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Introduction: Leveraging Tax Season for Law Firms
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Richard James: Tax season is the Super Bowl for law firm owners, especially if you're a flat fee or hourly based firm, not so much contingency.
Richard James: You know, when I built the firm in Phoenix, I leveraged the tax season to bring in more than 50 percent of our incomes in just 4 months.
And I did it in 5 easy steps. And by the end of this video, you're going to be able to do it too.
Step 1: Identifying Your Target Audience
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Richard James: Let's get to step 1 of the first thing that you need to do to get this ball rolling. We have to segment
the who. What does that mean exactly, the who? Well, when you're thinking about making this type of an offer, we'll get to that in a minute, to bring in money to the firm, we have to understand who it is that we're going to talk to. Where are we going to get the money from? It's from people. It's from your clients.
And so there are two very [00:01:00] important groups of people that you have to pay attention to in order to get money from. Well, the first are people who.
If you own a law firm and you're a flat fee or hourly base, you definitely are owed money by your clients. In fact, most of you are owed somewhere between 5 percent and 30 percent That means that the really, really good ones collect 95 percent of every dollar they bill. And the mediocre firms or really struggling firms collect 70 percent of every dollar that they bill.
the reason why that's so important is because that money that you don't collect, you will forever chase. If you're a 500, 000 firm and you only collect 70%, there's 150, 000 on the table. If you're a 3 million firm and you only collect 70%, there's 900, 000 on the table. Trust me, I see this. Every single day.
And so when we built the firm in Phoenix, we were collecting roughly 87%. [00:02:00] Now it was a bankruptcy firm. And so 87 percent for a bankruptcy firm is actually really strong. If I was a family law firm, I would think that was mediocre. So it does depend on the practice area.
Understanding Debt Collection Strategies
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Richard James: But let's get into a little deeper on this particular subject of money.
Because we have to break it down into two important categories. It's how much do they owe you? And is that a high number or is that a low number? And then we have to talk about the age of the debt. And is that young or old? So let's focus on the young and the old for a second. If you were to talk to a company that had a debt collection service, they bought a debt and they went to collect it.
You would find out that they would pay more money for younger debt and less money for older debt. because it's easier to collect younger debt than it is to collect older debt. So when you're putting together your offer, which again, we're going to talk [00:03:00] about in a minute, you have to understand who it is you're speaking to and you craft your offer to match the audience you're speaking to so that you can make a less aggressive offer to younger debt and a more aggressive offer to the older debt.
Okay. Let's talk about the dollars in this conversation. So, the dollars in this conversation really comes down to the amount that they owe you. And that kind of depends on your firm. If you're a firm that has an average case value of 3, 000, well, 1, 000 is a big deal for you. And an offer to them of, let's say, 100 or 200 would be a big deal to them.
But if you're a high end family law firm that does regularly 50, 000 average case values, and your average debt that people owe you is 20, 000, well, a 200 or 500 offer probably isn't going to make it. much of a dent. So we have to pay attention to who it is we're speaking to when it comes to what [00:04:00] they owe us.
Now there's a second very important category that we have to pay attention to and that is new prospects. And the reason why you have to pay attention to new prospects is because when you're meeting with new prospects, one of the ways to increase the average amount of money that you get as a down payment is to make sure you're making it an offer to leverage the taxes.
And now again, I'll get into the offers in just a second, but when we're making our offer, we have to understand who we're talking to because when you're sitting down with a new prospect, We want to convince that prospect to retain the firm so that we can start working their case and giving them advice.
And sometimes those new prospects don't have a lot of money today, but they will have tax refunds coming in. And so if we can get them to pledge their tax refunds, all of a sudden we can bring a wash of money in between January and April that ordinarily we may have to put that person on some sort of [00:05:00] longterm payment plan and wait for the money.
This is one of the reasons why we're able to accelerate the rate of collections during this four month period of time, which leads us to this conversation I've been having about the second step you have to do. You guessed it.
