The Law Firm Journey: From Survival Mode to Stage One Business

Episode Notes

Transcript

State Bar of Michigan: On Balance Podcast

The Law Firm Journey: From Survival Mode to Stage One Business

04/12/2018

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Intro: Welcome to State Bar of Michigan’s On Balance Podcast, where we talk about practice management and lawyer wellness for a thriving law practice with your hosts JoAnn Hathaway and Tish Vincent, here on Legal Talk Network.

Take it away ladies.

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JoAnn Hathaway: Hello and welcome to another edition of the State Bar of Michigan’s On Balance Podcast on Legal Talk Network. I am JoAnn Hathaway.

Tish Vincent: And I am Tish Vincent. We are very pleased to have Lea Ann Sterling join us today as our podcast guest to talk about her law firm journey from survival mode to stage one business.

Lea Ann, would you share a bit about yourself with our listeners?

Lea Ann Sterling: Sure. Thank you JoAnn and Tish, it’s sure been a pleasure working with you all these years. You have seen my journey.

I own and manage Sterling Law Office in Traverse City and Gaylord, Michigan. I have a JD from Ohio State. I practiced in Ohio and then joined the Michigan Bar in 1998. I had a lifelong enchantment with Lake Michigan, so 20 years ago I followed my heart and a dream to live up North where my family had vacationed. I naively thought that I had retired from law and would write books.

And when reality soon hit me, I opened my law firm in 2001 and entered 5-10 years of the survival mode. Looking back I feel I was probably reckless but still glad that I took that chance, because my husband of 30 year suddenly passed away last year and I don’t have to regret that we were waiting back in Ohio for me to retire next year before following our dream. We had 19 beautiful years being where we wanted to be.

So I guess looking back now from that perspective, it’s all been worth it.

JoAnn Hathaway: Yeah, it sounds like it. Well, Lea Ann, why don’t you start and take us all the way back to 2001, if you will, and walk us through the present.

Lea Ann Sterling: Okay. Well, I had no business skills, no lawyers in my family, no successful law businesses to serve as models. I had worked at the Legal Aid Society and for a civil rights litigation private practice in Ohio and I hadn’t learned any useful business skills from any of those experiences. And of course, back in the 1970s when I went to law school, they didn’t teach you anything as practical as practice management.

So no wonder I was feeling exhausted, frustrated and overwhelmed when I first spoke with JoAnn in the brand-new Practice Management Resource Center from the State Bar of Michigan. So I reached out to the Practice Management Resource Center and started learning how to actually practice law, the practice side of it; I knew how to run my cases, but I needed to know how to run the business of it.

And the first change I had to make was to actually treat my practice like a business. Some of the most important practice management strategy that I learned was to get some expert advice. It wasn’t as expensive as it sounds and I found that I couldn’t afford not to.

So I learned to reach out for some other advice. I got advice on technology necessary to run a business, an efficient law business and then I had to also learn how to use it; it’s not enough to just have a technology, you have to know how to use it.

And one of the first things I got was a timekeeping program and no longer was I keeping track of my time on a yellow legal pad, I actually had a program. And sometimes now looking back at it, wow, if we hadn’t had that timekeeping program then from the very beginning of when things started to lift off, it would have been so hard to institute that now.

Tish Vincent: Lea Ann, I just wanted to interject and make a point and maybe you can clarify this. As I understand it, having known you over all these years, through your journey and when you retained these experts, you didn’t get one expert, you really got an expert in each field and that was one thing I think that popped out at me when I was reviewing my notes again. And I think that instead of getting someone who was one law firm consultant, you got a technology consultant, you got a practice management consultant, you got a marketing consultant, is that correct, and do you think that was very helpful?

(00:04:51)

Lea Ann Sterling: Yes, experts on phone systems, experts on time management and time efficiency consultant and expert on human resources. And it really wasn’t all that expensive to seek out that kind of expert advice. I just didn’t have that knowledge and I guess what I was blessed with was being able to find people who could help me with learning these areas of practice management.

JoAnn Hathaway: Well, I think you really did your due diligence too, because a lot of the experts that you retained were specifically geared toward law firms, is that right?

Lea Ann Sterling: Yes, yes, they were.

Tish Vincent: Do you remember how you found them, Lea Ann?

