The business cycle consists of three elements: marketing to get the new client and retain the old client; production to produce and deliver the legal service, advice and/or documents; and finance to collect your billings and operate your firm. The first two tend to be the focus of most lawyers. Billings and collections tend to be ignored or given short shrift or delegated to a staff member with less interest and skill.
One statistic shows that sole practitioners spend 40% of their time in non-billing tasks, such as marketing, billing, collections and other aspects of running the law practice. In firms of 11 to 20 lawyers, the percent falls dramatically to 8%. Hence, the larger firm earns more money. They produce more effort; they bill more; and, even with poor collection efforts, they will likely collect more revenue than their solo counterparts.
Perhaps you should engage personnel to deal with some of the non-billing tasks, whether internally or outsourced and/or perhaps you should consider practice management software as your assistant. Failure to attain the appropriate resources to enhance your production efforts and non-billing needs is cheating yourself. Coaching will help you understand how to address these issues.
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Some law firms are late to the starting gate. Some firms continue to hang on to the "old ways" of running their practice. There are only a few alternative paths: Hang on with the old and wait for the world to catch up, or change as the world changes, making the tough decisions on a current basis.
In recent days, there have been several articles about large law firms cutting equity partners and staff in order to bring their financial affairs into focus. The reality is that they have found that the "eat what you kill" mentality works only so long before dissension and dissatisfaction sets in amongst the rank and file. Becoming more collaborative, cross selling the expertise of the firm and its individual members can create greater firm revenue. And paraphrasing former Pres. Kennedy, as the ocean rises, so do all the ships in the ocean.
In addition, the firms must identify their strengths and play to them. There are very few organizations that can be "all things to all people." With limited resources available, it is important to husband those resources and expend them in a focused manner for greatest benefit to the firm and its clients. Knowing who you are and what you want to be is essential to one’s success.
The catalyst to change is often money. With a cushion from past successes, there is little motive to change. When a cushion narrows or evaporates entirely, and when collections become an issue because clients with their own financial problems fail to pay your legal billings, motivation to review your operations and make appropriate changes rises to the surface.
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