Values Based Leadership

If you want to build a successful law firm practice, stop looking so hard at ways to bring in new cases and start looking at defining and leading by your values. Today’s consumers can spot a fake a mile away. They want businesses that are authentic and share their values. The internal workings and values of the firm will bring in new business. Are you prepared to lead your staff or firm based on your values?

Defining Your Core Values

Your core values are your principles—what you stand for, and things that you won’t budge on. Here’s an exercise to help you identify those principles:

  1. Make a list of 20 values you believe define you.
  2. Start prioritizing. Look at the first and second values. Which is more important? Keep that one and scratch off the second.
  3. Once you have narrowed the list to 10, review those values you eliminated. Are there any you would bring back to replace one still on the list?
  4. Review your final list of 10 core values and ask yourself if you would be willing to compromise on any of them. If so, remove them.
  5. Now you’ve got your final list.

Now, take that list and next to each core value, write down one way you will carry that value through in your firm. It can be harder than you think. And feel free to email us if you want help.


Are You Happy?

As many of you know, our coaching process includes much more than just evaluating your law firm operation. Many attorneys have participated in a Backyard Dreaming session with us. We don’t start by talking about the practice, but by delving deeper into the reason we’re on the porch chatting at all.

In many cases, the attorneys who have come are stuck and not sure how to move forward. Even when a practice is financially successful, there can still be something missing. Life is about balance. We want everyone to be happy and satisfied not only with their law firm practice, but with their life. If you cannot answer the question, “Are you happy?” with a resounding yes, maybe it’s time to talk with us and find out how you can change that.


What is Your Vision for the Future?

Our favorite way to describe the good life for our clients is simply this:

Living in the place you like
With the people you love
Doing the right work
All with purpose

If this description does not resonate with you as accurate, it’s time to review your core values, vision and dreams. Catalyst believes everyone deserves to live their best life. The art of vision making requires the ability to expand one’s mind and believe that anything is possible. Creating a vision for a life well lived as a lawyer and as an individual takes skills and patience, but the reward in the end is a defined picture of where you want to be.

Clarity of vision is a crucial ingredient to building a high performance law firm. People will follow you if they know where you want to go and how you intend to get there. If you are ready to create the life you truly want, call us today to learn how we can help you build a successful law firm and personal life.


What’s Important

As we all continue to watch the damage from Florence unfold across the Carolinas, it reminds us what is important in our lives. We focus on family, friends, health, and faith. Everything else takes a back seat. If you made it through the storm without any problems, hug your spouse and kids, then see how you might help others. If you were impacted by the storm, ask for the help you need. Remember, the Catalyst team is here to help you get back on track.


Is Your Law Firm Prepared for an Emergency?

As we sit here in Raleigh watching the news about Hurricane Florence (and several tropical disturbances behind her), we started to wonder how many law firms are prepared to deal with a potential large-scale emergency. All businesses should have disaster preparedness plans to accommodate small issues – like a server outage or water leak in the building – as well as larger scope problems like a hurricane, flooding, or wildfires.

Smaller issues can disrupt your business and cause inconvenience. A larger problem can leave you scrambling to operate your business for weeks or even months. A few high level thoughts as you review your emergency preparedness plans (or quickly write them!):

  • People come first – make sure your team members and their families are safe.
  • Communicate with your active clients ahead of time (if the potential issue is known) or as soon as possible afterwards.
  • Make plans to support your clients – this may include having offsite backups of all case materials or cloud storage; if electricity is out at your offices for any period of time, you may need to secure offsite work facilities in another location.
  • Keep contact information with you, including employee and client phone numbers, as well as your insurance agent’s information.
  • Share the emergency plan with your team. Everyone should know exactly what to expect.

Stay safe!


How Do I Set Clear Goals?

Cheryl Leone & David Favor

Many of our clients struggle to set realistic goals and attain them. Why? We believe it has, in part, become more challenging to focus when there are so many distractions around us. First and foremost, goals will never work if you don’t have a clear vision of where you are going. This is why we spend so much time on developing vision with values. Goals align with your vision, short term and long term. Values make the decisions for you.

