Profitability starts with your most valuable resource, your most costly resource, and the least understood resource in a law firm.  Firm Members are coming to work each day with little or no proactive development of their skills and their performance. We call these individuals “eagles in a cage.” Because of outdated, ineffective management thought process, the cost of employees keeps going up. Absenteeism, lack of productivity, and lack of motivation is keeping the cost of doing business far too high.

The 21^st Century law firm is changing rapidly.  It is impossible to keep your head above water. Technology is a big part of your budget and drives the efficiency of your work. Employees are now four generations working side by side. They aren’t into the old style work environment. Clients are more demanding and they want…get this…SERVICE with a RELATIONSHIP! Your peers, those people who tell you to your face they want you to succeed, are out competing against you on every corner. And all of this with firm income down and costs going up worse than the Dow-Jones ever will.

Yet out of all of this, the truly innovative, free-thinking law firm has a clear chance to become a pro-active keeper of the flock and make a statement that the firm’s most valuable resource is the employees. By creating employees that are energized, motivated, and feel like they are a strategic partner in the success of the firm, the law firm simply cannot fail.  This is the high performance concept.

It took us a while to figure out that while everyone was enthused when the hard work of implementation was going on, when accountability arose, the leadership was not ready. There has to be accountability to the firm by every member, leadership, lawyer and non-lawyer.  We have since learned to start first at the top and work down. There has to be a buy-in from top to bottom.

In our opinion most law firms are disorganized and chaotic for a reason.  It is because the on-going day to day grind of delivering the work product and the client service in a highly competitive, assertive environment takes priority.  There is no visible room for change. It is easier stay in the comfort zone and put up with the stress.  Change cause positive stress. Where you are now is negative stress.  The problem is as the saying goes if you stay the way you are you will always be the way you are.

There truly is a better life out there for everyone, not just the leadership.  It doesn’t happen over-night but as the thought processes change, the right people get put into the right seat on the bus.  There is renewed energy, synergy and a new way to make clients happy and who want to be involved with your firm.  Work productivity goes up and the management of employees is less of a concern as you start to develop them into high performance employees.  There is less turn over.  There is less additional staff needed because the work delivery is delivered in such a fashion that firm members are taking responsibility of getting the firm to a profitable state.

The only reason we can give you to change is this.  What do you feel like as you get ready to go to work.  How do you feel at the end of the day.  If it is one of dread or lack of enthusiasm, if it is with a sense of being over-whelmed, and if throughout the day you grit your teeth, something needs to change; either you or where you work.

Out of chaos come changes.  Out of change comes growth.  Out of growth comes wisdom.  And with wisdom comes profitability.

From Soaring Eagles by Favor-Leone available as an E-book on Amazon, Barnes & Noble, and Smashword.  We believe employees are locked in invisible cages through no fault of their own. The purpose of this book is to help open the cage and provide an environment for your flock that will allow them to soar higher than you ever dreamed possible. This book is going to teach you to throw out the rules, forget everything you think you know about employee management, and help you create a very simplistic but workable environment that helps you drive your firm practice.

Dads come in all shapes and sizes.  They can be big and tall, small and mighty. They can be all sorts of shapes.  They can be funny, wise, sad, serious or just be.  They may be the kind that spends lots of time at home or have a hard time getting home.   They can be stern or compassionate or funny or serious.

There are Dads out there who do not have children around them but have had the opportunity to witness the miracle of pregnancy of their child but never saw their child. Or maybe they lost their child before their time.   These Dads seem to know how special it is to be a Dad.  They need honoring the most.

There are Dads out there who are serious Dads to their pets, from dogs to cats to well, just about everything. Amazing how the animal population can seem to know a Dad.  Being a Dog Dad or a Cat Dog or a Whatever Dad is just about as serious as it can get.

There are Dads who yell  and shout(seems someone did not teach them an ‘inside voice) and Dads who don’t have to say a word.  There are Dads who let you stand on their shoulders to reach new dreams and those that hold your hand to help you cross dangerous roads.  Even Dads who let you ride roller coasters so you know that even the scariest things can be safe.

There are All Time Dads who are Sometimes Dad.  These Dads get blessed with children in their lives from other people whom they love.  They accept them as if they are their own and hold them close to their heart.  These Dads are special.

There can be Dads because of time and circumstances  didn’t  do the job that you wanted them to do.  That is perhaps where we learn that Dads need to be forgiven as well.

There are Dads who don’t know how to be dads because no one taught them.  They don’t know how to show they love their child but it is there in their heart.  They know it is important but can’t let it out.  Those are the Dads you really feel bad about and want  to say it is okay, we love you just the same.

And there are Dads that no one told them they had a child or who have been denied access to their child . Those need special hugs because they have lost out on so much.

There are Dads who go to church every Sunday and dads who play golf on Sunday.  There are Dads who know the importance of learning to be a good person no matter where you spend your Sundays. These dads are pretty special.

There are even Republican Dads, Democrat Dads, and some ‘not sure Dads’.  They may be a bit conservative or a bit liberal or down the middle.  Those Dads are really just trying to make the world a better place for us in their own way.  These Dads are okay just as they are.

I know there are Dads out there that say they don’t want to be a dad but have no choice.  I really think they do but it is easier to say they don’t.  Maybe you love them a bit harder and forgive a lot more.

There is no such thing as a perfect Dad.  In fact maybe that is what makes Dads special because they are just enough imperfect for the child who might be a little imperfect also.

There are Dads who have gone before us.  They are the ones whom seem to catch your heart at the oddest times because they seem to be the best Dads.   There is security in knowing those type of Dads are waiting up for us  when our time comes.  Because that is what Dads do.

There are all kinds of Dads and no matter which kind your Dad was, he is your Dad.  He may cause you to smile, shed a tear, or give you a catch in your heart but when all is said and done he is still your Dad.

On March 13, 1946, Dad began his 27 year career with the Ohio State Patrol.   What started out as a way to raise a young family in hard times became his life-long passion.  Three generations in our family have grown up on stories from Dad that were really lessons of life learned from his service to the law.   And I believe my love of the law and service to others came from him and I hope I have passed it on to others.

For three years, ending in 2008,  Dad fought cancer that defied all odds, amazing his doctors, his family, and friends.  In  January we learned that the cancer had returned with a vengeance.  And as the word spread that “the Captain’s” time was short, Dad was flooded with calls and visits from family and friends who wanted one last story and one last talk, and dad made many calls himself to tell more stories.  It was as if he wanted to make sure we knew how important it was to live life with these values that he learned as a patrolman.