Lea Ann Sterling: Well, by looking and by paying attention to what came my way, but sometimes I feel it was more that I was throwing up my hands to the universe and saying I need somebody who can help me with understanding whatever and pretty soon a person with those skills came on my radar.

Tish Vincent: I like that technique, just throwing up your hands and knowing exactly what you needed.

Lea Ann Sterling: But really it’s just being open to those — we are bombarded everyday with experts, how many emails do you get a day with somebody offering some skills, but I guess it’s knowing how to sift through them and to know what it is that you need. And as I went through this desperate journey, I started to see what I needed.

And then of course getting my staff together was a big, big part of my journey here then too. And even though I set myself up in this Northern Michigan environment with not enough clients and long distances to travel between courthouses and it’s just a remote rural area, I was able to also turn that around to an advantage, because like me, many other people wanted to — they dreamed of moving up North and raising their families near Lake Michigan and I was able to attract some really great talent using that, finding other people who shared my core dream to live up North. So I started with a couple of great young attorneys who wanted to raise their families up North too.

And then my support staff was another story. When I first started out in that survival mode, it was whoever showed up in the midst of a crisis that I needed something done and they got hired without any thorough and organized way of selecting people. But I soon, thanks to ICLE and Solo and small Practice Institute materials and a Practice Management Resource Center, learned of checklists and how to advertise properly and review and compare applicants and select the most promising for interviews.

And I still had this one more dream of finding that experienced legal administrator, maybe from a big city and they were looking to do kind of a pre-retirement gig up North, they still had some career left in them, but they had already learned a lot of things and I wanted that person, and sure enough one summer day she appeared from an 80 lawyer firm in Downtown Chicago, and she has blessed my life everyday since then.

Tish Vincent: That’s pretty amazing.

Lea Ann Sterling: She has been on board with me helping me make this a professional law firm.

So to keep these people, I believe in paying my staff well and providing them a place to work where they are respected and their family lives are respected too. So I used that location; it was a detriment, but I used it and turned it around and used it to my advantage.

I read a lot of books on managing and compensating and training staff and keeping them happy and in turn they keep me happy.

JoAnn Hathaway: Now Lea Ann, if we can go back, so it sounds like you really started with technology and that was really what helped with your efficiency in the law firm, can you talk a little bit about what technology you do use and how it has helped you; I know you had mentioned billing software?

Lea Ann Sterling: Right, right, the billing and timekeeping software and now it’s, we are just getting ready to undertake a major upgrade on that because our technology has to work in two locations seamlessly. We have a server at our main location in Traverse City and the Gaylord office are really two attorneys sitting there and their support staff is in Traverse City and they have to function as if there are just two more offices in our Traverse City office.

(00:10:01)

All the phones get answered here in Traverse City and they buzz them over in the Gaylord office as if they were buzzing me that I had a phone call. So our phone system, our server, our timekeeping, all of our backup systems, all had to be compatible with that kind of a remote rural business model.

Tish Vincent: And are you using any practice management software at all?

Lea Ann Sterling: Not other than our PCLaw and it has much more capacity than we actually already use, but I know that there are many other applications that we can use.

Another thing that I learned is that I would never arrive at my final technology destination, it’s ever-changing, and you just have to keep going with it. And so one of the things that’s also happened to me as my practice has grown is to have a technology support person, my tech guy, and he keeps all of these systems running, and he is an outside person that is just ongoing. We keep him under contract to keep all of our systems safe and out of harm’s way and the most efficient that they can be.

Tish Vincent: And didn’t there come a point in time where you decided that it would be best to focus your concentration on just a few select practice areas?

Lea Ann Sterling: Yes, it did, that was a major step for me. When I first started I took anything that came in the door, that’s pretty much what you have to do to build a practice, or at least back then. So after things got rolling for a while, we decided to just focus on the things that we had the talent at the time to do.

So I feel like I assembled technology, I assembled a team, and then I looked at what the team was — what their strengths were and then that’s what we focused on and started turning business away. I know that that sounds counterintuitive, but it was an excellent strategy for us to not take everything that came in the door.

And another major development was that I branded my practice with a well-known trademark and decided to focus all of our advertising into radio. I had started doing very little print advertising and I know that there were many disappointed salespeople trying to sell me advertising, but I just wanted to focus on the radio advertising.