We also tend to forget to review our goals relative to our plans to make sure they make sense. Then there’s the agreement factor: if you require input or assistance from others to achieve your goals, they must agree and prioritize the goals in the same fashion you do.

There are goals for personal and for professional. They need to align and there needs to be a buy-in not only by yourself but people critical to your success. Let’s use a real world example on a short term goal: We have a 3 day weekend. We have a client in distress. We have a four year old grand-daughter, Parker, we want time with every weekend. Our weekend goals were to write a blog, repair the deck rail and get the car washed. Down time was mandatory to reduce stress. An emergency arose within the family and extended family needed help. And the client needed to be seen.

We can’t do it all. We are clearly family first over business first but the loyalty we have to our clients clearly pushes our buttons. This requires compromise. The first “test” will be to determine which of these items align with our goals and toss out those that do not (or find more time). Next, prioritize. We ended up with a simple plan and each got what they wanted. Saturday morning was set aside to help the client. Saturday afternoon and night were Parker time. Sunday morning we had the client come to our home office. Sunday afternoon we helped the family member with a need. And Monday was a free day for both of us to do what we wanted, blogs, repairs, books. We let everyone know our needs and goals and they all jumped on board because they also knew our values (family first) and recognized our responsibility to our clients.

Aligning goals can require frank discussions. In our case, keeping family close is a lifetime goal as well as a priority. Loyalty and devotion to our clients drive us. As we review and prioritize the list for the weekend, the tasks that revolve around family come first. Next came the client. The rest can wait until another day. And to achieve this we involved family and the client to help us make this work.


  • Be clear on your long term vision
  • Define your top values
  • Set your goals to meet the vision and the values
  • Be public on vision values and goals
  • Learn to compromise goals without compromising values and vision

It is all about why, not just how

Back in my college days, I was told that “If you know how you will always have a job but if you know why you will be the boss.” That advice has stood the test of time. Often I will meet someone new on the job making a long list of notes reminding them how to do a task. Often there is a complete process document available that describes all the steps, which is ignored. My granddaughter would say: what is going on here?

When you are new to a job or task, it is understandable that you want to understand all the steps. I even understand the creating of lots of notes. What I never understood is why many people never attempt to understand why they are doing something.

The problem with reams of notes documenting how to do something is if one step changes or something is added you have to start over. I would see people getting frustrated on the job because a step no longer works. They are lost. Not all the time, but depending on the complexity this can happen. Some combination of the two approaches seems to me to be the best solution.

The missing element to understanding why is an understanding of the big picture. Let’s say that you have been hired as a legal secretary at a law firm. Your assignment is to send out a letter to the client. You have a case management system that reminds you to send the letter, and in most cases, that same system will generate a letter for you. Built into this process are many steps that include pulling up a template, gathering information from the case file, sending a file to a printer, and mailing the letter. But what happens if a step fails? The template is missing, the case management file was not populated, the printer is offline, etc.

That legal secretary will have a job, but someone that understands the big picture will be the boss. Now, I am not the boss, but many times I will get called in when something does not work. I arrive on the scene, and after a few minutes, I say something like, turn the printer on. Everyone looks on in amazement. That was oversimplified, but not by much.

You want to be the team leader or the boss; you need to know more than just how to do the job.


Let’s do a Strategic Plan

Lately, I have started to see more focus on strategic planning and tools like the Balanced Scorecard when we talk about Law Firms. We started focusing on strategic plans about ten years ago when we started working with our first law firm. We have not found a lot of law firms that have a strategic plan they are following. The idea of a balanced scorecard frequently goes hand and hand with strategic planning, and it is still difficult to find that idea implemented. If these two ideas have become almost universally accepted why is it so difficult for a law firm to implement? Or, perhaps the real question is, do these ideas apply to a law firm?

Based on the law firms that we have worked with and the success we have seen, these two ideas apply. So, it is not that these concepts are difficult to implement or don’t apply that they are not being used. I believe the problem is that most law firm owners do not understand the value of the concepts. But even that is a bit of a stretch. When I look a little deeper, I find several reasons.

