In a previous post (http://blog.aaepa.com/2010/03/11-essential-systems-6-continuity-revenue-stream), we mentioned the importance of knowing where your existing revenue comes from and using that to build a continuity revenue stream. Now, we’re going to expand on that idea and look at how to make that stream of revenue even bigger.

While the majority of your revenue likely comes from estate planning services, there is another facet of your business – called ancillary services – that requires regular attention as well.

Ancillary services include things like tax preparation, financial services and life care planning. These services can compliment the estate planning services you currently offer and if you’re following a solid Communication System (link to post #5), then you’re building strong relationships with your clients and their families.

These relationships are what make ancillary services work so well.

Because the truth is, people like to consolidate. It’s much easier to manage your legal documents and important papers if they’re all in the same place.

It’s comforting to know that the attorney preparing your estate plan is also very knowledgeable about your mother’s nursing home contract and the future expenses it projects.

Now, some of these ancillary services require additional accountability so you’ll need to be diligent as you begin to broaden your spectrum of services, but it can be done.

Many states now allow estate planning attorneys to also offer life care planning for parents or spouses who are incapacitated and unable to handle their day-to-day affairs. You can develop a tax preparation service that does more than just file the standard 1041 but also covers 1040s and other forms – a complete tax return option for clients who need it.

Review their nursing home contracts… help them plan for retirement. Give them a full-service experience that they just can’t get anywhere else.

Look at your state laws and ethical rules to determine which areas you are permitted to expand into and how to do it appropriately.

When you’re ready, use your strategic Communication System to remind your clients and prospects of these great ancillary services throughout the year.

And then watch your business really begin to grow.

Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

If you’ve been reading our posts on the 11 Essential Systems, then you know that they all revolve around the idea of “working on the business” instead of in it, a philosophy we live by at the Academy.

But for this particular system in our Essentials list, you’ll need to wear that technician hat that you love so well, so go ahead and put it on.

Having created systems to manage your marketing, your documents, your workflow and your staffing, you should now find that you have much better control of how you spend your time.

And that’s a good thing.

Because that means you have more time to devote to doing what you really love – being a lawyer.

But to do that effectively, you need a system.

Yes, a system.

In order to produce stellar legal documents for example, you need access to the latest legal developments and strategies in estate planning. You should have access to top experts in tax, trust, elder law and entity planning – experts that you can call at any time to discuss estate planning issues.

You need a regular CLE program, one that includes training with the same experts who drafted the documents contained in your assembly software.

You need access to the best legal language so that your documents are always cutting edge.

And when you have systems in place for these things, your work product improves. Trust companies point to your documents as the finest in the community and your firm becomes the firm for others to model.

Then, and only then, will you wear that technician’s hat effectively. And it’s then that you’ll be reminded of why you love to practice law.

Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

Are you keeping in touch with your profitability?

For many attorneys, the answer is surprisingly No. Not only are they unsure of the profit their firm generates but they have no real idea of how the money in their firm is spent.

These attorneys tend to manage the firm out of their checkbook rather than through financial reports. It’s not unusual to find that they don’t have a CPA nor do they have monthly Profit & Loss Statements or Balance Sheets.

And this is a big mistake.

Building a successful law practice requires that you manage that firm by the numbers – that is, that you stay in touch with the financial side of your firm.

And to do that, you need a financial management system.

Now, a good financial management system isn’t just about the software – it’s about what you do with the information it generates.

For starters, you should have a chart of accounts and know not just where the money comes from, but where it goes as well.

The Academy provides its Members with a uniform chart of accounts that groups all the various expenses and revenue sources into the appropriate categories. This allows our Members  to measure their numbers accurately and compare their performance against other Member firms.

Your system should generate those nifty little reports we mentioned earlier – Profit & Loss Statements, Balance Sheets and the like – and then all this information should be compared against your target numbers.

What target numbers, you ask?

Well, your daily number for one. Your daily number is the amount of money you need to make each day to reach your annual revenue goal. This number is calculated by dividing that revenue goal by the number of days you actually plan to work during the year.

Is your firm meeting or exceeding your daily number? You won’t know if you’re not managing your firm by the numbers.

The second number you need to calculate is your hourly number. This number represents what your time is actually worth and once you’ve calculated it, you’ll begin to see where some additional delegating might be needed.

After all, if you’re doing tasks that could be done by someone else at a lower hourly rate, you’re using your time unwisely. But the only way to know for sure, is to know exactly what your time is truly worth.

Now, while you’re calculating all these numbers and creating your financial management system, here’s another quick tip for taking control of your cash flow: build a relationship with a banker and obtain a line of credit.

