This episode’s discussion around the Community Table:
- How should I structure a bonus plan for my client intake specialist?
- How should I construct a pro hac vice agreement with an out-of-state law firm?
- How should I market my newly created educational course to my potential clients?
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Intro: The Un-Billable Hour Community Table where real lawyers from all around the country with real issues they are dealing with right now meet together virtually to present their questions to Christopher T. Anderson, lawyer and law firm management consultant. New questions every episode and none of it scripted. The real conversations happen here. For our first question a lawyer wants guidance about how to structure a bonus plan for the client intake specialist.
Female 1: Chris, I have two-part questions and it’s about a client relations specialist. So as the phone rings and then somebody answers the phone if it’s not answer in service. First part, so I hear a lot of things that’s very dangerous to have one of each, what if your person quits then who is going to be handling the job? So my first question how to handle that? Let’s say person is not quitting but maybe it’s time to get another one, how would you split the bonus? Because right now she has a base salary, hourly and then in addition to that she has a bonus on a successfully onboarded number of clients beyond the first top five clients a month. And second part question is I’m starting getting this feeling that she might not be 100% happy, so maybe that’s another reason to potentially maybe get another person not that I would absolutely want to get rid of my existing person but just kind of just in case sort of thing.
Christopher T. Anderson: Okay. Let’s try to tackle that.
Female 1: At this point my firm will absolutely break if I don’t have an adequate person handling the phone calls coming in.
Christopher T. Anderson: Right. So I want to be clear though that what we’re talking about here is a reception level, not attorney salesperson, right?
Female 1: No. Yeah, reception.
Christopher T. Anderson: Okay. What is your bonus now? So like you said, how do I bonus them? Just tell me how you’re bonusing this role right now.
Female 1: So any clients that in excess of the first five client of the month it’s $100 for each successful onboarded person.
Christopher T. Anderson: Okay. So now I have to go back to the first question. So, this is not the salesperson, this is just an intake person or the first phone call person, but you’re bonusing them on clients who sign up at the end of the day?
Female 1: Yeah.
Christopher T. Anderson: Okay. Stop that. Don’t bonus them on that. They can’t control that to some extent. What’s your goal for a number of new clients per month right now?
Female 1: It used to be roughly 14 clients and months and then she came to me and she said, last two months we had 23 each month so I think we need to up our goal. So I don’t know.
Christopher T. Anderson: All right. So why would you bonus them on five?
Female 1: No. First five is included as part of the base salary so it’s anything in excess of that.
Christopher T. Anderson: Yeah. So what’s happened here is your bonus structure is completely departed from your goals. They don’t have anything to do with each other anymore. And you’ve made the mistake. This is for really for everybody of incentivizing behavior that they can’t control. And so you have to have faith in your own systems, in your own firm and so that you have faith enough to give people incentives for behaviors they can control. For instance, this one. What’s your conversion rate of the people that this person booked a sales call. I take it they’re booking an ASP call or a sales call of some sort. That’s their job.
Female 1: Mm-hmm.
Christopher T. Anderson: Yeah. What’s your conversion rate of booked calls to clients?
Female 1: Okay. It’s pretty high. I don’t have the perfect statistic right now but it’s probably about 80%. A month is almost 100% even.
Christopher T. Anderson: Okay. That’s pretty amazing.
Female 1: Or once they show up. Yeah.
Christopher T. Anderson: Yeah, if they will but that’s not. See? But what’s your show up rate?
Female 1: Well, many people reschedule late while some people reschedule but eventually, they do come.
Christopher T. Anderson: Okay. Let’s say your show up rate is 90%. So laying it out it’s a whole another conversation that we need to have about. If you think your conversion rate is truly 80%, then you’re misunderstanding where the sale is taking place and we need to get a clearer understanding of that. That’s like saying the second person at Wendy’s has a 97% conversion rate. Well, it’s because the sale has not taken place at the second window at Wendy’s, right? It’s taken place somewhere else and we need to understand that in your business. Because again, we need to incentivize the right behaviors. Now, if these are all referrals, then that number makes sense.
Female 1: No. Not referrals.
