You’re good at marketing. You’re on your way.

Your marketing flywheel started moving and you kept pushing. You network with other professionals, you get speaking opportunities, the media comes calling. You’ve got a decent website, you’ve published some articles, and you’ve dabbled in online advertising.

The phone is ringing, the credit card machine is dinging, and your revenues are singing. Life is good.

But you’ve got a secret. That secret may be buried so deeply that you aren’t even aware of it yourself. You owe a debt, and the note holder is going to come calling soon. Things will get ugly if you aren’t prepared to pay.

If you’re on the fast track, passing $1 million in revenues, and headed quickly toward $3 million, then your lender is about to show up at your door.

Being good at marketing doesn’t mean …

Being good at marketing means you’re good at marketing. It doesn’t mean you’re good at running a business. Don’t delude yourself.

There are very few of us who have all the skills from the get-go. There is little about running a growing business that comes naturally. Most of us have to keep learning more if we’re going to keep leading a business through the stages of growth.

But most of us who are good at marketing imagine that, because we can sell ice to eskimos, we know all about running a business. We’re wrong.

Being good at sales and marketing means we’re good at getting attention and turning that attention into revenue. It doesn’t mean we’re good at building a team that will allow us to sustain ever-increasing growth.

Being good at sales and marketing means we’re good at helping people see the wisdom of hiring us to solve their problems. It doesn’t mean we’re good at implementing technology solutions or maintaining high standards of service delivery.

Being good at sales brings fast growth. But it almost always brings debt as well–lots of debt–and sometimes we don’t see it on our balance sheet. We don’t even know how much we owe.

The four types of debt that conspire to bring you down

There are four types of debt in our businesses.

The most obvious is financial debt. We may owe the bank, or our family, or our credit card provider. We may owe the landlord for upfit improvements or we may owe on student loans. This debt is easy to spot, because it’s right there on the balance sheet.

Management debt, on the other hand, is invisible. Management debt is what we owe when we haven’t carefully nurtured our team. We’re growing fast and we’re keeping the team together using our sales and marketing skills. We use the power of our personal presence to solve employee upsets and massage them into productivity. You can be pretty certain that your management debt is growing–fast.

Technology debt is also hard to spot. It grows as we expand and intertwine our technology. It’s what happens when we make haphazard purchasing decisions, toss some data into the software, and hope for the best. When problems arise, we patch the solutions together using other applications, and keep hoping it’ll work out. There’s little documentation, the people who knew how it worked are long gone, and the debt collector will show up at the most inopportune moment.

Finally, there’s marketing debt.

Marketing debt is the one kind of debt we assume we can avoid. We’re good at marketing. This is our strength. Our reputation is growing fast in the community.

But when the management debt and the technology debt come due, the damage is more than even your marketing skills can overcome. Clients get shuffled around the firm, wondering what really happened to the paralegal who disappeared and having to re-tell their stories repeatedly to bring new team members up to speed. Your reputation takes a hit. When personnel turnover causes clients to take their business elsewhere entirely, your reputation suffers even more.

Happy clients quickly turn into dissatisfied clients when their representation goes off the rails. They perceive change negatively. They want stability, and turnover feels like chaos to clients.

Technology issues also upset clients. When technology breakdowns result in missed deadlines, unexpected or higher than anticipated invoices, and data that can’t be located, you can expect your reputation to slide.

Building a great reputation is a delicate, difficult, time-consuming endeavor. Damaging it is easy. Upset employees, broken technology, and the resulting impact on clients will destroy your reputation in a fraction of the time you spent building it.

Let’s talk about each kind of debt, how it’s accrued, how to avoid it, and what to do if you suddenly find yourself owing more than you expected.

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Financial debt

Many lawyers abhor owing money. They’re committed to conservative growth and a fiscally responsible lifestyle. Even when their banker offers them a loan, they decline.

