Coping with growing pains

In the second of two articles on creating a law firm, advice is offered on how to put yourself on the map and become profitable

The big day has arrived. You are in your new offices, you have finished screwing the nameplate on to the front door and you are all set to trade. Your practice has been born. But will the telephone ring?

My guess is it already has. Not getting any customers is every new practice’s fear. The reality is, of course, you will. The question is will you get enough to make any money?

The important thing is to make yourself visible. This can take the form of advertisements in conventional directories, subscribing to internet adverts so you get picked up by search engines, or good old-fashioned word of mouth. Tell everyone that you are the new guy in town and you are hungry for business.

When you go to the sandwich bar at lunchtime give the owner a business card and tell him the type of work you can help him with. Then pop into the minicab office next door and do the same. Perhaps there will be the potential for some mutual business. For example, if you have a disabled client who needs collecting and returning to a local address. Or perhaps there is an urgent set of documents that needs to be delivered. While you are at these local businesses you could check that all their contracts of employment are up to date and that statutory disciplinary and grievance procedures are in place.

That is the way you will get business. You are not simply just another customer, because you are the lawyer who can help them with all that tricky stuff. Make yourself available – anytime, anywhere.

It is particularly important in these early days, when you need every client you can get, that you cement every contact you come across. The day-to-day slog is where you will make your mark. Once you have work coming out of your ears you can start to ease up a bit – perhaps be a little less available to some over-demanding clients and more picky with your client base.

Nine months down the line you are still in business. Ten-hour days and 15 minutes for lunch have become the norm, and yet the to-do list seems longer than when you started that morning. Some clients are even moaning about the service. Time to do something about it – but what?

The first problem is that there are not enough hours in the day to do the work, let alone working out a solution to the multitude of problems encountered in day-to-day practice. Oh well, better just slog on and hope for the best. Wrong. There lies the way to a surge of negligence claims and an appearance before your professional regulator on a charge of failing to supply a proper professional service. You must make time to manage. If your partner is a professional person who has good management skills, you could arrange a specific time to talk about your business for a few hours. You could also outline to your accountant the problems you face.

Of course, you could go through all the paperwork yourself, identify the specific problems that need attention, and consider how you might solve them: Are you producing enough revenue and profits to be able to afford an assistant? Will they be support staff, such as secretaries or receptionists, or fee-earners, or a combination of both? Would the answer be a paralegal who could give you a hand in answering the telephones and getting the post out? Should they be full-time or part-time staff? Do you need to cut back the client base and weed out unprofitable areas of work, or difficult clients who are slow to pay their bills? Do you need to increase the amount of time you spend with profitable and appreciative clients and try to acquire more of their work? Do you need to broaden the areas of work you cover or go the other way and become a specialist practice?

These are all key questions to which you must come up with an answer. Above all, you must ensure that at all times you are making a profit. The only way to do that is to examine the work you do, the cost you do it for, and the level of profit you are making. Whether it means doing more work of a particular type and less of another, increasing the rate at which the work is turned over or reducing the overheads, or increasing the fees does not matter – so long as it works. Tweaking any one of those factors will have an effect.

Get these things right and success for your fledgling practice is just around the corner.

Martin Smith is the author of Setting up and managing a small practice, a guide for solicitors, the third edition of which (now retitled Setting up and managing a law practice) will be published in September