Fred Cavaiani
Relief is tangible as the economy begins to recover from the Great Recession. That relief is a bit hesitant to emerge, however, and that hesitancy is infiltrating consumers' financial decisions.
When exactly the recession ended is a debatable point. Media accounts proclaimed the final finish at various times in the last few years, but lingering economic issues dragged on, keeping the definitive end just out of reach.
The news is often good these days, though. A recent story by the Associated Press, "U.S. Companies Report Rising Sales, Employment in 2Q," stated that an increase in sales have meant greater employment and higher wages, and those trends are expected to continue. And in "U.S. Jobless Claims Drop to Lowest Level Since 2006," Sarah Portlock wrote for the online Wall Street Journal that the number of people applying for unemployment benefits hit its lowest point since eight and a half years ago.
What does this mean for you and your firm? Remember: The economy won't grow without an input of money; likewise, your business won't grow without an infusion of capital.
I have often counseled that a business needs to lay out money to bring in money. For example, brick-and-mortar offices (while they still exist) should be properly furnished to send the right message and bring in paying clients. Up-to-date technology is also a must - not only to fulfill legal requirements of model laws, but also to appeal to evermore tech-savvy clients who know about the savings that technology can offer.
You'll need to spend money for staff members, who can do certain types of organizational and secretarial work, freeing you to bill more hours for actual lawyering.
In addition, as your practice grows, you will need to expend money for associates, who will allow your practice to grow and become more profitable.
Having said that, don't forget the still-fresh wounds inflicted on us by the recession. Your business won't survive unless you save some money for a rainy day. Don't let relief translate into careless spending. Heed the lessons of 2008 by tucking your duckets away while the going is good.
Even if the economy doesn't take another plunge anytime soon, your individual business might. You might have major clients who default on their payments. A disaster might strike, such as a hurricane that knocks down your building or a technological catastrophe that wipes out your records.
Any of those scenarios will mean a need to spend more money than originally budgeted for a given month. If you have money tucked away, your business can continue smoothly.
No matter how good the economy looks, your personal economy will look even better if you are wise enough to remember the recession and stash some cash.
-----
Edward Poll is the principal of LawBiz Management. He coaches lawyers to greater profits with less stress and is the creator of the new "Life After Law" coaching program, which enables lawyers to plan for profitable exits. He can be contacted at edpoll@lawbiz.com. Also visit www.lawbiz.com.
Published: Tue, Aug 26, 2014