On a warm beautiful North Carolina morning in May our entire family had gathered in Raleigh, North Carolina to celebrate the marriage of my daughter to an Ohio State Buckeye grad (which Dad was extremely grateful for).  Dad insisted the celebration go on despite their inability to be there; the first family gathering they had missed.   And as if in anticipation of the inevitable he talked to each one of us daughters the week before and told us again how much he loved us. He told us not to be afraid and to do what was right and to take care of each other. It seems quite fitting or perhaps planned that Dad left us that Memorial Weekend with the same dignity he had lived his life.

We three sisters firmly believe his plan was for us all together as a family so we could strengthen each other.  Just as I am sure he imagined, we spent the day re-telling his stories to each other about The captain, the patrol, and the men and women he served with.  Dad also taught us that laughter can make the unbearable bearable and despite our grief, the house rocked with laughter throughout the day.  We all told our favorite patrol stories and what it was like growing up as children of an Ohio State patrolman (not an easy feat then or now).  For the next two weeks each of us struggled to find some peace in our loss of this man who so influenced us and our families.

On June 8, 2008, I sat in an over-flowing church in Ohio for his memorial service. All of our family and Wilma’s family were there, his many friends, his beloved state patrol family, and the troopers who turned out to make the final journey with him made our family complete. I took strength as the troopers slowly raised their white gloved hand in final salute

Dad taught us by stories and exposure to men and women who serve others through the legal profession that the law is first and foremost about a sense of integrity that you do the right thing.  It is easy to forget this when you get into the day to day workings of your career. You have to hold true to your own core value that you will do what is right even when others don’t.  To do less is to dishonor what you and thousands of others do day in and day out.

He also taught us that the law is about having a strong sense of fairness, righting a wrong, and of allowing the road to justice to start with you. What matters is that you understand that justice can’t be measured and that your role is to make sure that in the end it survives.  It does not matter what your legal career is, it doesn’t change the fact that you are part of the laws that make this nation work. Don’t underestimate what you do.

Finally he made sure we understood that the law is about admitting wrong when you are wrong, taking responsibility for your actions, and allowing others to do the same.   The law only works when it works both ways.  We can’t be all right and we can’t be all wrong.  The law simply demands that we understand and make it work.   And what matters is the act of responsibility not the action that precipitated the event.

Because you get  caught up into the daily efforts of getting the job done in spite of over-whelming odds I think it is easy to forget how privileged you are to be part of the law.  It is a path or a journey that will define you in the end.   You might never know what one thing you did that righted a wrong or made a difference but trust me, you cannot be a part of the law and not have this happen.  It means you have to keep yourself focused and your pride centered.

The week before Dad died, I wanted to make sure he understood how much we admired who he was and he simply told me being a part of the law and service to others made him the man he had become.

As the group of solemn state troopers led the procession from the church and stood guard over his remains, I felt a sense of peace that what was begun for Dad with his beloved Ohio State Patrol should rightly end with them standing by his side and ours.

I now realize that my dad had no choice but to be who he was.  If you are truly into doing what you do for all the right reasons then you too have no choice as well. You must honor the law and hold yourselves to the highest standards of integrity, honor, and commitment to be the very best you can be.  It is a duty imposed on you by a higher authority.

I see the law changing daily.  I see good men and women become great men and women simply by being a part of the law.   And I have seen some who never quite get it, but those that do seem to have a passion for the law. They wear the cloak of justice with a great deal of pride and they refuse to allow others to tarnish it. And they understand that if you have a passion for the law then you did not choose the law, the law chose you.

Inscribed on Dad’s grave marker are the Ohio State Patrol Flying Wheel and a simple phrase which has carried his family through thick and thin.   We believe it honors all of those who have gone before him, who now carry on the tradition, and who some day may choose an area of the law as a career.  The marker simply has his unblemished name,  Dwight M Carey followed by: Pride in the Past, Faith in the Future.

Presented at the 100th Anniversary Celebration of the Ohio State Patrol, Columbus, Ohio, 2008, with all three daughters present.

Should I change it or not, that seems to be the question. Let’s say for example, that you have been doing business for several years and you have your ways. Over time you discover problems with your business and you bring in a consultant. That consultant will of course come up with a new way for you to do business. The question is, should you change or are your ways so set that it will be very difficult to change. The odds are good that the new way is better.

This is a common concern. If you keep doing it the old way you will reach a limit in the number of cases you can handle, so you should consider the new idea. Part of that consideration has to be what it would take to really surrender to it. The other part of this would be the strength of your belief that the new way is actually better. I believe that it is fair to bring both of these topics into the discussion. If you are leaning to trying the new way of doing business you need a solid transition plan. You probably will not be able to implement every new idea instantly, so plan how you will introduce the ideas.

There is always a temptation to fall back on the old ways, so plan on not doing that. Figure out a way to prevent sliding back into old habits. I have seen many well thought out strategic plans (and very expensive plans) get thrown in the trash can as the old ways are reinstated. There is no easy way to stop the business while you introduce the new ideas. For a period of time the old ways are fresh in your mind and the new ways are foreign to you. When the big push comes it is easy to take the path of least resistance and fall back on the old ways.
So far I have made the assumption that the new idea is a better idea. That is not always true; it could be that it is just an idea to do it in a different way. Frequently I have found that there is more than one way to do something and both ways are just as good. So don’t just accept every idea that is presented without looking closely at it. Getting into the technical aspects of this, we are talking about looking at the return on investment. The investment can me something other than money, it could be time or talent. Look at all aspects of the new idea. Will it take a new skill, some kind of new support, or even more space to implement? All of that must be factored into the return on investment formula.

Having spent almost a half century working in and with law firms, I feel I have had a front row seat in watching the evolution of the law office practice.  The last ten years have forced lawyers to see that there is the practice of law and then there is the business of the practice of law.  To sustain a profitable law firm you had to change or be left behind.  You have to embrace the fact that the law firm is a profitable business and adopt best business practices to make it succeed.

Today’s technology is tomorrow’s obsolete.  Client demographics are changing.  Client needs are expanding.  A generational workforce diversity is creating new ways to manage and operate at work.  New issues of law can drive different scopes of practice.  Social media has changed the face of marketing forever.

If the downward economy taught us anything it is that you must redefine how you operate today’s practice to a futuristic practice starting now!  Catalyst started taking a hard line look at what was or wasn’t working to achieve a sustainable profit about seven years ago.  We start running many financial and practice projections putting in many variables going forward.  We then added in the factors we thought would come into play fifteen years down the road.   We realized that for our clients to be successful in say 2025,  that they had to let go of the past, recognize that today is fleeting, and begin to transition to a law office practice that will be ready to meet the futuristic needs of the then 2025 law firm.