They don’t want the stress that comes from owing money to a lender. Many feel that borrowing from friends and family is even more stressful than borrowing from a bank.

But those same lawyers who won’t borrow a penny from a lender will often borrow more than they realize from themselves, their employees, and their clients in the form of management, technology, and marketing debt.

When it comes time to pay off these obligations, the impact is nearly always more significant than the constraints we feel when we’re paying a loan back according to a payment plan.

Lots of people are in financial debt. There are entire industries built around dealing with it. The promissory note to the bank provides a predictable, systematic approach to reducing our debt. As unpleasant as it might be, it’s usually the easiest kind of debt to identify and address.

Unfortunately, these other forms of debt, when left unpaid, are often collected in sudden, painful, unpredictable, and destructive ways that we fail to see coming.

Management debt

Management debt is the debt that accrues when you fail to manage your team. Each week that passes without adequate supervision, feedback, support, and encouragement incurs a cost. One day it comes back to bite you in the form of disgruntled employees, turnover, and poor performance.

Your best option is to pay off management debt early. Management debt, like any debt, carries interest, plus penalties for late payment. Management debt usually feels more like a payday loan than a traditional loan. The interest rate is astronomically high. Management debt compounds quickly as you grow, until the day that loan shark starts circling.

When management debt unexpectedly comes due, it’s devastating.

You’ll know you’re paying principal, interest, and penalties all at once when your small team (typically six to eight people) suddenly shrinks. An essential employee walks into your office, closes the door, and gives notice. She explains that she accepted another offer. Because you’re persuasive, you’re tempted to talk her out of the move, but that’s a mistake.

If you turn her around she’ll stay, for now, but she’s leaving eventually. The management debt has come home to roost and she’s the first casualty. If you take the time to look carefully, you’ll realize that she’s not really the first. You’ve had others leave. But that was before you were so busy. That was before the debt really piled up. The earlier losses should have been a red flag, but we typically only see the pattern in retrospect.

The loss of one of your key people is scary. There’s more work than you can handle without her. Replacing her is going to take time. She was one of your most promising and productive team members. Her loss hurts.

But she’s just the beginning. Don’t be surprised if her departure is simply the start of the dark cloud of management debt coming due. Don’t be surprised if, while you’re interviewing someone new, another bomb drops and another employee departs. Management debt feels much like a demand note being called by a very mean banker.

Technology debt

Management debt may feel like a sucker punch, but technology debt gives it a run for its money.

Technology weaves an ugly, out-of-control web if you’re not careful. Technology debt is the price you pay when you fail to adequately engage with the ever-expanding array of technology services you’re implementing in your law firm.

We’re in the business of solving problems, patching things back together, and moving on to the next engagement. We don’t always know exactly how we fixed that matter we fixed. We just know it’s resolved, the client has paid the bill, and now it’s time to move on.

Applying that same approach to the technology in our office leaves us with a big mess. Unfortunately, patching together technology puts one layer on top of another, on top of another, on top of another. It’s all interconnected, and it’s easy to forget why we added this element or that, and how it all works.

Before you know it you’ve got so many patches that you have no idea what’s down below the layers.

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The practice management system is connected to the intake system which is connected to the document management system using the application programming interface and a little bit of magic from Zapier.

Then you integrated the accounting system with the rest of the mess and added mobile apps for all of the above. The passwords for each piece of this puzzle are recorded–somewhere. But the person who handled the passwords walked out in a huff during the first round of the management debt crisis.

Wait, there’s more …

The website is connected to the credit card system which is connected to the practice management system which is connected to the accounting system. You get the idea. Layer, layer, layer, and another layer.

Is this all written down in a detailed, documented systems manual? Hahahahahaha, of course not.

This, my friend, is technology debt. This is the price we pay for making the documentation of the technology systems a low priority.

This is a big mess, and when the debt comes due, it often looks like a website that won’t load for potential clients, a phone system that no longer provides a dial tone, and a trust account that gets the auditor from the state bar oddly excited.

