How do you build a successful law firm?
It’s a question that keeps many owners of small legal practices awake at night.
In today’s market, being an outstanding law specialist and working with top talent still make up the foundation for a winning legal business.
However, they are certainly not the only factors that will bring you success. Effective law firm management strategies will keep you on top of your game and growing the way you want to.
In fact, there are a few common challenges that law practices identify in terms of management. They include client relations, the burden of administrative work, cost control and internal efficiency.
While tackling these issues is no simple task, it does highlight a number of clear steps that can be completed with the right knowledge and approach. They require dedication and know-how, yet are certainly possible to achieve.
Below you can find the essentials to successful law firm management, from customer acquisition and marketing to legal management software and internal processes.
Discover the main aspects of running a small legal practice efficiently.
1. Set the basis with a solid business plan
Small business owners from all industries are faced with a tough conundrum: to spare the time and create a business plan, or to play it by ear.
More often than not, those that opt in to have a strategy are the ones that make it at the end of the day.
That certainly applies to law practices as well, and having an appropriate business plan is an important step in launching or restructuring your business.
By having a clear path where you are going, you can work towards your goals much more effectively.
Your business plan is an essential management tool that should contain an analysis of the market you’re entering, a thorough overview of your business, and competitive analysis and identification of target markets.
It should also detail issues such as new technology, entry barriers, financing, cost projections, client relationships, SWOT analysis, competitor trends, and marketing strategy, among others.
You can work on creating your business plan on your own by using common templates or seek the help of business advisors who can give you a hand in identifying your possibilities and analyzing your market.
2. Laser focus your legal specialty
One of the common characteristics of successful law firms is the clear focus on a legal field.
While there are larger companies that provide legal services in a range of industries, for small firms it usually works better to center efforts in a well-defined area.
This is also key to successfully promoting your business as specializing in a certain law area. Many clients would prefer to work with an expert rather than a general practitioner.
As noted in a recent Reuters article, for lawyers it’s key to differentiate themselves from competitors in a clear way.
If you cannot see how you’re better and different from the rest, it would be difficult to communicate your advantages to clients. Thus, it pays off to take some time to identify and build on your specialty area, and then work towards positioning yourself on the market in this way.
3. Get customer relationships right
One of the basics of running a winning legal business is finding the most effective way to attract and retain customers.
You need to find the best tactics to communicate and engage with potential customers so that they’re persuaded to choose you for their legal needs. And, to stay with you in the long run.
Acing your customer relationships is key to your practice’s reputation as well, so it is important for your business on a number of levels.
The prominent trend across industries is to bring the focus on your clients, thus creating a customer-centric brand.
This entails careful handling of customer expectations and dedication to serving their needs. You have to take care of appropriate pricing that matches clients’ profiles, as well as regular information flow that keeps them in the loop.
You can also use frequent client surveys to identify the areas where you’re doing right and those where you need improvement.
Reduce admin work at your law firm
Simpler time tracking, invoicing, and more
4. Delegate and outsource non-legal tasks
Managing a legal practice involves handling a ton of administrative tasks.
You should not overlook their burden because if you try to handle them on your own, you may end up with piles of work that eat away at the time you could be spending on clients.
That’s why it’s important to delegate and outsource tasks as early as possible. Distributing work to your employees nurtures trust and a strong company culture, while also clearing headspace for you as the leader of the business.
In addition, this ensures that your internal processes run smoothly and effectively and that your clients will remain satisfied with your services.
Having administrative staff who can handle your day-to-day operations, for example, is key to eliminating chaos in your processes and saving you time, which you can use on what’s really important for your law firm’s development.
You can hire reliable virtual assistants to manage your day-to-day tasks. Just make sure you have the right virtual assistant software so the relationship is as efficient and beneficial as possible.
For your marketing needs, it’s best to use an expert who can get the job done quickly and effectively. Naturally, this counts for all types of specialists that you may need, from CPA and business consulting to event organization and advertising.
5. Ensure your industry compliance
As law practice, you have to comply with high working and ethical standards.
They are an integral part of your profession.
That’s why industry compliance should be a top priority in your law firm management. It involves numerous aspects, from establishing and enforcing internal rules to maintaining membership in industry organizations which have strict professional requirements, such as the American Bar Association.
Among the best practices you should keep in mind to ensure compliance is handling finances with the utmost care.
This means maintaining your business operating accounts separate from trust accounts at all times.
In general, as a lawyer, you need to have client deposits away from your business money flow. Mingling operating fees with a trust account is a common mistake which can lead to serious harm to your practice.
6. Use the right law practice management software
Running a successful law firm today seems impossible without technology.
Achieving efficiency and improving your processes is only feasible when you integrate the right legal practice management software in your business flow.
One of the tools that can be of great use for time tracking and budgeting is Hubstaff, which has a specialized solution for attorneys.
With its help, you can take care of time logging with ease, ensuring you would get an overview of how your team’s hours are spent. Hubstaff also allows you to easily track cases and their progress, either by task or by client.
You can also handle job costing, as well as maximize billable time and profitability.
Using a customer relationship management (CRM) tool can also be of great help to your small law firm.
It allows you to streamline your business development and client management efforts. Some of the top legal CRM solutions on the market include Lexicata and LawRuler, but you can also employ one of the general-use CRM platforms such as Salesforce, Introhive, and Pipedrive.
Improve your firm's profitability
With better time tracking and reporting from Hubstaff
7. Employ top marketing tactics to position your firm
In a sea of competition, if you want to get discovered, you need to stand out, and marketing is the way to reach people.
While you shouldn’t be a specialist, it’s important that you direct your small law firm’s marketing efforts by knowing your needs and setting the tone. One of the crucial points that you should keep in mind is improving your website so that it can function as a lead generator for your business.
This entails perfecting the content and visuals and optimizing your website for mobile use.
Making use of SEO tactics and paid advertising can benefit your business greatly, as well. It’s important to position yourself as an industry specialist through social media engagement and by publishing expert-level content on your website and on social media.
Since getting marketing right takes quite a lot of time and resources, it’s best to work with a marketing expert focusing on the legal field. You would then only need to make sure they are working towards the marketing goal you have set.
8. Evaluate success in regular intervals
In order to ace your law firm management, you need to keep constant track of where you’re standing.
This doesn’t mean micro-management.
Instead, plan to have an overview of the most important metrics within your business.
This includes checking profitability and billable hours to ensure that the time spent is worth the effort when compared to the income generated. Keeping an eye on costs, accounts, and transactions is also key in order to avoid escalation of serious financial issues.
Besides the financial side, it’s a good idea to regularly evaluate the results of your marketing activities, as well as the quality of your customer relationships.
Client satisfaction and a solid brand reputation are the products of consistent efforts, so you need to make sure you’re moving in the right direction. The closer you monitor all streams of business activity, the better you’d be able to direct them and achieve your overarching goals.
Ready to kickstart your small law firm management?
Running a successful small law firm entails many of the tactics any budding business would employ.
The best approach is to start with a clear differentiation of your company and niche and to devise practical and effective ways to handle customer relations and marketing.
Then you can seek optimization and higher productivity through delegation and outsourcing, as well as by selecting useful legal management software.
Last but not least, it’s a good idea to consistently review your efforts to make sure you’re on the right track.