Christopher T. Anderson: Okay. All right.
Female 1: Can I ask a question because I’m really, really, really confused. Because this position used to be strictly hourly and I’m not always there and nor do I want to make sure that their job properly. People are not motivated.
They could easily skip the call and let it go the answering service.
Christopher T. Anderson: Right. I didn’t say don’t bonus it, I said you’re bonusing the wrong thing. So, here’s what I’m thinking. If your goal is to have, let’s say 24 new clients per month and you truly, truly think I’m going to use 75% as your conversion rate because you don’t know your show up rate, there’s some gushiness here. Then what we know from that is that if we need 24 new clients and 75% conversion, we need to set 32 sales calls. Okay, 24 divided by 0.75 is 32. That’s how many sales calls need to be set. And they need to be sales, they to be qualified sales calls, but the 32 sales calls need to be set. So what you want to incentivize is that behavior. And so let me throw out a different idea for you. Don’t include any free, none are included in their pay. Because bonusing people, like you said, you want them to be motivated. You want to be paid for every sales call. But the first 20 — what do you think their total monthly bonus should be to make them happy?
Female 1: Well currently, its kind of comes out to $1,000.
Christopher T. Anderson: $1,000 a month. Okay. So, we want to get to that number at the number we want which is 32. So I would say for the first 20, they get– I’m going to try to see if this comes out, right. So first 20 they get $20 per sales call that’s booked. So when they hit 20 they’re at $400.
Female 1: Those are the people who will show up?
Christopher T. Anderson: Yes, people who show up.
Female 1: Okay.
Christopher T. Anderson: Then everyone over the first 20, they get $50. That’s one model. So the first 20 are $20 each, and then every one over 20 is $50 dollars each for show-ups. So, I’m going to give you two options and you tell me which one you like better. This is for everybody. Both of these works. I’ve used both. The first one is the one I’ve given you. The first 20 are 20 bucks, everyone after 20 is 50 bucks. Plain and simple, okay?
Female 1: They’re the scheduled consultation who showed up?
Christopher T. Anderson: Yeah.
Female 1: Not somebody who hired us?
Christopher T. Anderson: Right, showed up. That’s what they control. They can’t control the consult so don’t screw them over for someone doing bad consults. Pay them for show-ups.
Female 1: Okay. Can I ask one more question.
Christopher T. Anderson: Yeah.
Female 1: So sometimes people show up but it’s not a right type of consultation.
Christopher T. Anderson: That’s a non-qualified call and that gets annexed out. And they get dinged for that.
Female 1: Okay.
Christopher T. Anderson: They get zeroed out or you can even punish, but right now zero is usually good enough punishment. All right, option two is even more fun. They get $15 for the first 20, not $20, $15 for the first 20. But when they hit 21, it goes to $35 for all of them. So it goes retroactive. All the once they did that they’re going to get paid 15 for, they’re all 35. I love doing that because it really gets people to push.
Female 1: Mm-hmm.
Christopher T. Anderson: So those are two options. That’s how I would bonus those folks. I would stop bonusing them on new clients. First of all, this gets you out of any potential problems because you’re just booking, now you’re paying people for sales calls. Nothing, no prohibitions against paying people for setting up sales calls. Maybe some gray area when we’re paying people for new clients that are not lawyers. So I think that makes it a little bit cleaner and this incentivizes them more for the behavior you want which is setting up qualified calls. That helped?
Female 1: Yeah, yes. So should I get a second?
Christopher T. Anderson: Absolutely. So here’s, the question, so if you do have two, what I do with that is I do it as a team because what your goal is 30, right? So I do the same exact structure I just talked to you about and when the team hits, 21 they get bonus as a team, their bonuses go up. It doesn’t matter if this person set up 16 of them in this person set up, five of them, it doesn’t matter. Soon as the team hits 21, they pop to the next level all the way back to the beginning because all you care about is results.
Female 1: Okay. So each person gets 20 or 35 or–
Christopher T. Anderson: No. No, no, no. They only get paid for the ones they did.
Female 1: Oh, okay. So they would have to keep track. So basically, they’re getting half of what they used to.
