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Tyson Mutrix
This is Maximum Lawyer with your host, Tyson Mutrix. Welcome back to another Saturday episode of Maximum Lawyer. And today we're going to be talking about the real cost of running a law firm. And it's probably not what you all think it is. Before we get into that though, I'd love to hear from you. Shoot me a text. 314-501-9260 I've gotten some really fun comments over the last few weeks, so keep em coming. I even the funny ones, I think that they're pretty good. Luckily no one has, you know, sent me anything bad, which is good. But any suggestions you have, shoot them my way. 314-501-9260 and they will be in the show notes. All right. So I want to talk today though, about the real cost of running a law firm. And I thought about this episode because during one of the other interviews I had, I was really kind of thinking about costs and expenses and all that. But there are costs that we really don't think think about. And one of the major ones, if not the biggest one, is inefficiency in processes where there's a lot of wasted money in that area alone. Not only money, but just energy resources. Much goes into processes in general. But if you have faulty processes, you can just it's like a ship with a hole in the bottom of it where you're really losing out because it's really a hidden way that you're losing out on profits that you could probably easily solve with streamlining some of your processes. But so really what I'm looking at here too is if we're looking at workflows, we're talking about the inefficiencies, we're talking about really the, your workflows where you've got a set of tasks that are really taking more time or resources or money or steps than are really necessary. That's what we're really talking about when it comes to inefficiencies. And a lot of people think about lost profits as you know, you've, you know, you've spent too much on a product or you didn't get enough, you didn't charge enough on a case. And that's really not how things work. You're if you think about like decreased morale because you have terrible processes in your firm, you've got, you know, missed opportunities because you were unable to sign a case because you didn't have the E signature for your contracts set up properly and maybe you had a zap set up that kept breaking. So the text to the client to get these contracts signed, didn't go out. Those are lost opportunities. Or just your processes are leading to client satisfaction, a decrease in client satisfaction and an increase in client frustration. Those are costs that then drain other parts of your firm. Especially if a client is frustrated because you've got a jacked up system or process where now they're calling in or they're texting in, or they're emailing because they've got concerns. And then you're gonna have to address those concerns and just leaves a snowball of problems. And this is something that probably many of you have been dealing with for quite some time and you're just not addressed it. But there's a Henry Ford quote, you always do what you've always done, you'll always get what you've always got. So if you don't make some sort of change, nothing's gonna change for you. So you've gotta improve what issues you're having because otherwise you're just gonna keep dealing with the same issue over and over. And a lot of you don't realize that the decrease in the employee morale is caused, a lot of it's being caused by those inefficiencies and processes which then cause them to leave. You spend all the time training them, the money getting them up to speed and then they leave because you've got bad processes. So it's a really costly thing. So let's get into some of the common areas of inefficiencies in law firms. So a big one is manual tasks or redundant tasks that you're having your people manually enter in repeatedly. So every single day, sometimes every single hour, they're having to enter in data manually. And sometimes it's, it's double entry as well. Where you've got, they're plugging it in one area and they're having to go to another area of the CRM or your case management system and, and which then leads to mistakes. But that is very, very costly. We're having people manually enter things in where a lot of times it could just be auto populated. That's an easy fix. So that's why you're looking at, if you look at a lot of online stores, there's a lot of things that just order, they're, they're auto populated, they're auto filled for you. That way they can get the sale easier. Just think about all of the major, like you talk about Amazon or ebay or anywhere where you go buy online, they try to make it as easy as possible. For the customer to go through and make a purchase. They make it really, really easy so they're not entering a bunch of information. You need to do the same thing for your employees so they're not having to enter in a bunch of information. And same thing if you're having your clients fill out forms, that's another problem as well. So you want to try to auto populate that as much as possible. Another issue is just communication bottlenecks. Where you have too many emails, you're slow to respond to emails. A really simple way of solving that problem is just creating some sort of rule where, or you can Even say a KPI or a goal where you must respond within 24 hours or your employees must respond within 24 hours. That way you don't have emails just sitting there and not being responded to. Which then creates other bottlenecks. Because what happens whenever a client emails you and they don't get a response? What are they going to do? They're going to email again and they're going to text in and then they're going to call. So now you have, you've frustrated the client, you've not responded to the email that should have been responded to and it's then created additional work other people. So it's, you want to minimize as many of these snowballs as possible. Another one is, and this is a really common one, poor task delegation where there's a massive lack of clarity on who's responsible for what. And if everyone's responsible for a task, no one is responsible for the task. And I think most people know that quote by now where you've got to make sure that people are accountable. They know exactly what they're supposed to be doing, who does what. There should not be general tasks out there where no one really knows who's supposed to do it. Another thing is over complicating the task where you've created way. I know we've made that mistake in the past where we had these massive built out task systems where you know, lots of checklists and it just, it created so much extra work for our people when it didn't really need to. We created like very simple things. We created a task for or a checkbox where they had to click it, which if they had completed other tasks, if you just look at all the tasks overall and if they had completed one further down on the list, that means they would have already completed the one above it. So going through and identify things like that, little bitty spots where you can improve that can go a really, really long way. And simplify your task systems. That's an easy one. And then another one is underutilizing technology, which then will lead you to overpay for other technologies. And so you take a tech stack of, let's say you have 15, when in reality, if you just use four of them, you could get everything you need from them. And so you're really simplifying your tech stack. You're simplifying your processes. That's a really, really easy one. There is a Max Lacon presentation on that, I think it was by Billy Terracio that you should really check out where it's from a few years ago, but it's a really good one where people are underutilizing