Two articles caught my attention today in the Philadelphia Inquirer business section. The first had to do with the number of increased bankruptcy filings. The author talked about bankruptcies among the rich and famous, including that of former Phillie Lenny Dykstra who apparently owes between $10 and $50 million. I am no bankruptcy maven, and there may be very good reasons Mr. Dykstra is pursuing bankruptcy, perhaps to protect his other assets from creditors. Sure seems like he was irresponsible with the large sums he made as a player.
The second story I read today was about the trials and tribulations of large law firms who are having a tough time in the current recession because big firms, as the writer puts it, don’t have coherent business models.
That’s surprising to me. Having a business plan starts with putting on paper your purpose for being in business. For instance, mine is to have clients who are regularly informed of the status of their personal injury case and who are kept informed of the process throughout the litigation of the case. This creates a steady stream of satisfied customers who speak well of me and my firm, simply because they are informed. Of course, I am in business to make money. But, as far as I am concerned, that cannot be the primary purpose of my business. If my primary goal was simply to make money, my clients and their cases would become a secondary concern. It’s a simple business plan that is regularly communicated to my staff.
Incidentally, I have found that doing right by my clients equates to better settlements and verdicts for my clients. My clients are well informed of the risks of both settlement, and trial. This process of constantly keeping my clients educated about their case leads to happier clients, who then refer more clients to me. No surprise there.
At a minimum large law firms need to end the excessive waste of time, and waste of their clients’ money. Hourly billing rates by defense firms with no end in site in the litigation of a case, the filing of needless motions (something I see every day in the personal injury cases I litigate for my clients) is sure to raise the ire of a client, big or small. It’s simply irresponsible money management.