3 Signs your Law Firm is Going to Fail

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Hating your practice is not enough to tank it. True, some lawyers lose decades of their lives to practices they hate, but they just keep turning the crank. At the same time, lawyers who love their law practice go out of business every day, and it’s a tragedy we are committed to transforming.

Like everything else that requires real change, the first step is awareness. Here are three tell tale signs that portend not only the collapse of a lawyer’s practice, but often their family and their lives.

Sign #1 — Contained Chaos

When your practice is a three-ring circus with poorly defined rings, and the ring leader is busy chasing the tiger who is chasing the pony who is on fire because of something the clowns did when no-one was watching… you’ve got a problem.

Less amusingly, when you run your law practice without systems and processes for how clients are created, cases are completed and invoices are paid, you are setting yourself up for that kind of chaos.

When you lack a well-defined organizational chart with clear positions and accountabilities (even if it’s just you and a part time assistant wearing all the hats), you can’t clearly see who is doing what and who to hire next.

The, when you do hire, you are simply amplifying an already unstable operation, and like any container under pressure, the weakest point will eventually blow out (and usually at the worst possible time).

What’s the fix?

Start by making two lists.

  • What are all the things that need to happen on a daily, weekly and monthly basis in order for your firm to run like a well-oiled machine? Don’t worry about making it perfect. 80/20 will get you far enough in this process and you can always add to your list as new processes come to light.
  • Who is responsible for each of those processes? When do they need to be done and what are the standards for completion? Whom do they report to and when do those people meet in order to clarify questions and assure quality standards are being met or exceeded?

If you simply keep a legal pad with a sheet for these two lists and add to them as you go, you will eventually start to see where things are breaking down and either define things more clearly or hire more effectively.

Naturally, there’s a lot more to it than this, but it’s a solid start and starting is often the hardest part of any process.

So start this week. Block off 30 minutes to just brain dump your lists. If you have an assistant, you can ask them to type these up, and keep the list updated with your input along with their own from the perspective of the seat they are sitting in.

Sign #2 — Lawyers ‘R’ Us' door

This is what we often refer to as a typical “door lawyer” who takes anything that walks in the door. If nobody walks in the door, it’s not long before the door is closed. Permanently.

The antidote?

Pick a niche. Develop a clear value proposition. Stay the course. Become known as the go-to lawyer in your community for the type of work you specialize in.

Read Choosing a Law Practice Area: The Hedgehog Concept, where I give in-depth steps on how to create a niche for yourself that will ensure you thrive in any economic cycle.

Sign #3 — Shiny Object Syndrome

This is a classic symptom of entrepreneurial instability at the core. If you don’t stand for something you’ll fall for anything, the saying goes…

And lawyers (skeptical as they come) are often painfully susceptible to chasing the next Bright Shiny Object that crosses their path.

These B.S. objects, as we’ll call them, can be anything from the latest blog-marketing course to a consultant convinced they can get you to the top of google with SEO or google ads. But wait, what about the free webinar coming up? How about that conference with all those great speakers? And this thing! And that thing!

Meanwhile, how many clients are you engaging? How many cases are you handling? What is it that has you so eager to jump on the next bandwagon?

There’s no magic bullet, my friend. No bright shiny object is going to save you from the hard work of defining a niche, developing systems for attracting, engaging and serving your clients.

You can’t put seeds in the ground today and harvest tomorrow. It just ain’t possible.

Building a successful law business takes years. It requires dedication, and focus. You must educate yourself, yes, but if you jump from one thing to the next, none of your seeds will ever take root and you’ll never see the harvest you know is possible.

The solution?

Find a mentor. Someone who has created the kind of law business you want to build. Take them to lunch if you can, or invest in their coaching if it’s available. Follow their system to the letter. Don’t reinvent the wheel. Once you’ve built your practice the way they teach, then you can innovate or test new things, but not before.

The Paradox of Success

In the end, the paradox of building a successful law business boils down to the excitement in every day wins from doing the same things over and over and over and over and over.

Why? Because if you do the right things, the right way, every day… over time, you are certain to succeed.

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