Practicing law profitably updated 2013

Practicing Law Profitably

Philadelphia 2009Updated 2013

Ronald L. Burdge, Esq.Dayton, Ohio

What I Learned From 35 Years in my

Lemonade Stand

© 2009, 2013 R.Burdge

Ingredients

Water

+ Lemon Juice

+ Sugar

= Lemonade

= Profit ?

Knowledge

+ Time

+ Effort

= Clients

= Profit !

• Agenda for Building a Practice

• Some Rules of the Road

• Knowing Your Numbers

• # 1 Law Practice Problem

Tips on Starting a Law Tips on Starting a Law Practice Without ClientsPractice Without Clients

Without Starving

“Real Life’ Version

# 1# 1

Read

Jay Foonberg’s

Book

# 2# 2

Market Yourself To Other Lawyers

1+ 1 + 1 + 1 + 1 = 1Referrals Matter

# 3# 3

Pay Referral Fees In Cookies

To Referring Attorney’s Secretary

# 4# 4

Get An Easy-to-remember

Phone Number

# 5# 5

Master Social Media Marketing

(Nobody Else Has)

# 6# 6

Avoid Costly Phone Book Display Ads

The internet is the phone book of this age

# 7# 7

Pick An Easy-to-find Location

For Your New Office

Near other Attorneys

# 8# 8

Create Your Own Web Site

Use A Catchy Name

Get 3 Url’s:1. Your Name2. Your Law Practice Name3. The Name of Your Specialty

# 9# 9

Limit Contingency Fee Cases

To ½ Your Case Load

(or less)

# 10# 10

The Best Advertising:

A Happy Client

Your Client’s Case is Your Case … Make It Personal

Your Bonus Time !

www. The Law Coach .com

Click on the picture

Read the Chapters in your spare time

Practicing Law ?

This is Not it!

Riches to Rags

TheKingofTorts

Melvin Belli

Filed Bankruptcy

-Fame

WithoutFortune?

Rags to Riches

He went from thinking about suicide to thinking about livingAnd made money in the process – Don’t Give Up - EVER

Old RuleOld Rule

$ in$ in-Bills paid outBills paid out

== $ Left Over $ Left Over (your profit)(your profit)

New Rule

It’s a Business

Run It Like One

The Name of the Game: Profit

“What do you mean, my paycheck will be a little late this week?”

Is this what your secretaryor your wife will say?

New Rule

Do What you Know How to Do

Be a Lawyer

Not a Business Manager

New Rule

Control Your Business ?

Hire a Business Manager

SCORE.org

Cheap

Easy

and Good

New Rule

Have a Budget

And Live By It

Lots of Forms Online For this

New Rule

Know Your “Break Even” Number

Know Your Daily Number

How much money

do you need to make today

To have a job tomorrow?

New Rule

What Are You Worth ?

Calculate Your Hourly Rate

By Reverse Calculating It

The next slide will tell you how

Know Your Numbers

EGN IGN = Hourly Rate

Expense Generating Numbers

Divided by

Income Generating Numbers

= Hourly Rate

Expense Generating Numbers

Taxes Rent

Salaries Telephone

Utilities Debt Retirement

Supplies Equipment

Repairs Advertising

Maintenance Insurance

Income Generating Numbers

Total Firm Billable Hours

(you and anyone else)

Total Firm Billable Hours

Attorney

Paralegal – Law Clerk

Secretary

Not all billable time is equal

Weight the Rates

0

0.25

0.5

0.75

1

AttorneyParalegalSecretary

Weekly Billable HoursWeighted

RateAvailable

HoursBillable Hours

Attorney 1 45 45

Paralegal .5 40 20

Secretary .25 20 5

Total 70

Reverse Calculate Your Hourly Rate

Example:

1 Attorney - $120 k Salary

1 Paralegal - $45 k Salary

1 Secretary - $35 k Salary

Reverse Calculate Your Hourly Rate

Expense Generating Numbers

Divided by

Income Generating Numbers

= Hourly RateLet’s look at an example

on the next page

Expense Generating Numbers

Taxes Rent

Salaries Telephone

Utilities Debt Retirement

Supplies Equipment

Repairs Advertising

Maintenance Insurance

= $7,000 / wk

Reverse Calculating Hourly Rate

Now add 15% to it:

$7,000 + 15% = $8,050 (EGN)

Why?