Do it now, while you have money in the bank. Apply for a line of credit while you don’t need it.

The reason?

At some point during the lifetime of your firm, you may actually need that line of credit. You may need to rely on that established relationship to help your firm get through a difficult financial period. But building that relationship takes time and it’s much more difficult to acquire a line of credit when you’re low on funds.

So instead, take the proactive approach and form those ties with your banker before you really need them.

Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

Is your firm system dependent or people dependent? More importantly, do you know why it matters?

A people-dependent firm relies solely on the skills and talents of the people performing the jobs in question. They may or may not have the tools and technology they need to do the job efficiently but that doesn’t really matter – what matters is that they’re dedicated to getting the job done.

Now, on the surface, that doesn’t sound too bad, does it? After all, you want a dedicated staff… you want to fill your office with talented personnel who take pride in what they do. Succeed in that task and it makes sense to place the success of your business in their hands.

Doesn’t it?

Well, let’s consider the alternative.

A system-dependent firm establishes guidelines and procedures for every task in your office. That means that there’s a system for reviewing performance and a system for answering the phone. There’s systems in place that ensure proper cross-training and other systems for delegating all non-lawyer work.

Now, these systems still require you hire the best people possible – in fact, in a system-dependent firm, you have a process to ensure that the every employee is matched with the right job… not because it’s the one they applied for but because it’s the best fit with their skills and talents.

The difference in a system-dependent firm is that when your receptionist quits or takes a leave of absence, you know exactly how the telephone system works. When your paralegal decides to move out of state, you’re not left trying to figure out his filing system. And when your secretary calls in sick, you’re still able to produce quality documents in her absence.

Your time is spent managing the firm and doing lawerly kinds of work rather than ordering stationery and making copies. And because your staff has been strategically matched with an appropriate position, they’re busy enjoying a challenging and rewarding career.

The reason you can do all this is because there’s a system in place that tells you how. That system ensures that your staff are cross-trained and can step into other positions when needed to take up the slack. It ensures that you’re not spending your valuable time making coffee and ordering supplies because all of that non-lawyer work has been effectively delegated.

So, let me ask you again: does your firm depend on your people or the systems they work with? And which do you suppose has the best chance of success?

Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

Since the birth of MySpace, Corporate America has viewed social networking sites as an interruption to normal productivity… a distractive nuisance that must be contended with if you wanted to keep the workflow moving along.

The solution of course, was to forbid employees from visiting these websites on company time, a policy that was enforced by removing all access to anything that looked remotely like an online social haven.

But maybe that strategy wasn’t such a good idea after all.

The truth is, social networking sites foster a collaborative creativity that you just can’t find anywhere else and at the Academy, we’ve made a conscious effort to incorporate social media into our workplace for this very reason.

Sites such as Facebook and Twitter are actually a great place to get inspiration and the beauty of these resources is that you can access data from a diverse range of people with an equally diverse range of opinions, be it someone that resembles your target market or employees that work for a competitor’s firm.

The result is that you not only get to see how others are doing things, but you also get to hear how their choices are working out.

This kind of invaluable information allows you to tweak your marketing campaigns accordingly, create new services in response to a growing need and modify your systems to accommodate new venues of communication.

In short, social networking is truly a must-have if you want to grow your firm.

This philosophy is apparently becoming more popular as researchers and experts have begun to realize the unique benefits that social media can offer.

In a recent article at Advertising Age (http://adage.com/digitalnext/article?article_id=142701), author B.L. Ochman notes that resistance to social network access isn’t just a bad idea… it’s futile.

This statement is based on the growing number of mobile internet users across the globe. “Do your employees carry cellphones?”, she asks. “Well then most of them already have access to YouTube… right in their pockets.”

Obviously, you don’t want to sacrifice the work getting done in the hopes of a random idea popping across your screen, but as Ochman states, “if you can’t trust your employees, you have one of two problems: you’re hiring the wrong people or you’re not properly training the people you hire.”

Hmm… now, where have I heard that logic before?

Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

There was a time when the preferred way to create documents was to use carbon paper. The sheets of carbon allowed you to create multiple copies of the same document at one time and it was considered the most advanced method of document production.

Of course, anytime a mistake happened, the papers had to be pulled apart so the mistake could be erased on all the copies.

Today, those sheets of carbon paper have been replaced with some of the most amazing technology, yet there’s still so many attorneys not taking advantage of these great advancements.

And honestly, firms without state of the art technology systems are just wasting time and money.

