Wednesday, May 19, 2010

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

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