We are committed to blogging about law firm management issues. Whether you are growing your firm, maintaining or slowing down, managing a law firm can be a challenging exercise.
How to improve your law firm?
Most law firms will experience pressure over the course of the firm. It is not a matter of if, but when, a problem will arise at your law practice. How to create minimal upheaval is critical when one of these things happen. It can be a loss of an important client, loss of a partner, litigation against the law firm, market changes or lack of attention to profitable work. There are ways through this problem. First, get a handle on money. You will need a weekly, daily and monthly cash flow forecast. This should be a way for you to recognize how to decrease expenses later on. You should also discuss these issues with a banker. Your banker is a critical part of the success of your law firm. You should consider reducing partner draws and possibly increasing capital contributions. Perspective of an outsider is also important and will help you in your quest to turnaround your firm. It is also important to bring in outside help to identify weak-points in the organization. Communication is also key because a not communication will create suspicion, distrust and turn a difficult situation into a full-blown crisis. Finally, don’t act out of fear, but don’t hesitate and get too wrapped up in “analysis paralysis” that you cannot make a decision about the future.
What are the factors in predicting law firm profits?
- Leadership skills: setting direction, building consensus and reinforcing values.
- Managerial skills: ensuring that work product is prepared and delivered in a manner that meets the client’s expectations.
Source: McBassi & Company
Studying these three factors, it is clear that most lawyers only focus on the third factor, which brings not only makes the law practice less enjoyable, it makes less money for everyone. If you would like to read more on leadership for lawyers, there is a good article on the University of St. Thomas website.
Why do lawyers leave law firms?
There are attrition issues from “Big Law” that are worth investigating. Issues like the following usually come up in why lawyers leave law firms despite being paid extremely well and guaranteeing prestige.
Bottom-Line Orientation. Although law firms are certainly a business, it is difficult for anyone to deal with merely being a number. A bottom line culture is one that few people thrive in. And those that do are, well, obnoxious about it.
Limited Loyalty. This comes along with the bottom-line orientation above and offers a “what have you done for me lately” attitude that many people despise.
Examples of Quality Law Firms
Many law firms do not last more than two years. So it is important to study law firms that have stood the test of time. One of our case studies in this area is Lindley Law Firm PLLC, a Waco personal injury lawyer.