The recent Legal Trends Report by Clio showed that the average lawyer only gets paid for 22-28% of the time they put in. Unacceptable! New Solo host Adriana Linares brings in Marco Brown to teach lawyers how to change their mindset and prioritize getting paid for the great work they do. Based on a CLE presentation he gave, Marco outlines eight commandments that help layers rethink the way they handle billing and put themselves, their families, and their firms first.
Check out Brown Law LLC’s site to read Marco’s blog posts on each commandment.
Marco Clayton Brown is managing partner at Brown Law LLC in Salt Lake City, Utah.
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Marco Brown’s Eight Commandments for Getting Paid
Intro: So you are an attorney and you have decided to go out on your own, now what? You need a plan and you are not alone. Join expert host Adriana Linares and her distinguished guests on New Solo. Tune into the lively conversation as they share insights and information about how to successfully run your law firm, here on Legal Talk Network.
Adriana Linares: Hello, and welcome to New Solo on Legal Talk Network. I am Adriana Linares, a legal technology trainer and consultant. I help lawyers and law firms use technology better.
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Okay, Marco now that we’ve paid those bills. Are you there?
Marco Brown: Yeah, I’m here.
Adriana Linares: Oh great. It’s so nice to have you on New Solo. Thanks for coming on.
Marco Brown: Hey, thank you very much for having me.
Adriana Linares: I’m always happy to have real actual practicing lawyers on which you are right?
Marco Brown: I am an actual practicing lawyer, yes.
Adriana Linares: I’m kidding, I have a lot of those, what kind of law do you practice, what do you, where are you, tell us everything.
Marco Brown: Sure. I’m a divorce attorney. We only do divorce. We don’t do car accident cases, no real estate cases, nothing and we’re in Salt Lake City, Utah.
Adriana Linares: Awesome. Salt Lake City, the home of one of my other favorite legal technology products on the planet, NetDocuments.
Marco Brown: That’s right.
Adriana Linares: I’ll have to give you a call when I’m out there for their conference. So, you are a divorce lawyer but you love helping lawyers figure out how to get paid.
Marco Brown: I do because it’s such a rampant problem.
Adriana Linares: It is.
Marco Brown: That, I mean it amazes me when I actually looked at the statistics. I always knew it was bad, but when I looked at the statistics I realized how bad it was and I thought okay, what can I do to try to help my friends who were really a lot of these people to live a better life and get paid more and decrease their stress. So I started putting together a CLE on the matter.
Adriana Linares: Oh, that’s great and I have a little bit of cheat sheet in front of me of course, but I could act surprised and say it sounds to me like some of those statistics you may have gotten, it is probably the same place where many of us had gotten actual real-life statistics that we didn’t really have access to before Clio started publishing its Legal Trends Report.
Marco Brown: Exactly. The Trends Report has been fantastic. I think I started reading in 15 or 16 and it really clarified this issue for me.
Adriana Linares: So tell us some of those statistics, act like a statistician for a minute and rattle them off so that our listeners understand what we’re going to be talking about and ways that they can increase these, oh wait let’s see are we looking to increase or decrease some of these numbers?
Marco Brown: Well we’re looking to increase the amount you get paid and we’re looking to decrease the amount of hours you work.
Adriana Linares: Okay good. So what are some of these mind-boggling statistics that come out of and for listeners let me back up just a second, for listeners who don’t know about the Clio Legal Trends Report, you can Google it and download it for free. They might ask you for an email address so make sure you use not your real email address but your alternate email address because I’m always trying to get everyone to reduce their email hell that we’re all in.
But Clio has been anonymizing their customer data, don’t panic if you’re a Clio user you can opt out, but they do it in a really private and secure way, but they anonymize all the data of their users and they study trending and changing rates for different practice areas in different states. They log actualization rates for bills and invoices and have a lot of really other amazing and interesting information which really does no other report like it.
So if what Marco is about to tell us sounds interesting to you and you want to learn more, just go download the report yourself and open your own eyes to see the reality of what it’s like to practice law in most law firms and then hopefully take some of this advice to heart and increase the right numbers and decrease the right numbers.
Marco Brown: Exactly. Okay, so I’m going to give some from the Trends Report and then some from LegalZoom as well.
Adriana Linares: Okay good.
