Episode 15

You’re listening to SmartTalk with Victor and Mark; SmartTalk is hosted by Victor Medina estate planning, elder law and private client attorney in New Jersey and Mark Merenda CEO of Smart Marketing a marketing and coaching firm for law firms, Attorneys and financial professionals.

SmartTalk is a podcast for solo practitioners and small firm attorney’s looking to improve their practice.

This is SmartTalk episode 15 the boys moved to video

Victor: All right, welcome back to Smart Talk with Victor and Mark; hey look at us we’re on video now
Mark: we’re doing something different today
Victor: yeah unless your listening on audio but now you know there’s a video version
Mark: that’s right
Victor: you can go and look at it; we’re going to put it on YouTube. All right, so what do we have on tap for this week Mark?
Mark: We’re going to do something a little different we’re going to talk maybe a little more on practice management then marketing. I think it definitely impacts marketing it’s certainly going to impact the long-term development of your business.
Victor: Great, introduce our first topic.
Mark: okay, well lets talk first of all about what it is that you like to do and how that impacts the growth of a firm and how that should determine some things for you.
Victor: okay
Mark: you talk about a quadrant, I guess you use a quadrant, and I tend to use a symbolism of a bullseye; a target bullseye and say in the center of that bullseye is your unique ability it the thing that your gifted to do, its the thing that you love doing, it’s the thing that’s easy for you to do and difficult for other people.
Victor: Sure
Mark: and then in the next ring out from that bullseye is the stuff that you’re very, very good at; your probably better then most people at; and the next ring out would be stuff you are maybe more then adequate at; then the next ring out would be stuff you can do if you have to; your probably not that great at it but you can get away with it; and then the next ring out would be stuff that your not very good at; and the next ring out would be stuff that you stink at.
Victor: it’s like a reverse Dante’s Inferno
Mark: Well yes
Victor: The circles of Hell
Mark: each one of these things that your good at or that you stink at or so on, has a corresponding quotient of do you take pleasure in doing it?
Victor: Okay
Mark: with the likelihood that there’s a pretty exact correlation between your not liking to do stuff you stink at.
Victor: Right
Mark: right; I mean to do things your good at. So what that does is give you a road map in the growth of your firm and the hiring of your firm about which tasks and which duties you need to outsource or hire to place yourself in. To turn this from something less abstract into a personal story, I can tell you how it started with me; I was a solo marketing consultant and I had one client at the time,
Victor: a true solo? it was just you?
Mark: just me that’s it. I had one client and I was renting an office within his office suite
Victor: and he paid you to do that?
Mark: This guy was kind of a mentor to me, he’s a very smart guy, and as a matter of fact, he’s upstairs in this building that I’m in now, and I learned a heck of a lot from him, and he kept saying to me ‘Mark, you have to hire an assistant you have to hire an assistant’ and I would to him, ‘I can hire an assistant I made seventy five thousand dollars last year, a good assistant will cost me like thirty five forty thousand dollars, that half of my gross, there just no way.
Victor: Right
Mark: I can’t do it. And he said ‘ I guarantee it that you will make more than the thirty five forty thousand that this assistant is going to cost you by what that assistant frees you to do.’ And that was a moment of revelation to me. Cause he was saying to me was ‘ Mark you can make more money doing the stuff your good at and paying somebody to do the stuff your not good at or don’t like doing than you can save by doing it yourself.
Victor: Yes, I think this comes into a few things; the first is that when attorneys start out by themselves, they are doing it all; and I have to tell you almost as a character flaw or as a card of admission attorneys tend to be pretty tied to doing everything in their office; they feel responsible for it from an ethical standpoint anything that goes out; but by the same token its almost an ego thing, where at the end of the day they feel they can do stuff better – God complex – then anyone else involved and so their really hesitant to give up anything and they feel like the overwhelming pressure to be the person that does everything is something they can’t part with.
