We all expected that the unemployment report today was going to be bad. And it was.
• 5.2 million people newly unemployed and seeking jobless benefits this week.
• The four-week total is estimated at 22 million on the low side.
• All job gains under Obama and Trump wiped out.
And today funding for the Payroll Protection Program was exhausted, and politicians are holding up replenishing the exhausted funds over ideological differences. Hundreds of thousands (or maybe even a million +) of small businesses and their employees will likely be impacted if they can’t break the impasse, including law firms.
A lawyer’s jobs is only secure when they own their own law firms.
We’ve been hearing from lawyers who have been laid off, or think they are about to. Same with recent and soon-to-be law school grads. They are looking to rapidly establish viable solo practices, and they are joining LawLytics to help make that happen.
I’ve long believed that the only true private sector job security in the law is self-employment. And I’ve been writing about how to start a solo law practice, starting with my own solo practice journey (beginning with how I used law school to prepare to open my own firm) in the hopes that writing that series now will give other attorneys who may need it some needed information and maybe even inspiration.
But simply owning your own law firm is not enough for every situation – you also need the following.
But “self-employed” as a concept is not enough to provide unconditional security. Situations like this pandemic and these politics require true independence, meaning that, to be secure in your career as a private sector attorney you need to:
1) Own your own law firm; and
2) Be in control of every aspect of your firm, including the way you attract and engage new business; and
3) Keep your firm’s overhead fixed and low, including your marketing and office overhead; and
4) Be self-reliant by knowing how to do every job in your law firm well enough that, if you had to do it yourself, you could even though you delegate it to an employee to do it in normal times.
Dependencies that can kill or seriously impede a law firm owner’s ability to compete and make a living.
You may own your own firm, and yet, at this very moment be (at least partially) be out of control. Here are some of the most common reason we see:
1. Dependence on partners: It’s a lot more difficult to successfully navigate times like these when you have to build consensus with another lawyer. We’ve seen two partner firms where one partner is currently bent on doing nothing, while the other partner is wanting to take action. They waste their energy fighting with each other while more agile and decisive firms are quietly preparing to eat their lunches. We’ve seen firms with a handful of partners and firm governance that requires unanimous voting where one partner simply refuses to conduct any business remotely, therefore preventing the firm averting downtime and capturing opportunity. For that reason, solo practitioners and (or controlling majority) owners of small law firms are in the best shape. When you’re the decision-maker, and you’re in control, and nobody can drag you down except for yourself — and if you don’t take action you’ll have nobody to blame but yourself. That power, combined with owning the place where the proverbial buck stops, is a strong motivator.
2. Dependence on referral sources: If your practice depends on referral sources, you may find that they have dried up. If you had a high referral concentration from a small number of sources, especially if those sources were other businesses or professionals, your law firm’s revenue is downstream of your referral sources’ operations, and therefore dependent on them. But what if the referral source is a chiropractor, or tow company, or tattoo shop owner, or physician who normally deals in elective procedures? Referral sources like these are great to have but dangerous to rely on in an “eggs in one basket” sense.
3. Dependence on marketing agencies: If your law firm delegated your marketing to a marketing agency pre-crisis, there’s a substantial chance that the agency is currently failing you or will be soon. There are some simple reasons why, which I’ll cover in detail in a separate post in the next few days. Most small law firms that use marketing agencies represent relatively small accounts for their agencies. Though you may spend thousands a month on the agency, the agency may have clients that spend tens or hundreds of thousands a month. If you didn’t get great service and great results from your agency pre-crisis, what happens when your marketing agency starts to lay staff off? If your account was small, you likely had a junior person doing the work on your marketing. Which people are they likely to lay off first? Which accounts do you think they’ll prioritize for service and try to save first? Which customers’ revenue do you think they’ll fight to keep? If you weren’t a top priority for the agency before the crisis, things are likely to get a lot worse, especially if you are locked into a contract. And while they are prioritizing in their best interests, what opportunities are you missing because the agency in control of your firm’s marketing and you are out of control? How will that play out if you have competitors who use platforms like LawLytics (you almost certainly do) and are who in control of their own marketing and using their crisis-mandated downtime to get ahead?
4. Dependence on legal directories: If your revenue depends on legal directories, you have likely noticed a change for the worse. While directories were already generally a bad investment for many lawyers and were producing diminishing or non-existent returns for many attorneys pre-crisis, it’s likely much worse now, and it’s only going to get worse from here. There are several reasons for this, including the fact that law firms are taking control of their own thought leadership, on their own websites, and the directories are both losing their money and losing their participation (I’m talking about the self-defeating contributions of content by attorneys to directories rather than to their own websites), as well as the trojan-horse links to the directories that attorneys embed into their websites that divert traffic back to the directories. As somebody who ran a highly successful online legal directory prior to founding LawLytics, I have insight into the medium and I’ll post more about how I believe this will unfold in the near future.
5. Dependence on disposable advertising: If your revenue depends on paid advertising, whether it’s display ads, search ads, email ads, print ads, billboards, radio or television, you have been dependent on something that was never meant to be sustainable, and that is not likely to “bounce back” to pre-crisis levels. Advertising revenue is down across the board because it’s not currently effective for reasons I’ll get into in detail in another future post.
6. Dependence on a physical office: If you haven’t figured out how to operate your firm’s business remotely, including staff collaboration, phone systems, and conducting online client meetings, you are not in control of your practice or your future. Firms that are just chilling out till they can start meeting in person again are falling further behind each day. And it’s really easy to work remotely given the available technology. Your clients expect nothing less, and if you’re not in control of this aspect of your practice, you’re likely losing more than today’s business… you’re likely losing their trust, confidence, and goodwill.
The opportunity for attorneys in the midst of the COVID-19 crisis.
The good news is that, as an attorney, whether you’re a law firm owner now and want to gain more control, or whether you’re thinking about opening your own firm, your license to practice law comes with an implied license to take control of your future. Taking control, and achieving true independence, is easy to do once you have the right mindset.
Will today be the day that you decide it’s your turn to take control or to further solidify your control? I hope so because the legal community needs you. Your clients need you. The public needs you. Your career as a lawyer is important, and your voice as a lawyer and leader are needed. So, I hope you’ll take a deep breath today (or several), step into your power, and start taking control of your future by building a foundation of independence that nobody can take from you. If you’re not yet a LawLytics member, whether you’re just starting your firm and need your first website built and deployed quickly, or whether you have a website that you want to be able to control and make work for your firm, I invite you to schedule a free, interactive 20-minute online demo to see for yourself so you can decide whether LawLytics is a good match for you and your goals.