Tips for Running a Law Office

4 Strategies to Improve Your Law Firm’s Operations

Many lawyers go into law for different reasons.  Many want to serve, and this service is noble in itself, but it doesn’t always bring in the big bucks.  To make more money, you have to run your law firm like a business.  Running a law firm like a business isn’t something that is taught at law school, and while you may be great in the courtroom, you may be lacking the necessary skills in the boardroom.  For example, how much do you know about insurance, marketing, organizing cash flow, or just the basics of business?

To take your firm to the next level, you are going to have to change a few things.  It may be a little different at first, with enough time and practice, you can look to turn your law firm into a well oiled profit making machine.  This article is going to cover the basics of running your law firm like a business.

Learn the Basics of Business

If you aren’t familiar with things like cash flow, variable expenses, and overall profitability, then you need to start familiarizing yourself with basic business principles.  Just like in law school, if you didn’t know something you had to learn about it.

You will want to apply yourself the same way that you do in the courtroom.  Leave nothing unturned and begin learning the basics.  Whether you enroll in an MBA program or you start taking classes on business, any formal education is a great way to get a leg up on the competition.

Once you have learned the basics, you can begin to focus on cash flow.  Whether you are an in a large firm or you are working alone, you want to have a positive amount of cash flow.  There are few things that you can do to increase cash flow.  Focus on your top performers or the types of cases that your firm is good at.

Once you find out who your top performers are and what your law firm specializes in you can focus more of your efforts on a business development strategy.  This will help to fine tune your business and increase overall profit.

Marketing

You can be one of the best litigators in the world, but if nobody knows about your law firm, he or she are not going to hire you.  So it is important that you are marketing to the masses through multiple media.  Gone are the days of doing only billboards or word of mouth.

It is important to have a strategic marketing campaign that uses all forms of media.  Technology is key; it’s the platform that almost everyone uses daily. Having internet ads, and increasing the search engine optimization are both great ways to increase your presence on the internet.  This will help attract a younger base of clients.

Either way, try to focus on all forms.  T.V. commercials, billboards, internet and building your social media presence is a great way to increase your business.  If you put the money into your marketing, you should see major rewards in the long term, and it will help take your business to the next level.

Organizing Cash Flow

When you update your marketing strategy, you should see an increase in overall business.  This will help increase the cash flow, but it is paramount at this point that you organize the cash flow properly.  Not many lawyers went to law school so they could sit and manage money as an accountant, but if you want your law firm to be successful, you must be able to appropriate funds correctly.

This starts with the basics; you need to have a program that bills clients.  Having a good system in place will ensure that the clients are paying on time, and you can be alerted to any missed payments.  If you don’t keep track of the billing process, you may begin to lose money overall.

One thing you can do to ensure that funds start to flow is require a down payment.  Some cases can drag on and waiting until the end may hurt the cash flow to your business.  So if you get some money upfront from your client, you will begin earning earlier.

Also, you need to have a plan for when clients do not pay.  This happens often, and you want to make sure you try to get the money from them at the earliest possible time.  If you let it go on, then you will most likely not get paid in full.

A lot of people like to bring in outsiders for this side of running the law firm.  Hiring competent accountants and administrative staff will allow you to focus on law while the company is run by those who have a background in bookkeeping or accounting.

Outside Management

One option that many law firms are beginning to do is bring in outside management.  This allows the lawyers to focus on the law aspect, and the hired management can focus on running the business.  This is a great way to have an expert in business practices take you to the next level.

Whether it is in an advisory role, or as a member of the board, he or she will be able to help your law firm focus on generating profit.  This allows you time to focus on the law aspect, and diversifying your staff will only help the business overall.

Conclusion

Practicing law is a noble profession.  It is a great thing to win cases and serve the people of your local area.  While you may have a passion for the law side, it is important to your family and employees that you are generating a profit.

Your law firm is a business, and it is important that you run it like a business so you can maximize profits. Taking basic business principles and applying them to your company should help increase overall revenue.  Don’t be afraid to take classes on business so you can better yourself and the firm.

Also, make sure you have an organized marketing strategy to help increase your presence in the community.  Once you begin to gather more popularity you business should increase, and you may want to look into hiring an accountant to manage the money.

It is important to stay flexible and consider the option of hiring outside help.  They may be the necessary piece to take your firm to the next level.  It is important to remember that the way you run your business is a reflection of your firm.  If you want to be recognized as a great firm you are going to want to have a great business model as well.