Showing posts with label Manage Money. Show all posts
Showing posts with label Manage Money. Show all posts

Thursday, September 26, 2013

The Practice Target - a 6 month Transformation Program

If you found this, you know me, or someone you trust does. This is truly shameless promotion. Shameless because it's a great program! Heads up.

Well, I finally invested quite a bit in copywriters and designers for my baby, The Practice Target, and I have had the worst luck with getting a new site launched and a sales page up. If something could get in the way, it did. Which is why I'm going to give you information here. On my in-transition to G+ blog. 

I have a six month group program called The Practice Target, starting in October- so it's time for imperfect marketing action on my part. Here's the scoop, it's a LONG description, so you have the chance to really "get" what the program is about- in short, the next step is to schedule a conversation if you're interested.

Bad news? Not a lot of prep time or time to choose. And that's the good news too. Think about that.

Here’s How I Can Help You Grow

I've designed a 6-month program called The Practice Target. I’ll personally guide you through a transformation of your business. By the end of the course, you will have gone through a series of significant changes to your business.

The key point I’d like you to remember is that I’m there with you during the entire process. Each step is part of a gradual process that will result in an entirely new legal practice.

I’d like you to think of my course as a menu. I’ll offer you proven solutions and you’ll begin selecting the changes you believe are most important to your business. Remember, you are in charge. Over time, you’ll probably want to add more and more of the elements into the mix.

Very simply: each change you make will have an effect on your practice. When you implement more than one of these elements, your practice will begin to transform.

I’m not saying this to hype my program. I’m saying this because it’s the experience of the lawyers who have worked with me already.

Here’s Your Practice Target Roadmap

Month One: Time Management

It’s the number one frustration most lawyers face. Where does the time go? Most lawyers do not effectively manage their time. And what we’re really talking about is self management, not time management. Let me be perfectly clear. This has nothing to do with making lists or using alarms, buzzers or bells to keep you on task.

This is about your choice to manage your time and it sets the pace for all the work we will do together. There can only be one person managing your practice. And that person is you. This is the key principle which distinguishes between a well-run practice and one that runs in “last minute” or “crisis mode.”

We start our work together by putting you in charge of your time rather than the circumstances of the day.

Month Two: Setting Goals For Your Practice

In order to know whether a room is hot or cold, you need a thermometer. If it’s cold, you raise the thermostat. If it’s hot, you lower the thermostat. It’s that simple.

Before we work together on growing your practice, we need to take its temperature. Together we will determine which way to turn the dial.

Most lawyers I work with need to turn the dial up – some by a great deal. This is not a reflection on your skills, talents or compassion as a lawyer. It’s just that you didn’t take any courses on growing or managing your practice. You were just thrown in and what you've achieved is because of your determination.

Now it’s time to grow and set specific goals for your practice.

Month Three: Getting Clients – A Step By Step Plan

This month is about creating a marketing plan that works for you. In this section, we’re going to decide who is the best client for you to work with. (Hint: it’s not anyone with a pulse who walks in the door -even if they’re carrying cash.)

We’re going to decide whom we want to reach and how we want to get through to them. In addition, we will decide what we want to say to them when we have their attention.

It’s the non-sleazy marketing plan built to last. You will never be stuck sitting in their office wondering what to do first or next to get clients after this month.

Month Four: Your Marketing In Action

This is the month that will forever change your mind about the potential of your practice. This is where the rubber meets the road.

This is about making breakthroughs in your practice and discovering what is possible. Here we move from theory into day-to-day, boots on the ground. You’ll be transforming your practice and recreating it in your target image. Just like no two fingerprints are exactly alike – no two legal offices will do things exactly the same way.

You’ll be in at the bottom floor seeing the effect of the marketing program YOU chose. You’ll be astounded as you discover that getting more of the clients you want to work with is easier than you thought. There's no doubt that legal marketing can have a long cycle time, but by now, you will see a difference. You will know what to do to build your practice.

Month Five: Building Systems For Your Practice: Your Key To Having Clients and A Life At the Same Time

The way to run an efficient office is to have systems installed. This way, when something happens, your office experiences the equivalent of a speed bump, rather than a crash.

