Christmas is over and I trust you had a wonderful time. The New Year is now upon us, so what better time than the present to review how you are going to ensure that your firm not only survives but thrives in 2022 and beyond?
The challenge that most law firms have is a lack of confidence in those who negotiate fees because they fear losing the work or the client.
This is a powerful, yet negative motivator as it means that they are not in charge of those fee discussions, right from the start.
Hundreds or even thousands can be won or lost in a phone call, depending on the competence and confidence in having the right conversations with prospects and clients, at the right time.
Lawyers are undoubtedly highly intelligent, skilled individuals who know their stuff and care about what they do, often working long hours to satisfy their clients’ needs.
Like other professionals, they are not immune to the challenges which the business aspect of their work may pose and with the ever-changing legal landscape, this may be even more complicated for lawyers than other professionals.
Ever-increasing competition, much of which is a race to the bottom on price, the perceived threat of AI and the changes in the SRA’s regulations around price transparency may have been enough to unsettle even the most commercially-minded lawyer.
For those who are heart-led working with clients going through particularly tough times, it’s doubly difficult. Having those money conversations and managing clients’ expectations can be immensely challenging.
So even though their charge-out rates may well be set at the correct level, they may not apply them properly and automatically discount and over-service clients because they just don’t have the heart to, as they see it, add insult to injury by billing the full fee.
So what is the impact of this?
Clearly there’s a financial impact on the firm’s bottom line, resulting in a significant loss of revenue year on year. There is also an equally important factor which cannot be overlooked and that is the well-being of lawyers themselves, since not charging and managing clients effectively often leads to them working excessively and quite understandably being very stressed, tired and even overwhelmed.
Consequently, it may well be a contributing factor to the increase in mental health issues in the legal profession.
Lawyers are trained as lawyers, they are not trained in the art of conducting business, so how can they be expected to be experts at it?
It is therefore reasonable to expect that many of them simply have a lack of knowledge of how to talk to clients about the business side of the work.
Secondly, like any other human being, they have patterns of behaviour which are driven by their unconscious beliefs and their emotions, which, depending on their nature, may well lead to discounting and over-servicing of clients.
Academic ability, knowledge and even professional experience are one thing (well three actually); being competent and confident in business is of course a completely different skill-set.
Since most lawyers probably haven’t studied business, it’s hardly surprising or even fair to expect them to be good at it without adequate training; yet it’s vital to the firm’s success and the lawyers’ well-being.
It is important to emphasise that if you haven’t already got the message, that this problem cannot be solved by process and pricing training alone. From discussions with Managing Partners, CEOs and Practice Managers, it is very clear that they are tearing their hair out, frustrated with the amount of revenue which is being unnecessarily lost, as they don’t know how to solve this conundrum.
Yet there is a solution, once the dilemma is genuinely understood.
Since the problem is two-fold, it goes without saying that the solution must equally be two-fold.
1) Address the lack of knowledge.
2) Address the lack of confidence
Remember that a lack of confidence is emotional rather than rational. Human beings (and lawyers are human too of course) are complex, irrational and emotional.
This lack of confidence is usually what causes the all-too-frequent, unnecessary and often automatic discounting and over-servicing of clients.
Just one example is extreme people-pleasing behaviour, even at partner level which is not uncommon. It usually comes down to long-term unconscious limiting beliefs which drive them to consistently do work which is badly paid and work all hours of the day and night.
If not addressed, this may well be the slippery slope to overwhelm and a nervous breakdown.
Another less extreme example and also quite common is that of one of my past clients, a very experienced employment lawyer and part-time judge. During coaching, he said:
“I used to be constantly hunting on the prairie looking for the next kill, regardless of its quality. I never really considered my value. I wish I had learnt what Vanessa espouses when I was 25 and at law school.”
A third familiar problem is that employed lawyers often do not feel comfortable with their charge-out rate, look at it from a very personal perspective, comparing it with their salary and think:
“I wouldn’t want to pay that!
And it’s that very thought which causes the damage; they cannot help themselves and will discount their fees, just to make themselves feel better. That is normal human behaviour; to move away from pain.
Do you recognise yourself or some of your fee-earners in any of the above?
If so, what are you going to do about it?
My unique 9-step True Worth methodology, created as a result of my own inability to get paid my true worth many moons ago, will address the problems highlighted in this article.
Vanessa Ugatti is a keynote speaker, transformational trainer/coach and helps lawyers and others to increase revenue ethically, without having to work harder, by sharing her ground-breaking TRUE WORTH step-by-step methodology, leading to a wealthier firm and healthier and happier lawyers. For her 10-point cheat sheet to Get Paid Your True Worth go here: https://www.thetrueworthexpert.com/cheat-sheet-get-paid-your-true-worth