Step 2: Crafting the Perfect Offer
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Richard James: We have to pay attention to the offer. Now, what does this mean exactly? Buy an offer. Well, here's what I mean. When you're marketing for leads, if you pay an agency to market for leads or you do your own marketing, it doesn't matter. You're fundamentally saying to them, I'm going to give you something in return for something else.
Some of you say nothing more than, I'm going to give you a consultation in return for you calling the firm or filling out this form. Others of you are more savvy and you'll say like, I'm going to give you a free copy of my book if you just give me your name and email address and maybe [00:06:00] your phone number and hopefully your mailing address at the same time.
And you can get that information by giving them something. Well, when we're doing work to collect, we're doing the exact same thing. Here's the big difference. This is why tax season is the Superbowl for law firms. Because when you're crafting an offer, it's so important for you to leverage the conversation that's already happening in their mind.
And what conversation is happening in the mind of every single American inside the United States that works? Tax season. Why is it on top of their mind? Well, it's kind of a law and they have to pay their taxes. Two, many of them are depending on that refund. And three, the advertising world has been hammering them since slightly before January, all the way up until tax season about using their services.
You've heard them, right? TurboTax, H& R Block. We've all heard these ads and so have all of our [00:07:00] prospects and our clients. And so when we start crafting an offer that goes along the wavelength of the conversation that's already happening in their head, we start to be congruent with what they're already thinking.
And when we do that, we can get a higher response rate.
Hey, if you want to figure out how to maximize tax season for your law firm, go to the lawfirmsecret. com.
Now, We get a higher response rate, not from leads, but rather from collections, because that's where we're focusing our attention. That's the list that we can start to draft most of our money from right away. And so the first thing that you want to do, as I said, was identify your who.
We have to figure out who it is that you're speaking to. And that's why I went through that segmentation process. The second thing that we have to do is once we identify our who, we have to craft our offer. Now, like I said, we're going to have a different offer for a [00:08:00] few different groups of people. Yep, that's right.
You're going to have a little different offer for different groups of people. So let's take the people that owe you money, the people that owe you money and have old debt. We're going to give them a little bit more incentive to be able to pledge their tax refund, to be able to get their money paid back to you in return for some sort of discount. So we'll want to make sure we are careful as who we send these offers to. For somebody who has younger debt, we can make a lower offer, so it can be a much lower offer. Just the fact that we're making the offer and we're having the communication with them is something more than you're probably normally doing as a law firm.
And just the act of having the conversation with them that's already going in on their head about tax season and tying the pledge of their tax return to pay for your tax bill, something they already owe you, or sorry, your legal bill, something they already owe you for. It allows them to say a natural yes, especially if the debt is young.
This is why we start to get a rush of [00:09:00] income during this period. Now, that second group that I talked about, which was the new prospects, they too are going to need a special offer. And so these are the folks that, you know, when you sit down and you ask that question, is there any reason why we couldn't move forward today?
Or we had any reason why we couldn't help you with X today? and their answer is, well, I can't afford it. I don't have the money. Those people are the ones you're going to leverage. Tax season with right the ones who say yeah, sure. Here's my amex or here's my visa or here's my mastercard no, we're not going to worry about leveraging it with them.
Those who say, yeah, I can put half down today, we're probably not going to leverage it with them. but those who don't have any money, and do have a tax refund coming, we can actually leverage with them some sort of paid in full discount or other type of offer that we give them if they just pledge their tax refund.
So they put a little money down today, They pledged their tax refund. We work with them to make sure we understand when that tax refund [00:10:00] is coming in. We help them walk them through that process. And then what we do is we start to get an influx of cash. And, consequently, our hire rate goes up because more people can hire the firm because you're allowing them to pay with future money.
Fundamentally, you're offering them terms, but you're offering them terms from the concept of their tax refund is coming in. For those of you lawyers who just went to the outlier in this conversation and said, well, I can't control if they give me their tax refund or not, what should I do about that? The answer is, how about we worry about that when it happens?