If you use systems to run your office, it’s a much more professional office.

Let me give you an example. You've planned this summer vacation with your family for a year. Your kids have been looking forward to it since you told them. You’re packed and ready to go when suddenly, disaster strikes.

A member of your team becomes ill or wins the lottery and quits. Someone else is going to have to cover that work.

And your kids send you pictures of their vacation via text message. Unless…

You have the right systems in place to make sure a new staff member can step into the job and be up to speed in rapid time. No, this isn’t Disneyland. Law offices like yours can be systematized so they run more efficiently. When I talk about systems, I'm talking about establishing processes, templates, checklists, standards and the like. I don't recommend specific technology brands, but we will discuss technology to support your work and workflow.

When your office is purring on all cylinders, you’ll never be torn about whether or not you can spend time with your family.

When your office runs without you dealing with every detail, you can be more engaged with your clients giving them the highest caliber representation.

Month Six: Sound Financial Management

I put Financial Management in here even though my clients are lawyers. Most of my clients can handle multiple trust accounts, crunch numbers in divorce settlements, and even keep track of wily accountants. But when it comes to tracking their own numbers, lawyers are way less effective.

Just about every law office I've worked with needs some guidance in this sector. Let’s face it, it’s exciting to see revenue coming in, but boring to truly manage the bottom line. Sometimes it’s scary to face the facts. Challenging to think about actually charging what your work is worth.

Now understand I put this last in the sequence for two reasons:

Number one: by this time I should have built a level of credibility in your eyes.

Number two: most of my clients are very hesitant to admit they need help in this area.

This falls into the area of “Shhh. Don’t talk about it.” No one wants to admit their practice is deficient in this area. But once we make some simple but solid changes, it will have a positive benefit on your practice and your life.

Bonus: Month Seven: Putting It All Together

I include a seventh month as a bonus. Here’s where you graduate but ONLY after I show you how to efficiently integrate all that you have mastered.

In this month, we’ll make sure that you not only know what to do and how to do it but you've also implemented it.

It’s one thing to know ABOUT the topics we've covered. It’s another thing to actually DO them. Day in. Day out.

I want to make sure you do not feel overwhelmed or as if you are still juggling those balls or spinning plates.

I want you fully comfortable that you can maintain your new level of achievement without frustration.

Then and only then will I feel that I have helped you fully achieve your goals.

What’s Next?

Remember how I told you I hate hard selling? Well it’s true. I’d like to invite you to a private conversation with me. This is a conversation – not a sales pitch.

If you are ready to end the frustration and grow your legal practice, I’d like to chat with you.

The consultation is probably an eye-opening experiences that you will encounter in thirty minutes or less. It is an enormously interesting experience. I’ve helped dozens of lawyers find enduring solutions to their practice challenges.

First... I will deeply listen to your situation.

Second... we will explore your own problems and solutions. You will see the possibility of creating this change with the support of a coach and a group of like-minded professionals.

Third ...we will determine if you really want to change your practice model.

Then....if you are a good candidate for program and only if growing your practice is something you really want to commit to... only then... will we discuss our Practice Target program. I've found that whether you have a new practice or have been established for years, we probably can get you better, faster, easier, and more…actually, enduring, results.

Last... You decide. No pressure. No sales. Just a powerful, personal meeting. I give you my word.

I’m either right for you or I am not. You will know it at the consultation that you have with me.

I have a high documented success rate for almost everyone that follows the simple, clear program we lay out together.

Because of the amount of time I spend with each client as well as the group, I actually have a hard limit on the number of clients I work with at any time. If I can not accept you into the October program, I will place you on the waiting list for the next time a place opens.

I am not looking for a commitment to the program. Just the opportunity to spend some quality time with you on the phone.

Please click here to fill out the brief questionnaire and schedule your consultation.

It’s the first step to a new practice.  #lawpracticemanagement#

Wednesday, February 6, 2013

51 Weeks of Pace: Measure What Matters

Every month end is a good time to check in and see if you need to change your pace to meet your goals for the quarter.

