The dark days of mass layoffs at law firms appear to be waning. The 2012 Am Law 100 list shows that the key financial metrics—gross revenue, revenue per lawyer and profits per partner—all rose by single digits last year. 83 firms posted revenue gains, 25 more than in 2011.
That’s what’s happening at the nation’s largest firms. What about at your firm? Are you enjoying similar positive growth? Here are some things to focus on to help your law practice succeed.
It may sound basic, but too many organizations fail to document where they are, where they need to go and what they will do to get there. Still other firms go through the process of developing solid business plans but then never refer back to them to assess performance or progress toward goals.
Successful organizations have written plans that define the firm’s focus, target clients, and competitive challenges. Start with a simple SWOT analysis (strengths, weaknesses, opportunities, and threats). You can use that as a basis for the plan to set strategic goals and the tactics needed to achieve them. All key stakeholders in the firm should participate in formulating the plan to encourage “buy-in,” and the plan should be reviewed periodically to determine if the firm is on track. A business plan should be a living document that is used to guide the daily actions of the firm.
Finding, acquiring, and satisfying customers are top priorities for successful law firms. Clients have options in the current competitive environment and you want to make sure they choose you. Focus on maintaining high levels of client service to ensure client retention. Know your customers intimately, respond quickly to their needs, proactively deal with their issues, and add value to each interaction. Strive to establish relationships, not just fulfill transactions. A great way to do this is through a client communication portal. This makes dialogue between both you and your clients faster, easier and more organized – ultimately resulting in happier clients.
There are two components to the profit equation – revenue and cost. Acquiring and retaining clients generates revenue. Efficient management controls costs. Taking advantage of existing technology to better manage your law firm can significantly reduce your overall spending. We discuss this formula in depth in this recent post.
As an example, using law firm management software can dramatically increase your overall efficiency. A comprehensive law firm management software package streamlines time collection, invoicing, and data management that help control overhead costs. More efficient document management, online communication, and data security increase customer satisfaction, as well. We offer more tips for staying organized and increasing your law firm’s efficiency in this post.
There is no simple secret to law firm success. However, a fantastic place to start is to work smarter, set realistic goals and strive to achieve them, and never lose sight of your clients’ needs.