Marco Brown: So this Trends Report is actually great because it does give us a huge amount of data that aggregated all sorts of data for American attorneys, Canadian attorneys, even European attorneys, but we’re talking about American attorneys right here.
So in the 2016 Trends Report, the average attorney worked eight hours a day, the realization rate, which is the number of hours in the office to the hours billed is about 28% for small firms and about 22% for solos. So it’s amazing.
Adriana Linares: It’s dismal.
Marco Brown: Yeah it’s absolutely terrible. So the overall average collected for an attorney, a solo attorney is 1.4 hours out of an eight-hour workday.
Adriana Linares: Okay. So let’s just make sure we’re hearing you clearly and understand. Average lawyer logs eight hours of work a day, ends up only getting paid 1.4 of those hours.
Marco Brown: Yeah. Average attorney is in the — let me clarify it in the office eight hours a day it bills four hours a day and then collects 1.4 hours per day.
Adriana Linares: What are they doing those other four hours?
Marco Brown: I think what is when they comb through this data that’s a lot of admin, right. So they are doing a lot of admin, if you’re a solo you’re also meeting with clients and you almost never charge clients for the initial consultations, you’re just eating that time, so there’s that, there’s all the admin, there’s working with your assistant, there’s doing all of these things and about 26% of any lawyer’s day is spent going between tasks, right. So for going from email to the phone to talking to your legal assistant, to going to the bathroom, about 26% of your day is just gone in transition time, so there’s that in there as well.
So that the 1.4 hours was in 2016, lawyers did slightly better in 2018, it was 1.6 hours per day.
Adriana Linares: Wow, what a jump.
Marco Brown: It’s amazing, exactly.
Adriana Linares: Well I spent a lot of time in law firms and helping lawyers and I know that a lot of time is wasted seeking and searching for information or documents. Inefficiently working on documents, like duping and revising rather than starting from a template or using document automation, so there’s definitely a lot of room for improvement and I know that that’s obviously a very strong place where technology can come in helpful, and maybe that tiny jump in that number is, is thanks to technology is what I’m going to hope.
What about LegalZoom and its study?
Marco Brown: So LegalZoom is, this is a 2015 survey, so we get survey data from LegalZoom. We actually get behavior data from Clio, and the behavior data is great because survey data is kind of like how many times a week do you work out and you say five and really you’re just going to walk once a week.
Adriana Linares: Yeah, oh that’s like when I get that awful question of how many drinks do you have a week.
Marco Brown: Yeah exactly. You are just making it up to so you can look good.
Adriana Linares: Right.
Marco Brown: So this is LegalZoom data and this is meant to look good and it’s still abysmal. So what they found is solos account for about 56% of attorneys in America, their revenues per attorney $78,000, their profit per attorney is $63,000.
Adriana Linares: It’s amazing. And everyone thinks lawyers make so much money and here when you actually look at the numbers it’s — I hate to keep using the word dismal but it’s dismal.
Marco Brown: It is really bad. When I saw these numbers because I got these numbers at the Clio Conference I think in 2015 when the CEO of LegalZoom came to talk to us. I was absolutely amazed by this and that’s when I realized that this was a really rampant problem.
Adriana Linares: Yeah. I don’t even know if it’s a rampant problem as much as it is just normal, right, like it’s sad that that is a normal and I love the CEO of LegalZoom, that guy has so much interesting information, he gives such compelling talks.
Marco Brown: Yeah, it was one of the best legal talks I had ever seen.
Adriana Linares: Yeah, for sure.
Marco Brown: And he entered the lion’s den to give that talk to us and he was fantastic.
Adriana Linares: Yeah, he did. I had met at tech show and we had him in Florida a couple times giving talks and the guy is, he has got some balls to be able to even walk into some of these rooms where he just is basically like the bull and we’re all the matadors but he’s great, the guy is really very interesting and I love their general counsel Chas as well. They’re always out there educating and helping lawyers.
I mean it really — the information is really helpful. So you have some other very interesting numbers that I want you to share with us in your talk about helping lawyers get paid better and then we’ll actually talk about some of the commandments that as you call them in helping lawyers to increase the right numbers and decrease the right numbers.
Marco Brown: Sure, so the rest of the data has to do with the time it takes lawyers to get paid and we’re going to go through and talk through this a bit more because there’s at least one commandment that’s specific about this.