  1. By far the first reason on my list is that law firm owners have trouble defining their business objectives. It sounds crazy when you hear this, but I have found that most law firm owners cannot tell me what their vision is. In fact, even crazier, they cannot tell me why they are in business. OK, they can say “I want to make money” but why baffles them. The whole idea of having a well-defined vision for the business is the foundation of strategic planning.
  2. Strategic planning is all about defining the vision and then creating a roadmap to realize that vision. This is a top-down process. Since the “leader” generally does not know what the vision is, this is turned into a group effort. The resulting statement was sufficiently vague and so fragmented that it was doomed from the start.
  3. When the group finally starts writing the plan, there is a tendency to move or skip right to execution. Immediately jumping to an action plan without going through the process of clarifying the strategy sometimes has you going down the wrong path.
  4. I find that nobody is identified as the owner of the plan or the person accountable for the implementation. Everyone wants to contribute their ideas, but they are not the owner of the plan.   In fact, it should be the law firm owner that is accountable for the plan. This is a new concept for a lawyer/owner because they see themselves as a professional whose only responsibility is to their clients. They frequently separate themselves from the business.

These concepts have been around for many years in Corporate America but only for a few with law firms, so there is not a long history of success to point to as evidence of value. Where we have implemented these concepts, we see success. Often it has been between one and two years before we see measured success in the law firms we have worked with. The first year is all about planning and the second is gathering data from the balanced scorecard.

When the strategic plan is used to develop action plans, and the balanced scorecard is used to measure the results that can be used to improve the plan, we typically see a clear picture of the law firm. The four areas that are measured in our balanced score card are;

  1. Finances – those measures that measure financial success. This is everyone’s favorite because it is what they are used to. How much money did I make? How big is my bonus this year? This is real to everyone.
  2. Client Service – those measures that capture how well the firm served their clients. Law firms frequently focus on client service but never measure it. So, this is something all law firms want. The problem is leadership has trouble relating this measure to success or failure. If I improve client service by 10% what happens?
  3. Growth – those measures that capture how well the firm is doing to improve. This is the measure that will tell you if you will still be in business in a few years as the market changes. It is a measure of how effective the firm uses the human resources (staff). One of the problems here is that frequently staff is viewed as only a resource instead of being a key element of the business process. How do you relate training your paralegal to an improvement in the bottom line?
  4. Internal Processes – those measures that capture how efficient and effective the business process is. How are the tools, like the case management system, used? Do you have the right mix of skills, tools, workspace, and supplies? Frequently many steps in the process are skipped or ignored, so it is not easy to show how a quality review of a few process steps is beneficial. Most of the law firms I have worked with view their business as being skill based and not process based when, in fact, a high percentage of the business is process based.

Before we get to the execution phase, we need to have a good understanding of what we want to build and how we are going to measure success. Without this, we will be fighting fires every day and depending on brute force to make it through the day. Very little business improvements or refinements are going on. Is the law firm a business with business processes that react to the best business practices of the day? In the competitive environment we are in today, those law firms that are viewed as a business have a better chance of being here tomorrow.

One of my favorite stories I remember from our years working with law firms was a firm that was celebrating a million-dollar settlement. I, being the ole auditor that I used to be, started asking questions, like what was your return on investment. I got a lot of blank stares. With a little research, I could see that the “business” lost money. That peaked my interest, so the next question was, what was the vision of the “business?” I wanted to find out if they expected to make money. Well, more blank stares. We could dig deeper into this hole all day. Dare I ask to see the strategic plan for the business? Maybe tomorrow, I am getting some cake and coffee.


What about financial metrics for my Firm

I was asked to determine the Return on Investment (ROI) for a law firm. Return on investment is the “return” from an action, divided by the cost of that action. The first time I saw this metric, it was used to determine the effectiveness of a marketing program. The “ROI” for a law firm is not so obvious. My first thought was that it would be the total revenue generated minus the total expenses divided by the expenses. One problem with most law firms is that they make the lawyer’s earnings equal to any leftover profit. This was a problem because it makes the expenses equal to the revenue. My next idea was to assume a zero cost for the lawyer, and that gave me a false view of true cost. The compromise I came up with was to assign a base salary and make leftover revenue after expenses be a bonus. This provided an ROI I could use for trending.

