Running a successful law firm involves many different aspects. Of course, you need that steady stream of clients, lawyers who deliver, an excellent reputation, and processes that ensure efficiency. If even one of these is out of whack, it can severely chip away at potential profits. So, if you’re feeling like your law firm should be more profitable but you don’t want to raise your fees, the good news is there are other steps you can take. These are steps that don’t take away from the client experience or their results, and yet they should help increase your overall financial gain.
Ensure Billable Hours Are Being Submitted and Billed
The first tip has to do with the actual billing and processing system. It could just be that billable hours aren’t being logged properly or billed in a timely manner. These are common issues that negatively affect the bottom line. A good solution is to invest in billing and invoicing software that streamlines the billing process and stays on top of outstanding invoices. Many of these programs will now automatically start tracking time and give you the option to click a simple button to “bill” it, taking out the administration and monotony of time entry.
Ensure There is Little to No Waste
Then there is the elimination of waste, which any company should do if they want to maximize profits. Waste can occur in all kinds of different areas; overhead expenses in particular is an area of concern that should be monitored closely. Many firms will invest in areas of their business that don’t align with client values. For example, if you have an opulent office setting but your target client is a lower income earner, you could be doing more hard than good with your client perception. Lowering your higher cost office expenses is a great way to lower expenses. Also, becoming a mostly paperless/digital operation will amazingly save you on time, paper and printing expenses as well as postage by eliminating paper mailed documents where possible.
Bring in a Consultant
Another tip is to look into law firm consulting services. For example, enlisting the help of specialists like Legal Back Office is an option worth considering. They understand exactly how to manage a small law firm in a lean and efficient manner. Legal Back Office is a law firm management consulting firm that takes a very individualized approach. They take the time to get to know your business and how it currently operates. They then construct a strategic plan customized for your business specifically. Legal Back Office, through years of experience, knows that there are no “cookie cutter” solutions. As a bonus, Legal Back Office consultants have proven experience in bringing law firms significantly more in revenue and in profits than you will ever pay them!
Consider Expanding the Type of Areas You Practice In
You may also want to think about bringing on additional lawyers that practice in other areas so you can in fact broaden your offerings and portfolio. It may not even be necessary to bring in more lawyers; it could just mean that you have overlooked the potential of your existing attorneys. In addition, while rules of ethics in most states vary, fee sharing amongst lawyers with expertise has become more common place. For example, if you are a transactional corporate lawyer and you have a contractor relationship with a litigator, you can save the client a lot of time by remaining the key point of contact and single billing source to the client. You charge the client the same rate they would get with that litigator directly, but negotiate a reduced rate with the lawyer so you can compensate your firm for the administration of billing and client relationship management. This is a win-win-win for both lawyers and the client. Each of these tips can significantly help your law firm get on the road to higher profits without having raise the fees you’re charging clients.