Wasting time in your practice can limit your income potential, or even worse, it can destroy your firm. Follow these tips to make sure that doesn’t happen to your practice.
Lawyers who start practices are often amazed at how much administrative work is involved in running a practice, especially if their last job was at a firm where these tasks were handled for them. It can be downright intimidating.
Practices require billing systems, accounting systems, case management systems, malpractice insurance, worker’s comp insurance, general liability insurance, health insurance, website maintenance, email maintenance, IT maintenance, search engine optimization, phones, faxes, brokers, bankers, and printers. That’s just a partial list.
The temptation is to try to do everything on your own to save money, especially if you’re starting a practice on a shoestring budget.
We lie to ourselves by doing busy work
Let’s be honest. If business is slow, how much time do we devote to simple tasks like admin work because we want to feel busy? Feeling busy is our security blanket when we encounter a shortfall in billable hours. But feeling busy rarely increase revenue.
This is a common trap that lawyers fall into, particularly when a practice first gets started when a big case ends or a significant deal closes. You know the feeling. First, you’re relieved to have some free time, but then you realize that the phone isn’t ringing with new work. You occupy your time with busy work to mitigate the panic that creeps into your head. Every self-employed lawyer has been there.
If instead you are prepared to proactively invest down time building marketing systems or networking, you can break the feast-or-famine revenue cycle many of us experience. Your practice will certainly grow faster and your revenues will be more consistent.
The benefit of being a slave to the clock
We often view the billable hour as the curse of our profession. We’re slaves to the clock.
But despite all its faults, one benefit of our profession is that there is no mistaking the value of our time. Waste just 15% of your time dealing with delegable administrative tasks and you will lose 24 hours a month. For the majority of us who are billing north of $250/hour, that’s at least $6,000/month you’re losing.
Don’t be a control freak
Delegating won’t (likely) get you disbarred. Except in rare situations, there is no administrative task in your practice that can’t be delegated to someone else who can do it cheaper and faster than you.
For some lawyers with a strong book of business ($250,000 or more a year), there are vendors like the professionals at NexFirm who can run the entire “back office” of your firm for around $2,000/month.
You may wince at this level of monthly spending, but if you look at the numbers, it’s significantly less than the expense of a poorly skilled administrative assistant. If you recoup just 10 billable hours a month by offloading billing and bank account reconciliation alone, the return on investment for most lawyers is more than 100%.
For lawyers starting a private practice, a $2,000 monthly admin retainer may not be an option. Nevertheless, you can start offloading admin work in chunks as your practice can sustain the expense.
“How do I start offloading admin work?”
Start with bookkeeping!
Quickbooks (or its numerical cousins) will suck the life out of you. Dozens of hours of a month will be wasted entering expense receipts, recording invoices, balancing bank accounts and paying vendors. A quality bookkeeper can be retained for between $25 and $50/hour. Most bookkeepers prefer to work remotely, so you can take advantage of lower rates in different parts of the country, or even out of the country.
For a $350 monthly investment—less than two billable hours for most attorneys—you can recoup 10 or more hours of billable time per month. For a lawyer billing at $300/hour, you can potentially bill an extra $2,650 a month.
Get a Virtual Assistant
A virtual assistant, or VA, is a professional administrative assistant who works from outside your office. They usually work for multiple professionals at a time on a part-time basis. Just get them an email address for your firm domain and remote access to your network, and they are at your disposal same as any other administrative assistant.
Have your VA manage your contacts and mailing lists, upload copy into your firm newsletter and send it out, schedule and confirm appointments, type and mail prospecting letters, post blog articles, do internet research, deal with vendors or any other task that you would give to a capable in-house administrative assistant.
Virtual assistants can be hired for between $25 and $65/hour depending on their skill and experience level, less if you hire someone from outside the country.
Hire a Part-Time Student Law Clerk.
Student law clerks are willing to work on the cheap and will do just about anything. The best thing of all is when you can train clerks to do billable work, turning them from an expense into a small profit center.
Assign your clerk all mundane legal research that can’t be billed to clients. Have them research and write articles for your blog or newsletter. Teach them how to do some of the repetitive tasks in your practice that you hate doing.
Also, get your law clerk involved in the administrative tasks of running a practice. These are skills that are just as valuable as lawyering skills. You’ll be doing them a big favor. If they want to practice after graduation, hanging a shingle may be their only career option and having the skills to manage a practice will give them a leg up on their peers.
Here’s a little secret, when you hire a law clerk it will force you to be more organized. You’ll need work for the clerk to do so you’re not paying for them to surf their personal Facebook page. With your enhanced efficiency, you will likely see a significant boost in revenues.
There are so many more tips on how to better manage your time and work more efficiently, but these are a great first step. Follow them and watch your firm’s revenue numbers start to go up!