Adriana Linares: Okay.
Marco Brown: But it takes the average lawyer 87 days from the time they work on something until they actually bill for it, and then send it out to their clients, it’s almost three months right. And then it takes on average 83 days to get paid on the invoice, which is a turnaround time of 170 days, almost six months from the time you work on something until the time you get paid.
And the other data I give it as part of this talk a little bit but once you get past about 60 days on an invoice, your likelihood of getting paid on the invoice goes down to I think somewhere around 25%.
Adriana Linares: Right, that’s a decreasing number we want to increase.
Marco Brown: Yeah exactly.
Adriana Linares: And it’s true if you think about ourselves when we let’s say, we hire someone to paint our houses or just a contractor, if they’re not standing there with their hands out for you to pay them when the job is done and they say oh, I’ll send you an invoice and then the invoice comes via email three weeks later because they finally got around to it, you’re not in a hurry to pay it either.
I mean I just feel like this is a very typical problem that consumers and businesses have and then here we are lawyers who are providing a critical service, giving critical information, hopefully changing lives and saving lives and it’s taking you 170 days to get paid. There’s got to be a way to make things better.
Marco Brown: There is a better way.
Adriana Linares: All right. Well before we start talking about all those commandments, which I love that idea, how many are there, eight?
Marco Brown: Yes.
Adriana Linares: So it’s Marco Brown’s Eight Commandments for Getting Paid lots of money quick, we’ll talk about right after we finish hearing a couple messages from some sponsors.
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Adriana Linares: All right, and we’re back with Marco Brown, who’s an attorney in Salt Lake City, Utah, does divorces and divorces only. But like a lot of us out there really enjoy helping lawyers do things better and we’ve been talking so far about the dismal reporting of how little attorneys actually get paid for their time worked.
But Marco is going to save the day and has eight commandments to help us do a better job and I think these are probably tips that any of us could use, including myself as a consultant who sends bills to lawyers. I have a feeling that 170 days is probably about the average for a lot of legal technology consultants too.
So Marco, what’s commandment number one?
Marco Brown: So commandment number one is you need to change your mindset about getting paid, and the first people we learn from as attorneys about being a lawyer are our law professors. Our law professors bless their souls, tell us to do stuff like –
Adriana Linares: God love them.
Marco Brown: Yeah tell us to do stuff like –
Adriana Linares: Never spent a day in the law office.
Marco Brown: No they didn’t. They’re bureaucrats, right. They’re paid by the State or by a private institution but essentially they’re bureaucrats and teachers and they tell us to do things like do good, I don’t even know what that means.
Adriana Linares: Right, who’s out there telling you to do bad?
Marco Brown: Anyway, it just doesn’t make a lot of sense. Then the second group once we become attorneys is the Bar and I don’t know any Bar in the United States that really looks out for their attorneys and tries to get them paid more, what they do is they tell us look you need to do pro bono work all the time. So give away your stuff for free.
So these are the two groups that really tell us how to think about being an attorney and about how to get paid.
Well, they’re totally wrong. They don’t have to kill stuff and take it home and eat it and pay mortgages by trying to sell, so they don’t know what they’re talking about. And your number one job as an attorney is to get paid. Your number two job as an attorney is to do exceptionally good work for your clients. You getting paid less than a 100% for the work you do is actually unethical because you have a contract with them and that is I’m going to do excellent work and you’re going to pay me a 100%.
Now if you don’t do excellent work as an attorney, then you need to go to lawyer jail because you’re not very good at your job, but let’s assume that you are doing this amazing work, then they need to pay you a 100%. It’s no different than if your client came up to you and just started taking $100 bills out of your pocket. You would never allow that sort of thing to happen, doing that, allowing them to do that is unethical.
But that’s what lawyers allow their clients to do every day when they don’t get paid.
Adriana Linares: Do you think lawyers and especially young lawyers may be — young lawyers that are just coming out of law school and decide to hang their own shingle as many of them do, do you think there’s some sort of weird guilt or weird feelings associated with sending out an invoice and asking for the money? I mean I feel like even I have that problem sometimes 20 years later in billing my own clients or sometimes I’m like I feel so bad sending this bill, they were so great to work with, it really wasn’t that much work, it sure was easy and do you ever see that or hear that from them?