I could see a problem developing. It is relatively easy to discover the revenue, but what was the dollar amount of the investment that created that revenue? One idea for getting the expense number is to eliminate any expense that did not directly contribute to generating the revenue. This is often referred to as overhead or indirect cost. For example, the cost of a building does not directly contribute to making revenue, so it is an indirect cost. Does that mean it is part of the investment or not? This can quickly turn into an interesting discussion.

Or, you can make the case that all expenses are part of the investment. I have found that it does not make much difference as long as you know where the numbers come from, and they are consistent.

But getting back to ROI. Once you get a clean number for the investment, the formula is ROI = (earnings – investment) / investment. Return on investment is, by definition the gain from the investment minus the cost of that investment and then divided by the cost of that investment. I have found that the number, by itself, is not very meaningful. I can play with the numbers and create any result you want. The best we can do is create a trend using an ROI measure and see if we are doing better. So is it a good metric or not? I think the trend can be a good indicator.

By “trend”, I mean calculating the ROI every month or quarter to see if it is going up or down. As long as the definition of the numbers is consistent you can develop a trend. I like to use a rolling average over a span of two years.

The exercise to determine expenses is also a good exercise. Remember that expense category we called overhead? Overhead describes all of the costs a business incurs that do not directly produce output. Overhead would be office rent, liability insurance, membership fees, firm vehicles, business taxes, office equipment and most administrative costs. Well, another good indicator is the percentage of total expenses that is overhead. You would want to keep this low and make sure that the trend is not going up. The tricky part is to agree to what you consider to be overhead. As long as you keep your definitions consistent you can create a good trend for this number.

One of the keys to all of this is a good financial system that can keep track of expense and revenue categories. Once you have that you can drop those numbers into a “bucket”, like overhead. I pull numbers from the financial system into an Excel spreadsheet and calculate any of the metrics I want. What metrics do you like?


Law Firm Leadership

Law firms are businesses!  OK, but are you the business or are you building a business? This is a question that will set the focus of your business strategy.  We suspect that many professionals start out believing that the business is themselves, and any staff they hire are support, or a replaceable resource, with their focus on management of resources. At some point the case load or the case complexity grows, and the focus changes to a more team oriented approach.  Tasks are delegated, and staff becomes more than just a resource.  Once the staff becomes part of the team and receives training, it is much more costly to replace them.  Firm associates begin to understand that their leadership involves creating a pro-active team that drives the delivery of legal services with a strong return on investment for the firm. The lawyer alone is not the business. Focus shifts from management of resources to leadership of people.

This is the beginnings of a high-performance organization.  There are many elements of this type of organization, including a move from management to leadership principles.  One of those principles is an idea we first saw expressed in Tom Peters’ first book. He introduced us to the new concept of Management By Wandering Around (MBWA), which we have referred to as Management By Walking Around. I think that MBWA was developed by executives at Hewlett-Packard in the 1970s and popularized by Tom Peters in the early 1980s. The concept involves getting out from behind your desk and interacting with your staff; find out what they are frustrated about and celebrate their successes.

MBWA works best when you are genuinely interested in your staff and their work and when they see you as being ready to listen. There is nothing more insightful than seeing what is going on in the real world; client’s concerns, the interaction of your employees with your clients, and the functioning of your law firm.  You will have a much better idea of your staff’s problems and perceptions, as well a better view of the skill of individual employees. The benefit of MBWA is you can communicate your expectations in daily informal meetings with your staff. This idea works if your focus is on building trust, delegating responsibility, and developing staff.  This does not work if your goal is to find someone making a mistake.

More is gained by watching, observing, talking, and listening than will ever be by placing this duty on others.  However, what if the Firm owner or senior partners do not want a management or leadership role?  We find this a lot.  If this is the way it is, hire a Firm Administrator to take on that role. Our approach for law firms is to implement high-performance teams.

We propose a challenge.  Take the next thirty days and make it a practice to walk through the firm and talk to people within the firm.   Listen to what they say, find out how things are going, and ask questions.  At the end of the thirty days, do you see a difference in attitude? More importantly, did you learn anything that makes you change your mind about the people on your team?  We suspect you will.