As a lawyer, do you feel like you are missing out on revenue due to your clients, staff, or fee structure? Whether it’s intentional or not, you could be losing money simply by not examining your current processes or structures. If you feel like you are leaving money on the table, you will want to read on.
There are several ways you can put more money in your pocket, but today we are going to discuss three: looking at the quality of your clients, improving how you communicate to your staff, clients and referrals, and revisiting your fee structure.
1. Analyzing your clients and referrals – If you haven’t determined your ideal client, now is the time. You may be losing money by spending less time on those who are more valuable to your law practice. Sometimes re-evaluating your clients means dropping some, picking up others, and classifying them as A,B,C, or D clients.
“A” clients are the 20% of your clients that bring in 80% of your revenue. “B” clients have the potential to become “A” clients but are more price sensitive. “C” clients are reliable, consistent, price sensitive, but will pretty much stay in the “C” range. Anything below a D, you will want to consider dropping.
You can also classify your clients by personality type, audience interests, how they think, and user insights. Find a method that works for you when you when it comes to classifying your clients and determine which ones are worth keeping.
2. Improving your communication – Fundamentally, attorneys are communicators. They communicate with clients, referrals, other attorneys, in their community, and with the court. But when it comes to your staff and your law practice, are you communicating in a way that is building trust with your team?
Good communication builds trust, allowing you to delegate when needed. When you view your law practice as a business, you may start to notice a shift in your law firm’s culture. As you become more transparent, listen actively, and ask the right questions, you are strengthening your reputation while creating a level of credibility. This can increase revenue several different ways.
The first is delegating. When you create a team that you trust, you can delete tasks to them so you can focus on revenue-generating projects. The second way this can increase revenue, is through referrals. If you create a law firm culture that is transparent, honest, open, and trustworthy, your clients will start to take notice. Providing an exceptional experience along with improving and reevaluating your law firm’s culture, could provide a new way of building your referral base.
3. Revisiting your fee structure – When was the last time you raised your rates? This might sound intimidating, but in order to put money back in your pocket, that may mean increasing your service fees. With inflation and rising costs, raising your rates shouldn’t be anything new. In fact, most law practices raise their rates on a regular basis.
*”Andrew Maloney recently reported on a Wells Fargo Survey. This Survey concluded that almost 98 % of the firms surveyed plan on increasing rates in 2023 by some 7-8%. As I have discussed, the efforts to raise rates are not surprising. Law firms are facing significant increased costs due to inflation and perhaps reduced revenues in 2023. The easiest way to try to maintain record profits is just to raise rates. And since many clients have in the past routinely accepted increases (or haven’t even noticed them), it’s tempting.”
The goal of raising your rates is to focus on “A” clients by eliminating those that are not helping you generate revenue. Focus on clients and referrals who are willing to pay what your services are worth. Do not be afraid to raise your rates.
We hope that you will implement some of these processes in your law firm so you can build a practice that is reliable, credible, honest, and revenue-generating.