January 23, 2017
The New Year is already off to a fast start and if you haven’t identified resolutions for your law firm now is the ideal time to stop, reflect, and create a plan. Taking time to take stock can be difficult, but the long term success of your law firm is dependent on your ability to make continuous improvements. Make 2017 the year you stop struggling and instead, use these three resolutions to fast track your growth strategy.
Resolution 1: Measure One New Business Metric
In order to execute on your law firm growth strategy you need to appropriately manage your business as well as practice law. With so many deadlines and demands on your time it can be difficult to find the time to manage the financials of your firm, however, there are many relatively simple metrics that you can track to better understand and improve performance.
Yes, tracking billable hours is important, but there are other metrics that can provide insight into how to grow revenue and profit. Cash flow, utilization rate, realization rate, write downs, and matter profitability are just a few metrics to consider. As an example, you have increased the number of billable hours year over year, but aren’t seeing profits increase. That could be a result of a low realization rate and/or an increase in write downs…which is why adding an additional metric can add value to your firm.
Resolution 2: Learn from your Wins (the 80/20 Rule)
The 80/20 rule is pervasive in business and understanding how it impacts your law firm can help you work smarter in 2017 and beyond. Start by asking a few questions: What activities have generated the most business? What matters have been most profitable? What type of work did you enjoy the most? What have your clients been most satisfied with?
The answers to these questions will help you identify where you can shift your focus to align with more profitable and enjoyable work. In 2017, focus more on the 20% of activities that generate 80% of your success.
Resolution 3: Embrace Technology to Simplify Your Life
Technology is improving our personal lives and is becoming more prevalent with smart phones to the growth of smart devices in our homes, e.g. Amazon Echo, and the beginning of self-driving vehicles. Legal technology is also continuing to advance the legal profession, but lawyers have been notoriously slow to adopt it. Think how much more productive you could be with technology in your law firm.
Legal technology shouldn’t be viewed as a headache or a decision put off for another day. Find one part of your practice you wish was easier and leverage technology to create value for your law firm. You have lots of options from cloud-based practice management to drafting software to legal calendaring to time and billing software. All of these options can enable you to simplify your world and deliver high quality work with less effort. If you don’t embrace technology now, when will you find the time?
If you are interested in making additional improvements at your law firm, I’d like to invite you to join me at LegalWeek where I will be sharing insights from a study we conducted on the State of U.S. Small Law Firms and will be leading an esteemed panel discussing small law trends.