If you have a monthly review process, use it. If not, then here are a few key questions to guide you:
  1. How would you rank yourself on your "getting things done" record for the month? What needs to change? Anything you thought was important that you need to stop trying to do? (brochures, website updates) Any top priorities you must ensure you get done? 
  2. Looking at this month's invoices and your Work-in-Process, plus work you have signed and know you will invoice this quarter, where are you versus your quarter goals? [see note below for WIP definition]
  3. What's in your marketing pipeline right now? Is there anyone you can move from prospect to client? What activities need to be calendared to make that happen?
  4. Are you making 3 quality marketing connections a week? (referral sources, prospects, past clients)  
  5. Looking at how business is coming in- do you need to make more connections in order to meet your goals? Do you need to change your script in order to turn those connections into leads, prospects and clients more quickly? 
Whether you do a lot of analysis or take a shot with a few data points, start going through this process monthly. Measure what matters, and when you do- take action based on the reality of the results. Change your plan. Connect your actions to your schedule and calendar. Make sure you're delivering great client work and attracting new work at the right pace to meet your goals.

Every month you need to check in as if it were Groundhog Day. Like that little guy below, it's time to raise your head up and check in with the outlook for the future.

February Reality Check - Groundhog on Alert

Note:  WIP is the value of the amount of client work you have completed but not yet billed. It's a number that you want to have on your monthly financial dashboard. If the number is increasing, or if it's lower than you think it should be, then you might have a problem with a lack of work- or you have a delay in your billings. In a solo/small shop, you might think it's just extra work to track WIP, but I'm going to submit that it helps you remain disciplined about timekeeping and billing. This also reduces cash flow stress, because you're more aware of the timing of your revenues. Track it!

Monday, September 17, 2012

What would a financial reality check tell you?

Financial Reality Check By: Scott Waldron[/caption]
From  Reality check means a statement or action that helps you see what is really happening or possible. 

From Webster's New World College Dictionary: an instance of confronting or acknowledging the facts about something and thus dispelling unrealistic notions

Performing a financial reality check is the first step towards meeting your financial targets. To steal from the definitions above, confront the facts to see what is happening and what is possible. "Confront" is an important word choice, because when you chose to be a lawyer, you might not have realized you were signing on to be an entrepreneur. As an entrepreneur, however, you have to deal with money facts, which are often all tangled up in money feelings. That's why a reality check is required, to make sure that you're managing the facts of what is happening, and not acting on an interpretation of reality that is influenced by your feelings.

A financial reality check will help you know if what you're doing is going to get you where you want to go, financially.

  • How big is the gap between your actual and target financial results?

  • Is the gap getting larger or smaller over time? What's the trend?

  • Can you build a practice at your fee and volume levels?

  • What's the real lead time from getting in front of someone who has the problem you solve right now and turning him into a client? How long does it take for the marketing you do today to show up in your financial results?

  • How many qualified prospects do you need to connect with in order for one to choose you? Is your marketing activity level calibrated properly? 

  • How many clients and what types of matters do you need to bring on board to generate both the cash flow and income you want?

  • Is there any opportunity to build leverage into your operating model? Virtual assistance, in-office help?

You can see that the analysis will lead you to look at just about every aspect of your business. Start with the facts and see where they take you. Act on the facts, create action plans. Do more of what matters and less of what doesn't. Learn from where you are, don't beat yourself up for anything you coulda/shoulda done. That's a waste of time. Do the reality check and start where you are.

The Point

Review your financials on a monthly, quarterly and year-to-date basis. Don't go to the income statement level, choose something that is relatively easy to put together and benchmark against yourself. Once you start doing reality checks on a regular basis, you'll improve them over time. If you're using a book keeper and/or accountant, work with them to come up with a regular report that they give you- so that you spend your time acting on the information, rather than on creating the data.

Next time, we'll add in the target component of the reality check. If you have targets, fantastic- if not, I'll give you a simple starting point so you can start your fourth quarter fully locked and loaded!

Wednesday, August 29, 2012

Quick fix for cash flow problems?

