We recently experienced one of our worst nightmares in our trial consulting business. A case on which we had been working for many months, and for which we had been planning a large scale mock trial, settled a few weeks before the mock trial was scheduled. I’m sure it was a good result for the end client, but for us, and the lawyers involved, it meant that all the billings stopped abruptly. For us, the six figure project was over, done. All of the sudden, the work that would keep us busy, and the cash flowing, was gone. We suddenly had too much time on our hands. Shortly after this happened, I was on the phone with a lifelong friend, Cindy. When she asked how I was doing, I told her how “bummed out” I was, and we were, and I related this nightmare to her. She paused in response and then carefully asked, “If you don’t mind me asking, how do you run a business when your cash/work flow can be like that?” That is, so abruptly changed due to forces beyond our control. Her question gave me pause. I don’t think many of my friends or family members have ever gotten to that level of thought and understanding of how devastating such an event is for a small business. I know we’re not supposed to count our chickens before they hatch, but, we have no choice but to build our work flow around our engagements. We can’t overload our schedule when there is an upcoming project, however large or small it might be. We have to plan, staff, and prepare. When cases “evaporate” like this, it is not like there is something ready to take its place, at least not in the same, instant, timeframe. Cindy got it. It clicked for her. But, unfortunately, I didn’t have, and I don’t have, a good answer for her. Sure, one can try to build a pipeline of work and establish cash reserves, but that doesn’t really make it easy to absorb such losses. In discussions with the lawyers involved in the case, they indicated similar reactions. Though they know it was in the client’s best interest to settle the case, much revenue was lost for them in that instant as well. We just move on, waiting on the next one as best we can. I’m sure many businesses have similar realities, not getting the big HVAC installation job, or having a potential client decide not to build that building the architect had designed. All I can say, again, is that it not easy come, easy go. Owning a business is a wild ride!
The expression, “easy come, easy go” has no applicability to the situation David just described when we have been preliminary retained for a case that will bring in sizable revenue, only to have it cancel due to the settlement of the case. Although we always charge a sizable portion of our fees as a retainer, prior to beginning our involvement in a case, sometimes, cases settle before the date on which we were to be retained. When this happens, this means we receive nothing. Not only do we not get paid, when a case settles at any point during our work, it is impossible to schedule another client’s case within the time frame of the cancelled case; we just can’t move that quickly. As entrepreneurs, David and I are accustomed to our share of ups and downs on the roller coaster known as owning and operating a small business. Most of our family and friends, in contrast, are employed in professions that pay them a fixed salary on a regular basis. Even our retired friends have a guaranteed income from month to month! Not us. Our work, and the income we derive from it, fluctuates greatly from day to day, week to week, and month to month. David and I don’t expect anyone to fully comprehend what it is like to have the rug pulled out from under us when a case we had hoped would allow us to pay our bills suddenly, without warning, goes away. The usual reaction we get when we tell our friends the bad news is, “Don’t worry; there will be another case soon,” or “Well, now you can take a vacation,” or something similarly trite, thus, it was surprising when David’s friend, Cindy, understood the toll, both on our business and us, personally, when he explained what had happened. Most people would never call me an optimist, however, after this latest experience with the cancellation of a large project that would have “made our year,” I believe I am more of an optimist than I ever knew because I keep on trying and hoping for the next one. Thank you, Cindy, for your love, friendship, and genuine understanding of how David and I feel when times are tough!