“We need to raise salaries, so we’ll need to increase rates again.”
“It’s that time of year, get the rate increase letter out to clients.”
In the world of legal services, the decades-old strategy of continuous rate hikes is proving to be a dangerous path to profitability. Clients are more discerning, seeking value beyond billable hours.
And if a firm can’t provide a reasonable price, there are lots of alternative providers. Law firms, therefore, need to explore a multifaceted approach that extends beyond rate adjustments to secure sustained profitability.
Here are some ideas of how to do that.
Expand Horizons
Law firms should actively cultivate stronger relationships with existing clients before going on the hunt for new ones. There are a hundred reasons to approach practice building with this approach. The cost of converting a lead into a client is just one.
Diversification Strategies, Beyond Specialization
Consider digging deep into what your clients need today,and think about what they will need tomorrow.
Strategic Focus – Prioritizing Profitable Clients And Matters
Not all clients and cases contribute equally to a firm’s bottom line. A strategic evaluation of the client portfolio can unveil opportunities to optimize resource allocation.
Technological Empowerment
Enhancing Operational Efficiency
Embracing technology is not just a trend; it’s a necessity for every single law firm.
Project Management, Please
Efficient project management practices ensure that resources are utilized judiciously, lawyers are able to meet timelines and client expectations are consistently exceeded.
A Holistic Path To Profitability
By expanding client relationships, developing practice areas that change with the times, prioritizing high-value clients and embracing technology, firms can successfully navigate the evolving legal landscape.
I have attached a link to a piece in Forbes that I wrote on this topic. I hope it provides some value the next time a firm looks at its long-term profitability.
