business are reinforcing the importance of that need by the day.

Small law lawyers are increasingly coming to the realization that they are, indeed, business owners, and that they need to improve their business management skillset.

That is why we are launching a long-term effort to help small law firms grow their business acumen, improve their business planning skills, and identify and improve core competencies that are essential to securing their practice’s future. This post represents the first in a series that will highlight important skills for leaders of small law firms, and how those skills can be incorporated into plans for a prosperous practice.

The first step towards building a future is making a plan for that future. While they won’t often admit it openly, many lawyers will agree that they struggle when it comes to developing and implementing a strategic plan for their law firms. Larger law firms have the luxury of some economies of scale which allow them to hire business professionals for the express purpose of running the firm. This trend in operating teams is not new, with larger firms conducting their business this way for nearly two decades.

Small law firms, on the other hand, generally do not have the infrastructure or resources to hire an MBA whose sole job is to watch out for the firm’s business operations. This job falls on the “owner-operators” of the firm.

It is essential that these owners recognize that a solid business plan is central to the overall health of the firm and is necessary to sustained business growth. And unless that approach is truly well-planned, it will not create a healthy and profitable business over the long term.

There are capabilities and core competencies that are necessary levers to creating sustained financial health for small law firms. For the purposes of beginning this conversation, there are essentially three categories of core competencies that I would like to highlight:

1. 1. 1. Strategic management of firm resources, both capital and human;
      2. Effective client relationship management; and
      3. Business development with a clear return-on-investment (ROI).

Each of these categories deserves their own in-depth discussion and will be the subjects of additional posts in the coming weeks and months.

Regardless of which core competency your firm wants to focus on, however, you must do things with a reasonable amount of effectiveness. This is the foundation of strategic planning.

First, you must set goals and allocate resources toward accomplishing them. Your goals should be phased. Ask yourself: What do I need to accomplish in the next 90 days? By the end of the year? Next year? And what lies beyond that?

Second, within each phase, ask what it will take to achieve these goals. What will it cost? And what are the dependencies? That is, what do we have to achieve first for our next goal to be successful?

Regardless of which core competency your firm wants to focus on, however, you must do things with a reasonable amount of effectiveness. This is the foundation of strategic planning.

You must be realistic with what you’re trying to achieve. The corporate world loves to talk about SMART goals. These are goals that are Specific, Measurable, Attainable, Relevant, and Timely. These could be great “watch words” for lawyers as well.

Many lawyers may contend that they simply don’t have time to implement a strategic plan. To that I would offer the following: Practicing with passion can be an essential part of a fulfilling law practice, but to make the practice that you’re passionate about a sustainable part of your future, you must practice passionately in a profitable way.

Your practice needs to be structured in a way that will last for the long term. And that kind of structure requires forward thinking. To face the long-term realities of running a business, dealing with change, and confronting competition, you need to have a plan.

Follow this series in the coming weeks and months as we discuss in greater detail what skills and competencies you should consider including in your strategic plan, as well as advice around how to bring those plans into measurable action within your own firm.

For a look into some of the topics we’ll be discussing, download a copy of the most recent report.