The Golden Rule – when it comes to law firm management
I have been teaching lawyers for years, who want to leave jobs at
big firms to "fly solo" that being out on your own vs. flying solo
inside the establishment of a larger organization is mostly a state of
But just like Neo in The Matrix who took the red pill and suddenly
woke-up and could see clearly how everything really works, lawyers who
finally wake up and understand "The Golden Rule" when it comes to law
firm management, can adjust their own "M Theory" and set themselves
free to earn alot more money, have alot more free time, greater career
satisfaction and alot more fun!
And the results can even be kind of scary (in a good way), when lawyers who are already out on their own finally "get it".
Large Law Firm Economics 101
Everyone knows I founded How To Make It Rain.com specifically to help solos and lawyers in small firms with five or fewer attorneys. I don’t like to speak of it often – and I like to think of it even less frequently – but I actually have a bit of experience consulting with larger firms too (20-70 lawyers). And there is an economic formula that gets discussed behind closed doors amongst decision-makers in large firms. I think it was Hildebrandt consulting that was the first to coin the phrase "The Rule Of Three". It means that across a wide range of practice areas, in markets all over the country most law firms divvy-up the loot like this:
1/3 – Current Year Overhead
1/3 – Associate Salaries
1/3 – Profit For Equity Owners.
By applying "The Golden Rule" which I coined myself and states that "He or She who controls the clients in a law firm large or small, rules the law firm" to either the above formula or a similar economic formula for small firms (50/25/25) it becomes pretty clear that if you learn how to generate business you can get control over your destiny pretty quickly since there will always be associates who are only too happy to have work fed to them like housepets. But only a precious few who koow how to make it rain.