In fact, every firm should have four principal technology systems in place:

Networked Relational Database

This is a key component to running your law firm efficiently. A networked relational database offers several benefits:

• Tracks all client and family information
• Provides instant digital access to all estate planning documents
• Stores notes from conversations with clients, vendors and referral sources
• Generates every letter and piece of correspondence from the firm
• Executes mass direct mail campaigns

A relational database can also provide reports on every part of your business, including marketing reports such as client acquisition cost, seminar attendance, attorney closing percentages, cancellation rates, client source comparisons and marketing campaign success.

This is part of that “business person” mindset that says as a business owner, you want to know every facet of your business. You have benchmarks that help measure performance and you use these benchmarks to determine which areas (or personnel) need more attention and coaching.

It will also track client workflow management, keeping tabs on every estate plan as it travels through your firm’s workflow pipeline and showing you how much time is spent in each stage of development. This tells you if you have a breakdown in your workflow process by identifying bottlenecks before they become a serious problem.

You can also see your clients broken down by various demographics, such as estate size and zip codes and you can see which clients have which types of estate plans. Imagine being able to fire off an e-alert to certain clients when a new law passes that affects their specific type of plan… with the right database system, you can do this with just a few clicks of your mouse.

Now, there are several good relational databases out there to choose from. The Academy has built its own proprietary software, CounselPro, that is totally focused on the needs of the estate planning law firm.

Automated Document Assembly Program

Since producing documents is the core of your service, it makes sense that you would have a cutting-edge system to handle that function.

An automated document assembly program makes sure that every single estate planning document you produce is formatted and produced correctly. Some of the better ones come with all state-specific ancillary documents pre-loaded and give you the ability to modify and customize the language to suit your needs.

Many programs can be integrated with your networked relational database so that every thing you do for your clients is documented and stored in a logical manner.

Now again, the Academy’s CounselPro software meets all these specifications and then some. We don’t believe there’s any other program on the market that has this level of features and benefits.

Interactive, Content-Rich Website

Now, it’s not unusual to find attorneys with websites – quite the contrary, we see them all the time. But what we’ve found is that most law firm websites are static and uninspiring – nothing more than glorified billboards that provide little to no benefit to its readers.

What you should have instead is an attractive, professional site loaded with information that can be used by your clients.

The web sites we create for our Members for example, come with in-depth articles, surveys and free reports and offer site visitors the ability to register for upcoming seminars and events. We also enable the site to capture information from everyone who visits so that the Member owning the site can launch their own drip marketing campaigns.

Updated regularly, this type of site can go a long way in fostering that client relationship we keep mentioning and it also give the reader a reason for coming back.

Automated System for Contacting Clients and Prospects

You’ll remember we mentioned the importance of staying in touch with your clients and prospects in a previous post…

Well, now we’re going to point out the importance of having a system in place to manage this task for you.

At the Academy, we use a proprietary system called Contineo but it’s not the system itself that matters as much as what it can do for you.

An automated contact system should allow you to create multiple marketing campaigns based on a variety of criteria. Then, when someone has contact with your firm, they’re entered into your system and begin receiving the appropriate marketing sequence.

Now, in order for you to really see the benefits of such a system, your marketing campaigns should provide real value to your clients and prospects. That means you don’t bombard your mailing list with boilerplate advertisements – instead, you create strategic pieces – whitepapers, letters, postcards and the like – that help to establish your practice as THE FIRM of choice.

Of course, there’s nothing that says you can’t enjoy a certain amount of success without these systems… you certainly can.

But you’ll need a lot of carbon paper to do it.

Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

An Academy Member writes:

“A woman and her amazing young adult children came for a consultation at the end of December. Her husband had passed away in October and she knew she needed to get her estate plan in order. It wasn’t a hurry, of course, just something she ought to take care of at some point. She passed away unexpectedly yesterday. I am heartbroken, and will be processing my “laissez-faire” attitude about letting people leave my office without making a decision. I know I can’t make people move forward, but I know more than they do about how quickly tragedy can strike any of us and have a responsibility to do whatever is possible to get them to think through the consequences of not taking care of things.”

Attorneys hate the idea of being labeled as a “pushy salesperson” in estate planning meetings, and generally want to promote the image of a sensitive counselor instead. But when do you let clients who are clearly in need of your services slide out the door with the vague promise that they’ll think it over?

We know there is a delicate dance between attorney and client in these meetings, but when is it best to really take a stand for the family’s welfare? There are no easy answers in these situations, especially in a free society, but acquiring the skill to inspire clients to do what is in their best interests can often be the difference between a brighter future for the family or a lifetime of regrets.

