Growing your law firm in 2023 is going to be more complicated than in past years. While face to face interactions, dinners and formal presentations are effective, they take time. That’s your one asset that’s the most scarce. There are only so many opportunities to do these types of activities. It’s why firms rely on other forms of marketing, including websites, legal directories, videos and more. You need a tool, or series of tools, promoting your firm’s brand 24/7. Unfortunately, there’s a good chance you’re missing a key component.

A February article from JDSupra, highlighted excerpts from a December 2022 report, “22 Legal Marketing Statistics” by Good2BSocial. The report focused on the top 200 law firms in the US. Two stats immediately jumped out:

I found this interesting, as someone who produces custom-branded podcasts for law firms, financial and accounting professionals, healthcare professionals and others. In the Louisville market, I also service 2 law firms that actually have 2 separate podcasts.

So, the obvious question is, does your firm have a podcast? Has your law firm found its voice? If not, how much longer are you going to continue missing out on one of the most effective, content marketing tools available to you?

Avoid Billing Errors by Performing Audits

When was the last time you audited your vendor invoices? I’m about to tell you how I recently uncovered thousands of dollars in billing errors by 2 major law firm vendors. I’m also going to give you 4 specific situations during which you need to proceed cautiously. There are steps you can take to minimize the time you waste dealing with billing errors and chasing down the credits you deserve.

For many attorneys and other small business owners, cash flow is extremely important. However, the pressure of deadlines, preparing for trials, managing client requests, fielding new client inquiries, dealing with staff issues, and various other demands leaves little time for auditing invoices for contracts you’ve already negotiated. Nevertheless, neglecting this important activity can have a serious impact on your cash flow.

Earlier this month, I helped a small firm by reviewing a series of invoices.  I discovered FindLaw billing errors of over $8,200. Add to that amount the $8,700 the client would have been billed in the upcoming months because of the errant contract item.  Together, I actually uncovered what would have been close to a $17,000 loss for the law firm. It’s quite likely that the attorney would have never caught the billing errors.  The vendor would have continued to overbill the client and the mistake would have continued.

The challenge for solos, small firms and even larger firms is that extra time is the one thing no one seems to have. Consider the time you’ll spend actually trying to interpret the product descriptions listed, confirming that the prices match the contracted amounts and figuring out why the invoice may include charges from multiple time periods. I’m sure you’ll understand why firms just assume the bill is correct. Many of these billing errors can be overlooked because the discrepancy is diluted over a series of monthly invoices. They may not catch your attention because discrepancy doesn’t occur as an aberration on just a single invoice. But remember, even a slowly dripping pipe will eventually cause a flood.

4 Key Times to Review Your Invoices

When you work with large companies, like FindLaw and Martindale, the opportunity for billing errors can increase. I recommend you pay close attention to your invoices, particularly around these four occurrences:

1. During the first 2-3 months of any new contract. Your initial bill may be issued on a pro-rated basis. You’ll need to wait a month or two to make sure you’re able to see your billing for a full month. If you have questions, it’s always a good idea to contact your sales rep to have him/her answer them. Remember to ask questions until you’re confident you fully understand the issue(s).
2. Any time new products or services are added. This is especially true when you’re dealing with FindLaw and Martindale.  New products are actually added via stand-alone contracts, not simply as an addendum to the existing contract. The new contract term (e.g. 12 months, 24 months, etc.) will typically be different from the term of your primary services. This can cause issues if you ever need to cancel products/services. I’ll give you a tip for dealing with that situation in a minute.
3. When it’s time to renew a contract. Most vendors offer an incentive (usually a discount) to keep your business. For them, the view is “it’s always cheaper to retain a client, rather than trying to regain a client.” Remember, any items you’ve added have their own contract terms, even though they show up on the same invoice. The contract you’re about to renew may not contain all of the specific items you have with that vendor.  Make sure you confirm the specific items receiving the renewal discount. To avoid billing errors, you may want to begin working to align the terms. I advise clients to let an individual contract float on a month-to-month basis so it can be renewed at the same time as the addendum-based services. Over time, more of your component services can then exist on a single contract, or at least with a common expiration date. That’s easier to accomplish if the terms are only off by a couple months. If the gap is wider, you need to calculate the cost of the float to determine if it’s worth the convenience. It’s helpful to understand the specific calculation the vendor will use to determine the discount.  I can actually show you 2 different ways to calculate a percentage discount resulting in 2 different amounts.   Make sure you and the vendor are on the same page, before you sign your renewal agreement.
4. Whenever you change vendors. If you’re considering changing vendors, you should spend time understanding the various components of your current contact(s), including the remaining term of any individual contracts. If you have a website contract, but later added some additional items (see #2 above), you may still be liable for the additional items, even though the vendor is no longer handling your website. Watch over the next few months to see if any trailing invoices are billed.  It can throw off your budgeting.  It’s always better to know about this probability in advance.

