In today’s competitive climate where clients are demanding more for less, lawyers may find themselves forced to increase their offer in terms of service and efficiency. And with the challenge of remaining competitive comes the added challenge of remaining profitable without working under immense pressure, around the clock!
In fact, a UK Annual Law Firm Survey conducted in 2017 reported a 2.3% fall in average top 10 profit per equity partner (PEP) in 2017, with one quarter of firms surveyed reporting a drop in both fee income and profits and close to half recording a reduction in profits. Causes of falling profits are thought to include clients’ changing demands, the threat of foreign firms, and new entrants and technologies.
Improving profitability requires a combination of sound expense management and a solid plan to increase revenues by working smarter, not necessarily harder. It is also about getting the most out of your resources and embracing technology (rather than fearing it!) to ensure you don’t get left behind.
All that being said, below are four key areas we feel law firms could focus on to ensure they remain competitive, and profitable into the future.
Use of technology to enhance overall offering
Traditional law firms who maintain their manual processes simply won’t be able to compete with their progressive counterparts who evolve with technology. Features of certain software are assisting lawyers stay on top of cases and deadlines, store and locate documents more effectively and streamline processes in general.
Technology certainly isn’t here to supersede the human element, it is about good law firms delivering the highest quality work they pride themselves on, aided by the best technology.
Read more about how technology can improve the life of a solo lawyer.
Less time spent on mundane admin tasks
Many law firms complain about excessive time wasted on non billable tasks such as locating documents, filing and chasing payment. What if this was all better taken care of using legal software, allowing that time to be invested elsewhere in the business?
Without a clear system to help you prioritise and stay on top of the most urgent tasks, you’re wasting more time than you really should.
For more info read this post about time management tips.
Full ability to work remotely and securely
What the survey also interestingly reported was a 70% increase in firms embarking on remote or mobile working, meaning they require the necessary tools to support this.
Certain technology is allowing lawyers to get things done on the go, in real time, without any data protection and confidentiality concerns.
Learn more about how mobility is transforming the daily life of lawyers.
Effective tracking of profitability factors
Tracking profitability is critical for understanding which factors most impact the bottom line. For example, a certain practice area or client may be more profitable than another. Knowing where your firm is most profitable and where you are losing out can help you prioritise efforts and create a unique position in the market, boosting your competitiveness. Only the most intuitive software can provide this type of advanced reporting.
Here are some must track .
Paying attention to these 4 factors can surely help your law firm improve productivity, drive efficiency and ensure quality of legal services provided, which will improve client satisfaction and profitability while reinforcing your competitiveness in the future.
To get specific tips on how to track and increase profitability and grow your firm, download our free whitepaper "Metrics for the successful law firm"
