Do's & Don'ts for Staying Safe in Tough Economic Times 
by Dustin A. Cole

The May 6, 2010 issue of the Wall Street Journal featured an article entitled "Bar Raised for Law-Grad Jobs." Predictably, it discussed the nearly nonexistent job market for the approximately 48,000 baby attorneys who came out of law school in 2009 with mountains of debt.

But that's only part of the story. The economic downturn has hit the entire legal profession hard. Especially hard-hit are the small firms and solo practitioners. While much is being written about larger firms, there is little about what's happening to the small-firm folks, and little available to support them.

Incidentally, the number of solo's and small firm attorneys nationally has suddenly jumped from a historical 55-57% of the profession to a shocking 63% in 2009. All those 48,000 law school grads from 2009 and the thousands from previous years do not bode well for the future of the small firm. Many of them are already hanging out their shingles in executive suites, their homes or online, angling for whatever business they can get for whatever they can charge. This does not bode well for the quality of consumer legal services - or the prices for basic legal services in general.

In my recent work with attorneys across the country to help them re-focus and rebuild their practices to counter the dramatic changes in the economic and legal environment, I have developed a "short list" of "do's and don'ts" that come before everything else:

1. Don't cut ethical corners.

A cash flow crisis can make the unthinkable become at least a passing thought. But cutting ethical corners is deadly. No matter how pressed for cash and how good the intentions are to repay the money, an attorney cannot dip into a client's escrow account "just for a few days" to get past a cash flow crunch. This is slippery slope that too often ends with disciplinary proceedings or even disbarment.

Also, in tough times, clients often suggest an "in kind" trade of your work for shares of their company. It's done often, but it's still unethical. As long as the client is happy, this ethical violation may never come to light. But should the client's deal go south, they will be looking for a victim - and a deep pocket - and you will be in the crosshairs. The attorney who owns shares of a company he or she is representing is de facto in conflict. And the question isn't "what did I do wrong?" but "what are my malpractice policy limits?"

2. Do stay selective - and focused.

Two big dangers here. The first is practicing outside your area of expertise. It dramatically increases your chance of errors and grievances which damage your reputation and threaten your license - and your livelihood.

The second is lowering your selectivity to take in clients you shouldn't. Too many attorneys equate "busy" with successful, and work hard for people who don't pay, or don't pay much. Jay Foonberg, famed practice guru, says "it's better to NOT do the work and not get paid?" Why? Because such clients steal time you should be using for taking care of your best clients, and especially for marketing to find more good clients. If a client can't or won't pay you for working for them, you should be working for yourself -for the clients who do pay, or on your marketing.

3. Don't fire your key people.

Don't destroy your infrastructure. When faced with a shortfall, the instinct is to cut the highest costs - your best people. But those same people are usually responsible for keeping order and efficiency in your office, and assuring great client service. Losing them will put more burden on you, stealing time for marketing, dramatically increasing your risk of error, and potentially frustrating your clients due to late delivery and poor service. It often creates a downward spiral: firings, degraded service, loss of business, more firings, more degraded service, and eventually, no clients and no practice.

Instead, look for innovative savings: ways to cut costs rather than a knee-jerk slash and burn. For example, form alliances you may not have considered in good economic times. Discuss employee-sharing with another practitioner, or contract some of that indispensable paralegal out to others who have let their best go.

4. Don't go into avoidance.

When the work slows down, lawyers can become victims of the old saying ?work expands to fill the time available.' In action, it looks like "my business is down, I don't want to think about it, and so I'll go check the inventory in the supplies cabinet."

The key to building a practice in good times or bad is self-management - using your time efficiently. Schedule specific times to do your legal work, your office management, and most importantly, your marketing.

5. Do continually improve.

"Kaizen," Japanese for "continuous improvement," is the watchword here. This is the concept that built Toyota into a world automotive and manufacturing powerhouse. When business slows, it's a perfect time to evaluate each step of the practice to assure the highest quality legal work and client service from first call to conclusion of the representation. The shift is from "what work do we have to do" to "how is the business working," and it's a concept that should become institutionalized in the practice in good times as well as bad.

6. Do get serious about marketing.

The marketplace is as tough as it has ever been, with more aggressive competition, price undercutting, and more lawyers practicing out of their specialty and into yours. At the same time, there are fewer clients, most of whom are holding on to their dollars more tightly.

The fact is, marketing has to be job one. The fact is that, if no one knows to ask you for help, your great legal skills are irrelevant. Schedule time for marketing, build a comprehensive plan of action, and stay close to your referral sources and clients. If you don't know what to do, find a legal business coach. A small investment in outside expertise could save your practice.

The bottom line is that, to make it through tough times, stay focused - first on delivering great client care to the right people, and second, on attracting more clients to care for.

Dustin Cole, president of Attorneys Master Class, is a Master Practice Advisor who helps attorneys build more profitable, enjoyable practices and create financially successful retirement and transition plans. For more information go to www.attorneysmasterclass.com or contact Cole at (407) 830-9810 or via e-mail at dustin@attorneysmasterclass.com.