Marco Brown: Yeah, I do hear that from them and good for them for being human beings and caring about other human beings.
Adriana Linares: Yeah.
Marco Brown: But really you need to –
Adriana Linares: Get over it.
Marco Brown: You need to think about it. It’s unethical not to get paid. So you need to understand that you’ve done the work and now you need to get paid, because you need to pay all of these other people for the work they’ve done. You need to pay your paralegal and you need to pay the person who answers the phones.
And if you don’t get paid then they aren’t getting paid what they’re worth and that’s not okay.
Adriana Linares: And so when you say that it’s unethical, of course every time we use the word ethics and ethical in legal, we all get up in arms, it’s not ethical. So when you’re talking that way you’re really meaning about just getting paid for the work that you agreed to get paid for and then being able to pay your own bills and your own staff.
It’s really — I’m not even really sure what I’m trying to ask you but is that what you’re trying to say when you say it’s not ethical for you not to get paid. You’re supposed to get paid.
Marco Brown: The way I think about this is we do use the word ethics a lot as attorneys and it’s — if you are unethical you will get disbarred, right. I want to convey to attorneys that this you changing your mindset about money is just as important as you doing anything else as an attorney and keeping your ethics.
This is just as important as all of those other things that we don’t violate.
Adriana Linares: Great. I like it. Commandment number two.
Marco Brown: Commandment number two is bill regularly, at least once a month. So we see again going back to the data that that doesn’t happen, the average is 87 days just to get an invoice out the door and that’s absolutely unsustainable, you can’t do that sort of thing.
So you need to have systems in place where you’re sending out bills at least once a month. I have a friend she bills every week and gets paid every Monday. I tried that once, I tried it for about a month and everybody threatened to quit, so we don’t do that, we do once a month. So that doesn’t work for me but it worked for her and everybody needs to kind of find that, but the longest you can go without sending out a bill is one month.
Adriana Linares: No I agree with you and again for any business but really for lawyers, you have to send out your bills at the end of the month or mid month. I would love to see lawyers sending out bills twice a month, every week might be a little too much like you said it might not work for everybody, but you know what, there’s nothing wrong with trying different billing processes and systems until you find one that works for you but at a minimum, I totally agree with you Marco, it’s got to be at least once a month.
Marco Brown: Yeah, and the way I do it is I do it on the first, so I wake up at 4 a.m. or 5 a.m. on the first of every month, and I do all of the billing and then I’m done with it. So it’s all done by the time I get in the office and I never ever have to think about it again, because if I don’t do it at that point, then I know it’s going to be the fifth of the month or the seventh of the month and I will have not done it.
Adriana Linares: How big is your law firm?
Marco Brown: We have five attorneys.
Adriana Linares: You do all the billing?
Marco Brown: I don’t do, I put together the billing, I review the bills and then I have an office manager who actually sends them out and collects on them.
Adriana Linares: Okay. So when you say I get up at 4 o’clock in the morning, bills are ready for the office manager to get them out the door. How are you doing that? What’s your system?
Marco Brown: So I use Clio.
Adriana Linares: Okay great technology.
Marco Brown: Yeah, I go through every one of the bills and I review it just to make sure that everything’s in place, and when that is done I send a Slack. We use Slack to communicate within the law firm. So I send a Slack to my office manager and say billing is ready, let’s get it done and then she does it that day or the day after.
Adriana Linares: Excellent. Commandment number three.
Marco Brown: Is don’t chase money. So money is a really powerful motivator, the promise of money is also a really powerful deluder. So the idea of chasing money is the idea that you do things that you wouldn’t normally do as an attorney to get paid.
So example of this are helping people in different case types that you don’t normally do. So I do divorce I’m not going to take a PI case, but I sometimes think about that and I think well how hard can it be, these guys over here are doing it, I can do this sort of thing.
But then I think to myself no, no, I’m just chasing money, like I’m thinking about the payday and I don’t know anything about this. So that’s an example. Discounting your hourly rate or your retainer to get a client, helping a friend of a friend, do something, none of this stuff ever works out well and then we’re all amazed when it doesn’t work out well.
So all of these things are examples of chasing money.
