By Earl Alright
Being a lawyer must be synced with being a businessman to prosper in this profession. This pandemic has shown that many lawyers aren’t doing the business part of our practice well. Let me share one tip with you today that may help better things: Pay yourself salary.
The biggest problem with many consultancy services is that the proprietors aren’t on salary and it is not the firm that pays the bills. Every money that comes in usually belongs to Oga and whatever he assigns to running cost is what it is. So when big briefs don’t come, Oga gets broke, office can’t pay bills and juniors go without salary.
The cure is simple: Be on a salary. If you do this, all the money you earn would be for the firm and even when you don’t have big briefs in particular months, the firm will still have money in its account to run itself. And when there is no sufficient money in the account, the firm will owe its staff (which includes you, the proprietor) or may choose to pay half salary while owing the balance. You may be the proprietor, but in a business sense, you are a staff of the firm just like your juniors.
And hey, you don’t pay all your debts at once, that kills firms too, for there would be no money for overhead cost. So let the firm spread its debts even if it includes your salary (and with interest too to keep juniors and para-legal staff loyal to you).
Unless there is a real big inflow, it is not business wisdom to pay up all outstanding salaries plus the current salary at once, you would end up most likely incurring more debts (again) for the next month. Yes, you may find yourself in an unending circle of debts month in, month out.
So, you can pay 50% of an outstanding salary in addition to the current salary in a particular month, and move the balance 50% in addition to the following month’s salary and then move the compensation to the third month.
What’s your salary dear proprietor? Do you earn 1m this month and 100k the following month? That pattern kills business sir. If you spread the 1m into 200k per month as your monthly salary, you would have secured your salary for 5months (having assurance and security of a monthly inflow) rather than spending all of it in one month and going broke for 4months.
I could privately help you sort out the business part of your law firm if you chat me up. And always remember to read calendar man because I will share new tips almost everyday.
Nice business orientation and guide for running a post convid-19 law firm. Will watch out for subsequent tips. Thanks