A rainmaking partner’s unhappiness can often be addressed at his or her current firm.
What rainmakers often miss, or fail to internalize fully, is that a law firm is a business. And rainmakers are what bring revenue into the business. Without rainmakers, there is no business; the firm fails.
Therefore the key to getting what you want is creating a persuasive business case for whatever you want to do. Often, if you are happy at your firm but want to change how you work or take actions that cost money, you have to make a business case for it.
Sometimes, you may need to take your business case elsewhere, but you are still selling your value to the firm as a revenue generator rather than a lawyer who just does the work.
For lateral partners, a strong understanding of law firm economics is crucial to navigating your career path strategically.
In this post, I’ll shed light on how you can harness the knowledge of law firm economics to take control of your career potential and maximize your success.
Law firms depend on rainmakers bringing business into the firm
This foundational fact underlies your partner role in the discussion of law firm economics. We all know this at some level, but many partners don’t internalize it or realize what it means for them.
In plain terms: if you bring business into the firm, you have power and the ability to dictate your career.
Your value goes well beyond billable hours. The right partners bring in new business, foster client loyalty, and provide an upward trajectory for the firm’s overall financial health.
You bring in the business that pays the associates and the staff and generates profits for all the partners.
A rainmaker’s clients are the financial backbone of the firm; that is what allows you, the rainmaker, to dictate the direction of your career. It’s not just about the current value of the business but the growth potential.
Therefore, your business development strategy and team structure are crucial to the practice’s success.
Business development requires investment. Maybe you need to go to a conference, or perhaps you need to host a conference. Maybe you need to travel to Tulsa or Tahiti.
These are costs, and often the mistake partners make is to present these costs as expenses to the business law firm.
The key is to make a business case, or, in more verbose terms: a justification of a proposed project or undertaking based on its expected commercial benefit.
Whatever initiative you want to pursue, the key is to communicate:
- That you have a strategy,
- What that strategy looks like,
- The actions you plan to take,
- The results you expect, the more tangible, the better,
- The return on investment. The sooner it pays for itself, the better.
- And why you know this to be true: use past experiences or the experiences of others.
If, for example, you want to spend $50,000 on a conference, show how the conference will generate more than $50,000 for the firm.
Start with your strategy: I’ll go to the conference with Susan (a master networker); we’ll have a presentation room, she’ll talk to clients, and we will invite them to hear our presentation. We will collect their information and launch a follow-up program that keeps us in front of them for the next 12 months.
We expect that in the first three months, we will generate between $30,000 and $60,000 in fees, and within a year, we will generate $150,000. This is a one-year ROI of 300%. And we expect the benefit to continue in perpetuity.
I know this to be true because I’ve done this three times before and generated well over $1.5 million in total fees from spending approximately $150,000 on conferences.
Or you could say:
I want to go to a conference for $50,000 and develop relationships with key clients.
Which do you find more compelling?
The higher the amount you have to justify, the more detailed and compelling your business case must be.
And the more tangible outcomes, the more compelling your business case is. Tie your actions to revenue wherever possible.
This works for offices too.
One candidate I worked with needed a bankruptcy presence in Wilmington, Delaware. He was losing money because he couldn’t serve clients with an office in the right area.
His partners didn’t understand the value of this office and were reluctant to invest, they saw only the cost, but he had a great business case. They could invest in x amount to build the office and get y amount of revenue. Y was significantly higher than x, so it made sense.
His firm wasn’t convinced, so he found one that was.
And adding support staff
One of the most common complaints I hear is that partners are understaffed. They don’t have enough associates to do legal work or staff to support them. Again this boils down to economics: if you are overwhelmed with work, make the case. Show that more associates will increase billable hours, revenue, and profit.
This is where your power comes from
Once you understand law firm economics, you understand that rainmakers have power.
You can dictate terms because the firm depends on you. And if your current firm won’t listen, then you can find a firm that will. There are plenty of firms out there looking for good business cases and who are happy to invest in rainmakers that bring in revenue.
But there are limits.
The business case must work. I always tell people I can get them whatever they want from the new firm as long as it is not a helicopter to take them to and from work every day and a 3-hour work week.
The business case for a helicopter is a very difficult one to make (well, in most cities. Apparently, the traffic is so bad in São Paulo that they are not entirely out of the question. But you’d still need a pretty impressive book of business).
Whatever you’re asking for must always fit within the business. The business you bring into the firm must always pay for yourself, your staff and leave a profit. That is, after all, how a business works.
Still, if you’ve made the case and your firm won’t budge, maybe it’s time to move.
As a rainmaker, you possess unique leverage within the firm, allowing you to shape your career path. You should have a career you love. So if your firm doesn’t support you, it may be time to move.
If you are considering a lateral move, a strong understanding of law firm economics will be essential to evaluating your options and finding the perfect match for long-term professional growth.
Ready to learn more and discuss your needs? Let’s schedule a call.