profitable

98 – Delisi Friday – Scaling Your Law Firm, Your Way

In this episode of the Trial Lawyer Nation podcast, Michael Cowen sits down once again with his Chief Marketing Officer, Delisi Friday, to discuss law firm growth and how they’ve scaled their firm over the years in the way that best suited their goals.

The pair begins the episode with a look at the motivation for their most recent hiring expansion and how they knew it was time to grow. Delisi shares her frustration on the marketing and intake side, where she would receive a new case and have to decide between overwhelming an attorney with an already large docket or rejecting a case she would normally accept.

Michael echoes this sentiment and adds that rejecting “bread and butter” cases from referral partners was hard to do at times but needed to be done to ensure that the proper time and care was being put into existing cases; and that his staff was not going to be stretched too thin. This is how they knew it was time to hire 3 new associate attorneys.

“I always want to market our firm honestly, and I want us to fulfill our promises as well.” – Delisi Friday

Following this, Delisi asks Michael how he knows when the firm needs to grow and how to figure this out. Michael breaks down his answer in two points:

  1. “If I see the workloads on my people are becoming unhealthy.”
  2. “If [I’m] having to turn down things [I] wish we could keep,” paired with asking yourself, “Am I having to turn down enough things that justify hiring someone else?”

Adding onto these points, Michael says he saw that his firm was at the point where they had to hire more lawyers or start saying “no” to cases at a rate that he felt would damage his referral relationships. To this, Delisi brings up the firm’s weekly docket discussions. During these meetings, she not only brings up the number of cases on attorney dockets, but also the phases of those cases to properly assess if they have the bandwidth for more cases. Michael then discusses doing something similar in his monthly attorney development meetings and adds that a further challenge is getting lawyers to trust him enough to tell him when they are overwhelmed.

“I have to prove to them that I’m worthy of their trust … [by taking] steps to help and not punishing them for being overloaded.” – Michael Cowen

Delisi then asks Michael how he decides how he’s going to grow, to which he explains why he looks for what the pain points are and what type of hire would resolve them in the most efficient and logical way. This leads them to discuss the pros and cons of hiring an experienced lawyer, which has historically not had the best “hit rate” at their firm. This, according to them, is due to the firm’s established culture, procedures, and systems, which many experienced lawyers may find difficult to adjust to; having been trained in and working under different systems and procedures beforehand.

“I can’t do legal work, market the firm, and run a 33-employee firm.” – Michael Cowen

Michael then touches on the fear associated with growth; more specifically the fear of letting responsibilities go. He goes on to say that finding and hiring the right manager to cover those responsibilities and run with them is essential. By hiring and promoting the right people, such as his firm operations and intake managers, Teresa and Delisi respectively, most of those fears and anxieties have subsided while productivity and efficacy have only increased.

Building from this conversation, Delisi asks Michael what he’s learned along the way from scaling his firm and his advice for other lawyers, which he breaks down into 3 main points.

  1. Do you want to grow?
  2. Is this a temporary bump, or do you have a sustainable flow of business where it makes economic sense to grow?
  3. Do you have the cash flow to grow?

Throughout these points, Michael notes that growth is not for everyone, and it’s not the only way to build a successful and profitable practice.

“You should grow if it’s going to fulfill you, and if it’s what YOU want to do.”– Michael Cowen

Delisi then adds how every year, they seem to bring in roughly the same number of new cases without even realizing it, month-to-month. Michael clarifies that while this doesn’t sound like growth, the value of those new cases grows with each year, which reflects the growth model his firm follows. This is tracked through a concept learned from former podcast guest Chad Dudley, called the 5-Star Case Rating system, which assigns each case a star rating based on a variety of factors, and helps to accurately analyze a lawyer’s docket and the firm’s entire case load.

“We may have the exact same number of cases that we did last year, but the type of cases, the quality, and what our projected attorney’s fees are going to be vastly different.” – Delisi Friday

Michael then shares that growth isn’t always about adding more lawyers, but frequently requires more paralegals, marketers, or other positions. This leads Delisi to dig deeper into the onboarding and training process for all these new hires, especially the young lawyers.

Michael answers candidly, sharing how large the time commitment is to bring someone completely new and inexperienced up to speed. But, from his experience, the more time you put in up front, the better the outcome is in the long run. He elaborates on this sentiment by sharing his lengthy 3-step deposition training process with new hire lawyers, an incredible training strategy which everyone considering hiring young lawyers would benefit from hearing.

Delisi then references Chad Dudley’s podcast episode once again, sharing his fantastic quote about how being a great tennis player doesn’t necessarily make you a great tennis coach. This leads Michael to share that, while he’s a great teacher, he doesn’t see himself as a great coach, something Delisi commends him for realizing.

“We have a promise we make to our referral partners that if you’re nice enough to bring us in on your case, we are going to do the case to this standard. Which means I have to enforce those standards at my firm.” – Michael Cowen

Michael and Delisi then discuss some of the challenges they’ve faced when hiring new lawyers. For the most part, it boils down to setting expectations and being willing to have tough conversations when those expectations aren’t being met. This has led them to their current strategy of hiring 3 lawyers who are all relatively young in their careers, something Michael has been very happy with, citing their energy and willingness to learn and adapt.

Delisi agrees and adds that these associate additions have required the senior attorneys to communicate more with each other, which has led to more idea sharing and even a hint of competitiveness, which has been fun and rewarding to see.

