The best way to increase your legal business profitability is by creating long-term goals and strategies and streamlining various day-to-day processes. A meticulous, well-designed approach allows you to track payments, increase lead generation, and improve cash flow without breaking a sweat.
In this article, we’ll share eight tricks that all legal practitioners should implement. These methods will not only boost your profits, but they’ll also increase the long-term sustainability of your business.
Nowadays, it’s hard to imagine a stable, profitable business that doesn’t use SaaS solutions. These tools can increase the efficiency of your daily operations, finances, marketing, and sales, without breaking the bank. Most importantly, legal technology can reduce your expenses, thus allowing you to focus on activities that generate revenues.
While legal software is fantastic in this regard, you shouldn’t be too hasty during purchase. Take your time testing different solutions and choose the ones that best fit your goals. Furthermore, you should revise your toolkit every once in a while and get better programs when available.
Spending money on marketing isn’t necessarily a cost-saving measure. Marketing is one of those activities you can never spend enough on. Nevertheless, in the grand scheme of things, investing in law firm marketing services will boost your lead generation, which will, in turn, increase your profits.
Before you hire an agency, you need to decide which tactics you want to pursue. Search engine optimization is generally the best choice for law firms, but you can also make an impact with paid advertising.
Most legal experts use a hands-on approach when they start their practice. They will try to do everything, from marketing to sales and customer communication. After a while, you should realize this isn’t the most efficient way of doing things and you’ll likely outsource.
Focusing on tasks you’re good at is the best way to make money. That way, you can maximize revenues while significantly reducing overhead costs. While delegation could feel mentally exhausting, you’ll quickly learn how to forfeit control to other employees and external companies.
As mentioned, the focus is the name of the game in legal but also in any other field. Setting long-term objectives helps you pinpoint activities and processes that yield the highest profits while avoiding everything else. Furthermore, goals are vital for growth and sustainability.
The best way to approach things is to use the SMART framework. In other words, your goals should be Specific, Measurable, Attainable, Relevant, and Time-bound. Make sure to cover each of these bases because only then can you ensure you’ll achieve what you’re looking to do.
You shouldn’t simply presume you’re close to your goals. Instead, you need to implement relevant metrics that will help you track performance. That way, you can make informed decisions and improve your strategic planning.
Legal firms should prioritize three main KPIs: realization rate, utilization rate, and collection rate. The utilization rate shows you how many hours you’ve billed in a day, while the realization rate indicates the number of invoiced billable hours. Lastly, the collection rate shows how many working hours you’ve managed to collect from clients.
Of course, you can introduce other KPIs as well, as long as they fit your goals.
Although law firms aren’t as dependent on stable cash flow as, say, retail companies, they still need to have free money. Cash flow allows them to fulfill any obligations toward creditors or to invest in different processes.
You can do several things to increase the inflow of money into your business. The best thing you can do is improve your collection practices, as many law firms have their money stuck with slowly paying clients. You can also eliminate any inefficient investments and reduce expenses.
Receiving money on time is vital for the sustainability of your brand. Because of that, you need to make things as easy as possible for your clients by introducing alternative payment methods.
Besides paying in cash and with credit cards, your clients should also be able to pay electronically via the Internet. Subscription-based services might sound a bit strange, but they can also work very well. You should also consider introducing payment plans based on installments.
The last trick is the simplest and most intuitive. You should use a customer-centric approach that will focus on client’s needs and make them feel good during their dealings with your brand.
For example, you should always have some spare time for free consultations for long-term clients. It’s also a good idea to introduce video calls as a time-saving measure. Following up with your clients every once in a while and sending them a birthday card can also go a long way in boosting your retention.
Making your legal more profitable isn’t that hard with the proper strategic planning. Your main task is to introduce the best practices and legal software that will make it easier to collect money from clients, increase retention, and make better decisions. Hopefully, by implementing tricks from this article, you’ll build an incredible legal business that will stand the test of time.
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