Technology debt is ugly–really, really ugly–and makes you want to Google “fake my death” so you can disappear.

Marketing debt

Marketing debt sneaks up on you like its brethren. But unlike the other forms of debt, it’s much harder to satisfy. Marketing debt lingers over you for a long, long time, and there’s no clear path to recovery.

With management and technology debt, you pay a steep price because you allowed it to accumulate. But you can dig yourself out. It would have been easier to have paid along the way, but even when you’re in a deep hole you can find your way out.

Marketing debt is different. This is a stain on the face of your law firm that will take a very long time to erase.

Marketing debt is the damage that comes from:

• Associates quitting in the middle of a case, leaving the client upset
• Staff members saying inappropriate things to clients because they’re upset with you
• Technology failures resulting in the need for a continuance
• Billing failures causing the client to owe more than anticipated
• A document assembly system failing to use the right name or date of birth
• An envelope going out with the wrong address
• Embarrassment in front of the client or judge because you’re not prepared
• An email inadvertently being cc’d to the opposing party
• A calendar mistake that results in a client showing up for a meeting when the lawyer is nowhere to be found

Marketing debt is the fallout from management debt and technology debt that damage the lawyer/client relationship. Marketing debt is a frontal attack on the reputation of the law firm.

Marketing debt results in clients leaving one-star reviews, telling their friends exactly what they think of you, and contemplating a complaint against you to your licensing agency.

Marketing debt is word-of-mouth marketing gone awry. Marketing debt is an angry cadre of former clients doing their level best to warn prospective clients away from you. Marketing debt is hard to satisfy. It can take a decade, depending on the size and composition of your market.

How do you avoid the debt collector?

Debt, of any form, causes stress, limits opportunities, and forces us to take action we might not otherwise take. Our debt burden takes on a role in all of our decision-making; it refuses to be ignored.

Debt isn’t automatically a bad thing. When you consciously decide to take on a debt and manage it carefully, it can be a useful tool. It’s when it sneaks up on us and is incurred without our knowledge or consent that debt becomes an unruly, out of control, overwhelmingly difficult problem.

As you grow your firm, be very aware of what elements of the business are getting your attention, and thus thriving. Be equally aware of the pieces you’re neglecting. Know that you’ll be called upon, at some point, to shore up the neglected aspects of the business, before these weaknesses cause a collapse.

Below are some pointers on how you should think about and manage the debt as you move forward.

1. Manage the debt consciously

Manage your debt as you make decisions about your business. Be concious of how today’s decisions are impacting the debt load you’ll carry tomorrow.

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If you’re consciously borrowing from the management account to build the marketing account, you may be making smart decisions. If, however, you’re ignoring the accumulation of debt and hoping it doesn’t come back to bite you, then you’re living in a fantasy. Debt of every type ALWAYS comes due eventually.

2. Don’t grow

The debt we’re discussing is nearly always a consequence of growth. Growth is an option, but it’s not a requirement. Many lawyers create a small practice, grow their reputations, become more selective in the cases they accept, and maximize their price because they’re in high demand. For many practitioners, skipping the growth results in a happier, less stressful, more enjoyable practice.

Staying small has its benefits. Don’t grow for the sake of growth. Formulate a vision that meets your needs. Be deliberate in creating the business that suits your personality and desires. If staying small fits your dream, then you may already have discovered the way to avoid the burden of debt.

3. Grow slowly

If, however, growth is a big part of your agenda, do it according to a plan that factors in the accumulation of debt. Deliberate, careful growth achieved through the pursuit of a clear vision allows you to control the management, technological, and marketing debt so they don’t come as a surprise. Planning for debt allows you to keep your accounts in order and shift your focus to each priority before the balance gets out of whack.

