The most profitable law firms seem to have a wealth of resources that enable them to deliver top-shelf legal services to their clients, attract and retain the best attorneys, and maintain a happy workforce. How do they do it? How is it possible for a law firm to “have it all” while still turning a profit?
In the simplest of terms, profitable firms generate revenues greater than their expenses. Specifically, firms that enjoy sustained profitability find ways to ensure that attorneys and staff spend more time on revenue-generating matters than they do on administrative tasks. This leads to higher revenue, satisfied clients and strong client acquisition through referrals, advertising spend and word-of-mouth.
With that general playbook in mind, read on for four tips to help you start boosting profitability at your law firm.
1. Stop Multitasking & Start Delegating
Practicing law can feel like a juggling act in which success means keeping an ever-increasing number of balls in the air. Many lawyers respond to that challenge by attempting to perfect the elusive and mysterious skill known as multitasking. It’s a tantalizing and (dare we say) ego-driven notion that the best lawyer is the one who can type an email, answer a call, draft a brief and assemble deal documents all at once.
For most lawyers, even those who think of themselves as expert task-jugglers, multitasking is an illusion. What they call multitasking is, in fact, low productivity and poor time-management trussed-up with stress, adrenaline and copious amounts of coffee. It can become wheel-spinning—not forward progress.
The myth of multitasking exacts a high cost in a law practice. In fact, studies show that multitasking hinders employee performance. Multitaskers consistently under-perform individuals who tackle one task at a time, turning in lower-quality work and committing more mistakes. The result: sub-par, expensive, attorney work product and, inevitably, unhappy clients.
What’s the profitable lawyer’s secret to doing good work and keeping multiple clients happy? In a word: delegation. Successful law firms have a keen eye for identifying work lawyers should not do, and staying disciplined about keeping that work off lawyers’ plates.
Some firms allocate that work to in-house staff, but many have found even greater efficiencies through legal process outsourcing (LPO), which entails retaining outside firms to perform common law firm tasks that have little-or-no return. LPO companies can handle myriad jobs, including legal research, client intake, document review and even remote or in-person court appearances.
2. Use Legal Technologies To Automate Tasks
Doing tasks a certain way because “that’s how I’ve always done it” takes second only to multitasking in the ranking of inefficient-things-lawyers-(sometimes) do. Lawyers, schooled in legal doctrines that evolve over decades, not days, tend to resist changing their time-tested methods for logging their time, keeping track of client calls to return, reviewing invoices and drafting documents.
Still, it’s 2021. Lawyers who fail to embrace legal technologies risk getting left behind by the profession and its institutions. Firms of any size, anywhere, can enhance their productivity and profitability by using legal tech to automate tasks such as:
- Timekeeping, client invoicing and financial reporting
- Client relationship management (CRM) or case management software (CMS)
- Contract drafting, negotiation and execution
- Discovery-related document collection and review
- Drafting, proofreading and filing pleadings
- Legal research
- Legislative and regulatory compliance
Click here for more tips on how to grow your law firm by embracing the latest legal technology.
3. Take A Client-Centered Approach
Lawyering is a service business. Clients are the customers. Like any successful service-oriented enterprise, a profitable law firm focuses on ways to make its clients’ lives simpler and more rewarding.
This starts with facilitating better client communication for both current and prospective clients. Meaning, the firm has someone to answer the phone ‘round-the-clock and offers multiple channels for connecting with a lawyer, including via call, chat, text, web form and email. A law firm answering service also gives prospective clients the choice of an in-person or virtual initial consultation.
Once a client comes on board, the focus shifts to relationship management. Profitable firms keep clients informed and involved in pending matters. They communicate via clients’ preferred channels and send out client alerts on topics of interest. They track their contacts with clients and follow-up on a regular basis.
These simple measures, often aided by legal technology and legal process outsourcing, reliably improve client retention and boost client referrals.
4. Set SMART Goals & Track KPIs
Finally, profitable law firms care about analytics. They set specific, measurable, attainable, relevant and time-based (SMART) goals, and they use key performance indicators (KPIs) to regularly track progress. The SMART goals firms set determine the KPIs it will use to measure its performance. Typically, KPIs include data generated by core areas like marketing, financial reporting, new client development and existing client relationship management.
Lawyers should care about KPIs because they offer far greater insight into productivity, efficiency, profitability and client satisfaction than the metrics firms have historically used, such as revenue-generating hours or files opened. By setting SMART goals and tracking their progress using relevant KPIs, firms and their individual attorneys can boost profitability by fine-tuning their workflows, predicting areas of growth, making intelligent, data-backed decisions and holding under-performers accountable.
How A Legal Call Center Can Help Improve Law Firm Profitability
Wondering where to begin or how to start implementing the tips above? Consider delegating your firm’s “front desk” and new client intake process to a legal call center. An experienced, well-staffed legal call center, like Alert Communications, has intake specialists that can:
- Answer your phones when you can’t—24/7/365
- Provide an immediate and empathetic response to your current and prospective clients
- Capture and qualify those prospective new clients
- Push client data directly into your CRM/CMS system
- Track KPIs so you can see what’s working and what’s not
- Demonstrate your law firm’s clear commitment to customer service
Alert’s intake specialists do all of the above to give you back your time, help you improve workflow and processes and boost profitability.
Click through for more on how Alert Communications helps law firms grow.