Blogs & White Papers

Stay up-to-date with the latest business and legal industry news, white papers, updates, insights and analysis direct our experts. 


4 Ways To Maximise Law Firm Profitability

Post by Admin , Dec 19, 2018.
Business Consultancy

##IMAGEALTTEXT##

As with any business, making a law firm profitable is a challenge. Law firms face the usual challenges of finding the right staff, attracting new business, creating an efficient infrastructure etc. but added to this is the cost of aspects such as regulation and professional indemnity insurance which add to the overall cost of running a profitable law firm.

The size of the firm will dictate the challenges it will face but there are some consistencies that will firms of all sizes will face.

Some of the issues a firm should consider in its approach to sustaining or improving profitability are:-

Systems – A firm must have systems that are appropriate for its size and budget. Accepted that people are the heart of the firm but a close second is the system that it operates. A system that is ineffective and out of date that does not serve the needs of the firm can be as damaging has having a lack of experience. Firm do not need to invest beyond their means in systems but is must identify what it needs from its system and to ensure that it spends its budget on the best fit system to supply an efficient method of operation and access to core information. Having the right system and ensuring it is kept up to date is critical to provide the firm with the optimum operating model.

People – As a rule law firms sell time and it needs the right people, with the right experience able to use the best systems (it can afford) to generate the maximum income and therefore profit.  There are a number of restrictions to being able to recruit and maintain the right staff and experience but this is essential. Firms with the right team that is focused in the right direction have a head start in achieving profits. Protecting this valuable asset is not to be underrated and certainly not overlooked.  Having a structured review process in place with appropriate reward structures is essential to valuing and retaining staff.

Targets & Objectives – Part of ensuring the staff understand what is expected of them and how they add value to the firm is setting them clear targets and objectives that provide realistic goals. As a rule, staff want to know what is expected of them and will work to achieve the requirements of their employer. By not setting these out clearly and communicating them, this can lead to resentment as an individual can believe they are doing a good job when in fact their achievements are not at the realistic expectation of the decision makers in the firm. Clarity of role and understanding is imperative to sustain a focused and motivated work force that is driven to achieve the overall and collective goals of the firm.

Measure – The importance of measuring the output of the work performed by the staff and therefore the firm is essential. There is no point setting targets if they are not measured and the output fed back to the staff so they understand where they are achieving and where they are not and then for action to be taken to rectify where the performance requires improving or to reward where targets are being met.

There are of course other factors to consider when managing a profitable law firm and in this paper we have touched on some of the essentials.

To conclude, ensuring you have the right system to drive the operations of the firm, having people that know what is expected of them and they are measured against the targets set are essential ingredients and fundamental building blocks to a profitable firm.

 

At Mr Green consultancy we work with and alongside firms to implement long term strategic to deliver success covering all facets of law firm management. For more information on our strategic business review and planning service contact us on 0207 842 1825email us or make an online enquiry and we'll get back to you as soon as possible.


Enjoyed reading this post? Continue reading our blogs here