yAt university, future lawyers learn the values and traditions of their chosen profession.
Among other things, they come to understand that being a good lawyer means acting with scrupulous integrity, understanding what it means to serve client interests through a commitment to justice, honouring traditions and precedents but also challenging them when necessary, and often erring on the side of incremental, cautious change.
As good a job as our system of legal education does in teaching lawyers how to be good lawyers, it has, historically, been less effective at helping lawyers understand how to run a successful law firm. To paraphrase the legal maxim, being a good lawyer is a necessary, but not sufficient, condition for building a sustainable, profitable law firm.
Success also requires that you are business savvy, that you have a clear definition of your firm's core market, and that you adopt effective legal marketing strategies, all of which can be a challenge when your first instinct is to be focusing your attention on the clients who need your help rather than firm administration. Here is how effectively gathering and utilising data can improve how you run an efficient and profitable firm.
Methodically gather relevant data through technology
Lawyers tend to have an engrained appreciation for the value of information. Even those lawyers who lack natural instincts for business understand that to make effective, efficient decisions in firm management, it's important to start with accurate and useful data. Simply put, the firm that tracks and measures its performance along a variety of legal practice-relevant metrics -- lawyer and staff productivity, potential versus actual billings, expense and profit per employee, cost of acquiring new clients and matters, relative profitability of practice areas, and more -- is the firm that has the foundation for directing its resources to the most profitable and efficient ends. LawMaster's practice management solutions not only facilitate that data collection and reporting, but our Client Service Centre can help lawyers identify and interpret performance metrics that inform management decisions.
Define your firm's key market
A law firm that offers services that no one wants or needs will not survive, and a firm that fails to identify a competitive niche will likely struggle. There is a body of clients and assignments out there to which your firm's capabilities, location, culture, and interests are best suited. But how to find it? A reliable place to start is by developing a sophisticated understanding of how your firm spends its time, and of the relative profitability of each hour worked. By understanding what work your firm does best and most efficiently, you can identify where your profit-generating strengths lie, and evaluate whether and how to focus your energies on those core areas. Havin a better understanding of key markets and how they are changing will also allow you to pivot into new services during times of change such as what we have seen in the past year.
Of course, efficiency and profitability need not be the only factors you consider in defining your firm's particular market. Investing some of your human resources in less-profitable, more fulfilling work may be just the thing to cement your firm's culture and maintain high morale. The important thing is that you not fly blind. LawMaster's practice management solutions include tools to help you gather and synthesise the information you need to define the market in which your firm turns its most efficient profit. By having a clear picture of that market, you will be able make informed choices about how to sustain the level of profitability and growth that is right for your firm.
Capitalise on your market insights
With a sophisticated understanding of its key market in hand, a successful law firm can then focus its energies on winning the work for which it's best suited. There are any number of marketing strategies firms can use to capture market share, from public relations campaigns to targeted advertising to promoting its knowledge base at clients' industry conferences. And, while an experienced marketing professional can help you decide where to allocate your firm's marketing budget and resources, some trial and error will probably be necessary. You'll need to evaluate which efforts are working, and which are not. That is where the quality of your law software matters. An integrated solution like LawMaster's that can track firm time and capital spent on various marketing efforts, and track those efforts through to their respective impacts on client and revenue generation, is essential. Otherwise, you may be missing the chance to communicate your value to your best potential clients.
If we were to distil what makes a law firm successful into a single concept, it's this: successful law firms develop and analyse detailed firm performance data in order put the talents of quality lawyers to work in the market for which they're best suited. At LawMaster, we specialise in helping your law firm collect, synthesise, and exploit that data in order to sustain your business for years to come. Get in touch today.