HOW MANY REFERRAL SOURCES ARE ENOUGH?

Recently, I attended a program focused on referrals.  The question was asked “How many referral sources are enough?  As I pondered this, I was quite intrigued at what I discovered.  Interestingly for me once again, it came down to focus.  Chet Holmes of The Ultimate Sales Machine™ says should you do 10 things 14,000 times.  When identifying the number of referral sources you need its really no different.

So how many referral sources do you need?  Consider, if you would, a single meeting with a potential referral source is approximately 1.5 hours.  Assume further, you were committed to three meetings per week to meet with new referral sources.  That would take only 4.5 hours of your entire work week, about 10% of your time.  The question is, “Is it effective?”  If you stay committed to three referral source meetings per week, that will permit you to meet with 12 people per month; totaling about 144 people per year. Give or take a few. Seriously. If each of these 144 people referred you one or two cases, you will have between 144 and 288 cases per year, probably far beyond what you could handle or need to meet your firm monthly revenue goal.  So, is it necessary to meet with various referral sources three times a week?  Absolutely; but only if you are more than intentional about it. 

However, what if I said you were limited to only ten referral sources?  Which ten would you pick?  And knowing that you only had ten to chose from, what would be the criteria to identify whether a potential referral source made it to your top ten?  These are the questions you want to ask yourself to be able run an efficient profitable practice because as we know, if there are no referrals, there is no business.  And busy without business means loss, financial loss. 

What I recommend is you pick your top ten referral sources and meet with them and identify what it is about them that made them your top referral source.  Is it their personality?  Is it their clientele?  Is it the values you share in common? I suggest you indentify the qualities of your top ten; then your top two or three and absolute clone them.  What if, instead of meeting 144 people a year, you focused on the ten you had the best relationships with and asked them to introduce you to people like them?  What if, each one of them you asked to introduce you to just three more people?  What if, instead of meeting 12 new people per month, you commit to meeting four people, the same four people, and once each quarter?  And you continue to build your relationship and continue to work together in the ways that serve both of you best.  This creates several efficiencies.  First, you have to manage fewer relationships.  While your top ten will introduce you to 30 others, most of those ones referred to could be managed through that one relationship.  Continuing on, if one of the referrals from your top ten becomes a new top ten, then you can request three from them.  Now you are beginning to build a network of networks rather than starting fresh over and over again.  

Interestingly, as I look at my calendar and see the little time I have to market, I have a conundrum to determine how can I not market, otherwise, I’ll have no work to do.  Working smarter, not harder is always the answer. It is working with efficiency.  So, I challenge each of you to uncover who your top ten referral sources are.  Will you meet with just anyone?  A standard you have to determine right off the bat.  Another standard I would identify is if somebody’s calling you as opposed to you calling them.  Pay attention; possibly they’re identifying you as their top ten and they should get priority or at least a free look at you to determine if there’s a possibility for them to fall into your top ten.  It doesn’t take much.  It just takes focus, intentionally and authenticity. It’s not hard folks and you may actually find yourself having fun and oh yeah; increased clients, increased referrals and increased cash flow.

Straight from NAELA

Last week I found myself in sunny Orlando, Florida inside the Disney World Resort attending the annual NAELA conference.  It was remarkable to notice the difference between this group of lawyers and those that I met the week prior at the Ohio State Bar Association Annual Meeting.  Neither better than the other, both provided reasons to be proud to be a lawyer. 

 

However, the marvelous thing about NAELA attorneys is how truly driven they are from the heart.  They're absolutely passionate about helping people, especially those less fortunate.  The attorney's backgrounds were quite diverse.  I met a woman who had been practicing in the elder law area for "15 minutes" (her words).  This was her first conference after having spent 18 years as a public defender.  On the other hand, I met multiple attorneys with LLMs that have a thorough knowledge of sophisticated tax planning strategies.  NAELA attorneys covered the legal technical spectrum, but all shared a common theme, the need to help people.

 

Interestingly, as I met many of them, I asked two simple questions:  1) What is your greatest success currently in your practice; and 2) What is your greatest challenge?  What absolutely intrigued me was the answers to both questions were universally the same.  Their success was they were very "busy" and had lots of work.  Their biggest challenge?  Inconsistent cash flow!  It reminded me of why I decided to become an elder law and estate planning attorney; I am passionate about helping people.  The distinction, however, for me is having the ability to help people and get paid!  You have to be financially successful or you won’t be able to help anyone.  The difference is being able to choose your pro bono cases rather than making all of your clients’ pro bono cases.