With the firm’s permission, I want to tell you about Brinkley Walser, a law firm in Lexington, North Carolina.  In 2007 the firm was over 120 years old, steeped in rich history and tradition.  The firm itself was stalled.   If ever there was a traditional law firm that practiced in a traditional, well respected and conservative way, it was Brinkley Walser.  Walt Brinkley was in his early 80′s.  Highly respected by his peers, he had held the course for the firm.   After one partner meeting when the discussion seemed to go nowhere about how the firm had to change, Mr. Brinkley took me aside and assured me that the changes recommended had to happen.  And he said to me If they don’t change they aren’t going to be here in fifteen years.”  He went back into the meeting and said the same thing to the partners.  To the credit of the partners they have embraced the need for future strategic planning.  I thought it interesting that someone in his early 80′s saw what was happening now.

Today Brinkley Walser in my opinion stands in the forefront of law firms that are making the change to meet a long term tomorrow’s needs.  They created progressive management .  They appointed a managing partner. They embraced social media but with small town traditions.  They updated their website.    They changed their succession practice to meet tomorrow’s life styles.   They started looking at alternative billing practices.  And they started to expand where their practice areas were needed.  They have and are researching new futuristic practices of law that our environment and culture may need.  They keep an open mind and welcome all new ideas.   And they still retained their identity and their desire to be of service to their community and their clients that was begin over a century before.

We found that most lawyers believed and with some accuracy that technology was going to drive the future and they tended to focus on what investment to make.  We continually caution that today’s shiny nickel is probably tomorrow’s throw away penny.  We instead recommended that we create a vision of the law firm in 2025.

Before you can plan how to change you have to know what the vision is for the law firm.  For example, will the area practices be the same or do you anticipate new areas of law that you can get ready for now.  Will the client base that the firm has now change or be different.  What kind of needs will the firm have to meet the rapidly changing way the Courts will operate.  Will the partners want to transition to different roles based upon personal needs and desires for retirement.  What will your workforce be like to support the needs of the firm.

And with the building of a defined vision for how the leadership of the firm wants its 2025 law firm to look like,  you should then do a Needs and Assessment (SWOT Analysis) of the firm.  This hard look at where you are along with  is the beginning of a strong strategic plan for the firm.  The strategic plan will be a fluid, changing plan based upon events going forward.

From the strategic plan, you will develop short term business plans (one to two years in length) with benchmarks and accountability for change.

This is not done overnight.  Our experience has been with firms we work with that it can take one to two years to bring it together and start moving forward.  It requires a strong commitment from the leadership of the firm with a buy-in from the rest of the firm members.

The question you must ask yourself as either a active law firm owner or one contemplating opening a practice is where you want to be ten to fifteen years.  This involves not only a hard look at your firm but a hard look at the personal goals and needs of current owners.  Build the firm to meet those needs and be competitive and you will have a sustainable and profitable law firm in 2025.

CONTACT:  cjleone@catalystgroupinc.com

In 2008, we wrote the article From Start to Never Finished and it was very successful. We decided to repeat it so that lawyers thinking of going out on their own could get the benefit of our experiences and those of the people we have met. We thought after five years the article might need drastic updates. To our surprise, we realized we only needed minor changes. We might add that we have found compelling evidence of those who enter a new practice as a business person instead of a lawyer (darn those many hats you will wear), are much more successful. More important we found that our belief in high performance principles was justified and we encourage you to go through our website which gives a great overview of HP principle.

We have defined ten stakes in the ground that you, as a potential law firm owner, need to consider. Our favorite saying is what part of “for profit” don’t you understand? If you do it right, you will be a profitable law firm that delivers a high quality work product with exceptional service, and you will reap the rewards of your dream.

Our white papers are available as e-documents free of charge to our online subscribers. If you are interested in the above, please go to our website or our Facebook page and sign up to receive our practice tips on how to manage, market and master your law firm. You can also use your cell phone and text FORPROFIT to 22828. Your privacy is always our concern and will be protected. If you are a current member of the Catalyst Subscriber Group and would like to receive our updated white paper From Start to Never Finished email cheryl@catalystgroupinc.com.

We do retreats, seminars on leadership and strategic planning for small businesses and law firms. Recently we have been getting questions about high performance teams and leadership asking what the most important elements were. There are a lot of variables which are related to the type of business and the business culture you want to create however I believe that your vision for the business and being consistent are the top two elements of success. When I talk about a vision I refer to a picture of success. Nothing too restrictive and something you can have a passion for. When I talk about work culture I mean the way you want your business to run. Within those two elements are a large number of variables. Once defined you have a good idea of what your business is like and now you can tailor all the best business practices to your business. As long as the business is defined in that order (vision, culture, policies and practices) there will be very few conflicts. Now you have to concentrate on being consistent.
So, there is not one cookie cutter answer but there is a recognized process for defining your business. This is usually referred to as strategic planning but that is just a term. If that term is not to your liking then just call it Dave’s plan or your plan. Ultimately it is just a high level description of the business you want, defined business metrics to keep you on track and a set of goals to implement the business plan. Now that you have the big picture drawn you can define detailed, consistent plans like your marketing plan, IT plan, security plan, and many more.
So what was the key to success? It was having defined the vision for the business you want and the business culture you want to work in. If you develop a passion for your vision and your implementation of your plans do not violate any of your values you will be happy. Once that combination is realized (a passion for a vision with no violations of your values) your business is energized. Your attitude is positive and that energy and joy becomes evident to your clients and your staff.
Too many times business owners have no vision. With no vision they have no idea what the work culture would look or feel like. They begin to create policies and process that conflict with their expectations and even their values. The business generates frustration and a negative attitude which is felt by your clients and staff.
The same principle applies with an existing business. If you do not have a vision, a set of values, or a plan then start there to improve your business. The problem that almost always appears is that you start fighting brush fires and soon have an out of control forest fire. This happens when you address an immediate problem with no idea how it relates to the big picture. You are easily forced off your path to success. Soon you are so busy handling interrupts that you have no time to work on real solutions. My Grandpa would say that if my dance card was full when I spotted the girl of my dreams only trouble would result.
This is only the first step, so let’s say that you have all the preliminary work done. You did your homework and you are ready. The next consideration is the environment in which you are doing business. You have to keep up with the times and notice what is happening around you. Technology, cultures, laws and the economy are changing all the time. You can’t ignore what is happening just outside the front door of your business. OK, new term alert, this is where a SWOT analysis comes in handy. A fancy term that means Strengths, Weaknesses, Opportunities, and Threats involved in a business venture. It is always fun throwing terms like this around but it is nothing more than looking at the good, the bad and the ugly out there to determine how your business may be affected.
So now that you know what business you want, how you want to run it and you have your resources in place it is time to look outside the front door to see if you can predict how well the business will do. What is your competition, are there any new rules you need to be aware of, and where can you find your clients. Many times I have seen a law firm that had not considered the impact of technology or changes in the economy. Have you looked at the new social media out there and have you considered the impact of an online threat? What about the latest improvements in case management systems? At some point you realize that it is tough to do the business of law and at the same time manage the business of law.
Now, just looking at your business, have you looked at all the elements before you jump in and make changes? Before you buy that expensive software are you really going to use all those functions? I have seen many businesses implement a grand plan without thinking about all of this only to start bypassing steps over time. They start to realize they didn’t want what they got. Now it is too late to get a refund for all that time and money spent so you start with the Band-Aids. I visited one Firm a year after they implemented a plan that they all studied for many month and everything was back to what they had originally. Here is what you need to do! Sit down, take a deep breath and picture what your ideal future looks like. That is your starting point. Enjoy the journey.

