Lawyers: Polar Vortex freeze your cash flow?
February 21, 2014
Filed under: Money,Uncategorized — Tags: cash flow — admin @ 2:39 pm
It’s not just you. Don’t panic. It’s not the worst quarter ever.
The “Polar Vortex” threw much of the nation into our coldest winter in years. Compounded by a soft economy, this winter has really taken a toll on many small law firms in the northern states.
I hear about it from my clients. I see it in their numbers. Frustration, anxiety and panic is setting in. Don’t let it.
Here are seven things for you to consider as you deal with the financial damage created by the recent Polar Vortex.
- You are not alone. There are small businesses everywhere affected by this winter. I have seen in many different sources. Probably the best representative article about it is one I read recently in the Wall Street Journal. I’ve saved a copy of it for you as a PDF: Small-Businesses’ Sales Decline Amid Winter Weather. Take a moment and read it. You are dealing with a real phenomenon.
- Learn from it. Don’t write this experience off as a one-time event. Whether you agree or disagree with the theory of humanity’s affect on climate change does not matter. You can’t control what politicians, scientists or the media get whipped into a frenzy about. What you can control is your practice. So, learn from it. What if this happens again next year? What can you do to prepare for it? Right now, write out an action plan. (If you are in the southern states, think hurricane vs. Polar Vortex). Does it make sense for you to put aside a percentage of revenue monthly as weather-disaster fund in case this happens next year? Or, should you apply for a line of credit from your bank as a precaution?
- What plans do you need to adjust to plan out the rest of this year? I think they need to be revised based on your first quarter. What adjustments do you need to make to your marketing?
- It is time to work the phones. Call your top 20 referral sources and check in with them. See how they are doing. Ask for referrals. Start calling your best sources of business and fill your marketing pipeline.
- Organize all of your work-in-process that you can collect cash on. Rank it by dollar value. Then, you and your team just crank on getting it done. You need the cash. For most lawyers, there are tons of dollars laying around in uncompleted work. Get it done.
- Put together a plan of things to do the next time you are stuck at home due to snow, flooding or storms. You can hang with your family, snow board, make the best of it. When you grow weary of “family time” — or perhaps your family has grown sick of you hanging around the house bugging them — here are some things you can do. Write that marketing book you have always wanted to put together. Write 52 blogs that can be posted once a week for the next year. Write a course you want to teach. Write the systems that your office desperately needs.
- After the roads clear, you need to be focused when you are back in the office. No messing around. Dig in and crank.
Man-made and natural disasters can and will affect your business. You can be a victim of the circumstance or take action. I suggest taking action, because it will keep you warm and help thaw out your cash flow.
This article is part of a series to help busy lawyers recruit, train and manage a great team. If you have suggestions or questions, please contact me.
Law school taught us how to argue a point effectively, research court precedents and write compelling court petitions, but it didn’t offer most of us any actual business training — chiefly, how to hire and train employees for the law firms we would one day own or manage.
One of the biggest traps we can fall into as business owners is hiring staff members in a panic.
The following scenario might sound familiar:
A key staff member either quits unexpectedly or must be fired by you or your office manager. The crucial work this person did daily is going to pile up quickly. Most of it cannot be parsed out to other staff members. Clients will be phoning soon asking for progress reports. Important court filing deadlines are looming. And, of course, you have no viable candidates to replace this person because you haven’t been actively recruiting in preparation for staff turnover.
This is usually when many lawyers will quickly throw up a Craigslist ad full of high expectations for minimal pay. They sift through a barrage of emailed replies from desperate job seekers and proceed to interview and hire the first person who listed any work experience in a law firm.
Fast forward a few months or a couple years. Rinse, repeat. It’s a vicious cycle. I want to help you avoid this. To collect and keep a great team for your great practice, you need a foundation of values and skills to build upon.
First, let’s define what I mean by values. These are a person’s — or a firm’s — principles or standards of behavior, the internal compass about what’s good, right and important.
A fundamental value that many firms and individuals follow is The Golden Rule, — treating others as you would like to be treated.
When I set out to build a great team, I evaluate candidates on values such as integrity, accountability, work ethic and being a positive thinker. But, of course, because every team member is different and brings a different compass to the table, frustrations are bound to arise.
As the owner or managing partner of a law firm, you can deal with myriad problems, or frustrations, on a daily basis. These might include:
- My staff doesn’t show up on time. This directly eats away at productivity and profitability.
- They don’t listen. Communication isn’t just talking — it’s listening intently so there is no doubt about what is required.
- They don’t care about their work. If they don’t care, it will show, and the firm will suffer in the long run.
- They have no work ethic. If they’re on Facebook half the time, how are they going to meet deadlines?
- They don’t help each other. You can’t build a successful team without teamwork.
Note the distinction I’m making here. These aren’t problems with an employees’ skills, these are all related to an individual’s values.
To avoid these common frustrations, you must lay out what’s important to you and the firm. Clarify what really matters and educate your team about it. When that’s done, periodically grade your team to see who gets it — and who doesn’t.
Of course, great values alone won’t build a great team and a great practice. You need people with great skills, too.
Skills are, simply, the ability to do a task well, or expertise in a certain aspect of work. Some examples of skills I need in my great team are:
- Customer service. At the most basic level, we have to meet customers’ needs to be successful.
- Software expertise. Simply knowing how to use Microsoft Word is not an advanced skill. In today’s business environment, proficient use of standard office programs is expected. Test applicants on those programs. For expertise, I look for applicants with experience using CRM (customer relationship management) systems, document drafting software and writing spreadsheet formulas.
- Accounting accuracy. This is how we keep score.
- Drafting documents. I want staff members that can draw up documents, always making sure they double check their work against my notes.
The best thing about skills is that they can be trained. I can take a worker with great values and train her with the skills I need to build my great team.
Next time, we’ll talk about how you, as the owner or managing partner, can be a great part of your team.
I hope this information was useful to you, and if you have a specific case or a question, don’t hesitate to contact me.