Unfortunately for clients of large companies, sales reps face increasing pressure to focus on pitching and selling new products as their quotas increase and competition grows. There’s little time left to continue to work on the relationship with their clients. Sure, there are account managers (available via 1-800 numbers) who are tasked with handing change-requests and other issues, but monitoring your invoices isn’t something they typically do. An entirely different department processes your billing. This results in you, the client, having to identify these billing errors.

Internal billing audits by the vendor are rarely, pro-actively performed. If you don’t catch it early, the problem grows and you may have to spend precious hours or days trying to resolve the issue which can often involve multiple invoices, several phone calls to your sales rep, emails to account managers, calls to the credit department, tracking applied credits and of course, the loss of time you should have been spending generating revenue.

Fortunately for the attorney mentioned above, the vendor responded favorably to the questions I asked the attorney to present. I also provided the attorney with a spreadsheet including the specific information the vendor would need (invoice numbers, dates, product subscription numbers, amounts, etc.). A credit is being issued and the line item in question should be removed. The issue remains that if we hadn’t reviewed the invoicing, the billing errors would have continued for quite some time.

It’s easy to assume that these types of errors don’t occur that often. However, I audited the invoices and contracts for different law firm in Lexington, KY earlier this year.  I determined that they had 3 vendors billing them for website services. My audit uncovered a Martindale $8,000+ billing error. I provided the firm with an outline of the specific issues and recommended a communication plan to help them secure credits from the vendors.

In this particular case, the partner was concerned about the billing issue affecting their legal research. When a firm uses a vendor for both legal marketing as well as research, it may have to tread more lightly during the dispute resolution. If a firm decides to stop paying it’s website charges as a tactic to get the vendor’s attention, the vendor may decide to punch back by denying access to much needed online legal research tools.

Consider an Audit by a Consultant

Many firms can’t afford a full-time office manager or marketing team.  I launched my consulting firm to offer my services as an “outsource-resource.”  Over the past 20+ years, I’ve executed hundreds of sales contracts. I’ve sold products and services as a sales representative and director of sales. I’ve worked directly for Fortune 500 manufacturers and downstream distributors. I’ve contracted products and services on behalf of law firms in my former position as the director of a law firm.  I’ve negotiated contracts with vendors from multiple industries.

The value I bring to a small law firm, healthcare provider and others is that I can help you to manage your vendor relationships and contracts to ensure you receive the best value for the money you’re spending.

When was the last time you audited your vendor invoices, analyzed your cell phone plans, put your office supplies out for bid, or renegotiated your copier contracts?  

There are many areas you can monitor to achieve cost savings and increase your profitability.  Remember, at the end of the year, it’s not only about your top-line revenue.  It’s about the money you actually keep as net margin.

If you’d like to discuss your current vendor contracts, I’d be happy to meet with you. I work on an hourly basis and “percentage of realized savings” basis. Both of the above-mentioned law firms were surprised at what I discovered.  As a result, they were able to recover thousands of dollars from FindLaw and Martindale billing errors. An audit can help you to save money, manage your invoicing more effectively and determine if specific products and services are performing as intended.  To schedule a meeting, call me at (502) 208-9639. 

Jim Ray Now Contributing Articles for Medical News

I’m excited to announce that I’ve reached an agreement with the owners and publishers of Medical News (IGE Media). This healthcare publication will feature one of my practice-management articles in an upcoming print edition.  Additionally, I’ll contribute a monthly column in the online edition.

Medical News focuses on “the business of healthcare.” It’s distributed to physicians, private practice physician groups, hospital administrators and others in the healthcare field. They describe their mission as follows: “Medical News is the leading source for the healthcare business community to stay informed, grow their businesses and build relationships around important issues. We are the community for the leaders of the region’s healthcare businesses.”

