Engagement Success

Guest blog: How to create more cash and compassion in your firm

05 May 2020

We're delighted to welcome Vanessa Ugatti, author of Amazon Best Seller, True Worth: How to Charge What You’re Worth and Get It, to our guest blogging team. Vanessa helps lawyers to generate more revenue ethically, without having to get more clients, do more work or compromise value or values while helping them to create a favourable work-life balance. 

 
As I write this, we are entering week five of lockdown here in the UK.  With any luck, by now, you have got over the initial shock caused by the extent and rapidity of what happened and are slowly finding some sort of equilibrium. Yet, at the same time, you know there are likely to be more adjustments to make in the future.
 
I have spoken with a number of managing partners of small and mid-tier firms over the last couple of weeks.  If you are anything like them, after a flurry of activity involving furloughing a percentage of your staff and ensuring those remaining are set up to work remotely, you are now adjusting to this new way of working, on a day by day basis.
 
work-from-home-offce-covid-19-coronavirys-shut
Not that you’re sitting on your laurels, by any means. Of 
course, one thing is certain and that is uncertainty. And that was never truer than right now.  For some, that is a very uncomfortable place to be. The conversations I’ve had with them have all been pretty much along similar lines.  Some areas of law are busy, including employment, private client, litigation and family to some extent, while others, such as conveyancing have and I quote “fallen off a cliff.”  
 
They are now working on budgets, yet admitted to not really knowing what to anticipate or plan for.  I think that is only to be expected, given the fact that no-one really knows what is going to happen.
Before I write any more, let me be clear that I am not an economist, politician or a futurist, so I am unable to help you predict what the future holds.  What I can do, though, is help you to manage yourself, your business and and your staff better, so that you move through this as painlessly as 
possible.
 
From my discussions with decision-makers in law firms, I understand that there are a number of key issues they are currently facing. In this article, I will focus on the two which I am most qualified to steer you on which are:
 
1) Fee-earners charging and getting paid what they’re worth
 
2) Looking after yourself and your staff.
 
And the two actually cross over.
 
Cash is king (or queen!)

It is now even more critical than ever before to ensure that cash flow is monitored tightly.  Writing off large amounts of money should no longer be an option.  This means that you need to empower fee-earners to take more responsibility for and be equipped to apply their charge-out rates correctly and ensure they are getting paid in a timely fashion, at the very least. 
 
Sounds simple, doesn’t it?
 
The temptation, though, particularly for those prone to under-estimating, discounting routinely and over-servicing clients in normal times, unchecked or uncorrected, in this current climate is only likely to increase, without additional support. It’s human nature. Emotions are running high and those who are particularly sensitive can easily be sucked into others’ emotions.  They want to help their clients, which is admirable; yet often that is to the detriment of both the business and themselves personally.  
This doesn’t only cause a loss of revenue, it also means that your staff are likely to be more stressed and tired than usual and challenged with managing their own emotions.
 
In terms of the business, here are a few steps which fee-earners can do routinely, to help with this. They are all common sense and yet I have found that these frequently do not happen, even in “normal times.”
 
1) When taking on a new instruction, get money on account.  
2) Communicate very clearly with the client on costs right at the beginning of the project.  Do not just rely on the letter of engagement.  It’s as simple as them having a conversation with the client about fees.  
3) Ensure that the client understands if the scope of work changes measurably, particularly in the case of a fixed fee, that further discussions on costs will need to occur.  
4) Monitor projects carefully and revert back to the client if costs look like they are going to escalate.
5) Bill regularly and ensure that money is collected promptly and before doing more work. This is the only way to ensure that the money is coming in on time, thus eradicating bad debt.  Of course, all of this needs to be done sensitively.
 
What I have written is not rocket science and yet in my work, I have seen over and over that the above often just does not happen.  There are three reasons for this:
 
1) The fee-earners are not used to doing this so they don’t think about it.
2) They don’t know how to do it 
3) They are just not confident having those conversations with their clients.  In fact, they often shy away from them and hide behind letters of engagement and emails.  
 
When they do not follow this process, then they are in a very weak position when it comes to charging which is when discounting and over-servicing are likely to occur.  They will potentially be more stressed than usual by the current situation, as they realise that their jobs are at risk.
 
One of the most surprising behaviours I have encountered is fee-earners continuing to do work for clients who haven’t paid previous bills.  I know it beggars belief and yet it is not uncommon. Perhaps that has occurred in your firm. What are you as a firm doing to help overcome this?  After all, the future of your business and all those working in it are at stake.
 
Looking after yourself and your staff
 
You are stretched, stressed and preoccupied.  That’s a given, yet not to be ignored.  Despite that, you have a duty of care to your staff and this needs to be a top priority.  Without fully functioning staff, you don’t have a business. The firms which are doing this the best are likely to be the ones that not only survive but go on to thrive when we come through this.  They will have the most loyal staff who will also have grown in confidence through empowerment and care.
 
One of the potential hazards of living through a crisis such as this is that fear is rife.  When vast quantities of fear are being pumped out into the atmosphere, it spreads like wildfire. So many of your fee-earners will be experiencing heightened levels of fear, whether they continue to work or are being furloughed. . It’s even trickier if they are constantly being bombarded by clients who are often feeling very emotional themselves. This means that they may feel more stressed than normal or even overwhelmed. 
 
And, if you are feeling fearful yourself, it is likely to lead to decision-making and behaviours that are fear-based, which means that you run the risk of damaging your business, not to mention staff morale.
In addition, if you as the decision-maker is fearful, then it’s more than probable that you will transmit this to your staff.
 
So what can you do to mitigate these circumstances?  First of all, it’s important that you:
 
1) Take time to take care of yourself! Remember the analogy of putting your oxygen mask on first! 
 
2) Make a conscious effort to get up from your desk every couple of hours and move around. 
 
3) Take some deep breaths, preferably in the fresh air, and as you exhale, make a noise of release. 
 
4) Make time for exercise and social activities, even if they are remote! 
 
5) Take time to reflect on how you feel.  This will enable you not only to understand yourself better but also deepen your ability to understand others.
 
6) Acknowledge your feelings and accept them. Resistance gives them more power; acceptance helps them dissipate. By doing this, you will also be able to help others do the same.
 
7) Come back to the present moment.  Stay cool, calm and collected, as much as possible.
 
8) Think things through carefully and then make rational decisions, without procrastinating, based on logic and the facts you have available at the time, not fear.
 
9) Ensure regular communication with staff (whether they are working or furloughed) to keep them up-dated, engaged and feeling valued. Show them you genuinely care!
 
10) Foster an atmosphere of openness and encourage staff to speak up if they need help, without fear of being judged.
 
11) Ask for suggestions from your staff.  They will help guide you.
 
Of course all of the above points can be shared with staff for them to implement too.  Now is the time when we all need to take responsibility for ourselves and, if in a position to do so, help others do the same. Self-care and the care of your staff is not a luxury; it’s an even greater necessity now than ever before. Finally, you may wish to consider using this time as an opportunity to bring in remote training to your fee-earners or on-line motivational talks to uplift and inspire staff.