Most people think that law firms must be profitable, because lawyers charge high fees for the work that they do. However, as a lawyer, you know that those higher fees are necessary to cover all of the costs for running your business. And paying yourself a wage that will allow you to pay off your school loans and live. So, while you may be charging enough for your services, your law firm might not be seeing the profits you would like. Thankfully, we have a few tips that we would like to share that will ensure you can increase the profitability for your law firm.
Tips for Increasing Profitability for Law Firms
1. Find Your Niche
Not many lawyers specialize in all types of cases. It is always best to find your niche and only take on cases that fall within those parameters. You may decide you want to focus on wills and trusts, while another law firm decides that car accident cases are what they want to spend their days working on.
Once you have found your niche, you can focus on bringing in those clients. And since you aren’t bouncing from one topic to another all day long, you can really focus on what you do best. The results will be getting more work done in less time and yet earning more.
2. Get Creative with Referrals
There probably isn’t much you can do to entice a client to refer someone else to your law firm, but we are sure you can come up with something. Maybe you can send the person who made the referral a thank you card with a gift card enclosed. Anything to get their attention, so they will keep referring people to your office.
3. Increase Your Retention Rates
As a lawyer, you may not find yourself retaining clients like other businesses do. However, you want to make sure that every client you work with comes back when they require your services again. We understand that many people do not have multiple wills and trusts written up every day. But if you treat those clients well, they may refer you to family members or friends. That will increase your retention rates in a way, since you may be working with family members of existing clients.
4. Only Work with Ideal Clients
You are going to encounter some clients that are not going to want to pay your fees, no matter what results you can achieve. We recommend only working with your ideal clients, because they will be ready to pay what you charge without even asking for a discount. When you can charge what you are worth with your ideal clients, you will instantly see your profits increase. The reason behind that is you won’t be wasting your time working with anyone who wants to pay you less.
5. Build Relationships
Building relationships with your clients is an ideal way to have them return to you when they require legal advice. But did you know that those relationships will also encourage people to refer you to others? And that these relationships can assist with your retention rates? If you have been trying to increase your law firm’s profitability, building relationships with your current clients should be your number one goal.
6. Cut Expenses
Cutting expenses may seem silly, but honestly, it is one of the easiest ways to increase your law firm’s profitability. You don’t need to cut out anything you truly need for your business. But you can cut out those items that aren’t worth paying for. Nowadays, that may be magazines for the waiting room since most people are on their phone and ignore the magazines.
These are 6 tips for increasing profitability for law firms. Do you have any other tips you would add to this list? If you have been struggling to find ways to increase the profitability in your law firm, contact our office today. We can schedule a consultation to see how we can increase your profits quickly.