My consultancy continues to make progress in helping attorneys, physicians and other small business professionals to run their practices more effectively and more profitably. I’m confident this new channel will enable me to develop new relationships in the medical field. Thank you Ben Keeton and Tom McMahon for this opportunity. And to think, this all started after Tom attended one of my CLE presentations at the Louisville Bar Association.

I’ve spoken and written on the need for professionals to seek out opportunities to make presentations as a way of generating interest and forming new business relationships. This is a prime example of the type of results those presentations can yield.

Feel free to check out the online edition, as a well as the digital copy of the most recent print edition. The website is:  www.MedicalNews.MD. It’s a very good publication for anyone in the medical field or who does business in that sector.

Generating New Clients – The Lifeblood of a Successful Venture

One of the biggest let downs any professional experiences, is seeing a prospective client walk away without agreeing to do business.  That’s assuming he kept the initial appointment in the first place.  You’ve committed your two most important assets (time and money) to generating new clients.  You’ve arranged your office and conference room for maximum impact.  You’ve orchestrated key facts to differentiate you and planned your discussion points.  But when the initial meeting concludes, your prospective client simply leaves.  If that’s happening more than you think it should, it’s time to focus on improving your new client-closing rate.

I’m a process and metrics guy.  I’ve worked with clients to help them focus on a few important steps, or missteps, to improve the overall performance of their businesses.  It’s a cliché but I’m going to say it anyway, for most businesses, new clients are the lifeblood of a successful venture.   When you stop to consider all of the effort that goes into securing those new business relationships, seeing them slip away is a painful reality.

I read an article in a 2013 edition of Trial magazine that stated, “the overall cost to acquire a lead is somewhere between $250-$300.  Unfortunately, the average law firm only successfully closes about 20% of those leads.”  Regardless of your type of business, similar metrics probably hold true.  Then factor in your staff’s time to field the call, time spent scheduling and preparing for the meeting, and the necessary work to follow up and eventually close the deal.  Generating a consistent flow of new client leads might be a significant waste of time and money if your ability to convert those leads is low.

Many professionals measure the number of leads generated.  That’s a good start.  But I recommend also monitoring the number of no-shows.  You’ve already spent time and money getting the appointment.  Converting that prospect into a client is now your primary goal.  Establish your benchmarks and then take steps to improve your conversion rate.

Here are 5 steps to implement to improve your new client-closing rate:

1. Make sure you secure an email address from your prospective client during the initial intake.  Your staff is used to getting contact numbers, but an email address opens up your ability to leverage a few more tools you can use to your advantage.
2. Once there’s an appointment on the calendar, immediately send an introductory email.  Think of it as an early thank you note.  This individual just agreed to give you one of his/her most important assets: time.  Remember, you don’t “deserve” this client, he/she doesn’t have an emotional commitment to you, and he/she hasn’t agreed to retain you, yet.
3. Consider including a brief video so you can deliver some basic information “in person.”  Maybe you’ve recently written a blog post or article relevant to your prospect’s situation.  You can use your video to encourage him to visit specific areas of your website/blog.  Remember to thank her for placing trust in you.  Your objective (at this point) is to help this individual become familiar with you and most importantly, to keep that initial appointment.
4. Have your staff send an appointment reminder 2 days before the scheduled meeting, and then either the evening before or morning of the actual appointment.  You might have your staff do this either via text message or an email.  In today’s environment, a text is an accepted way to communicate.  There are automated programs you can utilize to handle this task.
5. Make sure you have a plan for post-meeting follow-up.  Establish a firm understanding of your next steps.  Send a thank you message including a couple high-level points from your discussion.  It’s a great opportunity for another quick video.  Consider sending a summary email of the discussion.  Use this opportunity to remind your prospect of the comments they liked.  Above all, re-enforce the bond the two of you established.

I’ve often found that most of my clients are pretty good at getting the person to sign up, once they actually have a chance to speak face to face.  Many seasoned attorneys and other professionals have an effective “take down speech.”   If it’s a case they want, they know how to get it.  In that situation, the math is simple.  If you want to develop your business by generating new clients, focus on making sure your first-time appointments actually occur.  It may sound overly basic, but you’d be amazed at how important this step really is.  Improving your new client-closing rate all starts with getting them to actually show up.