If you don't have a solid set of marketing habits- processes around staying in touch with former clients, connecting regularly with referral sources, getting into the world and talking with people about the kinds of problems you solve- you are leaving the growth of your practice, and your income, to chance. What you aren't doing today will show up as a cash flow problem in a couple of weeks or months, or next year, depending on how long your "sales" cycle is.

You must make it as easy as possible for the people who have the kind of problems that you solve to find you, choose you, and engage you when they need you. Consistency is not optional.

Take a look at what you've been up to in the past months. Are you seeing the results? Look at what you're doing right now, this month. What does that tell you about how your practice is going to look in the future? Will you be crunched at year-end or socking away cash to cover taxes?

Time to close the books on August. It doesn't take a full year-to-date analysis- you know if you're on track to make whatever you targeted to make this year. If you aren't on track, make September a transition month. New resolve. Get out of your office, off the listserves, and into your clients' communities as the best lawyer for the lucky ones who hire you.

Wednesday, February 8, 2012

Is "Gazillion" Your Number?

A very smart financial services firm has a commercial that contrasts two neighbor's approaches to financial planning. One of them has calculated his "number" to the penny- while the other one has a target of "gazillion".  Of course, the number is the elusive "how much money do I need to...".

What's the difference between the two? They live in nice houses next to each other, seem to have similar lifestyles- but somehow, we know that one will be more successful than the other.  One of them has chosen his future and is working purposefully towards it, while the other is leaving it up to chance.

I've been working with lawyers and other entrepreneurs for about 8 years now.  Before that, I was a highly compensated, ladder-climbing workaholic.  When I first started coaching, I was shy about focusing on the money.  I was tired of all the stupid things people do in the corporate world because of money. I was all about loving your life, balance, and so on.

Monday, April 18, 2011

Are your free consultations paying off?

If you're doing free consults and wondering if you should be, the first place to look is at the return you're currently generating. 

  • How much time are you investing per prospect? (from initial inquiry through to the hire or not decision)

  • How many prospects turn out to be qualified -  ready, willing and able to hire you now for services you provide?

  • How many of those qualified prospects do you convert to clients?

  • Of those new clients, what percentage pay full fees? (on time and without hassling you, by the way)

You should be tracking these metrics as well as the source of the inquiries that come in to you.  If you block out the time you spend on new client inquiries, it makes it easy to track and analyze the process.  Once you know what your process is delivering, you'll be better positioned to make changes to create the return you want to see. 

In general, my philosophy is that I don't work for free and I don't think you should either.  But my answer to "should I be doing free consultations" is a not-so-profound "maybe".   There are a lot of different ways to pre-qualify prospects, to raise the enrollment rate on the consults you do, and to price and construct an initial consult so that it pays off for you AND your client. 

As usual, the bottom line is the bottom line.  One-time consults aren't going to be a profit center for most lawyers. The objective is to use them to create high quality clients. If free consultations aren't working for you, then something needs to change.

First, take a look at the facts.  If you start tracking, I promise you, you'll be more effective immediately. Any time you shine a light on a process, it improves.

Wednesday, February 23, 2011

Good Question: Can a "policy" stop you from giving your work away?

Try this: "I have a policy of not solving my clients' problems for free.  I'd very much like to work with you, I handle these issues regularly for other clients. The next step is...." Does it feel easier to do now that it's your firm's policy? You aren't one of those renegades who ignores policy, are you?

Yesterday I was yet again asked advice on how to move someone from prospect to client more effectively. Investigation turned up the fact that the lawyer was offering a lot of advice for free. This is a lose/lose. You don't solve the client's problem and you waste your time. Not only that, but your true clients would be really ticked off to discover you giving services to people that didn't have to pay.

Value your time, pay attention, and don't give your expertise for free.  Make it a policy.  If that doesn't work, think of your brain power as a tangible product with a price tag attached.  How about a bathtub? After all, a bathtub salesperson can't just let you walk out of the showroom carrying one because he likes you or found your bathtub problem interesting!

Make 2011 the year that conversations about money became second-nature.

Tuesday, April 13, 2010

Good habit: Manage Your Receivables

You knew this was coming. Once you have your time keeping and timely billing habits in place- the next one is to create the habit of managing your receivables. Here's how:

  1. Be clear re when payment is due. Make sure you go over this during your intake process, and include it on your statements.

