For the most part, the partners in a law firm entered into this field because they were passionate about the law. But that doesn’t necessarily mean they are going to be very successful or knowledgeable about running a business. In fact, they’ve just spent the last eight years of their lives training to learn the ins and outs of the law. As far as the business side of things is concerned, their training is minimal at best, if it even exists at all.
More than likely, partners in a law firm are going to be faced with numerous business related challenges. Are they using time sheets to track employee hours? Or is that something typically relegated to a larger business setting? If the IRS comes knocking do they look into Comptroller Tax audits by experts at Monshaugen & Van Huff or do they use their own lawyers and handle it themselves?
At the end of the day, running a successful law office is just like running any other successful business. With that said, please pay attention to the tips we’re about to share with you below.
Take Time to Learn and Understand Basic Skills for Business Management
If you’re running a law office as a solo practitioner or there are other partners involved in your firm, it’s important to take a proactive step in learning rudimentary business administration skills and techniques. Figure out key metrics for your law firm like cash flow needed each month, what your average monthly revenue is, variable expenses, fixed expenses, employee and attorney productivity, and the overall profitability of your firm.
Take time to project the total revenue of the firm for the entire year and base this information on the average monthly revenue brought in by your law office. Next, if you’ve been tracking attorney productivity at the individual level, you can look through each attorney’s work per client and discover which ones are more profitable and productive. You’ll also discover which clients are bringing the most revenue into your firm.
Now that you’ve really begun to dig into the company, you can also start to discover ways to make clients more profitable. While you’re at it, take a look at your law firm’s biggest successes and use this information to help market your services to other potential clients.
Finally, after analyzing the profitability of your law firm, you’ll discover which areas of expertise pay the best and which areas might not be that lucrative. You can now shift your focus to more profitable areas and choose to specialize in those particular areas.
Is Your Marketing Effective?
As the owner of a law office, you have to market your services to potential clients. This may not be what you trained to do in law school, but it’s a necessary part of every successful law practice.
Do you already have marketing efforts in place? If so, it’s time to assess your marketing campaigns to find out if they are effective. How many new clients reach you through your marketing? Is it even possible to tell?
When all is said and done, make sure your marketing efforts not only draw new customers into your practice, but set it up in a way to test which ads are most effective. By structuring your advertising this way, you’ll be able to learn which forms of marketing are effective and which types of advertising to drop because they aren’t effective and a waste of money.
Take this to heart because once you’ve mastered marketing your law office, you’ll be able to maximize profits without paying for ineffective ads.
Now that you’re thinking more like a business owner and less like a lawyer, your practice should be thriving. If not, take heed of the suggestions we’ve shared today and begin implementing them into your overall business plan and strategy.