If you believe that your solo law practice has value after you have left the scene, think again. Most of the physical assets will only have a nominal value. Most solo practitioners do not have a backup plan for their departure. As long as income is steady or increasing, that the future will take care of itself seems to be the prevailing opinion. That is until the unexpected becomes the reality.
Consider a Maintenance Program to give you or your survivors something of value to build value into your business.
When I say “maintenance”, I don’t mean refurbishing your carpeting and office furniture. What I am referring to is the care and maintenance of your client workflow on an ongoing and sustained basis with increased and predictable cash flow. This is money you could be mining from your clients, but you focus on the short-term gain missing even greater long-term financial opportunities. These opportunities are latent sources of income and value building blocks that mean your firm will have a MUCH GREATER PERCEIVED VALUE when, and if, you sell or retire.
As an estate planning attorney, it is not uncommon for me to interview a client with an estate plan completed 10 or 15 years prior to their visit to my office. The reason it has been that long is two-fold. First, they don’t understand that the laws are constantly changing which might have affected their planning. Second, they don’t want to go back to the attorney who drafted the documents the first time and take another financial hit. The result: they have documents which do not foster their goals. Or even worse, they have documents which are worse than having nothing at all. Changes in the law, family relationships, wealth accretions, property transfers or other changes in people’s lives or circumstances require updates in estate plans.
Short-term pricing for a fully funded trust and attendant documents might be $4,000. Once the work is complete and the client is satisfied with the outcome, you send them out the door with a nicely packaged product. Pat them on the back and, enter stage one, you next client for another $4,000. Life is good. Cash flow is sustained and the outlook for your business is excellent. But wait! What if you offered that client the option of annual reviews, the right to call you anytime to get updates and answer questions without being billed for those inquiries? What if you sent them a questionnaire annually to determine if there are changes in their family circumstances and financial status? What if you offered that program for $200 a year and if you discovered changes that were necessary due to changes in the law or their circumstances, they would be billed additionally for that work with a credit against that work for money paid for their annual subscription? You could price the Trust package at $3,000 if they subscribe and over the next ten years bring in another $2,000 for a total of $5,000. That is a 25% increase in total revenue from that client over a ten-year period. And what is the likelihood that over that ten-year period they won’t need to have that trust modified? Those amendments to their trust added another $2000 to the pot for $7,000. This is not at all unrealistic.
Even though the client pays more overall, their documents are current, and you continue educating them each year regarding what they have with newsletters and annual consultations. All of this work is done during your slow times when you would not be billing anyway. But the real kicker is that you are building passive and recurring income into the firm structure. In the first year, you might sign up 40 clients at $200 for $8,000 of income. In the second year, assuming the same pace of acquisition, that becomes $16,000 of additional income. By the 10th year, assuming the same growth rate, you are now generating $80,000 of additional revenue annually.
If you put your practice up for sale today, you are the most valuable asset. When gone, so is most of the goodwill that your business brings to bear for the buyer. But with a maintenance program, your firm will offer inherent value greater than someone without that program might realize when selling the business even after you are gone.
There are other creative and imaginative ways that this marketing and planning can enhance other areas of practice including criminal defense, family law, immigration law and more. I don’t have the time or space to cover those, but you have to use only your imagination of the possibilities and opportunities to use this device. I have a Toyota Prius and I see it used every day in that dealership. I have my oil changed for half the cost of getting it changed elsewhere. The reason the dealership offers this at their cost is that when I come back for each oil change, they sell me a set of tires, air filters or an upgraded vehicle. They maintain that relationship which brings future business through their doors with a satisfied customer who refers others to that dealership and I keep buying Toyotas.
Consider offering your clients your version of “oil changes”. You sell them an upscale vehicle for the management of their estate – it needs maintenance just like my car. The get better service, you get greater and more predictable income with built-in value when you go to sell.