There are two primary functions of a law firm – achieving justice and make a profit. The goal of justice for clients must be put at the forefront of all operations, but in order to do this, a law firm must be operating efficiently and with a substantial profit, allowing attorneys to provide exceptional legal services.
Whether you’re running a solo practice, an LLC or an LLP, there are things you can do to increase profitability and in turn, provide a far better experience for your clients. Let’s take a look at some fool-proof techniques to increase law firm profitability.
The first step is the simplest. It’s essential that you market your firm well, allowing you to gain more business and increase your revenue. Without marketing, you rely solely on word of mouth – and no matter how reliable you may be as an attorney, there is no shortage of law firms across the United States. For this reason, marketing initiatives are essential.
A growing marketing option is through social media. Facebook gives you access to millions of people. Through their marketing and advertising program, you can choose the precise demographic that sees your online advertisements. Choose by age and gender, region or interests, and Facebook will promote an image of your choice, a description of your services or even a video.
Thanks to the auto-play function, videos are becoming a popular form of advertising. Think up an entertaining, engaging or informative video that advertises your firm, and try reaching out through Facebook.
More traditional forms of advertising work well, too – whether it’s an advertisement on your local paper or a commercial on local television networks.
Create a marketing budget
Building from the marketing angle, it’s important you also set aside a budget for marketing. Typically, a law firm should be aiming to spend between 2.5% and 3.5% of its revenue on marketing. This allows you to use your profit to invest in future profit and the building of both the size and influence of your legal firm.
Don’t take on every challenge
As a law firm and an attorney, it’s not only your responsibility to your employees to maintain profitability, it’s your responsibility to your clients to maintain a reputable brand. By only taking on cases that are going to bring you profit and a good chance at legal success, you build your reputation as an effective and professional lawyer.
Should you find yourself considering discounts for a client, or taking on unprofitable cases on the basis that it ‘could lead to future profit’, avoid that case. Focus on what you can realistically achieve, and achieve those things!
Provide flexible staff options
This is particularly important for law firms that are just starting off, or which need to reduce operational costs. When taking on staff, including assistants and paralegals, it’s important to offer flex-time and part-time employment opportunities. This reduces your expenditure on staff and allows your team a flexible opportunity to work and learn.
Use modern software and technology
In order to stay competitive, you need to stay efficient. The primary way you can do this is through technology. One such method is using document forms that can be amended easily according to a specific case and providing paralegals with templates for letters, contracts, and other documents. This reduces the amount of time spent on admin.
Software like PracticePanther offers other time-saving features, including legal billing and invoicing, contact management and calendar integration. Through a software system like this, you can keep all of your team up to date, manage your calendar more efficiently and have a comprehensive database of invoices, billing, and expenditure.
Implement any of these measures, and you’ll not only increase your law firm’s profitability but offer a more reliable, convenient and efficient service for your clients.