Mark: You can make better copies then your assistant
Victor: Right, exactly, because I can make sure the paper’s line up exact in there, there’s no margin on the outside and at the same time, there is, I think a movement with the advent, we call this the sort of advent of technology, which means that anything that the computer, internet can help you do that you used rely on a person or whatever else, they feel like that means they can and should be sort of carpet commuting and running their practice out to their house and doing everything on their own and that lower overhead means a more efficient practice and keeping more money. I think that I probably challenge a couple of those notions the first one you brought up which is that lower overhead mean more money and the other one that I think I probably challenge and I think that you might agree with me, is lower overhead or fewer employees means more efficiency; and I’m not sure that’s the case at all, I mean I think that you start allocating skill levels and job responsibilities for the practice correctly so that you have people that are best skilled at doing something at doing that job that’s when you become more efficient; and the scary thing I think for a lot attorneys is that means needing to bring in more money to cover the overhead but doesn’t necessarily mean that your more efficient because your by yourself at all. I’ll just relay this story; I am a terrible what we’ve discussed, as being an implementer; I, follow through that is not a strong suit, if I am the only person responsible for following through on something, woefully inefficient; its terrible, it’s a terrible way to practice.
Mark: Right, right, a couple of comments, I think that I’m always astonished that most attorneys and in fact most business people think of an employee as an expense instead of a profit center.
Victor: Right
Mark: To me, lets say in your business Victor, as an estate-planning lawyer; lets say the average estate plan is four thousand dollars,
Victor: okay
Mark: and lets say you have a candidate that can be your assistant for forty thousand
Victor: okay
Mark: so to me, you look at your business and you look at all of this stuff that your doing that does not have high value to the firm in terms of producing revenue or producing happy clients, or whatever it is.
Victor: okay
Mark: and you sit there and say okay, lets say that’s taking fifty percent of your day just to pull a number up, all of that admin stuff whatever it is; if this forty thousand dollar a year employee can take that fifty percent off your plate; now the question is, with the fifty percent of your time that you gained back, can you make more then forty thousand dollars in a year? That’s ten extra estate plans, which is less then one a month. Can you do that? But you don’t have to do that fifty percent of crap that you’ve been doing. Can you get one more client a month? I think the answer usually is yes.
Victor: well it brings up a couple of points, I think that attorneys are scared generally, and business owners are scared about and maybe being honest with themselves about actually using that fifty percent to gain new clients; this equation only works if you take that fifty percent and you go out and do work; and you actually bring in new clients.
Mark: That is true
Victor: There’s a safety net built into not having to go and do that extra work and just getting by with what you have.
Mark: Right it definitely put the pressure on; but I mean I think that a good thing
Victor: well, the pressure’s always there; whether its one client a month or two, the pressures there to get it done and by the way, your doing something you don’t like. It’s interesting because if you look at traditionally the way attorneys look at profit centers versus cost centers in their practice, they’ll usually look at attorneys or paralegals as profit centers. People who can bill out time
Mark: bill them out, right
Victor: exactly, I can bill their time and recoup their expense plus some extra, and I’ll do that one third, one third, one third computation and now I know how much money that I’m making. But I agree with you that I think that a lot of the admin rules that are there are also profit centers; I’ll give an example just from our, something just recently from something we’ve been talking about, you helped me with, which is that we brought on a part time person to help us do really two tasks; one was help us clear out a back log of things that was on Tiffany’s plate to do, she’s my key assistant; and then the other thing was, I have probably fifteen projects that are marketing related but also sort of administrative and substantive in nature, things related to our client maintenance programs and whatever else, that have been continually the too do list; and my thought is that this person, in just ten or fifteen hours per week, is going to come in a bang one of those out every week, maybe one every two week, I have supreme confidence that if I do this consistently over the next four to six months, I’m going to make a killing on what I’m pay her when really what she’s doing is not directly tied to bringing in new clients. But she’s a cost center; she’s doing things that do not have a direct line to getting money in and yet
Mark: and yet she’s going to make money for you
Victor: she’s going to make money for the firm; undoubtedly, and by the way, on an order of magnitude for what her cost is, not simply covering her expenses that are fairly low at fifteen hours a week, chute, but the moment one client comes based on what we’re doing, in that’s going to pay for ten weeks worth of work, not just one.
Mark: I think that’s so true; lets go to your point about the fact that if you free up this amount of time for you, if you use that time and go to the movies, this whole equation is not going to work for you.
