Entrepreneurial? Better Prove It
“We are very entrepreneurial at our firm.”
Just because you say it, doesn’t make it true. Your law firm is a business, so in that sense every lawyer is an entrepreneur. But very few law firms actually behave like entrepreneurs. They take risks with every file they accept, new associate they hire or attorney they elevate to partner, but they aren’t truly entrepreneurs because they don’t take the types of risk that allow them to develop as businesses.
In his bookÂ The Lean Startup, Eric Ries lays out three steps in the innovation process: build, measure, learn. A new company tries something new, measures its success or failure and then learns from it. No technology company works on an idea for three years before releasing it as a finished product; they launch one or more beta versions to help verify that the things work and their business strategies are correct, pivoting as the results require.
How does this apply to law firms? What should they build? Any number of things: new pricing structures, project management strategies, case management software, blogs, back-office outsourcing. What your firm builds depends on the types of customers you are trying to attract.
The second step is to measure. Every law firm needs at least one manager with a clear picture of the metrics that matter most. I’m not talking about profits per partner, either â€” that just measures the outcome. What drives the outcome?
I’ve helped hundreds of lawyers launch blogs, some of which never made it past the first couple of posts because the lawyers writing them were measuring only one thing: “How much new business has this blog brought me?” They’re being shortsighted. They ought to be measuring their readership numbers; how many pages the average visitor looks at; which Google search terms bring visitors to their pages . These measures tell them what the blog is doing for their exposure as a law firm â€” the degree to which their writing resonates with the audience. That’s how you build a reputation, and reputations build business.
The third step is to learn. You may have heard the saying (inaccurately attributed to Albert Einstein), “Insanity is doing the same thing over and over but expecting different results.” But how’s this for insanity: I’ve seen firms avoid measuring their results for fear of embarrassing the partners behind a new initiative should it do poorly, or those who don’t perform well in any given effort. The real failure is when the fear of a potential bad result keeps your firm on the sidelines.
Innovative firms do exist â€” they tend to be smaller, but they are out there building, measuring and learning. They represent a very small minority, but while the behemoth law firms lumber along at a snail’s pace, these smaller firms are growing rapidly and learning how to be profitable.
It’s great to say, “We are an entrepreneurial law firm.” It’s even better to behave like one.