It’s the rush to grow through aggressive, single-minded marketing that tends to create debt we fail to see accumulating. When we take a multi-dimensional view of the business we tend to notice which elements of the business are strong and which are weakening. Slower growth is an inevitable consequence of shifting our energy to shoring up the more fragile parts of the business, but the result is a stronger foundation.

4. Manage the team

As a practical matter, avoiding debt means paying as you move forward rather than ignoring it and letting it accumulate.

That means taking time away from the client work and the marketing, and focusing on other issues.

This means delaying that dopamine hit of retaining another client or closing another case, so you can tend to issues whose payoff doesn’t seem nearly as exciting in the short term.

A well-managed business, one that’s not accumulating management debt, has a rhythm of systematic meetings. The team is meeting daily, weekly, monthly, and quarterly. Issues are being resolved, the team is bonded and communicating, the priorities, values, and objectives of the business are understood by everyone involved.

Avoiding management debt requires building and maintaining a relationship of caring and concern with each member of your team. Knowing their priorities, understanding their issues and how their needs mesh with the needs of the firm is key to preventing the disruption caused by employee departures and disengagement. Paying into your management account involves a commitment to regular, systematic, personal connections with members of your team.

5. Document the technology with systems

Technology debt is easy to avoid when you take the time to carefully document the systems that run the business.

Technology debt grows quickly out of control when you and others on the team try to remember how things are done instead of writing down the steps. Documenting the systems, as the systems are created, is the key to avoiding technology debt. When there’s reference material that answers questions like how does this work? or how do we (fill in the blank)?, you’re minimizing your exposure.

We have, whether we see it or not, systems for running our offices. We unlock the door, turn on the lights, fire up the coffee pot. But when the systems live in the heads of the humans, instead of in a shared documentation repository, we’re incurring debt. When we take the time to turn our systems into words, or video, or screencasts, we’re paying down the debt. When we keep those systems updated, we’re creating an environment that supports continued growth.

6. Transition out of your old role into your new role

As the business grows, it needs a more mature approach to operations. It requires a solid foundation, with attention paid to keeping all elements of the business in balance. The marketing brings clients in the door, the management systems keep the clients happy, the technology systems keep things humming, and the reputation of the firm continues to grow.

The leadership of the firm must evolve. A singular focus on marketing is wonderful as the firm grows from zero to one million dollars. That focus allows the leadership to grow the team so that management actually happens and so that technology projects are well-run and documented.

But as you hit the million-dollar mark, you need to shift your focus.

As the leader, you’ve got to bring other team members into the marketing, so you have the time to devote some energy to management and technology issues. You can’t simply add more and more to your plate. You’ve got to let some things go as you take on new responsibilities. There’s only so much time in a day.

You’ll also have to grow your skill set. Being good at marketing doesn’t automatically translate into being good at management or technology. Nonetheless, those pieces of the business require some of your attention, and you need to educate yourself to the point where you can, at a minimum, ask intelligent questions.

You’re going to have to continue learning, growing, and evolving if you’re going to keep up with the growth of your business. Different stages of growth require different types of leadership.

Keep the debt under control

Accumulating debt isn’t the problem. The problem is accumulating debt without a plan for paying it back. Allowing debt to accrue without an awareness of the high cost and risk may prove disastrous. Take on all the debt you wish, but be keenly aware of the decision you’re making, and plan for the payback.

Clearly, you’re great at marketing–that’s why the debt is accumulating so quickly. You’re growing so fast that you’re unable to keep up with everything happening as a result of the growth. Congratulations! You’re doing great, compared to many.

Keep it up. Keep taking on the debt. But also keep growing, evolving, learning, and preparing yourself to pay off what you owe. Be prepared to pull back a bit on the marketing so you can pay down the debt–before the balance rises so high that it overwhelms you.

Debt is a tool that requires balance. Now you can see that debt comes in many forms, and it’s hiding in plain sight inside your business. It’s no longer a secret debt, accumulating without your knowledge. The secret of the debt you’re creating is no longer a secret from you.