Because if we do this right, so much money is going to come in through the bell curve, the outliers aren't going to matter that much. You're still going to net, net, net, a higher overall collected dollar rate than you normally 30 percent right now, or pardon me, 70 percent and leaves 30 percent on the table right now, When you run a program like this, you should be able to get it so that you only leave [00:11:00] 10 percent on the table or maybe 13 percent on the table.
That is a huge move in the right direction. So I know lawyers love to pay attention to the outliers in this particular case. Let's not do that. So let's take an example. so let's go back to the list conversation I had earlier. We had people who owe money. And of that, we had segmented it by whether they have money, or whether it is time, right? Or what we called age. and We had people who were old, and we had people who were young, right?
And so when we have these two different extremes, we're going to craft different offers. So for the young, we're only going to have to pay attention to a small offer, then we have to pay attention to, for older debt, it's going to have to be a larger offer. Now [00:12:00] this is in percentage to what they owe you.
So it's not just large or small, it's in percentage to what they owe you. Like a 100 offer on a 1, 000 debt is actually pretty good, So the third thing we have to talk about is
Step 3: Effective Marketing Techniques
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Richard James: marketing.
At the end of the day, if we don't take our offer and our list and put them together, right, you have to take the list that you segmented and you have to take your offer
and you have to put them together And this is called marketing. Okay, general 101. But basically, we have to make sure we let the list know that we have something to offer them. And what is that? Or how do we go about doing that? Well, let me [00:13:00] illustrate it. So if we were to not do this and we just created the offer and we just segmented the list, it would be like having a big, beautiful billboard in the middle of a cornfield in Iowa.
Now, if you're from Iowa, I mean, no disrespect, but oftentimes those cornfields don't have a lot of traffic going by them. And so if you're not putting your message out to your list about your offer, you're going to get Crickets. That's not what we want. What we want is we want to increase the income to the firm and we're looking for that magical 50 percent number in four months.
So how do we get there? We have to use a few different vehicles to get the message across. And there's some pretty easy ones, right? The first, we would just talk about sending the list an email. Free, doesn't really cost you anything. If you send it reasonably well, you should get a reasonable open rate and a reasonable [00:14:00] response rate.
But it's probably not enough. You might want to send something via direct mail. And yeah, that's great. But if you go with that, that's where I want to start, but you've never done direct mail before, arguably the slowest process for you to use, sometimes most effective, but oftentimes the slowest. I'm not telling you not to do it.
I'm just telling you if you've never done it before, it's not where I want you to start. The next that you can do is you can just pick up the phone and you can make a phone call. That's right. You can just have a live person pick up the phone and make the offer over the phone to the person who owes you money.
In your world, it's not soliciting. They're already a client. the next that you could do is you can send them a text message. That's right. You can just, either through technology or literally from an iPhone, text your list. A lot of [00:15:00] you don't have that many people that owe you money. Maybe it's 30, maybe it's 50, maybe it's 100.
Somebody in your office could send a hundred text messages from the iPhone. Why is this important? Well, because they get the right color message on their phone. If you're an iPhone user, you know what I'm talking about. And finally, not finally, but another option for you, is you can use Facebook, Instagram, even Google to some extent.
We'll let the technical gurus deal with which one you should be using. But we're basically talking about some form of Retargeting, right? So you're basically going to take the list and you're going to put a very specific message in front of the list. There are limitations to this. There are things you have to do to manage this that is for the professionals or for somebody in your office who does this for you to make sure you know how to do it.
But once you have list and you have your offer, now you can start to [00:16:00] communicate that list and that offer through these various vehicles. Now, here's a pro tip. Here's a pro tip. Okay, you ready? The number one pro tip I can give you is to make sure you have a deadline on your offer. Absolutely. A deadline on your offer.