Adriana Linares: I have two comments and/or suggestions and you can help me either support them or say that’s terrible idea Adriana. Obviously a lot of lawyers especially maybe younger lawyers and new lawyers don’t have a specialization yet, so they have a general practice and then when they come in to see me whether it’s in my capacity as a member benefit at the San Diego County Bar or just an attorney who’s called me to get some help with their practice management and technology and I ask them what kind of law do they practice. Let’s say they give me three different areas; family law, personal injury and real estate or wills. I say okay, well which one is your most profitable. They don’t know. They can’t tell me.
So my suggestion is if you do have that type of practice using a product like Clio or one of its very good competitors, you’re able to log what kind of matter you’re working on and then if you track your time even if you do flat or contingency, I still and look, we all hate tracking time. I’ve never met a lawyer that’s like oh, favorite part of my job is billing in six minute increments, whew it’s what I live for, nobody says that.
But you still should have an idea of how long a case lives from cradle to grave. Then at the end of the year, if you’re using these technologies, systems, and programs, and statistics, and dashboards, and analytics, you’ll be able to look at your practice and say wow, well the most profitable area, the practice area that I made the most money on this year was X, and then you can make decisions about whether to change your practice, focus on your practice or like Marco suggests, maybe don’t take on certain types of cases whether it’s because they might seem like A, pot of gold at the end of the rainbow or because you once thought that they were and it turns out that they’re really not.
Marco Brown: Well I think you’re exactly right. We need to track all of these things. Even if you do flat fees, I don’t know about other parts of the United States, but even if you do flat fees you need to track your time, because if you have to give what we call a Rule 73 affidavit for attorneys fees you have to lay all of that out.
But beyond that, you really need to track it so you can figure out where the problems are and where your opportunities are in your law firm if you’re taking too much time doing mediations or whatever else, you need to be able to look at the data and figure that out.
Adriana Linares: Right, or maybe you can figure out how to either outsource, offset or hand off some of those parts of a matter or a case where your time is better spent elsewhere, and it’s — a lot of it I think is the e-myth right, so the e-myth means a lot of people think it’s something about electronics, but it’s not, it’s entrepreneurial myth, which is if you’re spending more time in the business you can’t be working on the business.
So you really have to think about where you as the CEO of your company, of your law firm is spending your money and your time and tracking all that stuff through programs like Clio and practice management programs can really help you get a good look at that.
I like Commandment number four, the banana stand commandment.
Marco Brown: I do like this one. So that’s from Arrested Development if people don’t know that. The commandment is always have money in trust and there is this great joke on Arrested Development I’m totally going to mess it up now, where the dad who was in a federal penitentiary would always tell the son, there’s always money in the banana stand, and no one knew what did that mean.
And then I think in Season 2 or 3 the son gets upset and burns down the family banana stand, and dad says you’re a moron, there was $250,000 in the banana stand.
So it’s this idea that don’t burn your house down and go to zero, have money in trust, always in trust, because relationships change when your clients go below zero dollars. When they owe you money then the relationships change. So you don’t — you are no longer an attorney at that point, you are a banker and everyone hates their banker.
Adriana Linares: Yes, we all hate our bankers.
Marco Brown: Yeah, I mean no one thinks oh I want to take Bob, the banker out for watch, no one says stuff like that.
So the relationships really do change, so you have to have money in the trust in order for it not to get down to zero or below zero and the vast majority of attorneys what they do is they take that retainer, they get two or three thousand dollars and then they let it go below and they and then somebody owes them two or three thousand dollars and then they want to get back up to zero, so they’re always at zero or in the negative. You have to change that. You got to get two, three, four or five thousand dollars, however much it is above that and keep it at that, at that rate. It’s called an Evergreen Trust.
Adriana Linares: And I want to also just again another tip when you’re using practice management programs, when you take in that retainer money you can put a reminder in there that says, hey when this retainer amount drops below $800, let us know, like and by us, I mean whether it’s you the solo or whoever is helping you support your practice, so that you can send out that retainer request and keep it evergreen.
Marco Brown: Exactly. That’s a fantastic way to do it. You have to have systems for these things and that’s one of the systems.
Well, one thing I did want to talk about here is that this is counterintuitive but when you let people go into the negative, you’re going to get more bad Google reviews, and Google reviews are ultra, ultra important nowadays, but you’re going to get more bad Google reviews because that relationship has changed and they don’t like you nearly as much anymore.