And then that also defined my area, my geographic region or practice, because the radio stations broadcast over a particular area and I wanted to take full advantage of the area that they were reaching, so that became our practice area, our geographic practice area.

So now, more recently, we — and there’s so much more ways to reach — so many more ways to reach people now, so we have recently moved away from 100% radio advertising to a 50/50 program with a social media campaign, but it’s a managed social media campaign, and we are producing some videos and Facebook posts and blogs to reach the social media, instead of just depending on radio now.

JoAnn Hathaway: Did you hire someone?

Lea Ann Sterling: Right, like my tech guy that had been taking care of us all this time, he was getting more into that too, and he has a partner who was willing to jump in there with us. And the results are that after the first month of our first video, it reached 60,000 people on YouTube video and then 2,200 on Facebook. So we were really pleased with that.

JoAnn Hathaway: That’s fantastic.

Lea Ann Sterling: Just the beginning. I guess that’s good, at least that’s what my experts tell me is good.

JoAnn Hathaway: Sounds good to me.

Tish Vincent: What kind of videos are you making, Lea Ann?

Lea Ann Sterling: We are taking the radio work that we had already done and the resources that we had and we are translating them into YouTube videos with photos and talk about our practice.

And we are also, instead of just — the radio ads were all on family law, which is one of our main practice areas, but another practice area is immigration and so we have followed the same format for the original radio ads and are adapting them for other areas of practice, immigration being one of them that we are working on right now.

(00:15:01)

JoAnn Hathaway: So let me ask this with the immigration law, would you be serving people that are not in Northern Michigan then, can the law firm offer services at some other location in Michigan?

Lea Ann Sterling: Yes, it can. That’s pretty much a federal practice and the leader of our Immigration Department is actually licensed to practice in Michigan and Illinois and she still has some Illinois customers for her immigration services.

It’s kind of the same thing with social security disability law too; it’s a federal law practice in administrative departments.

JoAnn Hathaway: So all these decisions, it seems like you have to keep abreast of the changing environment and the changing kinds of media options and software. Is that pretty much a full-time job just trying to manage the business?

Lea Ann Sterling: Well, that brings me to another best decision I ever made for me and I don’t know that this works for everyone, but for me, my best decision in this long journey was for me to actually stop handling cases directly. I have such talented and energetic associate attorneys who are eager to hone their skills and do those cases, and if I step back and do what I call lead conversion, and I will get to that in a moment and also the management of the firm, it just keeps everybody fresh for the job that they need to do and so that they no longer feel exhausted, frustrated, and overwhelmed all the time trying to do it all.

So that was a few years ago and I made that decision to just start doing the initial cases. And so in my practice we do that advertising, as I have described and people contact us either by the Internet or email or by telephone or very infrequently by letter, but mostly by phone and by email. They will contact us and it is me, the lead conversion person, the most experienced person in our firm that reaches out to those contacts and finds out what their needs are and makes a contact with them.

And then we invite them to come into our office, and most of the time they will sit down with me or another one of the associate attorneys if I am not available to hear more about their legal needs, to sort it out with them and come up with a plan of action for them.

And then from there, the way that I did this to get people to not lock on to me as the person that they want to represent them is that I just made sure that our hourly rates reflected our experience. And so my hourly rate was much higher than the associate attorneys that I was trying to get the people to have as their primary attorney and knowing that I would always be around in the background, and they saw the economic wisdom of that and then they didn’t just rely on me that, oh, we have already met you, you know our story, we want you to be our attorney, and they were willing to build a team approach to handling their case.

And so I get called in when there’s a conflict, time conflict for the attorneys, we like to have cases move forward quickly, I am available to handle those, handle problems, to be a second set of eyes and another brain to work on a problem and as a resource person, throughout the case working as a member of the team.

So the lead conversion that I do also involves not only reaching out to people in the beginning and hearing their problem and getting them set off in the right direction, but then also following up with them and I find that that is very useful to the business model that we are following to get and keep our clients.

Tish Vincent: Sounds like an excellent plan.

JoAnn Hathaway: Now Lea Ann, do you use any type of surveys to monitor client satisfaction?

Lea Ann Sterling: Yes, we do; I have got one right here on my desk. A client satisfaction questionnaire that at the end of a case, we close the case, we send a closing letter and we send a questionnaire with them.