 

I had the opportunity to speak at the event.  It was well attended and the topic was, “How to maintain profitability in your law practice.”  I explained how profitability is a function of revenue and expense. I was shocked to learn most of the attendees did not have the least bit understanding of the difference between a fixed expense and variable expense.  A fixed expense is one you have whether your office is open or closed (i.e. rent, utilities, etc.) and variable expense changes based upon the amount of work you do (i.e. postage, paper, and yes, staff).  What intrigued me was most lawyers aim to generate revenue to cover their overhead.  That is, if their overhead is $10,000.00 a month, then their revenue goal is $10,000.00.  The scary part was most failed to include the most important expense of all, paying themselves!  It's absolutely critical when building a law practice to build your pay into your overhead as a "fixed expense!”  This must be included, so, for the lawyer with a $10,000.00 overhead who wants to earn $10,000.00 a month, (s) he needs to generate $20,000.00 revenue and if (s) he can’t, then they need to cut expenses.  It’s that simple!

 

After the completion of my talk, I encouraged them to do a 60‑minute revenue focus exercise to change the future of their cash flow (available at contact@mpssuccess.com ).  Many stopped me after the presentation and in the hallways, (even many "big wigs") and felt it necessary to tell me how applicable they found this simple fundamental practice management concept.  It became clear to me many lawyers confuse being busy with being successful.  In fact, I'm finding quite the opposite.  An attorney’s success is dependent upon the number of people (s) he can help.  If you are able to work profitably, you can help more people, and if you are not profitable, you become one of the people that need help rather than the one giving it.

 

When we shed some light on this, many of the members agreed, it was okay to be profitable and it enables them to help more people.  It's empowering because of the great work we can do as lawyers.  The clients are willing to pay for it, and yes, even bring hugs and brownies to the office (in my case, an 87‑year‑old continually brings homemade scalloped potatoes). Stay committed to helping people. Stay committed to profitability.  Because you absolutely need both to succeed, because “Whether You Think You Can or Can't, You're Right"--Henry Ford

A Pleasant Surprise

This past Thursday and Friday, I attended the Ohio State Bar Association. What made this unique is, I am not a member of the Ohio State Bar. My intention started out relatively simple; to be a vendor at the event to promote my national training program. The results of the two days created a pleasantly surprising experience by reminding me of the great things we do as lawyers.

The 1 hour plenary session, which all attorneys attended, featured Paul M. Lisnek, JD, PhD. Mr. Lisnek spoke on communication skills. I was quite surprised and pleased to hear this topic as I personally have been committed to the importance of communication skills to get into the perspective of clients for many, many years. The speaker was right on the money when he indicated lawyers are not sued because they make mistakes; they are sued because they lose their client's trust or they are arrogant. The presentation, although, only an hour, was very insightful and reminded me of the MPS Power–In-Partnership™ model we train, and the importance of making sure attorneys are able to communicate at the client level with the client to solve their problems.

As the convention continued, there was a highly contested race for president elect to the State Bar. Everywhere you went was infiltrated by paraphernalia to promote one candidate over the other. At first glance, it was frustrating and I thought an invasion of this great event, but, at the luncheon where the State Bar officials spoke, it became quickly evident this group of lawyers was very collegial, all speaking well of each other. In fact, the current year's president elect, rather than speaking of himself, acknowledged the other attorney in the audience whom he prevailed against. He also acknowledged staff people on the Bar Association which is not typically seen but very honorable. As lawyers, we often get caught up in our world and our importance, but seeing professionals at the Ohio Bar Association reminded me, we can take our integrity to a new level and have common decency and respect for our fellow members of the Bar, even if we disagree with them, and in this case, even if they are running against us.

As the two day event continued, I noted the programs offered covered virtually every area of the law. The speakers came in different shapes, sizes, and had different speaking styles. Most, unfortunately, were the traditional lecture style. The materials were good, but few of the materials were able to be implemented into the practice of any attorney who attended to enable immediate results. Again, great education, great effort, but it reminded me of the importance of our Teach, Show, Do, and Go™ strategy our training follows. Teach the law, show how it's applied, teach a tool that follows the law, have the participants do an actual case study using the tools, and then send them home with the tools so they know they are doing it properly and can implement it immediately. What a critical difference on the impact of these attorneys, but most will not even realize it because this is all they know.