There was this professional who was depressed. He told me that he had no idea what to do and he spent his day staring at the walls. He had no enthusiasm for anything.  He went through each day with one foot in front of the other.  He neither looked back nor looked forward.  And he didn’t live in the present.  I asked him what would give him the most joy if he could do anything. He had no idea and had never thought about it.  I suggested he take a walk, think about it, and maybe something would come up. He said he was comfortable in his recliner.

One of the many problems we face in life is that we get stuck in our comfort zone. We live in the past, or we are fearful of what may happen.  The guy was me about fifteen years ago during the recovery from prostate surgery.  I had all the classic symptoms: felt sorry for myself, asked why this happened to me, and really didn’t care about anything anymore.  If you have ever been to one of our retreats you probably heard my story and how I met Cheryl. This was B.C. (Before Cheryl), another time in my life.

I got to thinking about those days and all that has happened to me since, while I was coming up with a good way to start our year off.  Many of the new clients I have met are locked into their comfort zone, have lost their way or had a major event beat them down. They are off their path, frustrated and basically not happy.  This sounded just like me.

Have you ever wondered what your purpose in life was? Are you just a victim of circumstance or do you have a grander purpose?  If you are like me, from time to time it occurs to you that you must have a purpose. Perhaps it is my mature years or some yearning to just figure it out, but I have been working on this puzzle for the past few years.  The result of all this was no great revelation but instead the pieces of a puzzle started coming together.

There is a neat exercise you can use to discover your purpose in life.  Dare to DREAM!  In this exercise forget about all preconceived restrictions and just dream about the perfect future. What does it feel like?  What does it look like? A vision is a dream that focuses on what you want the future to be like and your role in creating that future. Visionless people view all change as a threat.  They live in denial of the future, wedded to the past, longingly remembering the way things used to be.  Life is an endurance test for these folks and hanging around them is a test of patience. Does this sound like anyone you know?

A good vision statement will take you out of your comfort zone and will frequently redefine success for you.  Your vision is a long-term approach to life.  It is not something you will accomplish in the next month, the next year or probably not within the decade.  The vision will be full of colors and emotions and excitement.

The lack of personal vision can be physically and emotionally debilitating.  You have no desire to do anything. You are not excited.  There is no anticipation about the day, no looking forward to getting up in the morning.  All you want to do is exist.   When you create a vision that you really believe in the energy comes back.

So go ahead and dream.  You don’t have to share this secret place with anyone.  Believe in yourself and develop passion for your vision and you will discover joy again.

I was interviewed  for a national legal publication on the position of a receptionist.  I immediately corrected the writer and told him that the correct title in today’s modern progressive law firm is Director of First Impressions.  My partner loves titles and has given this out to many law firm owners, including my daughter’s firm who immediately put it on a name plate with name and put it at the front desk.  She receives feedback constantly from her clients who love it.

In today’s competitive law firm arena, the first person a client sees or talks to in your firm is probably the Director of First Impressions (DFI for short).  I am constantly amazed that many law firms place at the front desk a person who can’t quite cut it as a work generator and use this as a dumping ground for ineffective employees.  Yet this person can make the difference in the growth of the business.

The DFI is the key cornerstone employee in a client relationship marketing (CRM) program.  Hiring a person with the right people skills, the ability to multi-task, and the ability to engage with the client, whether new or existing can make the difference between a banner year or a famine year.

Think of this:  If this position can engage one person to hire the firm and your average fee is $5000 that is $60,000.00 a year produced by this effective person.  Gosh..2 cases a year: $120,000.00.

Interested in knowing some dos and don’ts for the Directors of First Impressions sign up for our postings on our website and request our do’s and don’ts of the Front Desk.

Whether written as a mission statement, spoken or merely understood, your firm’s culture describes and governs the ways you and your staff think, feel and act. I would say that your culture starts with your logo because that is the first thing clients see. Whatever shape it takes, your firm’s culture plays a big role in determining how well your business will do.

If you’re not happy with your current culture, there are things you can do to start changing it now. Look for a symbol, story, ritual or logo you could use to bring out the values and personality you want for your firm. You could start with a new firm logo symbolizing your new culture. Or you could choose a story to focus on your approach to business and make it part of your culture.  How much more exciting would your firm’s culture be if your logo expressed the personality of the firm, or your mission statement was more than how to make money.  Consider what you are passionate about, the values you want to be evident, or the service you want to provide.

We constantly preach integtrated marketing.   You must learn to brand yourself clearly and concisely.  Who you are must be reflected in every bit of marketing, hard image and soft image.  Let’s face it everyone knows the Nike brand!

I  had a very frustrated client.  When I questioned her about what was upsetting her, she said all these new cases.  This is too much to do and she was getting stressed out. I was a little confused because just a few weeks ago all she wanted was more cases.  Kind of reminded me of that old saying, “Be careful what you ask for because you may get it”. This particular young lady was a recent graduate from our self-mastery course.  We talked about the philosophy of self-mastery, which promotes the idea to ask for what you want and want what you ask for.  This was a qualified first step.

Self-mastery starts with a clear definition of what you want, your purpose or your vision. The next step is to break this down into a mission or a definition of what you need to do today to realize that vision or purpose.  OK, she decided that what she needed was more cases.  The problem here is that there was no strategic planning done.  It was kind of a best guess that she needed cases.  If a little planning were done she would have realized that what she needed was a lot more.  She needed skills, resources and qualified cases.  A strategic plan would have defined a process and a set of goals to address what she needed.

As simple as this may sound, I frequently find there is no evidence of strategic planning.  Many times I see that people get just what they asked for but it was not really what they wanted.  We can explain this phenomenon over and over again and we still see a rush to execute.  The real problem here is that the vision defined really did not ask for more cases.  The end result being sought was much more global and it was probably something like: I want to be happy.  In her mind she analyzed that and decided that to be happy meant less stress and to have less stress meant get out of debt.  OK, so far – to get out of debt meant increased revenue and increased revenue meant more cases.  So, she wanted more cases. Beyond that there was no analysis done.  The first flaw in this analysis is that you don’t need more revenue to accomplish getting out of debt. You want more profit.  Besides new cases you probably also want to better qualify the cases you get, improve the efficiency of your operation and increase your capacity.  In fact you may discover that you really don’t need “more cases”, you need a better business process.

