Edward Poll, The Daily Record Newswire
Almost two decades ago I registered the phrase “The Business of Law” because it summarized the basics of my law firm consultancy, it focused on such an important truth, and so many lawyers seemed to lack an understanding of the concept.
Every public figure risks being misquoted, and often those misquotes attain a reality all of their own. For example, the quote long attributed to Calvin Coolidge at the height of the Roaring ‘20s, “The business of America is business,” is typically cited as an example of that era’s greed.
Yet what Coolidge actually said was more insightful, and although he aimed it at newspapers, it is quite pertinent to law firms today:
“A press which is actuated by the purpose of genuine usefulness to the public interest can never be too strong financially. … Rather, it is probable that a press which maintains an intimate touch with the business currents of the nation, is likely to be more reliable than it would be if it were a stranger to these influences. After all, the chief business of the American people is business. They are profoundly concerned with producing, buying, selling, investing and prospering in the world. I am strongly of opinion that the great majority of people will always find these are moving impulses of our life.”
Many lawyers insist that law is a “profession” and not a “business.” It’s a perspective that’s ingrained in legal training. Law school curricula have little business focus, and the view that legal educators have of law as a profession means that they consider any business training to be trade-oriented and therefore beneath them — an attitude that is perpetuated by CLE courses.
The result is that lawyers fail to understand the operation of the firm as a business, reliant on budget, collections, profit and loss — concepts without which a firm, no matter how noble, can survive, and which indeed should be considered “beneath” a firm in the most essential sense: as its foundation.
The phrase “The Business of Law” conveys to lawyers that law and business are not mutually exclusive. Lawyers who bridge the two concepts will better assess their value and create new ways to provide more of it. They become cost-effective contributors to their firms and value-added resources to their clients.
There is always a need for balance on the issue. Attorneys may tend to shy away from a business perspective because they fear rigid adherence to a policies manual or to financial benchmarks will restrict their practice freedom.
Certainly, those implementations should not replace qualitative factors in the firm’s performance. Decisions based only on rules and numbers will miss the full picture of how satisfactorily a firm is performing.
Consider this dilemma: If a lawyer is sitting on a plane or waiting at the courthouse in order to handle a matter for Client A, can he use that time to do work for Client B? If firm rules or financial guidelines require splitting hairs like that, it depreciates client service.
But we should never forget the quote attributed to Abraham Lincoln: “A lawyer’s time and advice are his stock in trade.” Remember that other than the obvious peril of insolvency, there’s another danger facing firms that ignore the business end of their practices: They often also have a poor grasp on the business realities of their clients.
Again, every law firm is a business and every business needs structure. Without quality advice and the value it provides, rulebooks and numerical printouts are poor measuring sticks.
But, ultimately, the country’s 600,000-plus solo lawyers are small businesses that, like every other enterprise providing a much-needed service, must on their bottom-line realities. Running a business-like firm simply makes the practice of law more professional.
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Edward Poll is the principal of LawBiz Management. He coaches lawyers to greater profits with less stress and is the creator of the new “Life After Law” coaching program, which enables lawyers to plan for profitable exits. He can be contacted at edpoll@lawbiz.com. Also visit www.lawbiz.com.