Victor: you sit on the Internet and do chat
Mark: but you know what? I kind of like taking on of the obligation and I’ll tell you why; you know this concept of throwing your hat over the fence? You come to the big fence and you don’t want to climb it, you throw your hat over the fence now you have to go; now you have to go. So I look at it hiring an employee that way too. Its like, I hired this person so now I have to pay them. The pressures on me, which in effect forces me to grow my business; I’m doing it because I have too. Whereas if I didn’t have that expense I’d be sitting in my office screwing around making podcasts with Victor.
Victor: so that’s interesting, you would say that then by extension; instead of waiting for enough revenue to grow your business so that way you hire somebody and now you’ve grown your business, actually the act of hiring someone is the first step in growing your business.
Mark: That’s the way I’ve grown mine pretty much every time.
Victor: Well, how do you answer the charge; don’t grow too fasts, how many people should you bring on? What level of smart growth factors into it? Are we back into the concentric circle or the way I like to think about it the quadrants, do you have to find stuff for this person to do in order for that to be a smart hire?
Mark: it’s really strange because I think its like many things it’s a combination of science and voo doo; there’s a little bit of magic to it too in the sense that if I run into somebody who is uniquely talented, great character, great attitude, great work ethic, and all of that kind of stuff,
Victor: sure
Mark: my impulse is to just hire them, hire them, grab that talent, whatever I give them to do their going to be great at and I’m going to make money off them.
Victor: So what are your three things for hiring? That’s one of them, find good talent right? I love this
Mark: Attitude, work ethic and what did I say? I can’t remember now
Victor: no, no, no, that was the first step, but what do you do when you actually find them?
Mark: hire them
Victor: right, but then you do what? Pay them over market?
Mark: oh, that, client retention,
Victor: employee retention
Mark: get the best people you can, pay them above market so they have nowhere to go,
Victor: right
Mark: and tell them periodically how wonderful they are.
Victor: Right
Mark: and keep them, keep them forever
Victor: and that’s the secret; that’s sort of the trick in there, is that you can find this great person and in order to bring them in, you have to understand you can’t cheat them out, if they’re worth that much to you, pay them the amount what you think they can’t- the Godfather number, the offer they can’t say no too.
Mark: Well, you’ve got a great point in the sense that you know what? This isn’t going to work if your lazy, if you don’t want to work much I sort of agree with the strategy of keep your overhead low
Victor: right
Mark: you won’t have much pressure on you, you won’t have much stress, you won’t have much gross, but you wont have to work any harder. There’s no doubt that when commit yourself by throwing your hat over the fence, by hiring this great employee now you’ve committed yourself to working as hard as it takes to be able to pay that person and make money for yourself. The formula for growing your firm its not, if you don’t want to do that, obviously this goes out the window.
Victor: Sure, but the saving grace is, I think, is understanding that you will likely be happier in the effort that you are expending; so just to bring it to the way I think about it, going back to those quadrants that we mentioned in the beginning, I end up thinking about taking a sheet of paper, and we’ve done this exercise before, taking a sheet of paper and drawing a cross on it; in the upper left hand side, there’s the stuff you hate to do, on the upper right hand side, there’s the stuff you suck at doing, maybe there’s some overlap, you don’t mind doing it but your not really good at it, there’s some stuff your good at, and then what you said, that smallest target, the stuff that’s your unique ability and that you enjoy doing; and the idea in hiring, at least the way I always understood it, is that you want to replace yourself sort of, in the order of the task; get rid of the stuff you hate doing first.
Mark: Well, this is really a great point because what a lot of people don’t understand that, lets say that, to stay with our analogy, lets say that now as a solo working, your taking home sixty thousand dollars, and your not having to pay that to anyone else, and lets say that you hire the assistant for forty thousand dollars and the next year you make a hundred thousand gross, well a lot of people will say that you didn’t increase any, your not taking home more money, your not profitable and all that kind of stuff. My answer to that is; yea, but now I’m spending eight hours a day doing stuff that I like to do and not doing all this other crap that was no good at that I didn’t like to do, somebody else is doing that; so I transformed the quality of my workdays and my work life even if it’s a breakeven proposition.