The pair wraps up the episode with their final thoughts on law firm growth. It’s been a wild, scary ride, but if you plan for it and grow at a rate you can handle while keeping an eye on your finances, it can be very rewarding.

This podcast episode also covers how to know when and why your lawyers are overwhelmed, why Michael likes promoting paralegals from within, a look at some of their past hiring mistakes, and so much more.

96 – Malorie Peacock – Building Your Profitable Law Firm

In this episode of the Trial Lawyer Nation podcast, Michael sits down with one of his favorite guests, his law partner Malorie Peacock, for an episode about the decisions they’ve made over the years to build and run a profitable law firm. 

“It’s a podcast about actually making money from practicing law.” – Michael Cowen

Michael and Malorie begin the episode with a look at where they started in 2014. Back then, the practice was general personal injury with a lot of small car wreck cases. That year was the first time they decided to stop taking non-commercial cases without a large insurance policy – a scary decision at first but has since proven to be very successful in branding Michael as a “big case lawyer” with referral partners. And because of this scary decision, Michael began meticulously tracking specific numbers to make sure the new strategy was working.  

Michael shares the main numbers he tracks and analyzes with his leadership team annually – the average case fee and the median case fee. He then breaks it down further by case type, referral source, lawyer assigned to, and more.  

Tracking each of these has shown that even though the firm is only accepting 1/3 of the cases they did before, the firm has grown significantly since 2014. This has helped fuel decisions from what kinds of cases they accept, to marketing, and when to hire more staff. 

“I didn’t dare to dream that we’d end up with the median or average fees we’re at now.” – Michael Cowen

Michael then reminds listeners that he’s been doing this for 20 years and being this picky about what cases he accepts is NOT something he could have done successfully when he first started. 

“If it doesn’t work, you can make other decisions. You don’t have to die on this hill.” – Malorie Peacock

He and Malorie then dive further into their “counterintuitive” approach to growth – to accept LESS cases but make MORE money – and the big and small decisions that were made to get them where they are today.  

The first big decision was that they would not accept any car crash case that did not involve a commercial vehicle or 18-wheeler, unless there was a “large” insurance policy, adding that the definition of “large” has been re-evaluated and changed many times since the decision was first made.  

Malorie then digs deeper into why re-evaluating your rules for case acceptance every year is so vital. Michael explains that you need to see if it’s working, and if it is working, decide if you should lean further in that direction or not.  

Another decision made was if it “doesn’t have wheels” and isn’t worth at least $1 million, they usually won’t take it. Michael shares why this one has been hard to stick to, but he and Malorie discuss why they need to be this picky, citing the lack of systems in place for these cases as well as the amount of research and work that needs to be put in to get the maximum value for the case.  

Malorie and Michael continue discussing some of the changes they’ve made, and some changes they decided not to make, and how they evaluate each item up for discussion. For example, they frequently discuss eliminating cases with low property damage, but for now have settled that they’ll take a low property damage case if it meets other criteria. This insightful and holistic approach is a must-hear for any listener who is looking to re-evaluate their approach to case acceptance. 

“You can’t fight a war on 3 fronts…If you have to fight on all 3 of those issues, it’s really tough to get a jury to go along with you on all 3 and still give you a lot of money.” – Michael Cowen

This leads Michael and Malorie to discuss the sunk cost fallacy once again, where you hesitate to pull out of a case once you’ve put money into it. Michael shares how he used to spend most of his time working on cases that didn’t make him any money, and how learning to let those cases go and withdraw when necessary has made him a much happier person and has actually caused his firm to make MORE money in the long run. These include cases where the client lied to you, or even cases where the facts just aren’t what you’d hoped they would be. 

Michael then shares a heartfelt story about his uncle, and how his death made Michael realize the importance of enjoying your life while you’re still here. Malorie adds that at the end of the day, a personal injury law firm is not a non-profit, and if you’re not making money, then you’re not doing it right.  

“We get one ride on this earth, and I want to choose to be happy and enjoy my time.” – Michael Cowen

They continue to discuss some of the smaller decisions made along the way, including the implementation of in-depth systems. Not only does this help the case resolve faster, but it also helps the lawyer focus less on meeting deadlines and more on in-depth research and complex legal work that can really maximize the value of the case. 

“Cases are not wine. They do not age well.” – Michael Cowen

Michael and Malorie begin to wrap up the episode with a look at docket size, which has lowered dramatically at their firm in the last 7 years. This has allowed them the time to implement those in-depth systems and end up getting 150-200% of the money they received 7 years ago on the same wreck with the same injuries.  

If you don’t have control over your docket, but you do have control over what you work on, Malorie recommends utilizing the 5-star case system. This system ranks your cases based on your projected fee and your win probability, and the goal should be to spend as much time as possible on the 5-star cases and as little time as possible on the 1-star cases.  

“Limiting docket size at the firm… counterintuitively… has made everybody happier, but also has made everybody more money.” – Malorie Peacock

The pair concludes the episode by emphasizing that the criteria and decisions discussed in this episode need to be discussed at least once every year, which they will be doing the week this podcast airs, and that the decisions you make need to work for your firm and your life.  

This podcast episode also covers saying “no” to cases, the Pareto principle, why Michael still accepts other personal injury cases, getting out of cases with “toxic” clients, the logic behind “from crash to cash in 12 months”, why you need to be ready for trial the first time you’re called, and so much more. 

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