Sole practitioners often struggle to find and interpret meaningful practice data that points business-building efforts in the right direction.
New practice management software with great reporting features helps many lawyers find personalized information in an instant. But old habits – such as not bothering to look at the data on a regular basis or do anything about it – can be difficult to overcome.
Obviously, it’s necessary to be aware of your financial performance. Regular conversations with your accountant highlight cash flow, operating costs and, hopefully, profitability.
But there’s more to it.
I have a client who asks herself a set of questions each November, after reviewing her year-to-date financials. The answers set the direction and boundaries of her business development efforts for the year ahead.
- Who are my clients?
- Which services do they retain me for?
- Why me and not another lawyer? Can I validate my answers to this question?
- Which clients pay their invoices at which rates?
- Which clients frustrate me and why? What could I do about it?
- What new, unexpected clients have I retained this year? Which ones did I enjoy working with and learn from? Can this be leveraged? Does anyone else know I’ve now done work in this area? Should they?
- What will reduce my level of stress next year?
If you think this is an amateur way to create a business plan, you might be right. Here’s what happened when I did the exercise for myself:
- 30 minutes to answer the questions
- 20 minutes to validate and review the data I had on hand
- 15 minutes weighing options to act on one of the opportunities, rather than talk myself out of it
- 10 minutes to write to a trusted client who could (and did) help
That’s it. Not exactly an expensive or expansive process. Within a week, it led to three introductions, three meetings and one new client who entrusted me with exactly the type of project I was looking for. That’s data I can take to the bank. And that’s the kind of data I like.