In today’s climate, the law industry is more competitive than ever with clients demanding more for less. We look at the ways Law Firms of all sizes can improve their profitability whilst remaining competitive.
Lawyers across the board are under increasing pressure to improve their offer in terms of service and efficiency. With the challenge of remaining competitive comes the challenge of remaining profitable, without working around the clock and burning out!
Improving law firm profitability requires a combination of sensible expense management, a strong marketing plan to increase revenues by working smarter, not necessarily harder and getting the most out of your resources by adapting and embracing technology.
Our specialist consultants advise and assist law firms across the country and internationally to increase profitability, whilst staying competitive and continuing to grow.
Free Initial Discussion And Quote
For a free initial discussion and for a no-obligation quote, please call us on 0330 133 8783 or email [email protected].
How Do Law Firms Increase Their Profitability?
We have laid out some of the key areas that we advise law firms should focus on to ensure they remain competitive and profitable into the future.
Embracing And Utilising Technology
Law firms who do not evolve with technology will be left behind as will be impossible for them to compete.
All law practices should be using some form of Customer Relationship Management (CRM) and Case Management System (CMS) software to keep track of client information, case deadlines, filling and payments, allowing time to be better invested elsewhere in the business.
Many other automated tools allow law firms to be more productive, streamline processes and help increase profits. These include online appointment scheduling, customer support chatbots, real-time calendar schedulers, video conferencing and more.
Leveraging new technology not only lets you connect with clients in a highly personalised and efficient way, but can also give you great insight into the productivity and finances of the law firm by measuring KPIs and Key profitability metrics.
Ability To Work Remotely And Securely
In the current climate, there has been a marked increase and probably permanent shift to homeworking. This allows for lower overheads from rent, however, and more productivity from less time spent commuting, however, lawyers will require the necessary tools to support this.
There are certain technologies allowing lawyers to be more productive on the go, in real-time, without any data protection and confidentiality fears.
Reduce Overheads And Waste
The first step in controlling waste is to identify areas where potential savings exist. You should not arbitrarily cut costs, think tactically about cost reduction and focus on and develop specific strategies.
Look at and review: Headcount, compensation, benefits, in-house vs outsourcing, rent and office size, marketing costs vs. return on investment, supplies and purchases.
Reducing wasteful spending ultimately results in increased profit.
Effective Tracking Of Profitability Factors
Tracking profitability is critical for understanding which factors most impact the bottom line. For example, a certain practice area or client may be more profitable than another and similarly, one marketing strategy might be much for effective than another.
Understanding where your firm is most profitable and where you are wasting time and money will help you prioritise efforts and create a unique position in the market, boosting your competitiveness.
You should keep an eye on several different metrics which can reflect the financial health of your law firm.
We can advise you on which metrics should be tracked and the relevant intuitive software and reporting that is right for your specific law firm.
Other Methods Leading Law Firms Use To Increase Their Profitability:
- Look into new practice areas if possible
- Recruit lawyers who specialise in practice areas that aren’t your firm’s speciality
- Train lawyers to market themselves better as well as your law firm
- Avoid bad clients
- Raise your fees if needed
- Bill accurately and frequently
- Be observant of billable time
- Ask clients for feedback
- Have new and existing clients pay in advance
Conclusion
While the points discussed are all valid and great tools to improve the profits of a law firm, there still needs to be excellent cooperation between the lawyers, staff and owners and good coordination of the various internal and external components.
Law firms are more businesses than establishments where the law is practised and therefore, measuring and addressing profitability is an essential tool for any law firm.
While all law firms are different and cannot follow the same business model as another law firm, the guidelines above are broad and can be applied in almost any legal practice setting.
Paying attention to the areas discusses and tracking them will help enable your law firm to improve productivity, drive efficiency and maintain the quality of legal services provided. This will in turn improve client satisfaction and profitability while reinforcing your competitiveness in the future.
How To Get In Contact
As specialists in the legal industry, we can assist you wherever you are based. To learn more about how we can help you, then contact us today for a free initial discussion, please call us on 0330 133 8783 or email [email protected].
