Rafael and Marta are attorneys and work together in a law firm that practices family law. Like many lawyers, their practice involves representing individuals who need their services to solve a problem. They specialize in marketing to the Hispanic community. They make a good living but are not creating wealth through their business. Their story is the same as most lawyers. They bill by the hour and their income is therefore limited on a practical basis to the number of hours worked every week.
Just as importantly, their income is also dependent on how many hours they work each week. If they don't work, they don't make any money. If they work less (or have less work available), they make less money.
Likewise if they work more, they make more money. Most of their clients come to them to solve a single problem and therefore represent a single transaction with little or no repeat business. That circumstance is an offshoot of the type of business that they are pursuing, family law.
They focus on divorce work and most of their clients, thankfully are not repeat customers. A constant challenge in their firm is acquiring new clients. Although both are the primary cogs in generating new business for the firm, they are also the primary cogs in the operation of their client attraction system. Like many other lawyers, they find that when they have time to market, they are able to fill their pipeline with new business. They then are tied up handling that new business and do not have time to market for new business.
They do the same thing that most attorneys in their situation do. They have a large yellow pages ad under the theory that people getting divorced will look to the yellow pages for a lawyer. What a great way to find a lawyer! Their ads look just about the same as every other lawyer's ad and are just as expensive. They also get referrals from their friends and other lawyers. They have worked at developing relationships with the people who will come in contact with people at the time they are looking for a divorce lawyer.
This system has worked fairly well and they have had a steady clientele for some time. They also have a very good reputation. They still have a major problem. Being busy with clients all the time still is not getting them any type of financial independence. They do well but they cannot make enough extra money to truly create wealth.
Their business starts all over again every month. They find new clients, service the clients, pay the bills, and then start all over again. Marta has joked that she wished she had become a singer so that she could just cash her royalty checks and occasionally record new songs.
There is no passive income in their law firm as it is structured. Rafael is also concerned about their exit strategy. Although they are only in their early forties, they struggle with saving enough to provide for retirement. He has known far too many lawyers who could never quit.
They lived well and had good income, far better than most people, but like most people, most of the income was spent on living well. So retirement is a question mark. He also wonders what will happen to the firm they have built. They have tried to hire new lawyers and train them.
What they found was that they then had a third job as trainer, in addition to marketer and worker. As a result, they have not developed other attorneys who might become the purchasers of their practice as an exit strategy. There is another problem with that scenario in that the income of the practice is dependent upon their being at their desks or in court every day. The only thing they really have to sell is the income stream from their billable hours. Unless another lawyer buys the practice to gain access to their clients and billings (and takes over their desks and court appearances), there really is nothing to sell except their jobs.
Their law firm, structured as it is, is not a business, it is really just two jobs. The market for selling jobs is very limited and not very lucrative. They both know Diego who used to practice family law. He now works from his home, having closed his practice. Over lunch the other day, Diego told them that he had started a non-law business as his exit strategy part-time several years ago.
He wanted an income stream that was not dependent on the number of hours that he worked and did not require him to fight with people every day. Curious about how that would work, they have scheduled another lunch with Diego to find out how an Hispanic attorney can start their own business and make more than they were making as a lawyer.
Jim Montgomery is a business owner and law firm owner in San Antonio, Texas. He helps people develop exit strategies through their own business to get what they want from life. For detailed free information, visit http://howtostartabusinessfromhome.blogspot.com or email him at jemmktg@mac.com.