I have had this conversation many times and the feedback I get would suggest that most people don’t really see the benefit of strategic planning or they don’t believe that focus on a defined vision is beneficial. Even if they did, most of the people I talked to are fighting demons. They are in immediate response mode busy fighting issues and have lost sight of any vision or higher level purpose. Many times I will see a law firm spend time and money to develop a grand vision or a strategic plan only to put it on the shelf and “get back to work” as soon as the exercise is over.  I have seen groups spend days putting together a good plan and all agree what the priorities are and on Monday morning toss all that aside.

Failure to execute strategy is one of the main reasons businesses fail and law firms are no exception. We know what to do, but don’t do it. Many times there is a disconnect between the people that developed the strategy and the people doing the work. A lack of leadership.  The other big ah ha moment was that the teams are under pressure to deliver results and do not have time to understand the great strategic plan sitting on the shelf.

Spending a little time to think about what you really want and how best to realize that dream can save a lot of time and greatly reduce the stress level. When I find a well-used strategic plan that has evidence of being opened up and read I usually find an efficient business.  If you do not explain the plan to the workers or you just don’t believe in the plan, it was a waste of time. Without that plan you will not gain the competitive advantage you need in today’s environment.

Every now and then some pattern strikes me as interesting.  I have been talking with several people about politics, and I know that is always dangerous but what the heck.  Anyway I began to notice a trend from people that were very emotional about a candidate or an event, they seldom had any noticeable basis in fact.  I say that only because I could not find any even after repeated questioning.  I began to realize that people had purely emotional positions.  OK, so you probably suspected this as well, but now that I considered that I took it a step further.  Hey, why not – I may as well charge down this path to see where it leads me.

Let me back up just a bit to explain my thought.  If you buy into the emotional intelligence or self-mastery theory that is popular these days, or at least I find it to be popular, then you are in control of the interpretation of the event and the reaction.  Basically the self-mastery theory is that an event happens and we interpret that event based on our beliefs and assign a meaning. That meaning causes us to react. The example we often use in our seminars has two couples receiving an invitation to a community dance. One couple believes that dancing is a sin and has a very negative reaction.  The other couple believes that it is a great way to have fun and has a very positive reaction.  There is a whole section here about what paradigm they are in but I am sure you remember that part if you attended any of our seminars. The point here is that one couple creates joy in their life and one creates fear. We seem to have the ability to shape the world as we wish, yet we constantly fall down due to fears and limitations that we put in our own brain.

Looking closer at this, if there is no basis in fact and the event itself is just part of your belief system you are also in control of the event.    In other words there is no invitation, which was the event, to kick off this process.  The event is built into your belief system and you are searching for evidence of it. Once you find it you are off and running. Now that seems interesting to me.  You have something that is creating a strong emotional reaction in your life that you have total control of.  This is great if the result is great joy, which I believe is a good thing.  But, what if it is causing stress, headaches, upset stomachs, or any of the other negative results?  Well, good news is you can prevent it.  Bad news is you not only created it but it is with you always.

I don’t think this phenomenon is unique to politics.  I have seen this in business as well as life in general. Have you ever noticed that the same key moment or event will produce different reactions in people?  You may become depressed or frustrated while someone else may just laugh it off.  Frustrating huh!  You should be getting some idea as to why this happens.  It is in the meaning each gave to that event. Imagine what your life would be like if you have a built in event that is guaranteed to cause a negative reaction! No joy in Mud Ville (I think this saying comes from “Casey at the Bat” by Ernest Thayer).

Now my bigger question is, why does this happen in the first place. Some of the stories I have heard in politics are just amazing.  Where did they originate? Why do people believe them?  What kind of stories have you created about yourself, your clients, your staff, your business, or whatever that has no basis in fact?  How many of these stories are stealing your joy?  Well if you don’t like the results, re-write the story.

Have you ever been to the Oscars when the winner says “I couldn’t have gotten here without….”

I pay close attention to employees in any business who are enthused about where they work.  You can tell it when you walk in the door or call on the phone. They have a natural high that comes from enjoying where they work.  This tells me alot about the business and the type of people who own it.  To create this type of employee you have to create the right environment.

First and foremost, you have to have some type of vision of the firm and where it is going and how the firm members can play a part.   You should be having regular monthly or quarterly meetings bring your firm up to date on where you are seeing the firm go.  Your employees can’t follow you if you don’t know where you are going.

Train them in the ethical considerations on how to talk to people about the firm. They need to know the difference between soliciting cases and soliciting good impressions of themselves and the firm.  Do they know how to let people know where they work, what a good job the firm does, and what type of cases it handles?  I am constantly amazed when the attorneys tell me they never talk about where they work or what they do!  Non-lawyers can be a huge source of first impressions for your firm.

The environment in your firm has to be one of team play.  It means there is mutual respect among everyone, not just the select few.   Do you introduce your staff to visitors to the firm.  I can tell you introducing your file clerk to a judge has a huge impact not only on your employee but on the judge who sees this as a respectful ethical attorney who values relationships.

Do you provide business cards for your employees?   Do not do this unless you are willing to train them on how to properly hand out.  Allow your employees to put their favorite saying on the back of the card (preapproved of course).  You will be amazed how many more they hand out if you do this.

Create a marketing board in the break room. Anytime a case comes in from a specific firm member put a star up with their name.  Create a prize list for those who have the most stars each quarter. Make sure to reward even those with one.  It doesn’t have to be money, it can be gift cards, gas cards, movie tickets, etc.

Be fair with your employees. There are lots of ways to reward employees for helping grow the firm and it may well not have to be a raise if times are tight.  An extra two hours once a month is huge on a Friday.   Everyone does understand we are in a tight economy right now and will hang with you if you are fair.

And the huge one is to have a client relationship marketing program that establishes a basis for exceptional client interaction between your firm members and the clients.  You will reap the rewards almost immediately.  This turns your clients into mini marketers as well.

There are many ways to excite firm members to be pro-active.  Anyone who has a vested interest in your success will help you grow. They just need to know how.

 Interested in designing a client relationship marketing program.  Contact cjleone@catalystgroupinc.com to set up a time to discuss your needs.  And if we can’t help you we will give you some good advice.!

