Clearing the Deck: Boosting Law Firm Success with the 90/10 Principle

Watch the YouTube version of this episode HERE

Are you an attorney who is looking to improve efficiency with your firm? In this episode of the Maximum Lawyer Podcast, Tyson discusses the "90/10 Principle" for improving law firm efficiency and profitability.

Tyson discusses the importance of the 90/10 principle. The principle involves clearing the 10% of cases that are either not profitable for the firm or attorneys don't want to focus on them to create a more lean practice. In order to identify these cases, you need to go through the caseload and pinpoint the bottom 10% by determining the case value. Looking at the financial side of things is a great way to determine this because you can determine how much money it costs to keep the case on the books. 

Figure out how much resources are going towards a case. If it is high, it might be time to cut ties with it. Also consider how much energy is being put towards a case. If the case is sucking a lot of energy and time from the firm, it can be put in that 10%. Once you determine the bottom 10%, look to identify the top 10% of cases for the firm. This is because once you shed the cases you don't want, all that energy will be put towards the top 10%. This could mean delegating your best attorneys to those 10% since they are high priority.

Ensure this is a recurring process. For example, put time in your calendar once a quarter or once a year to re-evaluate the cases that the firm is handling. This could be changing the bottom 10% and top 10% every 4 or 12 months.

Take a listen to find out how to ensure greater efficiency for your firm!

Episode Highlights:

• 00:24 Introducing the 90/10 principle, a variation of the Pareto principle
• 2:25 The process of identifying the bottom 10% of cases
• 3:20 Redirecting the effort from the bottom 10% of cases to the top 10%

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Transcripts: Clearing the Deck: Boosting Law Firm Success with the 90/10 Principle

Speaker 1 (00:00:01) - Run your law firm the right way. The right way. This is the Maximum Lawyer podcast. Podcast. Your hosts, Jim Hacking and Tyson metrics. Let's partner up and maximize your firm. Welcome to the show.

Speaker 2 (00:00:24) - Welcome back everybody. It's Tyson today for another Saturday episode. And today I want to talk about something I call the 9010 principle okay. The 9010 rule. And I'm sure that a lot of you have heard of the 8020 principle, the Pareto principle, where 80% of the effects come from 20% of the causes. I'm taking the 9010 rule to narrow that focus even more. And what this comes from is this quarter, our theme is clear the decks. And what we mean by clearing the decks is getting rid of all of the cases that we don't need anymore, that we don't want anymore, that are not nearly as profitable for the firm, but also settling cases as well so they fit in with this theme, fits in with our our normal KPIs where we focus on settling cases, getting cases resolved.

Speaker 2 (00:01:20) - So whether that is settlement or through trial and and getting the best possible results for clients obviously. But we are we are in the middle of a pretty big firm expansion where we're we're spreading into multiple states and we're needing to clear the decks before we kind of go into battle. So that's where that comes from, is we're clearing the decks before we get into 2024. So we can we can have a lean, mean fighting machine. And so I'm going to talk to you about this this technique that you can use though that's consistent in getting rid of cases but focusing on the most important ones. So what is this 9290 ten rule that I'm talking about. And it's a really simple tool. But what you're going to do is you're going to go through your caseload and you're going to pinpoint the bottom 10% of the cases that are really bogging you down, and you're going to need to dig into these cases and determine, all right, what's the average case value of this? What is the part of this is a little subjective.

Speaker 2 (00:02:25) - So there's the financial part of it where okay how much money is this bringing into the firm. What's it costing the firm. And resources however but also in energy. Right. Is there a client that. Yeah, maybe they're paying us a bunch of money. But the overall effect, the net effect of of just them draining our energy is not good. So you're going to want to put them into that bottom 10%. So don't think about this just financially a big part of this financially. So we look at it a lot by the case value. But you need to also look at it based on okay what energy is this sucking from the firm. All right. So here's I think this is where the magic comes in. You're getting rid of those bottom 10% of cases. What you're going to do after that though is you're going to take that attention, that time, that effort, all of that in. And after you've identified your your top 10% of your cases, you're going to take that all of that effort that you were focusing on with the bottom ten and focus on the top 10% of cases.

Speaker 2 (00:03:20) - This is going to propel you. This is going to like throwing gas on a fire to get your firm to that next level. And that's why I wanted to make sure I share this with you, because you are you're going to be taking I mean, think about all that draining energy from those bottom 10% and you're going to then boom, apply that directly to the top 10%. And that is how you're going to get your firm to the next level. And there's a quote from Warren Buffett that makes me think about this 9010 rule. And he talks about the difference between successful people and really successful people. Is that really successful people say no to almost everything. And what you're doing is you're saying no to almost every other case, right? You're only focusing on the top 10% of cases. You're obviously not ignoring those other. Once you've gotten rid of the bottom 10%, you're not going to ignore the rest of the cases, but you're going to put your primary focus on those. And maybe you dedicate a team to those top 10% of cases.

Speaker 2 (00:04:16) - However, you need to do it, but you need to you need to have your main focus. You need to prioritize, prioritize those. Maybe you review those cases first. Maybe you're reviewing those cases every single week or every single day, depending on the type of cases that you handle. So all your marketing efforts should be focused on that top 10% of cases that you that you want to acquire. So take that that effort, all that wasted effort from the bottom ten and then apply it to the top ten. All right. And then something else you can do with this is just set it on your calendar to evaluate every few months. You can do it every quarter if you want. You can do it yearly. Ours is the way we the way we deal with our cases. It's a little bit more effective if we do it yearly as opposed to quarterly, but I'm not opposed to a quarterly one, one of the one of the rules in our offices that if you identify a case immediately and ours is different from someone that's doing family law or estate planning, but if it's an injury case, and if we identify that it's going to be a lower value case, we need to get rid of it immediately and move on and let the client know, hey, this is not something that we're going to build a handle for you and then let them go find another attorney because it's not fair to them and it's not fair to you.

Speaker 2 (00:05:22) - You. Got to move on and let them. Let them still have access to justice. But they can do it with a with another attorney. All right. So hopefully by adopting this approach will mean greater efficiency for your firm. Hopefully it'll improve the job satisfaction that your employees will have. It'll improve your bottom line, which would be good for you. But it's going to also avoid you from sinking a ton of resources into cases that offer very little in return. And often they take more than what they're actually going to benefit you. So make those tough calls, drop those cases out of your bottom 10%, and then open the door to redirecting that energy into that top 10% so that you can take your firm to the next level. So I want you as an action item on want you to take a look at your caseload. Do it today. Identify those cases that are really holding you back. And then. Figure out a plan for for kindly, nicely ethically moving those cases out of your office.

Speaker 2 (00:06:25) - All right, so that's a wrap for today's episode. Hopefully you will apply this 9010 principle and that you'll get something out of it. But until next time, consistent action is the blueprint that turns your goals into reality. Take care.

Speaker 1 (00:06:42) - Thanks for listening to the Maximum Lawyer podcast. Stay in contact with your hosts and to access more content. Go to Maximum lawyer.com. Have a great week and catch you next time.