Fact-checking the small firm lawyer principal’s “too busy” claims…

I’ve observed lawyers claiming to be too busy to do X, Y or Z for the best part of 50 years, and to say it’s wearing a bit thin is a gross understatement.

Many principals, when they are required to estimate what parts of each day they spend on various business activities, come up with vastly different numbers than those produced as data by principals who allow their practice management software to capture the information for them as they work.

The “too busy” paradox ruins the professional lives of far too many small law firm owners.

It need not be so. Consider for even a few seconds…would a champion woodsman ever be too busy to sharpen all his axes and saws before and during competitions?

How can an owner of a small legal firm possibly allow the pervasive thinking to be that they are too busy to:

·????? Improve their awareness of the fundamentals of business financials?

·????? Learn the fundamentals of pricing psychology and strategy?

·????? Upskill in the basics of business development, and understand how it will improve outcomes for clients and all other stakeholders of the firm?

Fact…this is not a minor problem…about 90% of law firms are by definition small (yes, the definitions vary, but there’s no room for wasting brain energy on technicalities here) and they don’t usually return much for their owners’ intellect, diligence, and dedication to helping clients.

Fact…The profession is rife with discussion (from multiple commentators coming from multiple angles) of the relatively poor mental health of very large numbers of lawyers in private practices.

Fact…small law firms are renowned for their volatility of liquidity, and inability to pay all creditors as they fall due.

Fact…In most businesses, including small professional businesses that law firms undoubtedly are, a price variation of as little as 1% up or down can affect profitability as much as 10%.

Fact…In 99% of small law firms you would be hard-pressed to identify a Chief Pricing Officer, part-time or even contracted on a needs basis.

The effective wearing of that hat is just one of the vital roles that an owner needs to perform.

Fact…Most owners of small legal firms do not have even modest pricing skills, and are well-known to have weak business financial awareness.

N.B. The ability to read a bank statement and see how much cash the firm has in its office bank account on any given day is NOT “financial awareness”.

Fact...Far too many small law firm owners do not make a proper connection between effective business development and consistently having the confidence to price engagements robustly.

Even where many owners do try to “get some business development done”, much of the effort is wasted as a result of poor skills applied without correct planning and focus, and outcomes, especially return on investment, are not monitored.

Robservation #1…small law firm owners are their own worst enemies if they are too busy to:

·????? Regularly set a little time aside to study pricing strategies and their guaranteed impact on practice financial health…

·????? Invest decent time in scoping and pricing potential new work to avoid regularly leaving 1-10% of available reasonable fees on the table.

Robservation #2…As AI inevitably makes inroads into the amount of labour needed in wide swathes of current legal work small law firm owners who don’t rapidly upskill in pricing and other critical business skills will find themselves encountering significant additional stressors that are hardly likely to improve outcomes in health…mental or financial.

Recommendation…with the writing well and truly on the wall, it’s not too late for interested owners to re-prioritise to earn back part of their time currently being spent in:

·????? Valueless FirmTime? activity (valuable activity in this sphere is an entirely different thing).

·????? Poor-profit ClientTime? activity.

·????? Profitless ClientTime? activity.

The time thus rescued can be invested wisely in upskilling on pricing (including scoping all potential new matters properly in terms of both tasks involved and the prospect’s perception of value in the benefits to be delivered) and effective business development.

Robservation…Pricing properly the matters you decide to take on can save you having to find and take on significant engagements that you shouldn’t! Same or better profit for less work…who couldn’t do with that!

The Bottom-line…if plenty of these thoughts resonate, continuing with the “mouse on a treadmill” activity is about as far from business leadership as a small law firm owner can get.

The time to smash the old pointless cycle is now, before it’s too late.

You and your family, team members, suppliers…all deserve better!