Because you will Always Underestimate Actual costs

(that’s just the way life works)

Reverse Calculating Hourly Rate

Now divide your EGN

By your IGN + 15%

Why decrease it?

Because you will Always Over-estimate Actual Billed Hours

Or some billable hours will go unpaid

(that’s just the way it works out)

Reverse Calculating Hourly Rate

$7,000 + 15% = $8,050 (EGN)

Divided by

70 – 15% = 59.5 hours (IGN)

= $ 135.29 Hourly Rate

so round it up $140

New Rule

Track Your Time

Bill Your Time

Get Paid for Your Time

Unless you are independently wealthy

And can afford to work for free

(lucky you)

New Rule

It’s a Business

Run It Like One

The Name of the Game: Profit

You can’t help people tomorrow

If you don’t make a profit today

New Rule

The Cost of Losing Billable Time?

You Can’t Afford It

New Rule

15 min / day = 1.25 Hr / wk

= 65 Hr / yr

65 Hr x $140 …... = $9,100When your time goes down the drain

Your money goes with it

You Can Have Bonus Time, or Money Lost

Hint – Bonus Time is a lot better

# 1 Practice Problem

Fighting

over Fees

Start from “Day One”

• Use Written Fee Agreement

• Get It Signed

• Detailed Time Records

• Bill Regularly

Monitor Fee Bills

• Keep Bill Paid Current

• Suspend Work if Need to

• Withdraw if You have to

Fee Disputes

Don’t Sue Your Client

Landry v Haartz

Nasty, nasty, nasty consequences

In Case of Doubt …

Write It Off

Learn The Lesson

Move On

Top 3 New Rules

To Really Succeed

1. Be a Lawyer, not a Manager

2. Know Your Numbers

3. Don’t Fight Over Fees

4. The Secret to Success ?

The Real Secret to

Financial Success ?You’re not going to believe this …

The Real Secret to Financial Success

Economists Studied it

Doctors Tested it

Psychiatrists Worked on it

Neurologists Proved it

They all came up with the same Answer

The Real Secret to Financial Success

Doing “it” for money

Doesn’t make money.

Doing “it”

For the sake of doing “it”?

That’s what makes money…

The Real Secret to Financial Success

They studied “it” at:

Harvard – 6 yrs, 30,000 people

Stanford, Syracuse Universities

Mayo Clinic, 2001, 1,200 people

John Hopkins Medical School, 2 yrs

National Academy of Sciences

National Inst. Of Neurological Disorders

etc

The Real Secret to Financial Success

“It” has been written about in:

Journal of Business Strategy

The Economist Magazine

Psychosomatic Medicine Journal

Social Science & Medicine Journal

Journal of Gen Internal Medicine

Journal of Economics & Finance

etc

The Real Secret to Financial Success

They All(doctors, scientists, economists, business professionals, etc)

came up with the same Answer

Giving Makes You Rich

See? I told you that you wouldn’t believe it … but it’s true

Giving Makes You Rich

It has been scientifically and medically proventhat when you give it away

(whatever “it” may be)You earn more money

No one knows why it works,It just does!

So, to make more money and feel better about it too:

• Give back to your clients– Do something for free once in awhile

• Give back to your community– Volunteer for a good cause – not just money

• Give back to your profession– Help others when called on to do so

Business Helpers

Practicing Law Profitably

Philadelphia 2009Updated 2013

Ronald L. Burdge, Esq.Dayton, Ohio

What I Learned From 35 Years in my

Lemonade Stand

© 2009, 2013 R.Burdge