(00:19:45)

Then another thing that we found is useful, especially with this team approach, and so that we train each other and use our own resource of training each other as we have attorney meetings and we review all of the closed cases. As they are closing, each attorney will present the case that is being closed, the closing letter has been sent to the client, satisfaction questionnaire has been sent and we discuss the case, what happened, what we learned from it, what good briefs might be in our brief bank, and then also the question of what do we wish we had known at the beginning of this case that we know now. So that’s another part of our business model.

I have also added a professional bookkeeper who does our collections work too, but as we have gotten better at getting our money upfront, secured for collection activities aren’t as busy as they were in the beginning, but I found that it was really — I couldn’t afford to not have a professional bookkeeper handling our business side of the practice.

So I have made mistakes along the way, that’s for sure. I have endured the setbacks of losing cases, lean months when I didn’t collect the money, of economic ups and downs, employee misconduct and drama, employee turnover, which I am happy to say now it’s pretty seamless when people come and go, which is not that often, but when they do we have been able to standardize things and institutionalize our knowledge rather than keeping it in the heads of particular employees. So that’s gone more smoothly, but I have had my headaches with that.

And then just the relying on personal relationships instead of professional relationships to get the job done was a mistake that I feel like I have made. Borrowing heavily to maintain my former lifestyle and the lack of accountability and making fear-based decisions have all been mistakes that I feel like I have learned from along the way.

JoAnn Hathaway: Well, you have recently had a very good experience. I know when we contacted you to see if you would be available for this podcast, I contacted you and you were in Hawaii. Can you share a little bit about that and how you were able to work from Hawaii while you were on the beach?

Lea Ann Sterling: Well, sure. So now, here’s this journey that you have just heard about. I am 64. I am a widow, a new grandmother and I have people to see across the world. My children live in Chicago, Houston and Hawaii of all places, and so I like to go visit my daughter in Hawaii for as long as I can during the winter and visit her. She moved there 10 years ago, so I have been able to go almost every year for a while.

And from there I am able to work remotely with the team that I have assembled, with the business model that we have created and the technology that we have. I wake up in the morning in Hawaii and log on to my server and start talking to clients and reviewing email. And since we are already set up to have these two cities, Gaylord and Traverse City, it really doesn’t take too much to add Hilo, Hawaii to the mix too and do the same thing from there. I just have to juggle the time zones a lot.

One of the things I am working toward now as I continue to wind down even more is to divide my responsibilities and hopefully though those lead conversion jobs that I have will go on to a future potential partner and I will just keep the management responsibilities for now and that will allow me even greater flexibility to be where in the world I need to be at the time.

Of course, there’s no place better than being right here in Traverse City looking out on West Grand Traverse Bay, but I feel like I have built a business over this time, over this journey and with all these mistakes and all this expert advice, I have built a business that can make the transitions and it can survive without me.

JoAnn Hathaway: That’s very impressive. I think people are going to be very interested in hearing your story.

Tish Vincent: Right. It’s been an inspiration knowing you all these years and I have actually pointed to your article in our Bar Journal many times. So people that are just starting out and are feeling frustrated and overwhelmed, as you had mentioned, do have some hope and they have someone that they can look to and see how you accomplished it from your one small office where you were frustrated to your two firm locations now.

(00:24:50)

Lea Ann Sterling: One thing I would like to say too is that I think that looking back, a lot of it has to do with letting go and finding the right people to work for you and letting them do their job and not having to make every decision. Sure, I have been burned on that at times before, but overall I think that’s — letting go and eventually letting go of the firm itself and hoping that it can survive and move on.

JoAnn Hathaway: That’s wise. That’s wise.

Tish Vincent: I think that we are nearing the end of our show today.

Lea Ann Sterling: Well, thank you for having me.

JoAnn Hathaway: Yes, Lea Ann, thank you so much for being our guest. And if our guests would like to follow up with you, how can they reach you?

Lea Ann Sterling: At HYPERLINK “mailto:[email protected]”[email protected].

Tish Vincent: Thank you. Well, thank you again for joining us. This has been another edition of the State Bar of Michigan’s On Balance Podcast.

JoAnn Hathaway: I am JoAnn Hathaway.

Tish Vincent: And I am Tish Vincent. Until next time, thank you for listening.

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