10 Ways Law Firms Can Increase Their Profit Margin.
Published in Law Technology Today, April 24, 2020
The current day scenario presents small & medium sized law firms with ample opportunities to increase their profitability. In this blog, we list out some of the ways leading law firms are utilizing to increase their bottom line, effectively.
- Improving the Firm’s Documentation Process.
Innovating the document review process at your firm shall not only improve the quality of the documentation process on a per case basis, but also increase accessibility to each of these documents in the future. Proper documentation practices also aid in efficient and speedy delegation of work to firm’s attorneys and staff.
- Using Efficient Time Tracking Software to Prevent Loss of Billable Hours.
Inefficient billing practices are prime precursors leading to severe losses in billable hours for every firm. While quite literally every other domain has welcomed innovations in technology with arms wide open, the legal industry seems to maintain a certain level of inexplicable reluctancy that presents the legal industry with several obstacles.
Law firms that are currently using innovative billing and time tracking platforms ensure that their attorneys are capturing time efficiently and accurately: each entry is fully compliant with their client’s billing guidelines. The firms’ recovery is significantly increased, while the write-offs minimized. Equally importantly, the time spent on back and forth between your billing department and the bill review vendors is saved as well: as there is just no room for reductions.
- Expanding the Firm into New Practice Areas
Always keep an eye out for emerging practice areas that you can involve your firm in. By recruiting attorneys who work within newer practice areas, you greatly improve upon your firm’s business potential and attract various new clients. More Practice Areas = More Clients = Increased Revenue.
- Marketing: Using All Available Resources
For optimal results from successful marketing, encourage every availing resource, including getting your attorneys to market themselves. Let your clients know you are in the game, and you are here to provide them with nothing but the best. Brand advertising should be where your marketing efforts should be focussed on. Encourage your attorneys to attend local events and meetings.
- Avoiding Some Clients.
Steering clear of certain clients shall protect your firm’s financial health especially those who delay payment for your firm’s services or those who put your firm on retainer just to make sure you are available-but not really supply you with ongoing work that can be considered billable to them. By avoiding such clients, you can focus on improving your firm’s relationships with those clients who actually bring in profits.
- Seeking to Increasing the Firm’s Rates.
Rates can quite often be a very touchy subject for both the attorney and client, but the discomfort does not evade the necessity to maintain the bottom line. Yes, quite a large number of attorneys are known to maintain their rates constant for years but this inevitably imposes an ill effect on their business. Note this, the last thing you want to do is put your law firm under a financial risk. If you feel that it’s time your rates increased so that more doors open, then have that conversation with your clients and get your rates raised accordingly.
- Maintaining Strict Compliance with Clients’ Billing Guidelines.
Billable hours are basically what keeps a firm alive-without them, you might as well pack up and hit the rails. When your firm uses an innovative time and billing platform it will help your firms’ attorneys not to fall behind on their time recording and invoices. Encourage your billing team to send out their invoices on a monthly basis or as per client agreed billing frequency to keep a constant flow of cash coming into your law firm.
- Paying Close Attention to the Firm’s Billable Hours
Encouraging your attorneys to stay on top of the billings helps you track how your billable hours are being spent. If your firm is required to bill for their time in tens of hours, get them to use innovative mobile time recording tools to keep track of every 6 minutes spent with a client and on his or her case, whether it is a face-to-face meeting, on the phone, by email or using any other interaction.
This establishes a certain level of fairness, especially when your attorneys are loaded with strenuous cases and your firm is required to submit invoices to e-billing or bill review vendors who ensure that your firm’s invoices maintain full compliance with your client’s billing guidelines prior to processing payment to your firm.
- Gathering Client Feedback
Are your attorneys’ clients happy with the service they were provided? Will they wish to continue availing your services should more legal issues arise, and more importantly, will they recommend your firm to other prospective clients? The answers to these questions lie in the feedback that your client shall give you, if you take the time to ask.
- Ensuring that All Reimbursable Expenses are Billed For.
Many law firms tend to miss out on billing for many expenses incurred on behalf of their client. Proactive measures are required to ensure that this practice does not lead your firm to losses.
Source: www.lawtechnologytoday.org
Published in Law Technology Today, April 24, 2020
Author - Andre Wouansi
About Andre Wouansi
Andre Wouansi, Founder/CEO at ALB Andre is considered a veteran in the legal industry with over 17 years’ experience in the legal e-billing space. Prior to ALB, Andre was one of the owners and group CFO/COO at a US-based bill review company and that company was the preferred bill review vendor for some of the largest Insurance carriers, TPAs and Self-Insured Corporations in the US, UK and Canada ALB was created to help law firms comply 100% with their clients’ billing guidelines, hence no reductions on firms’ invoices by e-billing vendors companies.
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