Christopher T. Anderson: If you have two people, yeah. Unless you feel like paying double, then yeah, you’re going to have to find other things for them to do. Here’s what I recommend you do. If you don’t have the volume, if setting up 30 sales calls only keeps one person busy, you only need one person in this role.
You need to have someone who can fill in when the person is sick, takes vacation and that backup person could be someone else on your team or could be someone external that you’ve trained for this so you could back it up. I’ve got folks that are using somebody like Smith as a backup. Smith.AI or LEX Reception as a backup or you can have an offshore person as a backup when your person is busy, when they’re on vacation, when they’re sick that you’ve got to train backup that you can scale up and down.
Female 1: Okay. Can be used like (00:10:35) only can do so much.
Christopher T. Anderson: Well, either use them or use virtual assistant for this purpose that you can scale up and down.
Female 1: Okay. So would you recommend getting person while current person can handle it just fine.
Christopher T. Anderson: Then I wouldn’t hire a second person. I either have a backup in-house or a backup out of house or backup.
Female 1: Okay, okay.
Christopher T. Anderson: Then when your volume comes up and this person is about 75% full, then hire another person.
Female 1: Okay, 75% full. Okay. Thank you.
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Male: The following question is from a lawyer who needs to create a pro hac vice agreement with a firm outside her state.
Female 2: So I have a Florida counsel who wants to come into New Jersey as pro hac vice. I just want to make sure that I’m going to — my plan is to have two separate agreements. One agreement is our pro hac vice agreement between business-to-business between me and the Florida firm, and then the second one is my kind of standard retainer between my law firm and the actual client. Does that make sense?
Christopher T. Anderson: No, it doesn’t. I’m going to presume that the lawyer has a contract fee agreement with the client already, correct?
Female 2: Yes.
Christopher T. Anderson: Yeah, and you are serving as a role as sub if you will in that contractual relationship with the client.
Female 2: Right.
Christopher T. Anderson: So you need to review that agreement to make sure that the client has been sufficiently apprised of your roll. Who’s paying you?
Female 2: So my understanding is that the client through his power of attorney is going to be paying me. I don’t believe the attorney is paying me.
Christopher T. Anderson: In that case then I take everything back that I said. Usually in this arrangement, the fee floats through the law firm, the primary law firm to you. And so you have an agreement with the primary law firm, you review their fee agreement to make sure that you’re satisfied, that the client sufficiently apprised of your involvement in the case and you do not have a straight contractual relationship with the client. All of what I’m saying you should touch base with your professional reliability carrier and make sure they’re okay with this. But my understanding is that this is a model that will work. If however you are being paid directly and I don’t care if it’s through a power of attorney, through an agent or something, not through the law firm that that is primary, if you’re being paid directly from the client then you do want to have a small agreement with the client that references their primary agreement and your terms of payment and their obligation to pay you. And that’s more to protect you to get paid in this situation because you need somebody’s ass in the wringer if you will.
Female 2: Yeah. Because then I think it’s getting complicated because the pro hac attorney was going to submit his time to me to issue the invoice. Yeah, something’s not clear to me.
Christopher T. Anderson: So that then sounds like your primary which now is starting to sound weird.
Female 2: Yeah.
Christopher T. Anderson: I know you can’t go out. I don’t want you to go into specifics but so this is a family law case representing the pro hac vice has a client in New Jersey that they can’t represent directly because they’re not a member of the Jersey Bar.
Female 2: Yeah, the client is not in New Jersey but the cases going forth in New Jersey.
Christopher T. Anderson: The case is going to be in New Jersey. I’m starting to sound like this person is also like really actually relying on you substantively for New Jersey Law and taking care of substantial portions of the case.
Female 2: He says not because of the kind of case this is and who he is, but I know better that the answer to that is going to be yes.
Christopher T. Anderson: Okay. Well, let me let me cut to the chase. If he’s going to be passing his time on to you and you’re going to be billing the client for it, then fee agreement is between you and the client.
Female 2: That’s why I was thinking like that.
