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| Proven Keys to "Recession-Proof "
Your Law Practice
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May 2009 |
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In the next 12 to 18 months, we'll see many changes in the legal industry.
A few, select attorneys will use our country's current economic downturn to reposition themselves, increase their market share, and attract top talent who were let go by other firms. In every crisis, lies opportunity.
In this month's newsletter, we will cover several specific steps you can take to recession-proof your practice and turn this into an opportunity for your firm.
Also, be sure to check out our upcoming events:
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2 Rainmaker Retreats: San Francisco June 26th & 27th (sponsored by the State Bar of California) and Las Vegas July 17th & 18th
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Hope to see you there!
Sincerely,
Stephen Fairley
888-588-5891 |
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Keys to "Recession Proof" Your Practice
 1. Focus on Profits Not Just Growth.
Growth is a good thing and so are revenues; however, profits are better. Don't make the mistake of only focusing on your top-line revenues. Analyze your profit margins on various services you provide. In tough economic times, you generally cannot afford to have "loss leaders"-unless you have conversion rates of at least 60 percent or more to a higher back end service.
I recently started working with a small law firm generating almost $1.5M in revenues, but the profits were less than $400,000 annually. Barring the unusual, top-performing law firms will generate at least 30 to 40 percent net profits. We analyzed the law firm's P&L statements and found their accounts receivables were extremely high, an especially dangerous situation to be in given the state of the economy. Meet with your partners and business manager to analyze your profit margins. Specifically, look at your:
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Top 10 accounts-How can you serve them better? Are they obtaining legal services from other firms that you could provide? What do you need to do to convince them to send more business to your law firm?
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Bottom 10 accounts-How much time do you and your staff spend on managing these accounts? Do these accounts have the potential to become at least "B" clients or should you terminate them so you can better focus on your top clients? We have often seen the bottom 10 (or 10 percent) of a law firm's clients take up 30 to 50 percent of the attorney's or staff's time and attention.
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Services that you have used as "loss leaders"-Should you start charging a fee, even a small one, to reduce the number of "tire kickers"? Can you delegate most of the work for managing this service to either a staff member or an associate? What percent of people who use the loss leader service actually convert into a higher end/paying client? Consider significantly changing the service or eliminating it entirely unless you have at least 50 to 75 percent of people converting from the loss leader into a higher end service or you are including a service that's perceived as having high value, but does not cost you much to provide. One of our law firm clients who works with small businesses uses incorporations as a loss leader. If you retain him to create your operating agreement and buy-sell agreement he will incorporate your new company for no additional fee, other than fees paid directly to the state.
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Major services that most of your clients use-This area can make or break your law firm. If you have a handful of services that most of your clients use, how can you make those services more efficient or more valuable? For example, to make those services more efficient, consider having your staff manage parts of them. To make those services more valuable, consider offering additional services or programs that do not involve a lot of your time.
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| Upcoming Events
May 27th-28th Total Attorneys - Get A Life Conference in Chicago, In this two-day conference you'll learn how to manage all the moving parts of a successful law practice while still maintaining a life. Learn from some of the foremost experts on the subject.
June 17th-18th AVVO.com Seminar in Southern California, Learn online marketing techniques from the experts - lawyers and marketing consultants that use the web everyday to generate new clients and maintain their existing ones.
June 26th-27th Rainmaker Retreat in San Francisco - A 2 Day Marketing Boot Camp for Small Law Firms, Discover the Proven System that's Helped 6,000 Attorneys Find More and Better Clients.
July 16th Mastermind Group in Las Vegas, An Exclusive Group of Top Attorneys Who Discover How to Apply Proven Law Firm Marketing Strategies.
July 17th-18th Rainmaker Retreat in Las Vegas - A 2 Day Marketing Boot Camp for Small Law Firms, Discover the Proven System that's Helped 6,000 Attorneys Find More and Better Clients.
September 10th-12th Stephen Fairley Keynote Speaker at California State Bar Annual Conference in Long Beach, CA. The Annual Meeting willl feature more than 100 legal education courses, exhibit hall, and more!
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