July 14 2011  Republished by request

Yesterday our big family lost Hearsay, one of the three Golden Gang, who live with Beth and Shawn and loved by all.   For no rhyme or reason, far too soon, and without notice she was gone.  What started out as a routine surgery on her knee ended in seconds as she suffered a cardiac arrest.  Saying chances of 1 in 4000 sounds like a lot until you are the ‘one’ they are talking about.

I know you are not allowed to have favorites with grand-dogs but Hearsay had a way of tugging on my heart strings.  She was absolutely and 100% unrepentant in everything she did from dragging you to the ground by grabbing your shirt and pulling, to hiding your shoes, stealing napkins from your lap, and taking food from the table.  No matter how many times you screamed, yelled or stomped your feet she just gave you that goofy grin with her hair poking every which way and wagging her tail.  If she thought you were really mad she would run,  get a ball and stand in front of you going ‘woo-woo-woo-woo” as if to say, life is too short, just learn to play more.

Before there was a Shawn, Beth got Hearsay.  We both went together to pick out a puppy.  While all the other puppies were wiggling and playing with each other, Hearsay ran up to Beth and pulled on her trouser pants.  That should have been a warning but it was more of a look at me – I am the ONE!   I think from the first moment I held her in the car, I knew Hearsay was special.  I also think that was the time she chewed on my new t-shirt and put a hole in it.

Every time we lose someone we say how  beautiful, perfect and or the best they were.  Hearsay was special because she simply didn’t do what all good dogs do.  She not only didn’t listen she thought her role in life was to misbehave no matter what dire warnings you could give.  And yet for all the mischief she brought into our lives she brought laughter.  I can’t think of one time we didn’t have a family gathering that we all didn’t sit around and watch what no-no thing she would do next.

Hearsay thought Christmas was created so you could tear up all the Christmas presents.  No one in our family ever had a meal with a napkin on their lap if Hearsay was present.  She never met a stranger and in fact if given a chance she would invite them in.    She loved her balls and as soon as you hit the door she wanted to go play (that darn woo-woo again) and would do it for hours if you would let her.  This year she would be found with her head in the tomatoes eating them (whoever heard of dogs loving tomatoes in the summer).

As Piper came in to Hearsay’s life a year after she was adopted, Piper became the Princess but you could say Hearsay was the pea in Piper’s life.  Just enough irritating to be loved but the two learned to play together and share their Mom.  Hearsay was the reason Shawn met Beth.  He saw Hearsay’s photo and having a golden of his own it was kismet.  And as Shawn came into the mix we were so surprised to see her become a Daddy’s girl.  Perhaps it was because she had mostly females in her life but I think it is because she recognized what a big heart he had.  Shawn brought with him Buckeye and the Golden Gang was born both online and within the family.

Hearsay had such loving grand-parents.  There was me and Dave and then Glen & Sue.  There was Grand-pa Jerry.  We would shake our heads as she misbehaved and then laugh and encourage it more.  Perhaps we felt it was pay-back to Shawn and Beth of the antics they pulled growing up.  All our hearts are broken as well.

We can’t say what Buckeye and Piper must be thinking as these events unfold.  Certainly our upset causes them upset.  I think they know and but I don’t think they wonder too much about what’s next because they know what lies ahead for dogs.

There is a huge divide out there whether dogs have an external soul and whether there is a heaven or hell for dogs as well.  It is written that if you can love, dream and feel then certainly you have a soul.  I do not believe the God I know would have created such animals who love so unconditionally without bring them along into the next life we will enter.  A hereafter life with dogs would truly be heaven.

We have seen Hearsay dream of chasing balls as she sleeps and her legs run rapidly.  We have seen her whimper with a smile as certainly she must be thinking of the way she made us laugh.   Of course, Hearsay dreamed.   She dreamed with the happiness of a dog who never stopped being the incorrigible puppy and yet knew she had so much love in her life.

And love, well she loved us all.  Hearsay had the knack of making you think she loved you best but then Hearsay didn’t know how to do otherwise.  She was Mommy’s first, and Dad’s best.  She was the reason grand-parents fought to babysit.  She showed love every single day of her life.

Whatever vision you have of the hereafter, it has to include Hearsay.  I think of her now with Angels yelling drop it Hearsay or clean up on cloud 3.   I even imagine with a smile thinking of her  tugging on the robes of God to pull him down for a puppy lick on his cheek.   She will be the most misbehaved dog in Heaven.  But those in heaven will know that Hearsay has arrived.  And there will be lots more love than before.

And on any one day if I get a bit mischievous or want to play a practical joke my hunch is that Hearsay has become my guardian dog angel and is doing a bit of encouragement to make life just a bit more fun and a lot more livable until we meet again.

“The times they are a-changin” – an old saying that is still true today (actually a song written by Bob Dylan in 1963).  To compete in this modern age many law firms install a case management system.  The problem is they sometimes don’t let the system manage.  Many law firms use only a small percentage of the function that they paid for.   Here is an example of what we find.  The case management system logs in all the callers, creates intake sheets for potential cases, creates a case for those that qualify and tracks the progress of the case.  The case management system logs the status of the case, sets a task to put the folder out for pick up and waits for the staff to come in.  Each morning the lead attorney comes in to pick up all the folders for cases he or she wants to handle at court that day. When the folders are picked up in the morning the attorney marks the task done and the system marks the folder as out to court.  The attorney is now on his way to court.  When the staff comes in they can see the status of each case and know which folders were picked up.

Sounds like a simple process to keep the flow going.  A fair amount of money was spent buying and installing the case management system.  More resources were used to train the staff on the new process.  The case management system created a simple process that required the attorney to mark a task done in the morning.  The problem is, this attorney does not understand or like the system.  The attorney just wants to run in, pick up the folders and get on the road.  The attorney is focused on the case, not the business. The majority of lawyers had no intention of running a business when they decided to go to law school, they wanted to practice law. In this example, the actual case status and the status recorded in the case management system soon get out of sync. The staff no longer relies on the system for status and falls back on old habits.  All the resources applied to the new system were wasted.

The case management system was put in to allow for a greater number of cases and to improve the overall productivity of the firm.  If one person decides not to follow the process the system begins to fall apart.  All is not lost here.  When we find someone that, let’s just say, wants to do it his or her way we just embrace the situation.  One solution is to assign an administrator for the case management system.  It will be this person’s job to keep the case management system in sync and to smooth over the interface to the system for those hold outs that want to do it their way.  Over the last few years we have found that the new position of firm administrator has become very popular.  This is the person that understands where the boss’s inbox is, how he or she wants the folders arranged in the morning for pick up, how the data should look in the case management system, and a host of other “administrative” task that make everything run smooth.