The reason why this is so important is because deadlines make things happen faster. And what we're doing right now is actually referred to direct response marketing. It's okay if you don't know what that is, but just understand that direct response marketing basically says we're going to put out an ad and we're going to get a response back.
Think infomercial. Remember the ShamWow guy? Maybe you're thinking I sound like the ShamWow guy right now. I don't know. But I'm telling you that direct response marketing basically says we put out a message and we measure the response. [00:17:00] Well, if you want your response rate to go up, add a deadline. That's the first tip I'm going to give you.
Let me illustrate that with a story. So the reason why you want to make sure you add a deadline is because when you do, your response will go up. So I'm going to tell you a story that's going to bridge into my bonus section a little bit later. But know this, when I first started building the firm in Phoenix, I used a copy of a book.
Not this book, this wouldn't be relevant. It was a book specific about the practice area. And when I did, I started giving it away for free. And when we use television to drive that ad, we would generally get somewhere around eight new leads every time I did one of these ads. That was pretty good. Cost per lead was actually pretty low.
The moment we learned to add a deadline. All I said [00:18:00] was, Hey, instead of, well, actually, the managing attorney said it. He said, rich, how many of these books do we have? And I said, 27. He goes, yeah, we have 27 of these in the office. First 27, that call, we'll get a free copy. And as soon as we did that, we went from eight leads to 80 leads.
That's a 10 times full. So when you create your offer and you send it to your list, make sure. You add a deadline, and you're going to see your results skyrocket. Now, we would be remiss if I didn't get into the next following step.
So the next step is very important and it's oftentimes overlooked. And the reason it's overlooked is because a lot of law firm owners don't think about sales. And they don't think about conversion. They usually think about getting a good job done for their client, which is awesome. You have to do that.
They [00:19:00] usually think about administrative things and managing legal matter. Sometimes they can think about marketing and lead generation, and I'm hoping they're paying attention to profit. But sales, conversion, and selling is not the first place that they start. Which means most law firm owners don't think about the next word.
And that's step number four,
Step 4: The Importance of Scripts
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Richard James: script. Now here's why this is important. There are two fundamental areas where you're going to, well, I'd actually say three fundamental areas where you're going to need a script. The first is in your collections. or AR team, right? Accounts receivable or collections team. They are going to need a script because when people call back from an ad that you put out or marketing that you put out or they call into the list, they should be saying [00:20:00] very specific words in a very specific way in order to maximize the results.
It's highly important that that happens. The second place is probably pretty obvious. It's where you should have a script right now, and that's during your initial consultations, during your ICs. Why is this so important? Well, because if you have a script right now, you need to augment it a little bit when it comes to making the offer for the investment.
when they run up against people that don't have money or don't have a lot of money to be able to know how to exactly word the offer when we're allowing them to pledge their tax return. So we have to write out the script. Now, the final one, we're going to call that a mystery and I'm going to save it until last.
I promise you, I'll come back to that in a little bit. This idea of this mystery place, we need a script. Hold on, hold that thought. You got my word, I'll give it to you. So, if you're going to be [00:21:00] driving marketing, you need to make sure your collections team knows exactly what they're doing. You need to make sure that your, sales team knows exactly what they're doing.
So that you can maximize the number of people that take you up on this offer like, pledging their tax return. If you do that, we're going to increase the number of people who pledge their tax return, fundamentally increasing the amount of money we earn to the firm between January and April. And again, there's a mystery component I'm going to get to in just a minute.
Now, we have to talk about the fifth step, because again, it's yet something that's most often overlooked by law firms. So, step number five.
Step 5: Training Your Team for Success
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Richard James: We must train our team. So, I said earlier we have to have a script for the AR team, collections team. And I said we have to have a script. for the sales team. And I said we had to have [00:22:00] a script for this mystery team, right? Well, having a script isn't enough. So, when you train, here are a couple of key things you've got to pay attention to.
