It’s happening every day. Change. Just read the Daily Law Bulletin or National Law Review. New law firm mergers and buyouts are becoming commonplace. Law firms are looking more like a business and less like the wild west. It’s a reality that the firm you work at today, may not be the same firm tomorrow. While that could be a blessing or a curse, the common theme on the street for every attorney still remains, “what’s your book of business?” Why is that so important today versus in the past? Let’s take a closer look at the facts so that you can make an important life decision in 2019.
Fact #1. According to a Law.com article in October 2018, law firm mergers are happening at a record pace. Currently there are approximately six-to-eight mergers per month happening nationally.
Impact on you: Whether you are on the buy side or the sell side of a merger, it may not matter. Many of these mergers create an opportunity to trim the fat. It should not be a surprise that attorneys with a sustainable book of business are not considered “fat.” Doing good work for your rainmaking partner just isn’t enough anymore. Without having your own clients and driving business to the firm, you may be setting yourself up for disaster.
Fact #2. Being a business development coach for lawyers, I find myself interacting with legal recruiters from time to time. They regularly indicate that attorneys with their own portable book of business aren’t as marketable and get paid significantly less as an inbound lateral. In speaking with Chris White of The Gunther Group, he states that “In our recent experience, compensation for partners with a book of business valued between $500K and $1 million at midmarket firms can expect compensation ranging from $250K-500K. Without business, compensation could fall 20-30%, and would likely be significantly less (40%+) compared to partners nearing $1 million in originations. Importantly, midmarket firms rarely seek partners without a book of business except when they have a pressing need.”
Impact on you: While some opportunities arise from time to time for an in-house role or at another firm, the only real job security needs to be created by you. If you read my monthly column, you know that there are many skills that need to be learned (and they are learned, not “born with”) to make business development easier and even enjoyable. It’s critical that you find internal and external resources to gain these skills. We are only one recession away from another 2008 when lawyers were being released and displaced at record numbers.
Fact #3. The ABA released its Legal Professional Statistics in November 2018 regarding Lawyer population and it’s never been higher. There are currently 1,338,678 attorneys nationally and 63,422 in the state of Illinois alone.
Impact on you: With competition at a record high, it’s never been more important to separate yourself from the crowd. Marketing yourself and your unique set of skills is the answer for many successful attorneys. Ask yourself, “who’s the most successful attorney in my practice area?” Then work diligently to get there in the next two, five or ten years. Working on your business development skills and personal branding today will be critical to your future. The good news is that most attorneys aren’t doing this yet, so by starting now, you can work to get ahead of the curve.
Fact #4. The Baby Boomers are slowly retiring and it’s not going the way we all thought. In the past, it was assumed that an elder’s book of business would trickle down to the service partners’ book in the form of originations. In today’s business environment, it’s not financially beneficial or even feasible for the firm to give full originations credit when the rainmaker steps down.
Impact on you: Hiding behind the older rainmakers and waiting for them to retire or die, just isn’t a fool-proof plan anymore (and it’s a little morbid too). While it’s possible that you are due some reward for all of your hard-earned hours with his/her clients, counting on that may be the kiss of death for you. Balance your time on billing and originating to ensure you’re setting yourself up for success in the future. As I mentioned above, utilize all of the resources available to you. Work daily to learn, execute and grow your OWN practice. If you happen to get some credit on a matter you’ve worked on in the past, it’s just icing on the cake.
At the end of the day, it’s really “YOU, INC.” and must be treated as such. Developing your book and having your own clients is not an option anymore if you’re looking for independence, security and financial freedom. Creating new originations may seem like a second job, but with focused learning and execution you can still have the balance you need to be happy.
For more information on building your own book at your firm or individual practice, check out my blog at www.fretzin.com/blog.
Originally posted on ChicagoLawBulletin.com. Click here to read.