Sometimes it is not as simple as just buying new technology. In most cases the way you do business and even your work culture will change.  When you are ready to move into the new age of technology, look at the big picture.  Ultimately your firm will run with a lower HR cost because the skills needed and the number of staff will change.   Besides a lower projected cost the primary advantage of a case management system is ready access to status where ever you are.  It is not unusual for a firm owner or attorney to call in remotely to get status, new case information or just to see how the firm is running.  The system can provide a snapshot of what work was completed, who is working on what, and what needs to be done next if everyone uses the system.  Where a question needs to be answered by an attorney or a position taken, that can be done remotely through the case management system with new work task created that keeps the work flowing.

Start to talk about strategic planning and people start to get nervous. Forget about the name and the formality, and just concentrate on the elements. Consider the primary purpose for a business, IT, security, or marketing plan and just document the main elements.  We really don’t care if you call it a strategic plan or a big notebook. By writing it all down in some format gives you a chance to look at what you need. We would rather see a well read stack of papers stapled together than a polished plan that was stored on the shelf. The majority of the firms we have worked with do a fair job gathering the information; they just seem to have a difficult time visualizing their purpose and organizing their needs.  Eventually we get the vision down on paper with a set of goals to meet that vision.

The bigger problem is the business process. This word process seems to generate fear and lots of debate.  Every firm we have worked with has a problem trying to describe their process.  I believe that this stems from their roots as a skill based business.  In any case, just forget about that word process as well and start thinking about what you do. The whole idea is to figure out how we are going to realize all the goals we talked about in the plan or that big notebook.

The next step after planning – I mean the big notebook – is process mapping.  Before this can be done we have to know what you want and how you are going to do it.  The input to this step is that big notebook. The idea is to figure out four things;

• What do you do really well?
• What do you need improvement in?
• What work do you duplicate?
• What did you forget to do?

Of course, we never say that we are process mapping – we are just observing.  Once that step is done we look at the skills and tools you have as a resource.  Most of the time we find an expensive case management system running that is not used much and a set of skilled people working on cases with a loosely defined process and few defined expectations.  The second finding is almost always that skilled staff are duplicating work or doing work that is not part of their job description.  If we can match the skills and tools to the process we eventually document and the process to what was defined as needed by the plan, we have a winner.

A law firm is a business and a business is like an orchestra with you, the firm owner, as the conductor.  If we can orchestrate the needs, skills, and tools so that they are all focused on your vision we will be doing well.  The problem is that for a whole host of reasons the conductor does not understand the vision, the staff is not working on the needs defined and the tools are not being utilized.  This happened because the firm was never considered to be a high performance team.  Instead the firm was looked at as a receptacle of diverse skills that are assigned to multiple task.  Skills and tools were assigned to solve immediate concerns instead of realizing a common vision.  For example, we have seen lawyers standing in front of the copier running copies off.  Consider their hourly billing rate and calculate what it cost to run those copies!  We have also seen the same generic client letter recreated many times in a day instead of a common template being used to generate the letters.  We have seen staff members working on something not mentioned at all in firm’s plan.  Eventually this drives the burden rate up and the Return on Investment down. Oh, and we have heard law firm owners ask what the heck is ROI.

Start looking at your law firm as a business.  You must take care of your business so that your business can provide for you! If you can’t or would prefer not to manage your business, hire a business manager to take care of the business for you.   After all what part of for profit don’t you get?

Can high performance teams work in a law firm?  The concept of a high performance team includes the release of control to the team.  That means that recognition for success or failure is at the team level, never at the individual level.  So, for example, if there was a very big or complex case the recognition would go to the team that worked on it.  If there were any individual recognition it would be from the team to a team member for team participation.  It is easy to spot the style of the business.  If the leadership talks about individuals (their skills or their accomplishments) the firm is probably a skill based system.  If, on the other hand, the leadership talks about the accomplishments of the firm or the team the firm is probably set up as a high performance team.

What we see at most law firms is that the business has an attorney as the leader and he or she is focused on their skill.  Their business process or style would be based on their skill and the people they hire would be based on skill.  That part is fine but once that skill becomes part of the Firm, they either become part of a team or they become recognized as a skill. In a high performance organization they become a contributor to a team and in a skill based organization they become an individual skill.  This is a subtle difference and a difference that is hard to see. 

When setting up a high performance organization there are concerns about size when you start to talk about teams.  A viable team is 5 or more people, preferably around ten.  The team effectiveness increases as the team grows from 5 to around 20.  After 20 people in the team the effectiveness again drops.  If you have a law firm with less than 25 staff then you have one team, but the principles still apply.  Establish a vision for the law firm, a mission for each team and establish clear expectations. 

The starting point for a high performance organization is strategic planning and the development of the vision. When we start working with a firm we look for the vision statement and the strategic plan. We then try to match the skills and tools to that plan.  We often find a wonderful set of words that do not match what people are doing. The reality is that the vast majority of people in your firm are doing regular work, simply trying to do their best in an uncertain and stressful environment.  What is so often absent is simply any vision of where the organization is going (nothing fancy, just something that’s clear), and leadership that has a passion for that vision.  They get so caught up in the day to day challenges that they forget they have a team.   

So step one is to define what your vision is and then translate that vision for your staff with clear expectations.  Everyone needs to be on the same path. Once the vision is clear you can apply the principles of a high performance team.  The team has autonomy, each staff member knows their responsibility, the level of authority they have and their mission.  The work culture is well defined, the expected work traits are defined, the roles of each team member are known and everyone is working on the same goal.  At this point it makes no difference if you have a single team representing the entire firm or several teams.

Based on what we have seen over the last ten years, a law firm with up to 5 members seems to work well as a pure skill based unit.  A law firm of 5 to 10 members and there are benefits from implementing high performance team principles. A law firm greater that ten members and the high performance team win every time.

The advancement of an employee from one job position to another job position that has a higher salary range, a higher level job title, or a higher level of job responsibilities, is called a promotion. Decision making authority tends to rise with a promotion as well.  But what if you decide to just increase the salary without all the other nice things?  That is not a promotion.  You still want a form of recognition for employees who make significant and effective work contributions that will stay in the same job.

Individual contributors must be eligible for promotions that recognize and reward their role as contributors. The problem is that in a small law firm there are not enough positions available to provide a promotion path.  If the staff remains in the same position and receives pay increases beyond that of the cost of living you soon have a salary too high for the position.  It is sometimes tempting to give big salary increases as recognition but is this a promotion or a recognition.  If it is only recognition go with a bonus. 

Many times we have visited law firms and found staff in the same position for many years being paid far beyond what that position calls for.  Now you are in a bind.  The economy slows down and what do you do? Do you fire the person and start over? Do you lower the salary? Neither of these solutions is fair if the performance has not changed. 

