I hope you’ve had a great weekend.
I hardly slept a wink last night thanks to Mr. Peanut who was walking all over me all night long because he’s afraid of thunder.
I almost put the GoPro outside to capture the awesome power of the massive lightning and thunderstorm that rolled-in over Biscayne Bay ahead of tropical storm “Erika”. The good news for you (and the bad news for me & Mr. Peanut) is that by all predictions, it’s looking like I’ll get a second-chance to capture some awesome thunderstorm video tonight.
This made me think about a couple of lessons I’ve been meaning to get around to sharing with all of you to help you get better at predicting what’s going to happen in your business in the coming year, quarter and even in the weeks-ahead.
But before I get to the mechanics of this lesson we have to get a couple of points out of the way so you’re in a proper mindset to embrace this lesson.
…and to embrace a new way of running your business and living your life.
The word is “Predictability” Which comes from the word “Predictable” meaning “: to declare or indicate in advance; especially : foretell on the basis of observation, experience, or scientific reason”.
Either you demand a certain degree of predictability in your business, or else you’re tolerating a lot of bullshit.
A thousand years ago human beings had the same innate intelligence as we do today. But they had less information. And so they were not able to predict the weather nearly as well as we can predict the weather, today. Consequently, thousands of people died every year or suffered catastrophic loss in previous generations, because of storms which were predictable, but which were not predicted.
You see, the causes for the weather haven’t really changed.
If our ancestors a thousand years ago (or even a hundred years ago) had the same information we have today…they might well have predicted the weather, taken precautions and then who knows how much more advanced our society would be today!
The key is to understand that whatever can be predicted today, was equally predictable in the past.
Except in the past, people were not AWARE of the predictors. And so they often reached the incorrect conclusion that the world around them was un-predictable.
You see where I’m going with this, don’t you?
The causes that precede the effects that affect you the most in your law firm are quite well known and pretty well understood by people who make a study of law firm management.
Just like the causes that precede the effects in the weather are pretty well known these days to people who make a study of the weather.
Just like causes which precede the effects in your own line of work are pretty well known to YOU.
So here’s the thing….
I don’t presume to know how to predict the weather. Because I didn’t make a study of that body of knowledge.
Even though the weather affects my plans, my property, my comfort and my safety.
Instead I rely upon experts who know more about how to predict the weather than I do.
Nor do I presume to know how to predict the effects of a myriad of causes which affect my legal rights.
That is why I hire commercial real estate attorneys to advise me when I engage in commercial real estate transactions. And I hire business attorneys to advise me when it comes to signing important contracts. And I engage the services of an estate planning attorney, an accountants, a tax planner and financial advisors too.
You already know the reason why. In fact you give this advice every day to your own clients. And it’s GOOD ADVICE. Except you may not be following your own good advice. And that’s a double-trouble problem that may be suppressing your profits in ways that might surprise you.
DISCLAIMER: You Already Know This Next Part…
You already know it would be (insert your adjective of choice) for me to act as if my expertise in one area of my life and business (how to manage a small law firm) should suddenly qualify me know about everything else in my life and business.
But what happens to us in law school?
What causes us to get our heads turned-around so much that we come out of law school “feeling” as if, just because we’re familiar, qualified, competent perhaps even great at understanding, predicting and managing the relationship between one set of causes & effects…that somehow we should feel uncomfortable about asking for help in a wholly unrelated area of information?!?!
Could it be so simple as the fact that it was drilled into us never to ask a question we don’t already know the answer to, and somehow we forgot to apply common sense to that advice by recognizing it only applies at trial?
I mean, not asking questions unless you already know the answer is moronic outside of an adversarial setting like a trial, don’t you agree?
And so hundreds of thousands of lawyers who own solo and small law firms across the country, tolerate owning a shitty business that could be so much more profitable, predictable and fun…because they have it twisted-up in their mind that being great at the practice of law somehow equips them to be competent at predicting the weather or managing the BUSINESS of a small law firm.
To give you a sense of just how ludicrous this notion is, just imagine the most brilliant criminal defense lawyer you know, handling a complex estate planning matter.
…or if the best intellectual property lawyer you know trying to to handle even a simple real estate transaction.
…or anyone who has not made a concentrated study of how to manage a small law firm, going to their family and saying in essence,
“…even though I have never studied any of the 7 main parts of a law firm and I may not even know what they are, you don’t have to worry because I have the business of my law firm under control.”
Here are three simple questions you can ask yourself, to predict the revenues, expenses, staffing requirements and the amount of physical space your business will require in 12 months, in 90 days and in the coming weeks:
1.) How many net-new cases or matters were opened in the last 90 days (and what’s the average value)?
2.) What is the average ratio of cases or matters to attorneys and support staff (and how is each position compensated)?
3.) How much and how do you plan to invest on marketing and training in the next 12 months (and will you track ROI)?
And keep in mind:
If you tell a weatherman that a warm front is about to collide with a cold front over a hot sea, the weatherman will be able to tell you what to expect in the skies next week.
If you tell an estate planning attorney (for example) that you’re NOT going to leave instructions for your family as to how you want your kids to handle your affairs after you’re gone, the estate planning attorney should be able to tell you what to expect is going to happen to your family and the reputation you leave behind.
And if you tell someone who KNOWS about the business of how to manage a small law firm the answers to these three questions above, that person should be able to tell you pretty much everything you need to know about what’s likely to be happening in your life, because of what is likely to be happening in your business 12 months from now, 90 days from now and with a bit less accuracy, in the coming weeks as well.
The number of net-new cases multiplied by the average value will tell you how many cases your business had better be ready to handle, gross revenues, the number of staff you’ll need a year from now and in 90 days and how much physical space your firm had better be prepared to provide for staff and clients alike.
The average ratio of attorneys and staff : cases or matter and their comp structure will tell you when you are going to need to begin hiring, training and bringing more staff on-board to stay ahead of the growth-curve. This in turn will also tell you what your overhead is going to be which you can deduct from projected gross revenues (above) to get a pretty good idea what your profits will look like.
Knowing (meaning, having a plan) for how much and what you’re planning to invest on marketing and training will tell us a lot about where you will be spending and how much of your time you’ll either be enjoying or cursing yourself for not planning-ahead, a year from now. This information with also tell us what your firm’s revenues will be a year from now and whether or not you’re going to find yourself in the middle of a shit-storm or enjoying a wonderful day at the beach.
And now I have three more questions FOR YOU…
a.) Do you have the courage to face-up to these questions, or will you stick your head in the sand and keep telling yourself that your life and your business are unpredictable and so what’s the use?
b.) Exactly what part(s) of your previous training and experience in your area of brilliance do you believe prepares you to tackle these important questions on your own?
c.) What advice would YOU, YOURSELF give to one of your own clients if they were about to head-out into the wild and wonderful world of business unaided by information, training or any advisors?
Do the right thing for yourself and your family and your clients too.
Schedule an appointment to speak with a member from my team about the future of your business and how having an outside CEO can help you make it so much more predictable, profitable and fun.
OK I hope that whether you follow my advice and schedule an appointment or decide to keep going it alone, that you at least take the time to get the answers to the questions above and make your business and your life more predictable this week!