Victor: yes, I mean, this is a very similar to this concept that we’ve discussed before on pricing which is, for people that are overburdened with work; raise your rates. People say well I’ll lose clients; right, but the idea is that your do less work for the same money isn’t that a better situation? This is exactly the same set of circumstances, which is that, your going to do the same amount of work but your going to be happier because it’s the work that you like to do instead of the work that you don’t like to do; isn’t that worth meeting somebody that’s worthwhile and giving them the stuff you don’t like? Isn’t that worth something?
Mark: That’s so true; we’re going to spend eight hours a day doing this for forty or fifty years, to me, you want that time to be as enjoyable as it can be, not doing stuff that you hate and stuff that drives you crazy so if you can accomplish that through hiring, that’s a big, big, step.
Victor: Now we’ve talked mostly in this discussion so far about probably employees that would be based in the office, and folks that are available; technology has certainly made it possible for you to hire remotely, and bring in some help that’s technology based like a virtual receptionist or something like that or that’s non office located to do; do you have any thoughts about when its appropriate to do and when its not?
Mark: Well, I think it’s a task where you can measure productivity by the work result; for example, I have a web person who works full time for me, he’s in North Carolina and I’m in Florida; to me, I can tell how many websites he’s designed and how many he’s built out, and how many there are, I don’t care if he does it at midnight in his under shorts hanging from a chandelier, all I care about is the work product.
Victor: Your not putting that up on your website though, none of those pictures are going up?
Mark: No, no, no, but I don’t need him here, and I can still measure the productivity, I think those kind of jobs are very appropriate for home workers or telecommuters or that kind of thing, its also wonderful in the sense that it allows me to avail myself of the talent that’s available nationwide. I don’t have to worry about who can I get lives here in the neighborhood.
Victor: Sure, one of the things I was lucky enough to watch over the weekend was an interview with Terry Kelley, who is the CEO of Gore Technologies, which is basically the people that make Gore-Tex; they were featured I think, in one of Malcolm Gladwell’s books when they talked about small teams; they had the philosophy where each of their plants can’t grow to more then a hundred and fifty people or so, because they start to lose the unique characteristics that have made them successful and so they have eighteen plants all with fewer then two hundred people in each plant and they will challenge the idea of the economy as a scale of putting them all under one roof; the only way that works based on those principals, is when you have personal connections with people and folks understand that they have a vested interest in the future and I think we’ve talked about this before, Daniel Pink’s thoughts that the way you motivate people to work above a certain salary level or educational level has to do with autonomy and not necessarily with salary. I think that’s probably an interesting factor in as you start to grow larger, when it’s not just hiring your first assistant or your second employee; but when your now trying to craft a team around you and say ‘I need six or seven people in order to make this work’ when you really start to leverage that size, and I know you have a number of clients are just about at that level, they’re probably four of five large in terms of size of their firm; maybe just one an attorney, that’s the lead counselor, but they’re there, fostering those personal connections I think is probably really important I think not to compliment you too much cause I don’t want your head to grow, you’ve done that really well in your company (Laughter) now we’re really sorry we have video! Because you have employees that get along with each other, they get along extremely well with your clients; they understand the culture of the services, the company and the services you want to provide, they are all extremely adept at making it seem seamless, whoever you’re talking too is a Smart Marketing employee, and it’s the same across the board. I think that fostering that is going to be an important part of getting everybody involved.
Mark: I’ll tell you what one of the keys is that may not be completely obvious in that is simply longevity of the employee. How long do you keep your employee? How much turnover do you have? Because I feel with my employees that each year that goes by, they’re accumulating more and more knowledge, more and more expertise about our clients, about their business, about what its like to market a law firm, what are the issues and all that kind of stuff, and that’s terribly valuable.
Victor: Okay,
Mark: and I see a lot of companies and a lot of law firms where there’s rapid turnover. I have a client that probably had, I don’t know, six associate attorneys, they stay for six months to a year and then their outta there!
Victor: Right, one of the things I’m happiest about is that Tiffany’s been with me in charge now, for about four years but with this firm, and doing the work that we do for over seven or eight years, and even some time when she was in high school, so she certainly is committed to what we do here and her knowledge base increases and one of the thing that we talk about, or at least try regularly, is to say ‘what kind of track are you on and what’s available for you so that you understand that what you’ll be doing ten years from now will be as interested and challenging as it is today and that there is a charted growth path that includes your growth as well.