  2. Review your receivables. Accounts receivables should be part of your monthly financial dashboard.  Anything over 30 days goes into 15 day increments until such time as you deem it uncollectable. Make this a standard practice and you will collect more of what you earn. Focus creates results.

  3. If a bill is not paid in 30 days, start your collection process. Don't assume a client has decided not to pay the bill, he might just be lousy at paying bills. Consider this your gentle reminder, do not think of it as a dire measure.  Foonberg suggests you use the words "Total Now Due and Payable" on the original invoice and "Total Now Due and Overdue" appropriately. Add a hand-written "thank you" note  to invoices as well.

Your collection process is going to be based on your clientele and your style. You should lay out steps on a calendar, and follow them for every client- steps that you discuss in your intake conversations.  Here's a sample collection process:

  1. After 30 days and until it is paid, a monthly overdue invoice is sent as part of the billing cycle.

  2. At 45 days, check to see if payment has been received, if not, a phone call reminder is made. This call might be made by the lawyer, or by a designated representative. The objective is to work with the individual to resolve the situation before you send the overdue invoice that will go out at 60 days.

  3. At 60 days, the lawyer follows up on the overdue invoice personally, a call or visit, with the objective of getting a commitment to pay. A followup confirmation with the payment agreement and timeframe should be sent by the lawyer. (email or hard copy)

  4. If you still aren't paid, continue to repeat the personal contact until you have either received full or some negotiated payment, or you decide to write off the amount. If you know collection is a long-shot, you have a write-off to make. The decision to go into arbitration or to take any legal action is outside the scope of this post.

The longer you wait to collect, the less likely you are to collect. It's a fact. Billing consistently and acting on unpaid invoices will ensure your clients are clear on what they owe. Uncollected fees aren't income. As soon as you start acting proactively to manage receivables, you'll improve your realization rate.  If you hate doing it, outsource it. 

The real goal is to have an effective client selection process, to manage client expectations about fees and create such high-quality invoices that your clients pay immediately. If your clients are in the habit of paying, you don't need to maintain this habit of managing your accounts receivable! Until then...

Thursday, April 8, 2010

Good habits: Bill Promptly

Speed of billing is one of the levers you can move to improve your cash flow. Take it seriously. It's the 7th of the month, if you haven't gotten last month's bills out yet- make it your priority. Keep track of your time on a daily basis, write quality billing descriptions the first time and use billing templates in order to get your bills out with the least amount of pain possible. 

If you're drawing down a retainer, you should still get a statement out promptly. This keeps your clients up to date and ensures that any replenishment requests don't come as a surprise.

Until you've billed for your work, you can't hope to collect it. Put a regular system in place and stick to it. If billing is something you hate to do- step up your marketing and create a budget for outsourcing the task! One way or another, get your bills out consistently.

Billing is a big ole frog for many of us. Well- it's National Frog Month, use this prompt to get rid of any frogs on your plate now and to keep them OFF the menu next month!

Note: for more about frogs, see Brian Tracy's classic book, Eat That Frog!

Friday, February 26, 2010

Afraid to face your financials?

Fear of the facts is something that puts you in good company! Two weeks before she was slated to ski in the 2010 Olympics, Lindsey Vonn injured her shin.  In an interview that aired during the opening coverage, Lindsey admitted that she avoided having the injury diagnosed. She didn’t want an MRI. She didn’t want an x-ray. She knew her dream was in danger and she didn’t want to face it. She didn’t want to be taken out of the games.
Many of my clients feel the same way about their financial results. However, just as Lindsey found, “not facing” is different than “not knowing”. She didn’t have the details, but she did know that she had a serious issue.  Eventually, Lindsey needed to have her injury diagnosed in order to treat it most effectively. Similarly, you need to understand your financial situation and real prospects in order to make the best decisions for your practice.

Monday, February 22, 2010

Afraid your fees are too high? For whom?

