Attorney marketing colleague, Stephen Fairley, had an an interesting comment on one of his recent Facebook posts. I want to share the comment, by attorney Jules Cherie, along with my thoughts on the subject.
Here’s the comment:
“I know that many people will disagree with me, but the best thing I did was to stop trying to build my practice.
I find that just taking four or five personal injury cases per year is the best way to live both professionally and personally. You have more time for your clients and you have more time for yourself. You are always ahead of the defense and they can’t keep up with you. You also have less overhead. The more cases you take the more staff you need to manage them. This creates a mini-bureaucracy and then there is less personal contact with the clients. I like it when the phone DOESN’T ring.
I would also recommend that everybody read The King of Torts by John Grisham and take note of a character in that book by the name of Mooneyham. Contrast his practice to that of the protagonist.”
Here are my thoughts.
MARKETING
I assume Cherie’s new cases are coming in via referrals. If these are from clients, he gets them because he has built a career of serving those clients and earning their trust and gratitude. If they are from attorneys and other non-clients, they are the result of years of building his skills and reputation and relationships with those referral sources.
He isn’t building his practice today (marketing) because he doesn’t need to. He did it over many years. He planted seeds and is now reaping the harvest. Good for him.
BUSINESS MODEL
Knowing what you want, e.g., big(ger) personal injury cases, helps you to know what you don’t want (e.g., everything else). This is good. Specializing is good. Low overhead is good. Having little or no staff to manage and pay is good.
On the other hand, there is no leverage in a business model like this. It’s all about you and what you do. You don’t earn income off of other people’s efforts. If you get sick or want to slow down or retire, your income stops.
PRACTICE AREA
Four or five big(ger) personal injury cases can generate hundreds of thousands of dollars in income. The same is usually not true for divorce or estate planning and many other practice areas. If you earn ten thousand dollars per case or client, you’re going to have a lot of clients or cases to earn six- or multiple six-figures. This may or may not require more overhead and more “marketing”.
You can get big(ger) personal injury cases through advertising and other means, but the biggest and best cases usually come from referrals. To get those referrals you need to be very good at what you do, and many attorneys are not, or if they are, don’t yet have the reputation or connections (pipeline) built to get those referrals.
Although I’m sure Cherie is extremely selective about the cases he takes, he still has risks. Losing even one case, or a judgment or settlement well below expectations, could have a significant impact on his income. He also risks losing whatever costs he might invest in building the case.
On the other side of the risk equation is the fact that one very good case could bring in millions of dollars in fees, more than enough to make up for any loses he might sustain. In addition, there is arguably less risk in handling bigger cases with significant exposure for the defendants and their carriers, and thus potentially greater settlement value, than small(er) cases which are often not worth litigating.
CONCLUSION
Cherie’s practice has many positive aspects. It allows him to focus on doing quality work without the many distractions and burdens associated with running a higher volume practice. As someone who ran a high volume PI practice, I clearly see the appeal. But this business model isn’t for everyone and those who would like to adopt it need to remember that it’s not something that can be accomplished overnight. It takes a long time to build your skills and reputation and make the connections needed to enjoy a small volume referral-only practice. There are no shortcuts.
When I was practicing, I didn’t have time to read fiction. Now that I do, I’ll have to pick up a copy of The King of Torts and learn more about what I was missing.
Leverage is the key to earning more without working more. That’s what The Formula is all about.
