There seems to be no end to what you could spend money on when it comes to building a law practice. Just a short list includes rent, employee salaries, outside vendors, software, website development, bar association dues and meeting expenses.
Even if you are a lawyer at a large firm or company where many of those expenses are covered, you may find yourself spending your own money from time to time. Perhaps there’s an educational program or conference you want to attend but the firm won’t cover registration fees, travel or hotels. Should you take the money out of your own pocket?
Chris, a solo practitioner, recently described a typical conversation with her husband. More often than not, whenever she considers spending money on her practice (on a bookkeeper, for example, or software that could streamline operations), he reminds her that every dollar she spends in the practice is one less dollar she has to deposit into their daughter’s college fund. As you can imagine, Chris is left feeling guilty about spending the money – after all, “good” mothers don’t selfishly jeopardize their child’s future – so Chris continues to wish her law practice were more organized, lucrative, less stressful and more personally rewarding.
When you want to advance your legal career, increase your earning power or grow your law practice, money decisions must be made. With so many places to put limited financial resources, though, how can you make the right decision?
Ask Yourself This Question Before You Spend Money
When it comes to maintaining and growing a law practice, there’s a great deal of truth in the old adage, “you have to spend money to make money.” With so many competing demands on your wallet, it’s worthwhile to have a clear standard by which to make spending decisions.
When given the option to spend your money on your practice, ask the following question:
Is the money I am considering spending a cost or an investment in my future?
In other words, are you spending money to make money? Will there be a tangible reward? Or are you spending money for some other reason, such as impressing others, making someone else happy, because it’s what other lawyers are doing or because a slick salesperson talked you into it?
Examples of expenditures that could be considered more an investment than a cost:
- Attending the annual and mid-year conferences of the trade association where your target clients congregate. Why? Because you’ll have the opportunity to develop and maintain relationships with the people who are in a position to hire you. The expected long-term payoff is not just more clients, but the ideal clients for you.
- Hiring a part-time bookkeeper to handle billing and trust accounting on a monthly basis. Why? Because you’ll be paying the bookkeeper less than your billable rate and you free up time to work on those high-level activities (legal work) that only you can do. As an added bonus, having expert help may reduce your stress, allowing you to focus on growing your practice rather than just treading water.
- Enrolling in programs that help you grow your expertise, such as “Strategic CLE” courses that ensure you are well-positioned to serve your clients and be considered a leading authority in your field.
- Learning the critical skills and mindset you need to grow a robust book of business and fill your practice with a steady stream of clients.
Examples of expenditures that might be considered a cost rather than an investment:
- Hiring an office decorator to design a fancy reception area with high-end furnishings when a simple, professional lobby would suffice.
- Creating a website using an expensive web-design firm when what you really need right now is nothing more than a streamlined online presence with language that speaks directly to your target market and positions you as an experienced professional.
- Placing static print advertisements in community newspapers or law journals.
Other Money Decisions Will Keep Coming Up
Other money decisions that will likely arise as you pursue your career in the law and grow your law practice include the following: Should you . . .
- Sponsor an event to “get your name out there?”
- Buy a table or a seat at that charity benefit?
- Join another section of the bar association?
- Engage an outside vendor?
- Take on that client at a lower fee than you typically charge?
- Treat that networking contact to lunch?
- Hire a full- or part-time associate, paralegal or assistant?
Yes, it is true to an extent that you have to spend money to make money. But instead of just spending money, invest it in people and programs that will help you advance and grow and build a foundation from which you can create the career and practice you truly want.
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