Practice Management

I once invested in a bankrupted electronics company.  It had fallen on hard times.  The father who had started the business had nursed it to where it was.  It was left to his children.  When the economy went through a down cycle and money needed to be saved, the children did what?  They fired all of the sales people and the marketing people.  Two things happened.  One, of course, business immediately fell through the floor because this was a business that required constant contact with its industry.  Two, the sales and marketing staff went down the street, having nothing else to do, and opened up a new company.  Because the sales of the established business were falling so aggressively the new company established by the old sales staff was able to steal the rights to some major and necessary product lines from the their old employer.

Do not believe it can happen in a law firm environment?  You are wrong.  It happens in a down cycle all of the time in a couple of different ways.

First, when money gets tight a fight almost always breaks out over who is actually doing work and who is not actually doing work.  Well, of course the rainmaker is doing less physical work -- interviewing clients, drafting pleadings, attending court, etc.  He or she is also likely taking out a good chunk of change out of the firm.  The fight turns into resentment and the rainmaker is either tossed or gets mad enough to leave.  And the rainmaker takes loyalist with him.  Every wonder about those lateral transfers?

Second, you are an attorney who works for yourself or in a small firm, you feel overwhelmed trying to earn money that you neglect your relationship and network building that allows you to continue to practice effectively.  You in effect fire yourself.  Like the cooking shows on TV you do not know whether to cook against the clock or to talk to the camera.  You elect to cook against the clock on the work that is before you.

When things turning down, the last thing you want to think about is collaboration with other attorneys for the actual work that needs to be performed.  You need the money and you do not want to split the fees.  But, collaboration is the best of all worlds because the attorney with whom you are working does not get paid.  He or she only get paid when you get paid.

It is vitally important that during down times that you do not fire yourself or your marketing staff or rainmaker.  The opposite is true.  You need to continue collaborating and doing everything that is necessary to maintain those relationships.  Then, when the upturn comes, and it will, you will be ready to reap the rewards.