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The Business of Law: Law Firm Profitability

Posted by Carly Wilson on Wed, Mar 14, 2018

The Business of Law: Law Firm Profitability

by Carly Wilson / March 14, 2018

A very frequent emerging theme we see across law firms is recognizing “the business of law” instead of just the practice of law. Both technology and economics push law firms towards a clearer view of the bottom line, which has given a rise to new firm-wide initiatives more relevant to the business itself. With that being said, many firms are interested in learning more because this is a relatively new concept to them. Profitability modeling varies firm to firm in approach and methodology, it's not a one-size-fits all solution. Experts at law firm profitability, the BigSquare team is always interested in conferences to provide firms with the most up-to-date information on the topic. We are looking forward to both sponsoring and attending The Mechanics of Law Firm Profitability Conference later this month to focus on the “changing scope of matter management in support of client value, practice efficiency, and law firm profitability.”

 

We love to share our insights on conferences after we attend, but thought that since this is such a hot trend, why wait? The past decade has drastically changed the law industry, directly coming from what clients expect and how firm have responded. Many firms are now focused on reducing costs while tracking the profitability of individual matters. There are missing pieces for both sides, but an important goal to focus on is the outcome; what did your firm accomplish, and what’s the value in the eyes of the client?

 

law firm dashboardFirst priority at firms is always doing the very best job for clients, but in order to grow, its critical to do just that with a focus on profitability. Business centered activities help to remain systematic and constantly moving forward. A great point of consideration in managing a law firm like a business is using key metrics. Knowing exactly what metrics to measure, saves a lot of time, manpower, and money rather than developing them yourself. With our Legal BI experience and an understanding of matter planning and law firm profitability, we saved you some time with this Key Profitability Metrics download.

 

Understanding what practice areas, lawyers, matters are profitability and why, is very powerful. Not only this information, but also the opposite is just as important. Knowing what is falling behind provides management insight required to make the decisions to increase profitability. Collecting the data is vital, but metrics are not useful until the numbers are put in something that is easily understood. A law firm dashboard like Firm Focus allows your end-users the ability to easily perform profitability analysis on the dimensions that matter to you.

 

Profitability is different firm-to-firm, which means your profitability metrics and dashboards should be as well. Most important thing is to not let that slow down your process to finding a solution to provide this vital information. The best way to stay competitive is to stay one step ahead of your competition. Because many firm's management is looking at profitability from a business aspect, it is important to stay updated on this trending topic. These 5 Tips to Improve Law Firm Profitability would be a great place to start.

 

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.

Key Profitability Metrics for Law Firms Cheat Sheet

Tags: Law Firm Profitibility Business Intelligence Profit Drivers Legal BI law firm dashboard

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