The 20/10/5 Rule: The Key to Managing Your Firm and Your Life

Many small firm and solo attorneys who seek outside marketing assistance are frustrated by their income, stressed out, and/or overworked. There are usually three specific issues that stand in the way of their success. Once the three issues are solved, their income, happiness, and stress levels all improve. In this article, I’ll describe the three challenges and discuss solutions to solve each issue.

Here are the top three reasons why those who work with small firms and solos see problems:

  1. Many solo and small firm attorneys are stuck on the “Revenue Rollercoaster.”  It begins when you have a full load of matters you don’t have time to market. As those matters are completed, you have time to market but it takes awhile to bring on new clients. So your revenue drops. Then your marketing (finally) gets traction and you’re full with clients again (and once again, you have no time to market). As the cycle repeats itself, revenue goes up and down. This is called the Revenue Rollercoaster, and it’s one ride that’s hard to get off.
  2. Unknown to them, most lawyers simply do not spend enough time marketing.
  3. Many lawyers do not have a guideline that tells them when to hire people, and whom to hire.

In the course of solving these challenges, there is a simple framework that can address all three issues (the Revenue Rollercoaster, insufficient marketing time, when and whom to hire). As this framework is implemented, it is surprising how quickly one can identify and fix critical issues in law firms. Once the issues are addressed, the firm’s revenue, growth, and owner happiness all go up. It’s called the “20/10/5 Rule”.

The 20/10/5 Rule

The 20/10/5 Rule is a way of balancing your time on a weekly basis. The “20” refers to 20 hours per week: the maximum amount of time you should spend on billable work.

The “10” refers to 10 hours per week: the amount of time you should be spending weekly on marketing activities.

And the “5” refers to 5 hours per week: the amount of time you should be spending on law firm admin tasks each week.

Taken together they add up to 35 hours, which makes for a nice work week!

Note: litigation-focused practices should use these numbers on a monthly basis, rather than a weekly basis. So the rule changes to 80/40/20.

In addition to giving you a formula for balancing your time, the 20/10/5 Rule is a helpful diagnostic tool as well:

  • If you’re spending more than 20 hours per week on billable work, congratulations! It’s time to staff up! You can hire an associate, paralegal, or legal secretary. The key is that you must be able to bill out their time. They can be part-time contractors, full time employees, etc.
  • The second part of the 20/10/5 Rule is the 10 hours spent on marketing each week. It may seem like a lot, but it’s not as difficult to achieve as you may think. First, it includes travel time. Second, it encompasses a wide range of activities such as bar association meetings, networking events, and social events where networking takes place (community galas, clubs, etc.). You’ll find that the 10 hours is usually achieved with 2-4 events per week. If you’re under 10 hours, increase your marketing efforts. If you’re spending more than 10 hours of marketing a week, but not getting the quantity or quality of clients, there’s something wrong with your marketing.
  • Lastly, if you’re spending more than 5 hours per week on law firm admin, you’re wasting precious time though it may not be obvious to you. Consider outsourcing some tasks and/or getting more admin help. When it works well, technology can reduce your admin time. Unfortunately, oftentimes technology and software can be a huge time drain. In these situations, hiring high quality professional expertise to get things working efficiently is usually a good investment.

In conclusion, let’s review the 20/10/5 Rule: 20 hours billable time, 10 hours marketing, 5 hours admin time. Use the 20/10/5 Rule as a diagnostic to see what needs to be changed. If you don’t know how many hours you’re spending on billing, marketing, or law firm admin use your billing program and set up ‘clients’ for marketing and admin and track your time in those areas just like you do for real clients. That way, you can check to see how well you’re tracking to the 20/10/5 Rule, and what needs to be changed.

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