The magic of a franchise system is that someone brilliant develops a business system and then documents every step that must be taken to permit someone less capable to follow the system and replicate the results. So, wherever you go in North America, someone much less accomplished than Colonel Sanders can sell you a bucket of chicken that is just as tasty and unhealthy as the original.
I am of the opinion that, generally speaking, lawyers are not particularly good businesspeople. I attribute this to the following:
During my career, I was fortunate to work with three phenomenal law clerks. I trained two of them. The third was trained on Bay Street. Each of them was exceptional because they were intelligent, capable, motivated, well-trained, and empowered.
Rarely accused of being overly immodest, I will take credit for empowering them.
How good were they?
Since lawyers tend to think that they know a great deal more than they do about just about everything, they often choose to do things themselves rather than pay money to experts to do them.
One of the things that lawyers typically do poorly is performance reviews.
In the first draft of this post, I set out as a fact that I had a question which would stump 95% of all lawyers. My wife read the draft and said that I was wrong. There is nothing unusual about that. I am wrong plenty and she is quick to notice when I am.
I have been known to be critical of large law firms. Not today. Say what you will about Big Law, at least large law firms are smart enough to hire professionals to manage their businesses. For that reason, I am going to leave them out of today’s rant.
Instead, let me turn my wrath on small and medium sized legal practices. You know, the ones typically headed by a few brilliant legal minds who are way too intelligent to need help from people with real business expertise.
I once had a partner who was a “heads down, get your work done” type of guy. Knew his law. Billed like a fiend. Not much of a people person. Let’s call him Ken.
I have decided not to pick on Big Law today for a change. Let’s talk about smaller firms with entrepreneurial founders instead.
Sometimes lawyers call me and tell me about how they feel about their law firms. They don’t call me if they are happy. They call me when they want out. Out of the firm, out of their practice area, out of private practice, out of the practice of law altogether. Out of something.
I have heard a good number of tales of woe. One interesting theme is around the flaws of law firm founders. Serious flaws. The type of flaws that drive good people to head for the exits. I have termed this Founder Deficiency Syndrome. It sort of has a nice ring to it, don’t you think?
In law firms, most lawyers typically get paid for two things: (1) billings; and (2) bringing in clients. Of course, there are a few lawyers here and there who get paid just for being brilliant, but then again, too few to mention.
Today I want to focus on lawyers who get paid for bringing in clients. Time and again during my tenure in law firm management, I saw lawyers who were billing and earning a lot of money, but who did not have a sophisticated understanding of the financial implications of their relationships with their clients. Usually this came up when they were thinking about leaving one firm and joining another firm. They would tell the new firm how much they were billing and give their best guess as to how many of their clients would follow them. More often than not their best guess was wrong, and not by a little bit, but by a whole lot. Rarely was the mistake that more clients than expected followed them to their new home.
I became a partner of a law firm and attended my first partners meeting many years ago. Since my firm was a medium sized firm, partners meetings were important since the participants actually made decisions (as opposed to what happens in large firms where an executive committee makes most decisions.) Each partner had an equal vote.