When you get one-star Google reviews is when you somebody owes you two or three thousand dollars and you keep going on their case and you get it done and you’ve got them a great result but they still owe you two, three thousand, four thousand bucks at the end, and you have to come after him, that’s when you get a one-star Google review.
If you tell them I’m not doing any work on your case until you get me the trust and then I’m going to do really excellent work that’s when you get five-star Google reviews.
Adriana Linares: Excellent. Well before we cover the last four commandments, let’s take another quick break and listen to some messages from our sponsors.
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Adriana Linares: Okay, we are back. We have got four more of Marco Brown’s commandment to getting paid left. What’s number five?
Marco Brown: Number five is related to number four. If your client doesn’t pay or you don’t have money in trust, stop work, stop now, stop right now.
Adriana Linares: That’s mean Marco.
Marco Brown: It is mean. That’s totally mean. I like to think of it as compassionate because it really is insurance for everybody involved, but really if people don’t pay then don’t do the work. Get paid. So there’s a guy named Lee Rosen and he talks about this. He says, get paid like a casino boss. A casino boss will literally do anything legal or illegal for you until you don’t have any more money. So get paid.
Now to do this though you really have to have clear triggers for stopping work and the way we do it in our law office is on the 20th of the month, we run credit cards. So everybody has credit card authorizations and we run the credit card authorization, if that doesn’t go through, if they don’t replenish then that is a clear trigger that we stop work. Our office manager gets declined and she sends out Slacks to everybody involved saying stop work on the case.
Adriana Linares: Interesting.
Marco Brown: And it’s how we get paid. So you have to have systems in place and you have to have clear triggers in place to make this function.
Adriana Linares: And I’m going to guess you must have some very polite but stern language that you send either via email, snail mail, over the phone saying we’d love to keep working on your case, we’re so sorry your card was declined, surely there’s a problem with your bank, please let us know as soon as this problem has been rectified and we will happily keep working on your case.
Marco Brown: Exactly. So we do it by email. We send that out and what we found is that about probably half to three-quarters of the time, the credit card has been expired in the last month so they just call in to give us a new credit card. We were very rarely ever get beyond about 48 hours when we and when a credit card gets declined.
So there’s really not much downtime in this, everybody kind of thinks that oh, well if the credit card gets declined, they’re out of money, no they’re not, they just go find other money and then they pay you. When you force people to pay you, they pay you.
Adriana Linares: They find the money.
Marco Brown: Yeah exactly.
Adriana Linares: Yeah they go chasing the money.
Marco Brown: Yeah instead of you chasing the money, exactly.
Adriana Linares: Great, good tips. Okay, number six is one of my favorites because I suggest this to lawyers all the time, you can’t be a door law lawyer.
Marco Brown: Yeah you got to specialize. So what I mean by specialize is you do one thing and you do it exceptionally well. Now, this doesn’t always hold, if you’re an hour outside of Fargo and North Dakota and I’m not even sure North Dakota exists as a state. I am not convinced of that.
Adriana Linares: There’s only like eight lawyers there and they’re all really busy.
Marco Brown: So if you’re there, you can’t do that sort of thing but what you need to do is you need to choose two things you can do, maybe, maybe three things, but I wouldn’t suggest it. I would suggest two things. If you’re in a city though or a place of substantial population then you need to do one thing and the reason for this is specialists get paid more money and we know this is true because we can look at doctors.
So a general practice doctor in America makes about $150,000 a year. A general surgeon who’s a mid-level specialist, probably makes $400,000-$500,000 a year. You get the guy that’s the brain surgeon that only works on one particular thing, he or she is getting paid $900,000-$1,000,000, specialists get paid more money. So you’re going to do less work and make more money if you specialize.
Adriana Linares: I love it. Have you ever fired a client? I have a feeling I know the answer to this question?
Marco Brown: Have you fired a client, yeah.
Adriana Linares: Just today.
Marco Brown: No not today, no.
Adriana Linares: So rule number seven, which I think is another funny quirk that lawyers have is lawyers sometimes don’t realize they can be the ones firing the client instead of the client firing them. So your suggestion is fire your worst client like right now.