The first, and most important, is we need to make sure they memorize. We need to make sure they memorize the script. Yes. Memorize. I know we don't want our team to sound like a used car salesman. I get it. I don't want them to sound like a used car salesman either. But I do want them to get results. And the way that they get results is they memorize what it is they're going to say, when they're going to say it, and how it is they're going to deliver the message.
And if they do that, they will maximize results. Remember, these are folks who likely owe you money. or are in dire straits and they need your help, but they don't have the money yet. And they're going to have it when their tax return comes in. And so we just need to make sure we [00:23:00] help them get you paid because you've already done your services, or we need to make sure that we get them the help they need.
So we have to convince them that it's in their best interest to retain your firm by pledging their tax refund. Okay. So, First thing we want to make sure we do is memorize. The second thing we want to make sure we do is practice. Now, practice comes into two primary categories. The first category that practice comes into is that they have to role play.
The second category that they have to come into is we need to play live game table.
This is vital when we're training people because there are times we want to role play with a cold situation where they're not playing with live fire and we get the marbles out of their mouth, right? And that has to happen over and over and over and over again until we know that they've got it. [00:24:00] And if they've got the game tape, which means we listen to a call that they made or watch a sales call that they had, we can actually review what they said when they were playing with Live Fire and we can actually help critique them.
And finally, it brings me down to my third step. We really should be scoring. Their calls or a sample of their calls to know whether they're doing what we want them to be doing. Remember, my grandfather said we should inspect what we expect by report. There's what we think is happening in a law firm, there's what we want to be happening in a law firm, and then there's what is actually happening in a law firm.
And the way you figure out what's actually happening in a law firm, especially when it comes to this particular category, is we go ahead and we score their calls and let them know how they're doing. And again, this is in every single department. The AR team, the sales team, and the Mr. team we're going to talk about in just a minute.
Now, I don't know about you, but I like bonuses. And I know it was five steps. Right now you [00:25:00] have all five steps you need. Segment your list. Make yourself an offer. Start marketing to the list and by putting the offer in front of them, write yourself some scripts and then start training. And if you do these five things by the end of this video and you start taking action, you're going to start to see results if you leverage tax season in your law firm by doing these things with the two types of lists that I gave you.
Bonus Tips for Maximizing Tax Season
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Richard James: But I'd like to give you a bonus. Are you okay with that? I hope so. I like bonuses. Let's give you one right now.
Alright. Let's give you a bonus. In addition to using this for marketing into the segmented list of people who owe you money and new prospects you're meeting with. I want you to absolutely positively [00:26:00] start leveraging this in your advertising. So if you're using Facebook ads or Google ads, if you're using any type of YouTube ads or you're using direct mail to put your message in front of prospects who likely need legal services that you offer, and you're trying to convince them to retain your firm, one really fast way to do that is to leverage the conversation that's already happening in their head. So we want you to start to use this in your lead generation. If you use this tactic in your lead generation technique, you can create the same concept of an offer. You're not going to give money back for pledging your tax return.
You're not going to be able to identify about how much the case value is or how much they owe you because you don't know any of that yet. But you're just going to start to have the conversation that you allow them [00:27:00] to leverage their tax return in your practice, even if they don't have money.
You're going to talk to them about how tax season relates to what it is they're going through. You're going to leverage the conversation that's already happening by the massive behemoths out there that are bringing their attention up. And you're going to enter into that conversation with your lead generation techniques.
If you have your own marketing team, this is fairly straightforward to do. Your creative team can start to come up with ads. What does that look like? Well, if you're in a YouTube ad or a Facebook ad, couldn't you put a red, white, and blue striped hat on like uncle Sam and wear it? And maybe even go as far as dressing like Uncle Sam, maybe even put a white beard on and that can be a start of your commercial.
You'll start entering their mind about something they're already hearing a lot about, but you'll pivot over to the benefit of your firm. Now, you could do other things [00:28:00] in just writing, using words. You don't have to dress up in costume if you don't want to. That's okay. Maybe I'm the only one who's willing to do that, and that's okay too.