Mark: and that’s the autonomy thing that you mentioned from Daniel Pink’s book; when you think about work in general, to really dumb it down, what is it that we don’t like about it? We have to go to a place; we don’t have any choice we have to go, we have to stay a certain number of hours; we have to go home, we don’t have a choice of what we do, somebody’s telling us what we have to do everyday, that kind of thing. So with your higher level employee’s, the more autonomy that you give them about how they choose to spend their time, when they choose to do it and all of that kind of thing, then that take away some of the more unpleasant aspects of work.
Victor: Right, and there’s also another set of competing values that are linked to sort of practice management employees to bring them on which is a lot of companies or one of the best words today is innovation; that always competes with a set of policies and procedures to make sure that you can have a consistent result or something that you can depend and you kind of weigh those in balance; I heard and interesting way of thinking about that because I think that in order for innovation to be successful, you have to give permission to the people innovating to fail; they have to have, the culture needs to support misguided attempts or else if you hold them accountable for every single one that goes in there, soon you’re going to encourage them not to experiment because there’s no reward
Mark: they’re too afraid of failure
Victor: Right, and so I think the interesting analogy that I heard is, thinking about the water line on a boat; and that is to say there are some things that if you attempt and go out and do will compromise the integrity of the ship and so the analogy was drilling holes below the water line.
Mark: (Laughter)
Victor: If you drill holes below the water line, you’re going to take on water and sink. You are permitted within your own world to drill as many holes as you like above the water line, and I think that’s a great way of sort of balancing those competing interests and saying you may innovate in those worlds and feel free; and we’re never going to hold you accountable for failure, we’re going to reward the fact that you were out there taking risks and trying to be creative within your world so long as continue to drill holes above the water line and know what compromises the brand integrity here at the law firm, the compromise, the work product that we’re putting out there, blowing deadlines, don’t think that your going to be creative by keeping all of our scheduled paper submissions on a sticky inside of your purse that’s not going to work, that’s going to compromise our integrity, those types of thoughts.
Mark: I think a great place to empower employees is in the realm of customer service, client service; for my employee’s I tell them that you are empowered up to two hundred bucks; anything that you have to do, want to do, or think that we should do for a client, you have credit for two hundred bucks to do whatever it takes. If its raining and you need to call a taxi, if you need to send something overnight, if a client says their aunt just passed way and you think we should send flowers or something, you don’t have to ask me, just do it; and then I have a couple of key executives who are empowered to a much higher number just to do whatever it takes to deliver good client services.
Victor: You’ll have to let me know who they are and what the limit is, so that way I can test it out there, I want to know if your systems working Mark, it’s a benefit to you!
Mark: well, that’s exactly why I didn’t tell you I knew you might have thought that. Now I think that if you think about the times in the past where you had a job or I had a job or something like that, I think the ability to say hey, I can go spend some money is an empowering feeling; I can use my judgment, this person trusts me enough with my judgment and with their money to do what it takes; and it also says to everybody that our focus is client services here not nickels and dimes and I think that’s an important moment and somebody else’s business it might be different that they want to put the emphasis on but I think the empowerment is certainly an important factor.
Victor: I like it, I like it I think its great; and one of the things that I think separates what attorneys can do in the world of increasing do it yourself options or software options comes by way of client services or what we’ve discussed before about the client experience.
Mark: I get the question quite often is – and I think they got it out of a marketing text book or something – is how can I differentiate myself? And my response to that is ‘do halfway decent client service and everybody will rave about you and bring your friends because everybody knows lawyers have a terrible reputation for –
Victor: The bar is really, really low
Mark: it’s really, really
Victor: you can step over it
Mark: you don’t have to do much, return phone calls, show up on time for appointments, serve a Coke in your conference room, it isn’t going to take much to make you look great; have the phone answered in a good way, those are little basic things that most businesses wouldn’t give a second thought to they’d say of course you need to do that; but law firms are notoriously bad so to me, that presents an opportunity to you as an attorney to stomp all over the competition, their crappy at it, you be great at it that will differentiate yourself. If every lawyer was exactly the same skill level, if we assumed all lawyers were A plus lawyers, how would one lawyer beat out another lawyer the other competition? Through great customer service; up through, I got a C line and you don’t, that kind of thing.