When I hear this, my first question is always “too high for whom?”  My general rule is that unless you are priced far above every other lawyer, then business lost on price is business you shouldn’t be taking anyway. If you didn’t have financial pressures, you wouldn’t miss those clients, so don’t spend your time or energy worrying about losing them. Work with clients who value you as much as you value yourself. Being slightly out of price reach is a way to build your positioning over time.
Here are some things to consider when you set your fees:

Wednesday, July 8, 2009

Do you need a "Financial Health Day"?

Ron Lieber's plan, "A Day Off to Tackle the Financial To-Do List", in Saturday's NY Times, is perfect if you've been intending to get a handle on your financial situation and/or paperwork- but keep putting it off.  Lieber likened the concept to the more familiar one of taking a "mental health day". Financial health is a definite factor in my own mental health, so I love that connection.  Worrying about finances is best addressed by spending the time to get the facts and make a financial plan.

Monday, June 1, 2009

Considering discounting your fee? Watch this first!

Watch this YouTube video the next time you feel pressured or even tempted to discount your services!

The golden rule is to work with people who value your work as you do. Sure, there may be times when you make a choice to work for less than full fee. Do it for love of the work, or as a contribution, or simply because it's something you want to do. Never do it because a client is pressuring you.

Nuff said. Discounting is a discussion that shows up persistently AND consistently. This little video should go into your bag of tricks when it comes to dealing with the topic!

Tuesday, October 21, 2008

Good Question: Do you realize what you're worth?

You decide what you are worth. You set the fees and determine what and how you bill. What do you want to make? Market levels are relevant; do you play at the high end of the fee schedule? In the middle? What do your clients expect to pay for your experience and services? Will your clients value you as you do yourself? In a purely logical world, you set fees, charge for services and monitor the results, reevaluating your strategy if indicated.

However, this conversation is not just about "value". It's about money. The topic of money is never purely logical. Setting and then asking for appropriate fees can be incredibly hard.  We tend to settle for less than we (secretly) think we are worth. As my corporate career advanced, my compensation structure was negotiated for me by a recruiter. Invariably, the offer would be far better than I would have asked. However, it was never more than I knew I was worth. As a solo or small firm lawyer, you need to stand for yourself as well as those recruiters did for me.

Do any of these four things and you'll never earn what you're worth:
  1. Set your fees too low or give frequent discounts - ask yourself if you're satisfied with your fees
  2. Offer free services or get caught giving more than you intended- for example, a free intro consult that turns into something you should be paid for
  3. Write services off - because you're not comfortable asking for the actual amount, even though you know the full fee is legitimate and the work should be valued at an amount greater than you're billing
  4. Allow clients to leave invoices unpaid

Monday, October 6, 2008

Financial Management Basics- Create a Calendar

Whew! I'm always relieved when "end of month" processing is completed. Just like you, CFO (& bookkeeper) isn't my favorite role as an entrepreneur!

Anytime you create a system to get things done, you improve operating efficiency. Yet so many firms have no real processes related to financial tasks. As always- I encourage you to connect to your calendar! In this case, it's a separate financial calendar, showing all planned activities related to financial management.

The calendar isn't date dependent, rather, think of a blank calendar and week 1, week 2, etc. That way you don't have to think about the actual 1st or last day of any month. You can create one calendar that works for every month. For example, you might review preliminary bills the end of the third week of any month. You might plan to mail invoices on the first or last Friday of any month.

Tuesday, July 1, 2008

Don’t like the financial forecast? Focus & change it.

I'll assume you're interested in this financial management conversation and have been taking action. By now, you know where your financials stand as of the first half of the year, and you have an idea of where you'll be at the end of the year. What next?

Tuesday, June 24, 2008

How & Why to Create Financial Forecasts

Focus brings results.  Get a handle on your results year-to-date, then forecast them going forward. Make choices about where to spend your time and money. The aim is to get what you want. Intentionally.

Start with a month by month spreadsheet, using the picture you already created for the first 6 months of the year. (OK, or 5 months, with a June forecast that you're fairly certain of) This blog isn't the place to specify line items, so use your judgement; what's the highest level of detail that will be useful in making decisions? You can always add detail later, start at the level you find meaningful.