Marco Brown: Right now today, so when I say the words fire your worst client, there’s a face that comes up in your mind.
Adriana Linares: Yes.
Marco Brown: That person is your worst client. That is the person that you despise as a client because they’re mean to you, they don’t pay their bill, they’re bad to your legal assistant, whatever it is, you have that person, fire that person today. They are a time suck in your law firm and you aren’t getting paid, so just get rid of them. And the reason for this is it opens up your ability to focus on people who do pay you, and to acquire other clients who do pay you and treat you with respect.
Adriana Linares: And I think whenever we talk about firing clients I think about my friend Ernie Svenson, Ernie The Attorney, he’s well known out there. We were walking through the French Quarter one day and it must have been a carnival or something but this guy was walking toward us, a whole group of us were out and there was a guy walking toward us in a king costume, big purple fuzzy crown, purple fuzzy cape and Ernie stopped to say hi to him and the guy was very funny and super nice.
And as the guy walked away Ernie said oh yeah I used to work with that guy, I had to fire him, and it was a long time ago and I didn’t really think a lot about attorneys firing their clients. I said why, why did you fire him, he said wouldn’t listen to a thing I said, didn’t do one single thing I told him to do, who wants that kind of client.
So aside from just clients that don’t pay you as you just said Marco, I think clients that don’t respect you that even though they are paying you or giving you a hard time and causing you stress and every time the phone rings, you just look at it your eyes roll, man being a lawyer is stressful enough as it is, all these other things you’ve got to deal with.
I think being comfortable with firing clients and in the right way is also just critical to having a successful law practice, so I think that’s a great tip even when it doesn’t come down just to the money but just to your sanity.
Marco Brown: Yeah exactly, it’s a mental health issue. I’ve talked with psychologists about this and it really is a mental health issue. Your stress, the majority of your stress in your job is caused by a very limited number of clients. It’s called the Pareto Principle, so any minority of inputs equals a majority of outputs.
So probably 10% to 20% of your clients who are creating probably 90% of your stress, so get rid of them, live a better life.
Adriana Linares: And I think to go with your gut before you even take them on, because how many times have you said I knew I should have never taken that client on but you do it anyway and maybe you’re chasing the money or maybe business was slow that week, that month, but really go with your gut, it’s probably usually right and you’ll save yourself a lot.
I happen to do this a lot with lawyers and law firms. I can tell on the phone if they’re going to be a pain in my ass to help, and I love working with my clients. I work all the time, text me, call me, I’m here but man, when it gets a little too much, I won’t even take them from the beginning. I will literally suggest them to my least favorite legal technology consulting companies.
I don’t think I’m the right fit for you, why don’t you call so and so.
Marco Brown: Yeah, your gut is your instinct you’re got whatever you want to call it, is always right. I would go with that 100% of the time because even if it’s wrong, it’s still only going to be wrong 5% of the times, you’re going to save yourself so much by following your gut.
Adriana Linares: I love it. Okay, rule number eight kind of falls back into this mental health, really taking care of yourself and I love rule number eight.
Marco Brown: Yeah make you, your family and your team your first priority, clients comes second. The idea that we hear all the time is the client is always right and the kind of sub-idea is that you should do whatever for the client and put them first. Well no, that’s completely wrong, you put yourself and your family and your team first.
If you can’t remember the last time you had a vacation, a real vacation with your family or did real stuff with your family or went on a date with your husband or wife or whatever, then you have a real problem and you’re putting your clients first. When you put yourself first and your family first and your team, then things are going to work out.
You’re going to work the number of hours you should, you’re going to pay your people and yourself the amounts they should be paid, everybody is going to be much, much happier.
When you put the clients first and do whatever they say and don’t get paid and get overworked then everybody’s miserable and you’re the cause of it, right so don’t be the cause of that, put yourself first.
Adriana Linares: I think that’s such great advice and especially for new and young lawyers and I was just reflecting on my many years of working with lawyers and law firms and I have to say that I feel like most of the time that is what I see in practice. Lawyers are so protective of their partners and their associates and their staff and I love that.