Christopher T. Anderson: Yeah. No, that changes everything. So really, you’re the primary, he’s an associated firm. Your agreement with the client has to establish that he’s going to be taking part in the case and your financial arrangement with his firm and he doesn’t need a director agreement with the client. If he has one that’s fine. But you, now, yeah. You need a full-on fee agreement. Why am I giving you legal advice? I am Not giving you legal advice.
Female 2: I know you’re not giving me legal advice.
Christopher T. Anderson: Okay. Good. As long as we’re clear.
Female 2: I know you’re not. You never give me legal advice. You just keep telling me to let things go.
Christopher T. Anderson: So we’re clear on this recorded call. I am not a member of the New Jersey Bar and I’m not qualified to give you any legal advice in this situation, but that’s what I would do. I do encourage you to clear this with your malpractice carrier and I’ll tell you that this sounds weird. I do this kind of work all the time and if someone is asking me to be local counsel in a case. I don’t expect that I’m billing the client directly. So this all sounds weird.
Female 2: Yeah. Because I’m local counsel, he’s lead counsel.
Christopher T. Anderson: Yeah.
Female 2: I’m just here to supervise and put my two cents. No, for this particular case, I intentionally want to insert ourselves. So the way it was presented to me is this other attorney would be lead counsel and I’m just here to sign off on the shit.
Christopher T. Anderson: Right.
Female 2: And I was like, “Yeah, yeah, yeah.” He doesn’t realize yet that that’s it’s not going to fall out that way because of the way New Jersey operates and because he’s going to have to know some nuances, right? I don’t feel comfortable just signing off. I want to be on every court appearance. It’s my name on the line at this point.
Christopher T. Anderson: And you are at best co-counsel and it is sounding a lot more, like your lead counsel based on what you’ve now describe it. If I were in your situation, I’d feel more comfortable to direct relationship with the client and both agreements need to spell out for the client and for the lawyers who is responsible for what. And you like basically presume even after all that, that you’re responsible for 100% of what happens in this case.
Female 2: True. Because again, the attorney who wants to come in is not that this means anything, but he’s a five-year attorney and I think he thinks he knows more than he might actually think he actually does. And just because he’s done this a couple of times in other locations, other jurisdictions doesn’t mean they were doing it correctly.
Christopher T. Anderson: Yeah. And he’s sounding more and more like a hotshot lawyer who’s figured out how to get good clients that he doesn’t have the expertise to serve and he’s looking to have you be the talent which is fine. Listen, that’s a great relationship. You got someone who can bring in great clients and who you’re going to then have a direct relationship with, fine, but then yeah, then have your approved standard fee agreement with the client spelling out clearly what the other lawyer’s role is going to be, what the billing arrangement is going to be, what the fee sharing is going to be between you. I would think that he should do the same and you should review his.
Female 2: Okay. Review his agreement with the client.
Christopher T. Anderson: Yeah.
Female 2: So almost mirror.
Christopher T. Anderson: Yeah. I don’t care if it’s mirrored, I just want you to be comfortable. The client is well advised and not misinformed because any misinformation the client is going to come back and bite you.
Female 2: Yeah. That clearly define roles.
Christopher T. Anderson: Yeah.
Female 2: Okay.
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Male: Our last question today comes from a lawyer who is uncertain how to market her newly-created educational course to her potential clients.
Female 3: So I am doing a side project that I think will really help my firm. So if you recall, MyMich(ph) is helping special needs families and create trust and do what we can to help them. One of the most popular issues we get is once we create these trusts, the trust is like, “What do I do? How do I do this?” So we created a book. Nobody reads it. So we’re inundated with questions, questions, questions, everybody is just like, “Can I do this? Can I do that?” All these whatever rules. So I decided to create a trustee school. So, I’m putting it together. It’s this labor of love. It’s taking me a year but it’s not coming together. So, I have two ideas of how I’m going to provide this. But I’m not coming together. So I have two ideas of how I’m going to provide this. My initial thought was putting it on the market and advertiser for it, sell it for 1,500 bucks and just make this a reoccurring thing. People want to download it and every now and then I’ll put in updates. Or someone had mentioned this and I think I like this idea. Client hires me, I use It as part of the reason why they should hire me to build their trust because I’m going to give you this trustee school for free and then maybe I use this trustee school license it to other attorneys so they can use it in their practice to entice other people to hire them so attorneys hire me. I don’t know.