Do keep fixed expenses separate from expenses that will vary meaningfully at different levels of activity. (In other words, if you're going to buy a building, forecast the expense increase on a separate line. If you're going to add more staff, be sure salary expense is on its own line, but don't include a line item for increased toilet paper expense.)

Quick and dirty forecasting: (all right, quick might be an overstatement)
  1. Annualize what makes sense (office expenses, salary expense, anything that is predictable at the approximately the same monthly rate)  Note- if you there were unusual/one-time revenue or expense items in the first half of the year, be sure you pull them out before you annualize.
  2. Incorporate assumptions that have a high level of predictability, such as a certain level of revenue you are attracting consistently, retainers you've nearly signed, salary expense related to adding an assistant in September, rent when you move out of your home to an office, etc. DO write them down, and DO add them on their own lines in the appropriate month so they are easy to add/change/delete.
  3. Apply percentage increases if it makes sense, using YTD results and emerging trends. Again, document assumptions and incorporate them in a way that it's easy to change them and see the impact.
  4. Make some wild-ass high/low assumptions. These are usually going to relate to revenue & capacity. If you think your first half marketing will pay off, do you want to throw in 40% more revenue over 3rd quarter? If so, do you need to add a staff member? Computers? Office space?
  5. Create "bottom-line" scenarios using your high/low assumptions
Unless you're reporting to shareholders and analysts, the value of forecasting is in the process, not the accuracy. If actual results vary wildly from forecast, you'll see why and change what you're doing in time to change the results. (or you might change your assumptions and see what's more likely to happen)

The standard is "directionally correct". Your billing system and other software should provide data and reports. If it's an option, have your accountant create a forecast for you on a monthly basis. Don't over-analyze. Do your best. The other thing about forecasting is that the more you do it, the better it gets. (& easier, because eventually you'll figure out how to automate or delegate it)

Bottom line- you're the CEO, you're responsible for results. Having this information and blocking the time to strategize and change your resource allocation isn't optional.

Friday, June 20, 2008

Get the facts: 1st half results are nearly in!

The last week of June starts Monday. Time to prepare the billings that will wrap it up for the first half of the year. Great time to assess your midyear results. Get your books in shape for June month-end. You need to have access to data about your business in order to create a rough forecast of where you'll be at the end of the year.

On the revenue side, run your sample bills. Clean everything up so that June invoices go out in record time. Evaluate your accounts receivable- anything you need to write off? Are there any adjustments to the first half of the year that you haven't made to date?

On the expense side, be sure you're current. Ensure that you've recorded and categorized expenses to the point where you can tell what the outlay covered. If you added staff, be clear about when that salary expense kicked in and how it changed your expense picture. Make a note of any expenses that changed materially over the first six months of the year.

Review your client base. Look at the number of clients you are handling and track when they came on board. You'll want to see the rate of new client business and understand what portion of your first half revenues came from new clients. Be sure you've got an idea of how much of your current book of business will carry over to second half. If you have revenue (or, better yet, profitability) by client- make sure it's up to date.

And lastly, what's your personal income? What have you paid yourself month to month? Put the numbers together.

If you aren't using some sort of management dashboard, this is the kind of data you'll use to put one together. If you have all the information, but you haven't been looking at anything but your bank balance, now's the time to take it up a notch.

Bottom line- end June with a clean and updated set of books and indicators. Take the time (or pay someone else) to collect information that you can use to do some basic analysis and forecasting. Whether or not you have a business plan that you review periodically- you're the CEO, it's time to take a look at the facts.

Thursday, June 5, 2008

Should a solo lawyer pay herself a salary?

Solo lawyers must pay themselves salaries.

First- your business exists to serve your life. Your practice is a part of your life, but you also need to take enough money and free time out of it to have the big-picture life you want. Do not be satisfied with leftovers. Figure out what your target income is, then put yourself on salary. Be realistic.

Monday, May 19, 2008

What do you do when you don't get paid?

It's easy to get so caught up in billing that you fall behind in collections. Realization, a key financial management metric- asks "what percent of what you bill do you collect?" Until an invoice is paid, it is a receivable. You can see that no matter how much you bill - if you don't collect, you aren't in business.