Focus and intensity
During the last three months, my practice has experienced significant growth and is on track to witness a breakthrough year. I attribute this change to increased focus and intensity in the way I run my practice. As lawyers and business owners, we are expected to be master multitaskers while attempting to solve our clients’ legal problems. Unfortunately, we can’t, and we shouldn’t. Multitasking can lead to a series of problems, including missing deadlines, incomplete assignments, unhappy clients, malpractice and a tremendous loss of revenue. What we can do is commit to focusing on one task at a time, and, while we are attending to that task, avoid distractions and complete the required assignment.
How did focus and intensity increase my firm’s revenue and profitability? Beginning this year, instead of concentrating on billings and receivables, I began to concentrate on revenue collection on a daily basis. Why this approach? It has kept me focused and allows me to make adjustments more frequently than I could have if I evaluated financials on a monthly basis. A closer look at the calendar reveals that you only have around 200 business days to accomplish your financial goals for the year and around 20 business days to meet your monthly cash flow. Time does not stop for anyone. Everyday that the firm does not receive a payment is a day lost since that day will never come back again.
Spreadsheets: A simple approach to staying focused
I created a few spreadsheets that are updated at the end of the day to account for any payments received that day. The monthly revenue spreadsheet keeps a daily record of incoming payments. This amount is automatically added to a month-to-date and year-to-date amount. It is simple and not very high-tech; however, it has allowed me to see how the firm is impacted when a client “rolls over” a payment by a few weeks and when no payments are collected on a particular day. The cost of running the practice continues to accrue depending on whether or not funds are collected. For this reason, it is essential to implement a revenue-focused practice. Try this for three months, and you will be surprised how your mindset changes.
Maximized advertising opportunities
I audited all my online ads, including those on Avvo, increased my advertising budget to gain more exposure, and optimized current ads to draw more quality calls. With our practices, it is not uncommon to have outdated information in ads and directories, especially if we don’t make a concerted effort to review them at least once a year. My goal was to increase the number of new client inquiries by 25 percent. More calls equal more clients.
Closed old cases and dismissed slow-paying clients
If you have been in practice for a few years, you most likely have cases that seem to linger or clients who do not pay on time. I moved these “old” cases to a priority list and, with the assistance of my staff, began to finalize them to reduce my caseload. These cases were dragging the firm down and needed to be closed. Likewise, clients who had outstanding balances or who were not paying on time were dismissed. Presently, I have a “no” accounts receivable policy, and all services are paid in advance or through monthly contracts. This has helped my cash flow significantly. I also encourage my clients to pay via PayPal, and that has been a tremendous boost.
The use of the spreadsheets to keep score has kept me focused on my goals and has motivated me to maintain the intensity to accomplish them. This approach is simple, yet effective. As business owners of small practices, we must remain focused on the collection of revenue to maintain our business and achieve profitability.