I suggest that salary reflects the job description.  Each job description should have a related salary range for it.  Any salary beyond that range is a promotion into a new job description.  So consider developing some job descriptions for your business.  If you just want to recognize good performance, and the employee is already at the top of the salary range, consider a bonus or some other form of recognition.  As for recognition programs, I have seen some creative ideas over my years.  Consider a day off, a shopping spree, a trip to the Spa, or even a vacation trip.  I have even seen the use of the corporate car for a year.   The problem with salary increases beyond what is recognized for the job is that it is not fair to the employee or the business.

I would be interested in how you handle this at your firm.

Why is it so difficult to express your vision? We can breakdown this formidable task for law firms like this:

• In our first interview we learn what you would like.  In general, you want to make a profit and since you created a law firm, you want to do that by selling legal services.
• Further discussion reveals other  hidden wants like;
  • Enhance the reputation of the firm or the attorney owner
  • Be known for good client service
  • Be known as the best law firm to work for
  • Etc.

OK, so now we have a start on what the real vision is. Your initial vision is to sell legal services for a profit.  Good, but this does not represent a market leader.  I know what you want to do but nothing that makes you stand out from hundreds of other law firms.  So, let’s define who your clients are and how you serve them better than any other law firm.   Start thinking about what you want to do better than anyone else.

• Are you the most economical service, the best client service, the most popular, the most accurate, the best turn-around time, etc.?
• What are you really selling?

Be a little creative here.  A lot of coffee shops sell coffee, but the market leader sells that early morning waker upper.  So do you sell worry free real estate closings, peace of mind, justice, revenge, or perhaps something else?  What makes you stand out in the crowd?  What is your unique business proposition or what most marketing people call your Unique Selling Proposition?  The actual definition is “the factor or consideration presented by a law firm as the reason that their service is different from and better than that of the competition”.

Now that we have that piece of information, we can define what your mission is.  Ever stand back and wonder why your staff just doesn’t get it?  Perhaps they were never told.  What is your goal?  What is it that you want your team to do?  Perhaps the team’s mission is one of these;

• Show a profit
• Have no complaints
• Show no late payments
• Have the best settlements
• Have the best court room win record

We are getting closer to what you really want. After some thought perhaps your vision is to sell legal services, for a profit, while establishing the best client service in the industry.   Sounds reasonable, so how would you do that?   The first step would be to define some goals or expectations.   The list of goals may look like this;

• Each area of the business will show a profit and in fact a positive trend in profits.  Your goal may be to increase your Return on Investment by 10% this year.
• Our client service will be positive based on measurements unique to the area of law the team works on. Your goals may be;
  • A positive client survey
  • No complaints
  • On time performance
  • Higher than predicted settlements

The second step is to sell your unique business proposal to your team and make it a source of pride.  I would go even further and say make it a condition of employment.  

There are at least four driving forces that create results.  We start with the vision which leads us to a service and selling it which leads to results.  There are three other drivers that will impact your results.  Your passion for the business will affect your communication about your business.  What you measure and gather feedback on will impact your performance, so your scorecard is important.   Then there are your values that will drive behavior and set the tone for your work culture.   All of these drivers should develop expectations that should be communicated to your team.  If you can establish the four drivers so that they act in concert and are consistent in execution you will produce consistent positive results.

Now look at each area of law or each team that makes up your law firm and see if each one can satisfy the four areas and produce results.  You may have to tweak the vision and the mission some for your law firm but this should provide a starting point for you.  I would be interested in seeing your results.

Over the years I have noticed that expenses are not always what they appear to be. For some reason it is easy to find out what the revenue was but not so easy to discover what all the expenses were.  The reasons for this range from ego to just not recording some expenses.  The revenue is almost always recorded because it becomes a deposit into an account somewhere. The ego part is, most are very proud to announce what they earned.  I visited a firm when an attorney was proudly announcing that she had a million dollar settlement.  A grand achievement indeed, but at what cost.  It is rare that anyone can tell me what the case cost.

Here is an example that may help show the problem.  We discovered a large transfer of funds that was not allocated to any specific expense category and tried to nail it down. Over time we discovered that an activity outside of the firm was being paid for.  I really didn’t care if it was a salary, an expense or a charity.  All I wanted to know was, what is the category of the expense so that I can do some business analysis.   The best business process to follow would be to create a category for the expense and not worry what that category was as long as you know what it was for.  Now when I start trending the burden rates, ROI and expenses I can get an accurate view of what is going on. 

One of the measures you want to do in a business is determine the ratio between direct and indirect cost.  The direct cost would be cost associated with creating the service which the law firm sells. So, for example, the attorney and paralegal salary would be a direct cost.  Now you can debate a series of other cost like the case management system. Is this a direct cost for the service or a support tool which would be an in-direct cost? Many firms argue that a lot of their internal process has been transferred to a case management system with intelligence and should be counted as direct cost.  As long as you are consistent with how you assign the cost items it really will make no difference overall to the trend analysis.  The goal is to try and categorize the expense categories as direct and indirect.  Now you can create formulas to track or do trend analysis.  What you want to see is low in-direct cost because that cost is not producing revenue. You should have several financial metrics defined, like revenue, burden rate, ROI, and the direct to in-direct ratio to get a good picture of the Firm’s performance.

The same theory holds true in personal finance.  While in business we tend to focus on revenue, in personal finance we tend to focus on expenses.  The problem here is that we tend to put a favorable spin on the things we like. For example, I have it in my head that the motor home I want cost $36,000.  I can work up a budget for this.  Actually the motor home I looked at was listed at $81,000 and after discount on paper it was $66,000 and after the trade in was $36,000.  So one that wanted it could rationalize that it cost $36,000 and one that did not want it could rationalize that it was an $81,000 motor home.  Probably both would be right in their mind, but neither one would be entirely accurate.  The reason this is important is, the way you perceive an expense will cloud your judgment.  What is the real impact of this purchase? The amount of the expense is only part of the impact.  You also have to decide if this is a direct or an in-direct expense. In personal finances a direct expense helps realize your vision.  Again you can get in all kinds of discussions over what is direct and what is not.  I think business is easier than personal to do this, so let’s look at personal.  If our personal vision was to become nationally known educators (we share our knowledge through books, seminars and blogs) who live in their country estate, enjoying good health and a loving relationship, then any expense that supports that vision would be a direct expense. Buying motor homes, paying utilities, or going to the movies would be in-direct.  The goal should be to keep direct high and in-direct low.  

The intent of the story is to recognize what your expenses are, and also recognize if they are direct or in-direct.  If you cannot do that you cannot prioritize expenses correctly.  When you are looking at expenses you need to consider the real cost and if it is a direct expense or not to determine the true impact.  One of the metrics that is often used is the ratio of direct to in-direct expenses.  I would love to hear about your metrics.  Other than the standard revenue number, what financial metrics do you use?