Twenty One Years of Business Lessons Learned – Sometimes Forgotten – and Often Relearned

Our firm just celebrated its 21st anniversary. To say the last two decades (and then a bit) have been interesting, is an understatement. The firm started when a group of us departed another firm. No one would describe the departure as amicable, nor did we have much time to get it done. We opened for business on October 1, 1996 in office space that was still very much under construction. 

Originally, the firm’s business was almost exclusively medical malpractice defense work and two thirds of that work came from a single insurance carrier, The St. Paul, which at that point still controlled a huge amount of the market in Virginia. It quit writing malpractice insurance all together at the end of 2000, and now for most malpractice lawyers it is a vague and distant memory. We developed additional business, some in different areas, and expanded. Recently, we have largely gotten out of the malpractice defense business. At one point, the firm had reached almost 50 employees. 

What have I learned in 21 years?

First, I have to recall an old Army story: A grizzled old sergeant looks at a young lieutenant and in an effort to influence his actions tells him that he has been at this for 20 years. The smart (or smart ass, depending on your perspective) lieutenant looks at the sergeant and asks if his insights based on 20 years’ experience are “cumulative or the first year repeated 20 times.” Well, I hope my wisdom is more cumulative than not, but at times it certainly seems that there are many lessons you learn. You then forget and you then have to re-learn. And sometimes this cycle repeats itself.

With the above in mind, having run this firm for all this time here are my business insights, for whatever they are worth:

Cash rules. Cash flow matters. You may be overflowing with work and everyone is busy as can be, but if you are not generating cash you will quickly be in trouble. Whether you are doing hourly rate work or contingent fee cases, you have to always be mindful of doing everything you reasonably can to get cash in the door. All those employees, landlords and various vendors want to be paid on time regardless of whether the firm is generating enough fees to do so.

Management is not easy. Even in smaller operations you are constantly juggling a multitude of issues, mostly personnel issues. The decisions are not always obvious ones and quite often you can be sure that you are going to make someone unhappy.

Do what you do well and stay away from what you don’t do well. With regard to practice areas this is a pretty obvious proposition. We do healthcare related work and I think we do it well. However, as I clean up various messes over the years, I am reminded that there is no such thing as the “simple car crash case” or an “easy divorce,” let alone a “basic will.” Those will get you in trouble every time. The principle also applies to the operation of the business itself. Most of us are not marketing or IT experts. Find someone who is – and I fully realize that is easier said than done.

Treat clients just as well when they are mad at you as when they love you. Anyone who says clients don’t get unhappy has not likely had many clients. Resist the temptation of treating them accordingly. Even if you have to part company, try to do it as reasonably and businesslike as possible.

People have strengths. They have weaknesses too. We need to direct our colleagues into doing those things that play to their strengths and do what we can to mitigate their weaknesses. If someone has adequate intelligence and a decent work ethic you can usually find a niche even for some of the more peculiar characters. 

The causes of almost all errors and omissions are “multifactorial” to use that great doctor term. Only rarely is a screw up the sole cause of a single individual. Finding fault is usually not a productive effort. Fix the problem and/or mitigate the damage and try to figure out what you can do to prevent a recurrence.

Deal with problems and deal with them decisively. In 21 years I have seen quite a bit of real problems, employees caught stealing, impaired lawyers and a host of other dilemmas. I can’t say that I have always followed my own advice, but I can say that I have never been successful at solving a problem by ignoring it.

Demand honesty and do not tolerate dishonesty. It does not matter if a lawyer generates a huge amount of business. If he or she can't be trusted, you don’t want that lawyer in your practice. It also does not matter if it's just little stuff, like expense reports. Lying, cheating and stealing are never okay. And if someone does so with the small things, they will move onto bigger stuff. It is here that the rule above comes into play also: Deal with the problem and deal with it decisively.

Avoid public embarrassment. It’s tempting to voice your frustration with an errant employee, especially if you are also firing that individual. It does no good and only makes the other employees uneasy. 

If possible, let people save face. This is a corollary of the above. It’s not always easy to do and sometimes people reject the opportunity when it’s offered.

Don’t be mad when people leave. I am always shocked that, when someone leaves, I find myself feeling a bit rejected and even mad. Part of this comes from the fact that when people leave for supposedly greener pastures they have to justify it by finding fault with their current situation. After over 20 years what I have found is that a fair number of those who left end up making overtures about coming back. I try to keep that thought in mind when some departing employee is smugly touting the better place for which they are leaving.

Don’t take things too seriously – and don’t take yourself too seriously either. Easier said than done, of course.

Don’t panic. Really, don’t panic. No matter how bad a situation is, it will only get worse if you don’t keep your wits about you. The funny thing is that if everyone just stays calm and works through the situation, usually it turns out to be not quite as bad as feared. Regardless, the sun will still come up in the east the next morning.

Avoid getting mad. This is not an easy one for some of us and people can really irritate you at times. Losing your temper, however, never does much good. It’s not even all that satisfying in the moment. It’s kind of like panic: It doesn’t help. 

There is so much more I could say, but I will sum it up with two rules which control everything: First, treat people as you would want to be treated. In some form or another, most religions have this rule and it is a good one.  Second, as the Hippocratic Oath puts it, first do no harm. In other words, don’t make things worse.