You can just use words to accomplish your goal. Now if you've got an agency that you're working with, sometimes it takes a little bit more effort to get the agency to do this. Why? Well, because agencies can only give you so many hours. When it is, they're working with you, and so they can't do a lot of the creative.
So they may need you to go out and develop some of the creative for them. There's places for you to do that relatively easily. We'll create more information on that in a later video. But what I want you to know is that All that matters is that whether you're using an agency or you're using your own in house agency, I want you to start having the conversation during tax season, about tax season, and how it relates to your practice area, and how it relates to the way that you're allowing them to leverage their tax return to [00:29:00] afford the services that you offer if they think they can't afford it.
I'm not going to write it for you right now, but I hope you get my point. Now, earlier I talked about that mystery team and that mystery script. Well, guess who that is? That is your ASA. What is an ASA? That is an appointment setting agent. The people who are on the phone answering the phones or making outbound dials to your unconverted leads Those are the folks that are going to need their own script Those are the folks that are going to need their own training Because they're going to need to know exactly what to say to either your unconverted lead list Let's say you didn't even want to do this with advertising and you wanted to generate more leads and more appointments But you didn't want to spend money on advertising.
You didn't want to come up with some creative Fine. Just write a script for your appointment sending agent. Let them take your old list of unconverted leads, you know those people that didn't set an appointment when they came into your firm, didn't show to the appointment when they [00:30:00] originally set an appointment, or didn't retain the firm when they originally met, when you originally met with them.
And just let them pick up the phone and call them with this new offer around the idea of tax season. We're going to be entering into their conversation. Oh, by the way, We can also use the same tools we used earlier. We can send them an email, we can send them direct mail, we can pick up the phone and call them, we can text them, or we can retarget them.
And so when we start to generate leads and we look at this from a lead generation perspective, the unconverted lead list is a low hanging fruit, easy way for you to start to generate more appointments using this conversation of tax season.
Conclusion: Achieving Your Best Tax Season Ever
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Richard James: So, how did we go from generating no money during tax season to almost 50 percent of the revenues of the firm in just four months?
We paid attention to generating our list, who we were going to talk to. And I said, it's those who owe you money, those that are in the new [00:31:00] consultation, and now I revealed to you that we also use unconverted leads and prospects out there when we're marketing. Then we crafted our offer and we put these things together.
After that, we just made sure we wrote our scripts. So everybody knew exactly what was going on. And we started marketing these things to put them together. And then finally we trained everybody on the entire pool of information. And once we did that, we just made sure we did it over and over. and over again.
This is not about reinventing the wheel. Once we know this works, we just want to do more of it. That's the key. Don't try something new. This isn't actually new. It might be new to you. But this has been around for a while. So just use something that somebody else is doing and do more of it for your firm.
If you do that, you're going to find, you're going to have your best tax season ever. So, if you want to have your best tax season ever, as we just discussed, you want to pay attention [00:32:00] to the five most important things you absolutely must do. You must segment. Your list and identify the who we're going to make this offer to. Then we need to create. Our offer and the offer is going to have something to do with their tax return in pledging their tax return and talking about Uncle Sam entering the conversation that's already happening in their brain because the world knows about tax season and then We just want to make sure we turn on the marketing Where basically we say, okay, list, here's our offer.
It's a simplified way of doing it. And then from there, we're going to make sure we have scripts. Right? And the reason we want to have scripts is because our teams that are fielding the phone calls or making outbound calls, we want to make sure they know exactly what to say, when to say it, and how we want them to say it.
And then five, we're going to [00:33:00] train everybody on the team who are using the scripts and make sure they're doing it correctly. That's how we make sure this works ad nauseum.
Hey, if you want to figure out how to maximize tax season for your law firm, go to the lawfirmsecret. com.