Attorneys need to beef up for a shaky road ahead
Double dip, downgrades, recession, over-leveraged – all ominous signs that we still have a shaky road ahead. One thing that solo attorneys and small law firms need to do to ensure that they remain steady is to focus on profitability and efficiency, not just revenue.
Focusing on profitability will ensure that the firm has enough cash flow and reserves to stay productive. Some tips on retaining and increasing profitability include:
- Accounts receivable: ensure your clients are paying on time. If you need to outsource legal processing- do it.
- Payment plans: proactively offer payment plans for outstanding amounts to allow clients to pay down their balance faster.
- Outsourcing: Free up time where you can by outsourcing the legal services research and writing services with Nora.Legal.
- Services: Review your service providers and see if there are providers without contracts or with flexible use options. This optimizes your usage and reduces overhead.
- Expenses: Look at monthly expenses and target a 2-5% decrease. Look at the best alternatives in terms of resources, services and technology.
Straight-up advice form from law firm executives like Nigel Knowles, DLA Piper co-chief executive: "It's going to remain tough out there for a lot of firms that have nothing to differentiate themselves from the competition. Firms need to be either among the global elite or be a global business, otherwise, they need to find a niche." Some ways to differentiate your law firm/ law practice from the rest would include:
- Branding: Look harder at your branding and marketing material. Outside of the fact that you like it, does it reach out to your target audience? look harder at your branding and marketing material. Outside of the fact that you like it, does it reach out to your target audience?
- Fee structures: Can you provide alternatives to your clients to make services affordable. Flat fee, alternative billing will differentiate law firms while competing for business.
- Niche/ Services: Look hard at areas that are growing/ are in need based on market conditions and invest some time and effort into building long-term specialized practice areas.
- Payments plans: Enough said – it never hurts to have a plan. Ensure that you have a system in place to follow up periodically.