Victor: We’ve certainly taken to that here, and I’ve tried to spread that message out when I’ve talked to people I’d say to the extent that you can, script the client experience from start to finish. Have them understand, or have your employees understand that every time a client or prospective client touches your law firm there should be a I think I’ve used this term before a cognitively consonant experience with the one before it. So it should be pretty clear in their mind that every time they’re going to interact with your firm they’re going to get the same level of treatment, the same level of customer service, the same warm feelings about your ability to help them as they did the first time. It’s going to do a few of things for you; we’re sort of off employees now, but the first thing it’s going to make it easier as you suggest to differentiate yourself from your competition, the other thing its going to do, which I people understand don’t understand, its going to make it easier for you to screw up in the future; because what ends up happening is that put aside the idea that you will be perfect, if you can agree with me that you may screw up in time, you probably will, if your engaged in a long term relationship with them; if you have, create an expectation in their mind that you are going to do everything well and you happen to screw up, you will have purchased for yourself a lot more leeway then if you were continuingly sort of screwing up or not going in the other direction of what you created for them and no you got to come in hat in hand with a real big screw up and try to fix that.
Mark: As we probably discussed in one of the podcasts, I’m not sure, the research is very interesting, it shows that if you something as a business, if you screw something up and then you make it right with a good attitude and blah, blah, blah, and all of that. The client is now something like fifteen or twenty percent more loyal then before you screwed it up
Victor: if you had been perfect
Mark: yeah
Victor: so you might want to find something and screw it up to get more loyal clients
Mark: the old cliché in human behavior it’s during bad times or bad events, you find out who your friends are; when there is a dispute or a screw up or something that the client finds out what your company is made of, what your made of, how your going to treat that situation. So I’ve written a piece on the screw up is opportunity. So you’re right, if you have great costumer service too you’ve earned a whole bunch of good will. You’ve seen those studies I think, about hospitals that have found out that basically if the doctor’s are nice, and the hospital is nice, they get sued much less often.
Victor: I actually saw another study that is related to that; which is one of the things that hospitals will do on the advice of attorneys is not admit any liability or screw up but the study show that if your quick there to admit that something went wrong and then attempts to fix it your much less likely to be sued then if you sort of stonewall and insist that you didn’t do anything wrong and decide that whether or not legal advice that your countermanding; the studies are pretty clear that people are as interested in the acceptance of responsibility and the attempt to fix it by good natured people as they are not having suffered the screw up at all.
Mark: yeah, I think the formula’s pretty simple, which is one, admit the error, don’t try and pretend it’s the clients fault or some employee, two, apologize for it, three, make them whole, and four, give them something extra and that does it. Starbucks is a great example, I go down there, I put in my order, wait in line, they deliver the wrong drink, I say I’m sorry I ordered this, they say okay sir right away, they make my drink that I ordered right away, they give it to me with a certificate for a free coffee the next day. So to me, its like they didn’t try to tell me that it’s my fault that I gave the wrong order or something,
Victor: right you didn’t speak loudly enough
Mark: right, right, they apologized, they made it right, they gave me the drink that I ordered, and they gave me something extra now I’m glad they made the mistake, now I feel good about it.
Victor: sure
Mark: so yeah, I think it’s an important formula and part of this whole empowering your employee’s thing that we talked about.
Victor: All right, I think we’ve come full circle on that topic; do you want to introduce our next one?
Mark: Yeah, well I think there’s a lot more to say on that particular topic but we can continue with that practice management aspect maybe next time. But I would say this; if I could convey one thing to the attorneys out there, it would be that an employee is a profit center, and it’s a way of making your working life much more interesting and better because you’re going to be doing more stuff that you like and less stuff that you don’t like. So on both on a dollar basis and a work satisfaction basis, its something you should consider and something you should not view as cost or overhead.
Victor: And we’ll let that be the last word on the topic; so we’re going to close out SmartTalk for this episode, thanks for joining us, thanks for watching our inaugural video episode and we’ll be back next time, thanks a lot.

You’ve been listening to SmartTalk with Mark Merenda and Victor Medina; to subscribe to SmartTalk, go to Smartblog.smartmarketingnow.com

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