Assumption of risk.
That was the phrase that immediately popped into my mind when I opened my electronic California Bar Journal the other day and saw this at the top of a prominent ad: “On average law firms report over 40% of client payments are past due.”
If you haven’t seen this, try to guess what this was an ad for.
While you’re thinking about that, let’s consider the implications of this statement.
Law firms are reporting their past due client payments?
And to whom are they making these reports? Are they notifying the authorities so that their clients can be hunted down?
Assuming this figure has some basis in reality, should this be a surprise to lawyers? After all, they’re representing people in legal trouble. How do you think they got there?
Lawyers should assume the risk that their allegedly flaky clients perhaps are really flaky.
This, obviously, is a terrible business model. Most companies don’t seek out customers in financial trouble who have been reported to “on average” not pay their bills.
So have you guessed the advertised solution to this problem?
The ad is for a credit card processing company.
You’re supposed to encourage your debt-ridden clients to increase their debt – and then not pay the credit card company instead of not paying you.
Then you increase your business by representing the client against the loan companies.
It’s a win-win.
Another ad: Of course, you could avoid the payment collection problem if you could limit your practice to successful clients.
Keep that thought in mind as we examine the other prominent ad on the California Bar Journal front page. It’s the one that says “ETHICAL MARKETING” right next to the Journal’s masthead at the top of the page.
If you click on the ad, you get sent to a page featuring a lengthy audio sales pitch for something called Practice Alchemy that, among other things, claims it’s “not a sales pitch in disguise.”
But he’ll sell you his team’s services.
The speaker claims his legal marketing strategy was so successful that he stopped being a lawyer.
Why keep doing something if it works?
Now this fellow guides other lawyers in the marketing strategy that worked so well for him.
The strategy – after the pitch dismisses search engine optimization, lead purchasing, and advertising as terrible ideas – turns out to be persuading your clients to give you referrals.
Some of you may be wondering at this point how you get referrals if you don’t have clients in the first place.
The answer is that you don’t.
Practice Alchemy will only deign to advise you if you’ve already booked $100K in business.
Apparently, the law practice lesson is that success breeds success.
My guess is that the marketing advice is to do a good job for the clients and keep them happy.
You don’t have to pay me for telling you this.
Assumption of risk.