Jennifer Price
Director, Member Services
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

My blog posting on February 18th, “Client Suicide and Attorney Ethics ” got me thinking. Is suicide itself legal? It used to be illegal, dating back to British common law. As late as 1963, several American jurisdictions criminalized attempted suicide. But, today, no state has a statute against suicide itself. But, what about laws against acting to end another person’s life? Certainly ending someone else’s life is illegal if you do the act without the victim’s consent; that’s murder. However, if the “victim” consents, is it still a crime?

In Washington v. Glucksberg, 521 U.S. 702 (1997) the U.S. Supreme Court held that there is no constitutionally protected right to assisted suicide and, therefore, states may prohibit assisted suicide. The vast majority of states have statutes or common law providing that assisted suicide is a crime. In a handful of states it is not clear. In only three states, it is clear that it is legal and, there, only with physician assistance. Oregon has allowed physician-assisted suicide under the Oregon Death with Dignity Act since 1998, ORS 127.800-955. The state of Washington followed its northwest neighbor with the passage of initiative 1000, which became effective on March 4, 2009. In January 2010, Montana judicially recognized the legality of physician-assisted suicide in Baxter v. Montana . In Oregon, there have been only 460 physician-assisted suicides since passage of the statute in 1998. Of that number, 59 occurred in 2009.

As we all know, there is no federal estate tax in 2010. However, the law currently provides that decedents dying in 2011 with assets exceeding $ 1 million will have those assets taxed at 41% up to 55% of the assets in excess of $1 million.

Oregon is decoupled and imposes a tax above $1 million, even in 2010. Washington is decoupled and imposes a tax above $2 million, even in 2010. While more attractive than Oregon, Washington is not the best jurisdiction. Montana is coupled to the federal estate tax, thus there is no state or federal death tax in 2010. Thus, it appears that the state nicknamed “the Big Sky Country” might be the best place to die in 2010. Perhaps it is appropriate that the state’s motto is ” Oro y Plata ” or “Gold and Silver.” It is the only state which allows physician-assisted suicide and has no federal or state death tax.

Oregon and Washington each require that the patient in the physician-assisted suicide be a resident of their state. Presumably, Montana’s common law physician-assisted suicide would have a similar requirement. Factors demonstrating Oregon residency include but are not limited to:

(1) Possession of an Oregon driver license;
(2) Registration to vote in Oregon;
(3) Evidence that the person owns or leases property in Oregon; or
(4) Filing of an Oregon tax return for the most recent tax year.

Montana requires different lengths of residency for different purposes. For example, it’s 60 days for a driver’s license, but 90 days for a divorce.

Will there be a rush to Oregon, Washington, and Montana in the closing weeks, days, and hours of 2010 in order to cut short a terminal illness and avoid a tax? It will be interesting to see if there is a spike in the numbers of physician-assisted suicides for 2010.

Do you think many terminal clients will attempt to move to Montana, Washington, and Oregon to take advantage of their physician-assisted suicide laws and the estate tax gap of 2010?

Steve Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

Part of working “On The Business” is analyzing your annual revenue streams. Now, the smart attorney not only has multiple revenue streams, but is also constantly looking for ways to add to those streams and build what we call “Continuity Revenue.”

To do this, you’ll need to first consider where your existing revenue comes from. So, let’s start with the obvious:

Existing clients generate a good portion of your revenue and you can anticipate a certain percentage coming from ancillary business and new clients each year as well.

In addition, you most likely receive a decent amount of revenue from trust administration.

Now, if you’ve followed the strategies we mentioned in the Lifetime Communication System (link to system #5 post), then you can probably also count on that trust administration income continuing from generation to generation. This is one of the benefits of creating a multi-generational relationship – you don’t have to worry about losing your clients to another firm when the assets pass from one generation to another.

So far, so good. But you could have more…

Perhaps the most overlooked opportunity for building a continuity revenue stream is creating annual programs that generate reliable annual fees.

A “Wealthcare Maintenance Program” or “Client Care Program” for example, would provide clients with a certain package of services for a fee, in the range of $300 to $500 per year.

If you have 1000 clients, that could generate $300,000 to $500,000 every year on January 1st. Wouldn’t that be a wonderful way to start out your year?

This “package” could provide them with free amendments throughout the year, free updates on law changes and a Docubank card that gives them the ability to electronically retrieve medical records and other important documents when they need them.

You could also include several educational seminars on topics of interest, such as funeral planning and identity theft, topics that ideally relate to new services your firm offers. In addition, seminars on non-estate planning issues put on by local experts provide your clients and prospects with valuable information while giving you an opportunity to stay in front of your public.

