As modern law firms are discovering new strategies to boost the revenue, let’s take a look at the tops ways which can facilitate the same in 2020.
In order to function efficiently and ensure justice for its clients, it is important for a law firm to operate profitably, as only then can attorneys provide unmatched services. For lawyers, law firm profitability dictates their overall practice as it stands as a primary goal for the business. Growth of a law firm, particularly revenue growth, is the most important aspect that governs profitability. As per Law Practice Today, law firm profitability is a crucial management task that influences strategic management decisions.
From reducing unnecessary expenses to adopting new marketing strategies, there is a myriad of methods that lawyers adopt in the pursuit of acquiring more revenue for their firm. As modern law firms are discovering new strategies to boost the revenue, let’s take a look at the tops ways which can facilitate the same in 2020.
1. Explore new practice areas
Often, law firms fail to see the bigger picture when it comes to the expertise of their attorneys. Lawyers specializing in niche practice areas can be overlooked in large law firms by other professionals. It is important to enhance the potential of each attorney in your law firm and encourage them to explore new practice areas to fully utilize their expertise.
2. Be observant about billing
It is important for lawyers to pay close attention to billing efficiently. It is advised for them to keep track of every half-hour that they spend with the client regarding his/her case, whether it is on the phone, email, face-to-face, or any other means of interaction. The focus on billing should be maintained periodically as working capital is needed to cover disbursements and unbilled time. Attorneys must learn effective timekeeping and there must be a proper timekeeping system in place for the firm. For adequate functioning of this process, centralization of collections and billing can be done through a managing partner who takes responsibility for checking that the timekeeping system runs smoothly and efficiently.
3. Effective firm management
There are many firms that lack an efficient management structure. No partner can guarantee a law firm’s success unless it has a robust management system that provides results assessment, long-term planning, and regular administration. When problematic situations occur, a partner often pays heed to those situations when they attain a crisis level. Therefore, the year-end income may be less than expected by the time problems are found and solved, months later. Hence, a law firm should maintain a proper management structure that dictates the firm’s operations and enhances its revenue.
4. Implement an adequate marketing plan
Upon the expansion of your firm, the strategies and methods for marketing that you had previously implemented, may not prove to be that effective. In this competitive market, firms that lack an adequate marketing plan are often seen lagging behind. Acquiring clients and maintaining a loyal client-base is what brings a law firm stable revenue. Hence, they should adopt effective marketing strategies and encourage attorneys to build an environment for the same to ensure exponential revenue.
5. Manage invoicing and time entry processes
As a law firm, ensure that the billable time is processed timely and does not remain pending until the end of the month when invoices are created. Preferably, you should try to reduce the amount of time between actually working on a billable item and making the time entry. It is advised to build a structure where time entries are checked and confirmed each week. Following this will ensure that your billing admin need not go from one attorney to another at the end of the month.
6. Establish a financial plan
Until a law firm has a forecast profit and cost financial plan against which real output can be calculated, the business will have little chance to recognize and fix economic problems. A fundamental financial strategy that involves estimates of revenue and expenditure based on the past observations of the firm will allow lawyers to make preparations for unexpected possible outcomes and avoid financial inconveniences. Analyzing the financial data regularly will help in recognizing glitches, and hence, corrective actions can be taken accordingly.
7. One billing method does not fit all
Inadequate billing methods can cause disruption in the cash flow of a law firm. Hence, it is crucial to realize that one billing method won’t necessarily work for every client. Stay informed about, and fully comprehend the various forms of fee structures to accurately evaluate the choices and pick the one that best fits each situation, or offer up the different options to your clients and let them choose. Hourly billing, flat fee, contingencies, etc.; keep the client informed about the fee structure to avoid future conflicts and increase conversion rates.
8. Implement modern technology
In this competitive market, technology is largely being implemented by high-revenue businesses. Efficiency is the key to your law firm growth and technology brings efficiency to all your business processes. Among its various implementations, one such approach is to adopt document forms, which can be conveniently changed as per a particular case, and to provide templates for letters, agreements, and other paperwork to attorneys. PracticePanther is a software that offers additional time-saving tools, including contract management, legal billing and invoicing, and integration of calendars. The use of the latest technology not only enhances revenue but also ensures that you, as a legal service provider, achieve optimum client satisfaction.
9. Maintain a reputable brand
As much as it is important to maintain profitability, maintaining a reputable brand is also essential for you as a solo attorney or as part of a law firm. Hence, pick up your cases accordingly and avoid the ones you think will prove to be unprofitable/beneficial in the long run. Keep realistic goals and put in your best effort to achieve them.
10. Work remotely and securely
With technological advancements, working remotely has become a very popular and successful trend. Statistics show that there is a 70% increase in firms relying on remote or mobile working. Hence, facilitate the culture of remote working within your law firm which will enable the attorneys to work on the go without any concerns of confidentiality or data protection. This will also help them to maintain a better work-life balance.
In this market of increasing competition, it is essential to inculcate diligence and work continuously toward achieving success as a business. Implement the strategies mentioned above for your law firm and you will be able to multiply revenue exponentially.