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7 Ways to Increase Your Law Firm's Profitability

Posted by Carly Wilson on Fri, May 01, 2020

7 Ways to Increase Your Law Firm's Profitability

by Carly Wilson / May 1, 2020
There are several ways law firms can increase their profitability. We compiled a list of a few of the most popular methods that leading law firms utilize to broaden their bottom line. Some of the top ways leading law firms are gaining and maintaining an edge on the competition include:
1- Improve your law firm's systems

By documenting your law firm's typical routine for each case then you can review and take precaution against potential roadblocks or mistakes that can limit the profits your law firm can make. Having the correct system in place will not only increase profitability but productivity as well.

2- Use efficient time tracking software

We all know that inefficient billing practices can lead to severe losses in billable hours for a law firm. There are multiple innovative billing and time tracking platforms created specifically for law firms to help ensure that their lawyers are capturing time efficiently and accurately. It's imperative that your firm utilizes this type of platform to it's fullest potential. This also helps reduce the time spent on back and forth in your billing department.

3- Look into new practice areas

Maximize the potential of all your lawyers and always keep an eye out for emerging practice areas in which you can involve your firm in. Additionally, by hiring lawyers who work within newer practice areas, you greatly improve upon your firm’s business potential and attract various new clients. And we all know, More Practice Areas = More Clients = Increased Profits.

4- Market your firm and your lawyers

The best way to increase profits is to let clients know you’re in the game. Extend your marketing efforts with better advertising. Not only should you market your firm, but have your lawyers market themselves as well. You could consider showcasing your lawyers at special conferences, events, and meetings. Utilizing social media, LinkedIn, and podcasts are a proven way to gain exposure in what is becoming an increasing mobile & remote legal community.

5- Pay attention to the billable hour

Make certain that your lawyers are staying on top of their billings. This helps the firm track how your billable hours are being spent. With the abundance of tools available to firms, we now can easily track hours anytime, anywhere, from any device.  Be vigilant about billable time. In some cases, billable hours are lost due to a lack of accurate tracking or billing. Require your lawyers to occasionally review their billing process to make certain they’re properly charging for their work.

6- Utilize a firm-wide business intelligence tool
Top law firms are harnessing the power of advanced self service business intelligence tools to achieve success. Many legal specific business intelligence tools streamline the analysis process. This makes it easier for people to see and understand their data without the technical know-how to dig into the data themselves. There are many BI platforms available for ad-hoc reporting, data visualization, and creating customized dashboards for multiple levels of users. Providing your lawyers this insight into their book of business is vital. Administration and Management need to be able to quickly and easily analyze all aspects of the firm.

Firms such as Leech Tishman use BI tools to help develop reports on crucial data that they were unable to retrieve from their time and billing system. BigSquare was also able to provide firm members ready access to key data as well as develop and publish key metrics that measure performance. Read more about why they chose to implement a business intelligence tool at their firm in this case study.

7- Gather client feedback
In the end, clients need to have a problem solved, and they will base their opinion of your firm on the results they receive. Are your lawyer's clients happy with the service they were provided? Would they recommend your firm to their friends? Will they come back if they need help with other legal issues? Finding out the answers to these questions is a great gut-check to see what needs to be improved and what should continue as is. 

To learn more about law firm profitability, we put together some additional resources in this blog post. Key Profitability Metrics for Law Firms Cheat Sheet

BigSquare is the leading provider of Business Intelligence for law firms and professional service organizations.  We focus exclusively on law firm reporting, law firm BI, law firm profitability and law firm analytics.

Tags: Law Firm Profitibility Profit Drivers Law Firm Technology Legal Software law firm business intelligence

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