The Coach: Where are the profits? | Gary Mitchell
Thursday, October 24, 2019 @ 1:22 PM | By Gary Mitchell
As far as audits go, there are two that I suggest you conduct. The first is an audit of your time. The second is a marketing audit.
Time audit, your time
I always advise starting at the top. Take a look at how you spend your time on a daily basis. What are you doing? Are you doing things only you can do? Or are you doing some things that can easily be delegated down. Do the math. You bill out at $X, so, if you are spending time doing anything other than billable work or tasks focused on growth or leadership, you are leaving profits on the table. Those tasks can easily be delegated. I see this time and time again. It’s most common in the start-up and early growth stages, but I see it later in the life cycle of a firm as well.
Most lawyers think paying someone else to do something is a cost centre. OK, but even when that’s true, my point is you focus on being the lawyer and bill out at your rate, and then hire someone or if you have that someone already, delegate the tasks to them. Again, do the math. It’s really simple folks.
Abraham Lincoln is reputed to have said: “A man who represents himself has a fool for a client.” If you agree with that statement, it follows that you will agree with this: “A person who tries to fill all roles has a fool for a boss.”
You will never get off the treadmill unless you look ahead, plan ahead and expect to bring people on. That leads into the next section.
Your people’s time
Following the logic about your time and moving through your staff, conduct time audits with your lawyers, paralegals, assistants and clerks.
Again, with the same logic I just talked about, I bet your lawyers are doing work that can easily or at least without much direction be done by a paralegal or clerk. How can I be so certain? Because I see it every day!
And continuing in that vein, are your para’s doing work that could be done by assistants or reception? One of the biggest areas I see in loss of profitability is not having the right people doing the right things.
When to get help
Now if you are more junior and starting to grow your team, my rule of thumb for when to get help is that when you have been consistently at 60 per cent of your own workload capacity, clients and files — it’s time to start looking. Why I say that is because at some point you will need to invest your time in on-boarding and getting anyone new on your team up to speed. If you hit capacity, you won’t have time to do that, and the treadmill continues.
Fear has a lot to do with it. Fear that it might be too early to get help. Fear you will put too much money out and won’t have enough coming in. But let’s look at my formula a little closer. If you start looking by the time you are consistently running at 60 per cent capacity, that gives you the luxury of time to find the right people. It affords you the luxury of being “choosy.” Then by the time you reach 80 per cent capacity, you will still have the time to train them and get them to the level you want before you hit 100 per cent capacity.
And here is an even more important point. I’ve seen so many professionals not follow this formula for fear of bringing people on that they end up referring so much business out, they don’t see the forest for the trees. Why refer all that work out when you could simply hire someone and grow? More profits being left on the table — don’t be one of those people.
The next thing I suggest you do is look at how and what you are spending on marketing. That is anything related to lead generation: advertising, sponsorships, events, SEO campaigns, digital marketing, etc.
What are you getting for your investment? What actions are working best? What things are not working or performing poorly? You really should know if what you are doing is working; if the money you are spending is bringing in more clients.
Once you have gathered the information as outlined here by conducting your audits, you are armed and ready to make decisions on what to change, increase, stop, tweak or start something new.
Tune in next month when we will examine what you can do with this information you’ve gathered to move your firm into higher profitability.
Gary Mitchell is a business coach and published author, working with lawyers and law firms since 2005. Follow his blog or on LinkedIn. He can be reached at 604-669-5235 or email@example.com.
Interested in writing for us? To learn more about how you can add your voice to The Lawyer’s Daily, contact Analysis Editor Richard Skinulis at Richard.Skinulis@lexisnexis.ca or call 437- 828-6772.