Is Business Professional?
Q: As a lawyer who runs her own practice, it seems like everything I do revolves around trying to make more money. Is it professional to always be concerned about turning a profit? Or should I focus more on other things?
A: All lawyers today need to be fully sensitive to the financial needs and operation of their firm.
The issue is one of business competency. The lawyer who has it understands the operation of the firm as a business (budget, collections, profit, loss), the firm’s billing structure, how each attorney determines firm profitability, and the importance of clients and their own businesses. Years ago I registered the phrase, “The Business of Law®,” because it is such an important truth that summarizes my consulting work—and because so many lawyers seemed to lack an understanding of the concept.
Running a law firm in a businesslike way improves the professionalism of the practice of law. The purpose is not simply to get more money for the lawyer; it also benefits the client. A profitable law practice is much more likely to avoid such ethical problems as dipping into client trust accounts, either as direct fraud or as a stopgap “loan.” Moreover, a law firm run as a business will also approach client service more efficiently—returning phone calls promptly, creating and adhering to a budget, providing sufficient details on clients’ invoices, etc. You can’t truly be a professional service business until you understand The Business of Law®.
Tags: Cash Flow, Management, Marketing