I love Lee Rosen.
His is one of the few blogs I read close to daily. He writes about law practice management from a perspective that would be massively familiar to anyone interested in financial independence. Basically, burn the conventions of the past, focus on what matters, and create the life you’d like to have for yourself.
It’s inspiring stuff that he’s put into practice in his own law firm in North Carolina (that he runs from all over the world).
As a partner in a small firm, I find his management advice very sage, even though I’m not planning to live out of a suitcase any time soon.
His management advice is also pretty good financial advice – at least for lawyers.
His post “Ego Exposed as a Destructive Trap for Your Finances” is brilliant; it’s about the difference between seeming like a profitable firm and being a profitable firm.
Here’s the conversation between two lawyers that causes the problem:
Where do you practice?
Oh, I’ve got my own firm in Raleigh. You?
I’m in Durham, and I’ve got my own practice as well. I was with a firm for a handful of years and then struck out on my own. What kind of law do you practice?
Family law for us. What about you?
We do employment. It’s a lot like family law from an emotional standpoint—lots of client upset. How many lawyers do you have?
I feel like I’ve had that conversation roughly 100 times. This month.
It would be really rude – even for a lawyer – to ask another lawyer how much money they make. Yet we each desperately want to know how we stack up with each of our conversational partners. There’s no point in talking to someone if you don’t know whether or not you’re winning. (Winning the conversation? Winning in life? I’m never really sure. But I’ve learned that it’s very important to be winning.)
So we look for proxies. When you’re talking to someone at another small firm, you ask how many lawyers they have. I find myself bragging about each new hire.
There are so many better things to brag about. Lawyers could brag about their firm’s actual profit. (Large firms do this, and the American Lawyer prints it every year. But because you’re talking about a very large firm, you’re normally not talking in any detailed way about any one particular person’s compensation. It, somehow, feels different.)
Or, if we weren’t in a profession that encourages us to be broken people, we could brag about how much time we get with our kids. We could brag about all the things we’re doing that make us happy like exercising, or having hobbies, or being engaged members of our communities.
But we don’t. We do a freakish dance to brag in a backwards way about our success. More lawyers = more cases = more profit = winning. Though, like Lee Rosen says:
If our ego were fed by profits, we’d be much better off. But profit isn’t discussed at most lawyer cocktail parties. The number of associates somehow serves as a proxy for profits. But, sadly, there’s no correlation between associates and profits.
Rosen’s suggestion is to focus on profits even though you can’t brag about it. What I’m trying to do – which may be harder – is to just not try to win the conversation in the first place.
We give so much power to casual acquaintances. We fear their disapproval and cravenly seek their admiration. It drives people to buy cars they can’t afford to get to jobs that they hate. It drives lawyers to hire more instead of manage effectively.
Lawyers often run law firms the way they run their financial lives. Which is to say, we tend to run them poorly.