What kind of non-estate planning seminars could you do? How about a class on getting organized, creating a family history scrapbook or even a cooking school demonstration? The list is virtually endless.

The whole idea is to provide value. Do that, and you’ll give your clients a reason to love the relationship they have with your firm.

Building continuity revenue gives you a semi-passive income that continues from year to year, increasing your bottom line and fostering quality relationships with your clients in the process, two key components to building a successful law firm.

Sanford M. Fisch
CEO & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com

We talk quite a bit about systems here at the Academy… systems that manage your workflow, your finances and your marketing campaigns, just to name a few.

And while those systems will certainly continue to be the key to your success, there is another piece to that puzzle that’s equally as important … a piece that can give you huge returns on your investment if managed properly.

I’m talking of course, about your staff.

Now, before you assume that your staff is “fine,” I want to urge you to take another look. And here’s why:

Although we’re exceptional at drafting documents and adapting to new legal trends, it’s not unusual to find attorneys who are “lacking” in the area of human resource management. In fact, many attorneys avoid that particular aspect of law firm management as much as possible, assuming that if their employees aren’t complaining, they must then be happy.

But the truth is, you set the tone for how your employees will experience your firm, so if you don’t put an emphasis on things like performance, teamwork and personal growth, your employees won’t either.

And an uninspired staff means an unproductive firm.

Fortunately, there are a number of ways to not only keep your staff on track but also give them the feedback and support they need to excel:

Communication

First and foremost, you need to have an open door policy with your employees. Performance reviews should be a regular event to be sure, but your internal communication strategy needs to go much deeper than that.

In order for your employees to get behind your Big Picture, they have to know what it is. Just as the football team understands the play they’re being asked to run, your employees must understand the strategies and policies you’ve implemented in your firm.

That means regular staff meetings where you discuss current workflow as well as overall objectives. Brainstorming sessions that allow your employees to express their ideas and be a part of your creative vision. And last but not least, the ability to discuss issues with you on a regular schedule, instead of being left to just handle things on their own because you don’t have the time to deal with such matters.

A Place for Everyone and Everyone in Their Place

The idea that every employee should be appropriately “matched” to their job is a core strategy at the Academy and one you should implement in your firm as well.

What this means is that your employees have the position they have because it’s the best match to their skills and talents, not simply because it happened to be the job they applied for when they joined your firm.

After all, building a winning team isn’t just about selecting the right people – it’s about getting the most out of the people you select. Think of it as not only putting the right people on the right bus, but also getting them into the right seats.

Someone who is creatively inclined for example might do much better as your marketing assistant than as your drafting paralegal. Likewise, if you’ve got a filing clerk who’s known for being the perkiest person in the office, it might not be a bad idea to have that person greeting your clients when they come through the door.

This strategy accomplishes two things: first, you get the “best” that your employees have to offer, an obvious advantage to your firm. But your employees also get the chance to do a job they truly enjoy, a benefit that will increase loyalty and cut down on turnover.

Systems, Systems, Systems

One of the best ways to de-stress your staff is to give them clear instructions for what you want done. And this is where those systems we love so much come in handy.

Having comprehensive systems in place that not only describe their responsibilities but also detail how to accomplish their goals, makes doing their job that much easier.

It also greatly improves their chances of success.

To get the most from these systems, give your employees the opportunity to take part in their development… figure out the best way to do the things that need to be done and then document that process in your operations manual.

Show A Little Love

Showing your appreciation can range from a simple “nice job” to a bonus at the end of the year for exceeding expectations. But don’t forget all those little extras in between.

Create challenges and goals throughout the year that once achieved, can be formally acknowledged. A production goal for example or an educational milestone… these events are great fillers to add to your firm’s newsletter and should also be rewarded internally in some way. Present them with a certificate for example, or take them out to lunch. Or if you really want to earn some boss kudos, give them a free half-day off to use at their discretion.

Of course, these ideas are just the tip of the iceberg. You can provide employee discounts, offer extra days off around holidays or create an annual company picnic where your staff gets to kick back and enjoy themselves on the company dime.

The point is to create incentives that go beyond their paycheck. Don’t ask “why should they work for my firm”… Instead ask, “why should they love to work for my firm.”

The bottom line is that the more you encourage your employees to be a part of your vision, the more they’ll take that vision, and your success, to heart.

Robert Armstrong
President & Co-Founder
American Academy of Estate Planning Attorneys, Inc.
(858) 453-2128
www.aaepa.com