Christopher T. Anderson: I just want to be clear. The student in the trustee school is the same person as your client.
Female 3: Not necessarily.
Christopher T. Anderson: Who else would be the student? Ignoring the fact that you’re going to sell this to other attorneys.
Female 3: Yeah. It could be a person who needs to know how to be a trustee. So trustees are could be the creator or could be the alternate. So it could be the person’s other child, other relative.
Christopher T. Anderson: Got it. But it would be someone related to and it would still be a vehicle through the client?
Female 3: Yeah, yeah, I get that.
Christopher T. Anderson: Yeah. What I’m trying to vision is this is also a people who are trustees out there want this course and then become your client because you use to position yourself as an expert.
Female 3: Okay yeah. So that’s my third option.
Christopher T. Anderson: Yeah. And with anything like this, you should choose one to start with. And we’ve been talking a year ago, I would have said you should market a year ago so you can find out who your avatar is.
Female 3: Yeah, true.
Christopher T. Anderson: Because you don’t need the product to make that learning. That’s why we need startup talking. But you’re here now so we still don’t know which market is going to be the market for you.
Female 3: Mm-hmm.
Christopher T. Anderson: So my answer to you is let’s go find out. Let’s run limited marketing to all three segments. One, people who are already your clients. Two, other lawyers to see if they want to buy this to put into their clients, and three, the marketplace to see if there people who are already serving as trustees who would want to buy it. And it’s obviously a longer conversation to say how to market all three but I’m talking about 30 days’ worth and throw 500 bucks each to see where the traction is and then that’s your first one. And then we refine and we can retest to the other markets once we’ve got that first one rolling. But if you try to do all three at once, you’re going to get confused. The market going is going to get confused and you might sell a bunch of these but you’re going to get spread and you’re not going to be able to deliver the way that you want to deliver. When you find out which one is your channel, you run with that for six months to a year and you get that really solid and then your next launch is going to be much, much easier.
Female 3: Yeah. I mean, I gently suggested it to clients some words during our sessions and I’ll say, “So listen, this is what we’re happy to do for you blah-blah-blah. And because, would like to be a client of ours, we are also going to provide you the trustee school which is still in the making.” And every time I said like, yes.
Christopher T. Anderson: Yeah. Remember lean startup that yes means nothing. We have to figure out what our leap of faith assumption is and yes is never the leap of faith assumption. Leap of faith assumption has to be the target parting with something of value. It could be money, could be information, could be something else, but they have to part with something of value that they wouldn’t otherwise partner with. Because that’s the only way you validate your model. People will say yes to anything until you ask them to write a check.
Female 3: Well, they do hire me.
Christopher T. Anderson: But they didn’t buy this. So yeah, your client’s, yeah, they trust you but when it comes to writing a check, and what I would have said a year ago is I want a deposit.
Female 3: Yeah.
Christopher T. Anderson: But now you can either take a depositor or take the check. Whatever you want to sell. Have figure out a price point?
Female 3: No, and I don’t even know how I would do that. I mean I can only tell you —
Christopher T. Anderson: Is it all online learning or like how is the one —
Female 3: Yeah, it’s all online. It’s on the Kajabi Platform. It’s about three hours. So the whole thing is “How to be a rockstar trustee–
Christopher T. Anderson: Throw me out. Tell me your price point. So the first one that comes through your mind. What do you think?
Female 3: 1,500.
Christopher T. Anderson: That’s exactly where I was. 1,499.
Female 3: Mm-hmm. Yeah, yeah.
Christopher T. Anderson: That’s it. Offer at that price to each of the three markets and you can offer the attorneys. The only difference is you could offer us a license where can sell it for 1,999 — actually, they can sell it for 1,499 too and they get 500 of that.
Male: Thank you for listening. This has been the Un-Billable Hour Community Table on the Legal Talk Network.