The KY Psychological Association recently published an article I wrote for it’s members.  The following appeared in the KPA’s April 2014 statewide membership communication.  While it’s targeted for healthcare practitioners, the article is relevant to all small business owners.  Here’s a copy for your review and consideration:

Business of Practice:  Managing Your Profit

For many mental heath care providers, there’s a chasm between helping your patients to cope with significant psychological challenges and effectively managing the business of your practices.  Most of you have invested years of study and training in the effort to develop successful, therapeutic practices.  Many, however haven’t had the time to seriously study the fundamentals of accounting, marketing, and the other disciplines associated with actually running a business.  As a practitioner (and business owner) you’re confronted with challenges on both ends of this spectrum.  At times, the business of your practice may present greater challenges than your patients.  Sound familiar?

You may remember me from a presentation I gave at the 2012 Business of Practice conference.  We discussed topics such as personal branding, marketing on the Internet and tips to attract new patients.  My hope is to provide an on-going series of articles for you about ways to run your practice more profitably.

I’d like to start with a simple observation, and then a definition.  Observation:  Patients will heal and move on.  The key to any successful practice is managing the intake of new patients.  However, it’s critical that you understand practices can go out of business, profitably.

Businesses of all types are subject to financial constraints.  While the desire to treat patients is a driving force, doing so profitably is paramount.  You have a finite capacity to treat individuals.  There are only 24-hours in a day and we must assume that family and sleep will demand at least a small portion of those hours.

Your ability to think and effectively treat patients is highly dependent upon your personal stress and energy levels.  Over the years, I’ve seen numerous professionals burn out because they thought they simply needed to work harder.  However, when you do this for an extended period of time, you run the risk of making poor decisions which might not only impact you, but your practice and possibly your marriage.

That point brings me to a definition. “Profit” is what is left over after you subtract your business expenses (including taxes and wages/salaries) from the billable revenue you generated.  As a pure business fundamental, you need to focus on your net profit, much more than on your overall revenue for the practice.  This is where many practitioners struggle.  You may have significant income from private pay patients, provider reimbursements, or government programs.  However, if you’re not actively managing the types new patients you’re taking, you may be in for a crash.  More on that point in a minute.

For now, let’s consider two ways to manage your profit.  The first is to limit or cut your expenses.  While that can be effective in the short run, there’s only so much that you can cut.  For most, there is a necessary level of expense, which must be incurred to run your practice.  Your ability to “cut costs” by its very nature, therefore, is limited.

However, you can also manage (and increase) your profit by increasing your overall revenue.  But beware; this also requires a healthy balance between taking on new clients, and accepting the right clients.

When you consider the changes in our health care system, it’s fairly certain that government supported reimbursements (e.g. Medicare) are going to be reduced over time.  Many of you have already seen this.  As the focus on mental health grows, practitioners are going to be faced with an ever-increasing pool of potential patients, but whose ability to pay (or at least pay what you actually deserve) will be reduced.  This is going to put immense pressure on you to ensure that you’re being properly compensated for the services you provide.

Let’s come back to my earlier point about actively managing your types of new patients.  In most businesses, there are a core group of services that yield the best results for the business.  For you, this might be testing and evaluations, short-term counseling, group therapy, or possibly intense one on one psychotherapy.  Whatever it is, this is your best possible type of patient.  However, some practitioners struggle to maintain an active influx of these “ideal patients.”

Overtime, the practitioner may take on other types of cases simply to pay the bills.  They run the risk of deviating too far from their core patient load, which typically either requires more time, yields less income, or both.  While the cash seems to be coming in, the actual profit margin is less and less.  Eventually, your days are spent dealing with the wrong types of patients for your particular practice.  This is what I meant when I said practices can go out of business profitably.  Reaching the point at which zero income is generated isn’t at all typical.  Like a puddle on a hot day, the evaporation of your profits may occur rather slowly.  Add to that the on-going pressures of daily life, family and work and you can see the implosion coming.  You may have a colleague who has already experienced something similar.

By putting into place strategies and tools to assist you in broadening your exposure to a larger pool of potential patients, you’ll eventually have a larger group of individuals from which to choose.  This will help you, as the practitioner/business owner, to effectively select enough of the right kinds of patients to allow you to take on other non-core cases – all while growing the overall profitability of your practice.

In the next several articles, I’ll detail various ways you can do this.  I’ll provide you with tips and suggestions intended to help you develop your practice to the point at which you might begin working less, but actually earning more.  Sound interesting?  You’ll have to look for my next article to find out.  Until then, feel free to check out my blog at  www.JimRayConsultingServices.com.