So when a client is screaming and hemming and hawing and the secretary is upset or an associate has been embarrassed by a client, I got to say I love the way attorneys defend that work family and of course that’s probably going to transfer through to their personal life, but I love that and that’s one of the reasons that I love working with lawyers and law firms is that we are — it’s a fiercely protective and family environment also on occasion though there is that that crotchety old mean attorney. And if you work for him or her guys, go out on your own, you don’t need that kind of stress either.
Well it has been great Marco. What else, what other a couple last tips, suggestions, what our frequently asked questions that you get from lawyers or law students when you talk about these things, like what’s the most frequently asked question after you give this talk?
Marco Brown: I think the question I get asked the most is how can I determine what my retainer should be.
Adriana Linares: Oh good one.
Marco Brown: And the way I think about this is in an ideal world, you want a retainer that is equivalent to your worst possible month in a case, right. So for us that would be a Protective Order and a Temporary Restraining Order and some other hearing in a month right.
So that is going to come up to probably $7,000-$8,000 of work in a month. So ideally you would want $7,000-$8,000 in the retainer that’s a little rich though, so the way I think about it his back that down to like the 95th percentile, because that’s going to back a lot of money off.
Marco Brown: So think about you are like 95% of your worst month, and that’s going to get you in a range where your retainer is one doable and then two, going to protect you.
Adriana Linares: I love that.
Marco Brown: And this is why you need data, right, you need to be able to look at your cases and say, okay so my worst month is like this and then my 95th percentile month it’s like this, and that’s why Clio and all of these other things are so helpful because you can just go pick cases and go look at those things and determine that that data. If you don’t have it, you’re just guessing and guessing ain’t good.
Adriana Linares: It’s not, and I just want to remind everyone too, that data, those statistics that dashboard that you have in practice management programs is only as good as the information you put into it, and if you’re a four person firm and you’ve got one or two of you that are really diligent and good about logging time, putting information in and then two of you aren’t, then your data is only half that good.
So another thing I would really encourage everyone to do is put these systems in place, put these processes in place and train and push, because you’ve got — you are running a business here. We can’t have willy-nilly, the Wild Wild West of data management, everybody’s got to be committed and contribute to that data pile equally so that you can get really good statistics and information at the end of the year and decide how to change for the next year and grow your firm.
Marco, it’s been really nice having you on New Solo today. Thanks so much for coming on. Will you tell everyone how they can find, friend or follow you if they want to ask you any follow-up questions or just keep an eye on what you’re doing?
Marco Brown: Sure. Everybody can email me if they want to, it’s [email protected]. I don’t have a telephone in my office, so that’s not the way to get a hold of me.
Adriana Linares: Good. I like that.
Marco Brown: Which is a story in and of itself.
Adriana Linares: Yes, so I was just thinking, huh no phone in the office.
Marco Brown: That’s one of the ways I keep my sanity. We switched over to Vonage a few years ago and I told my office manager that I no longer wanted a phone in my office and she got mad, but it’s been great. It’s absolutely fantastic.
Adriana Linares: Do you have your clients use the Clio portal a lot as a way of communicating with you all?
Marco Brown: You know we never have. I’ve never really looked into it that much because we just kind of do the old system where the office manager just sends them all of the documents, I should probably look into that a little more.
Adriana Linares: Yeah. No I think sure, and let us know how it goes. You can come back and say hey we’ve been using portals and are these numbers went up and these numbers went down and it’s better around here.
Marco Brown: Yeah absolutely. So if you want to reach me on social, on Twitter, it’s Brown Law LLC. I think it’s Brown Law LLC on Facebook as well. I’m on LinkedIn, so you can get me any of those ways as well.
Adriana Linares: That’s great. Well I really appreciate you reaching out and sharing your knowledge and your information and really caring about the legal community the way you do because you don’t make money off of these talks, you just — you’re a good guy, you’re doing good like you’re law prof told you.
Marco Brown: There’s a little bit of that yeah.
Adriana Linares: Yeah.
Marco Brown: But I can do good because I get paid a 100% for what I do.
Adriana Linares: I love it. That’s great. Well I very much appreciate it and I’m sure our listeners too.
All right everyone. It looks like we have reached the end of another great episode of New Solo. Thanks so much for listening.
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And remember, you are not alone, you are a new solo.
Outro: Thanks for listening to New Solo with host Adriana Linares. Tune in again to learn more about how to successfully run your new practice, solo, here on Legal Talk Network.
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