Lastly, while I came here in a “sales” mode, within an hour of arriving, it was gone and immediately began friendships. Instead of trying to convince someone why they needed my program, I merely started to find out about their pain and what it was about their practices they were experiencing. Being an active practitioner, I was able to relate quickly to their frustrations and share mine as well as some potential solutions. What resulted from this were new friendships based on common goals and objectives to help people discover the best ways to do it. I believe they call that collegiality. In fact, one of the friendships formed was with a well recognized attorney in the area of Asset Protection whom is affiliated with individuals who have spoken ill of our iPug™ Trust. In getting to know this gentleman, I realized how similar we were and in fact, have come to really respect his level of knowledge in the area of asset protection. On the other side, he got to understand me and our use of the asset protection strategies and was quite surprised at the applications and how the use of the iPug™ trusts are viable. Amazing isn't it.

As the event closed, the greatest thing I took from this two day event is an appreciation of what we do as lawyers. I am privileged to work with so many competent, caring, hardworking lawyers whose primary goals in life are to represent their client and help achieve the results clients didn't think were possible. It's very rewarding to realize that as lawyers, we are blessed with the ability to actually change the world because we know the rules by which the law is built and we can challenge it when we think it’s not being followed. What a special privilege this is for all of us to positively impact the world.

There's No Recession in Medicaid Planning

Has the stock market crash of 2008 and subsequent great recession affected your estate planning practice? In October 2008, my law firm celebrated the highest grossing month in our firm history, up 70% from January 2008. In November, we did one-half of what we did in October. Unfortunately, when the revenues fell in half, my overhead and expenses did not. I had to make significant adjustments quickly.

As I sit here, a year and a half later, it’s amazing how once again the old adage that “it all works out in the end” has once again prevailed. My law firm is now leaner and generates between 60 and 70 percent of the revenue we were able to do at the peak but with only 50 percent of the overhead, thus a more profitable model. What saved us? Actually, when the market tanked, all estate planning business ceased. Nobody was banging down our doors to avoid probate, but the doorbell continued to ring to help those people concerned with losing a lifetime of assets to the nursing home and wanting to qualify for Medicaid. Interestingly enough, through this economy we have found a whole new client market, those wanting a new type of “asset protection”.

As an estate planning Attorney, when you hear “asset protection” you tend to think of the sophisticated asset protection strategies to avoid estate taxes or the asset protection trusts domiciled in Alaska or one of the other 11 states that permit the wealthy to create irrevocable trusts and still retain some rights from them. This is NOT the asset protection planning clients are hiring me for.

Asset protection for non taxable estates has emerged as a whole new desire of the consumer market. The significance of these trusts is they do not have the restrictions of the traditional asset protection trusts that must comply with estate tax laws or the laws of the 12 states; they rely on common law and trust law. Statistics show only 3 out of 1,000 Americans have a taxable estate of $3.5 million dollars, thus representing 0.3 percent of the population, leaving 99.7 percent who don’t care about estate taxes.

Unfortunately, the legal industry has not caught up with this phenomenon, but MPS attorneys across the county have. What we are finding is clients are hiring us on a 10 to 1 ratio asset protection planning over traditional estate planning. We have also found that there’s a whole new fear of clients that didn’t exist before. When we ask clients what they want, they tell us to protect our assets but we don’t end there, we ask “protect from whom or what?” The No. 1 answer, they want protection from is the nursing homes. That did not surprise us, but what shocked us was the No.2 response, they want protection from the government! I began this blog with talking about the demand for Medicaid planning even during this down economy, which remains high. Since then I have also discovered, what I believe to be the next generation of estate planning, asset protection for non taxable estates, which provides asset protection while Medicaid compliant and permits the grantor full control of their assets and full use, but no access. Not only are clients loving the protection, they especially appreciate the “tax neutral” status they hold so no special tas reporting is required. Business owners and professionals are among the clientele hiring me for these trusts. Clients’ new fear of our government has created this new opportunity. I make no representation of what side of the isle you fall, Republican or Democrat, Liberal or Conservative, I am merely sharing feedback I am seeing day-to-day from everyday Americans. If you are not providing this new form of asset protection, I encourage you to get up to speed on it quickly. Clients need it, and more importantly, they are writing checks for it, even in this economy.