their technology. All right. Something to look at when it comes to processes. You really should look at Toyota. I know that's outside the legal world, but if you just look at their manufacturing principles, they go off Lean principles, which we're not going to go into that. Maybe I'll go into lean principles in another podcast, but they really focus on continuous improvement. It's called Kaizen. And you're looking for really small incremental wins. And you iterate so you get better. You identify small, little bitty wins. You iterate. And the other, another big part of it is just reducing waste. So you identify and you eliminate steps that don't add any value. Right. That's something where I call it overworking a case. We were overworking a case when, you know, we were going and doing all these extra things that we really didn't need, except for in a few cases, so maybe 5% of cases, but we were doing it on every single case. It wasn't really necessary. So we still had the option for people to go and do that on cases that needed it, but the vast majority of cases didn't need it, so we stopped doing it. And that's something to really look out for, where if it's not really adding value to the majority of your cases, just you need to stop doing it. Let me give you sort of a game plan for how you can help fix this, though. There's easy fix when it comes to identify some of these, and that's just simply mapping out your workflows from start to finish. Go and buy some of that butcher paper on a roll and that'll really allow you as a team to go through and map out everything you can go through. Start with a pencil if you want, and really as a team or a marker, and go through as a. And identify everywhere. A case goes. So you map it out from start to finish. And that's why having that, that role is important because you can make it really, really big. You don't have to put it on the wall if you don't want to. You can do it on the floor, whatever it is. But map it out, really map it out. And that's important. And from that, identify pain points or backlogs where there's a bunch of tasks and you may already have a list of those that you may already have an idea as to where those are. So you can start on those, but going through and identifying those as a team, really, really simple. You can also look at just where are all of the tasks backlog where you have, let's say you have a task system and there's a particular person that is never getting all the tasks done or a certain board that's not getting all their tasks cleared. It may have nothing to do with that team or may have nothing to do with that person. It may have everything to do with it. You just, you have bombarded that area that either that team or that person with could be just unnecessary tasks or just too many tasks. Maybe you overloaded that person where you need to kind of fix that. Another thing you want to do is automate whenever you can. So anytime you can, you want to automate, even if it's really small stuff. So anytime you're having to do things multiple times, if you can automate it, boom, knock it out. It's really, really easy. That's a simple one. Another thing you can do these days is looking at AI. So if you need to review contracts or a document, you can utilize AI agents now and you can use those to, to review things. That's. Now I'm not super comfortable with them reviewing documents yet. Like I wouldn't have an AI agent look at a settlement release quite yet, but I think it's on the horizon, it's something to look at and you can at least start testing it out. Another thing you can start doing is making sure you're training your staff and then empowering your staff. So it's not just about training making sure. So that's kind of like the baseline making sure that all of your people know what to do when they're supposed to do it. Because that is another thing where people under train their employees and then they don't know what to do. So they're constantly asking, asking people questions or asking you questions, which is leads to other inefficiencies, but then also empowering them to make decisions, Let them make mistakes. Let them make decisions where when they're coming to you, asking you questions, say, well, what do you, what do you want to do about it? What do you think you should do? So letting them make those decisions and then let them let them know it's okay to make mistake. You don't want to have this environment of fear where your employees are afraid to do something so they don't do it. So they come in and ask you and then you end up being the bottleneck. You want to be able to create an environment where people feel comfortable making a decision and then they free up your time, they free up other people's times and if they make a mistake, big deal. Most mistakes even in the legal area are fixable. Where you train, you get better and you go from there. Cross training with that too is another one where just because one person knows how to do something doesn't mean that you shouldn't, you know, train everybody on it. Making sure that you're training in pods and teams is a really helpful way of spreading out and spreading out the knowledge and also make sure put it into your knowledge database. But by doing that, it really softens the blow. If you have an employee that leaves or if you have to let go of an employee, it really softens that blow because the team can then pick up the slack in that situation. And then the last thing is really, if you are making adjustments, make sure you are setting measurable goals where you can, you can track how it's affected things. Any changes that you make, find a way to track it. That way you can see if it's make actually making an improvement. Otherwise it's just if you're guessing it's, it's not a good thing. You want to make sure you have the data to back it up, which I talked about in a previous episode, about which, which data points and how to track and all that. So check that episode out. You can, there's no point in going into it here. Hopefully by doing these things it'll have a massive long term impact. It makes me think of someone we had on earlier today where they were talking about short term versus long term decision making and this is something where this is more long term decision making. Immediately you may not notice a difference, but long term you're going to see a massive, massive benefit from it. So keep that in mind. So even though in the moment it may feel like you're wasting time doing this, in the long run you're going to end up saving yourself a ton of time. You're going to increase your profit, you're going to grow. It's going to free up a lot of the capacity, whether it's, you know, resources, time, energy, money to do other things, the things you want to do. You should see increased employee satisfaction. That's probably the biggest gain you're going to see is an increase in employee satisfaction where you're going to see less turnover. They're also going to be happier. So your clients are then going to be happier, which leads to a better client experience, higher client satisfaction, increased reviews, which then, you know, you're going to see more referrals from your clients. So that's, that's always a good thing. So that's all I have for you today. So make sure you go and you check out your processes. You're. You're losing a lot more money than you probably think you are. So make sure you check that out. Map all those workflows, automate where you can, and really find all of those areas where you're having all those pain points. As a reminder, I'd love to hear from you. 314-501-9260 Shoot me a text. I would love to hear from you. Until next week, though. Remember that consistent action is the blueprint that turns your goals into reality. Take care.