How can your law firm save money with constant downward pressure to do more with fewer resources? More than ever before, the litigious nature of society has increased the need for legal counsel. The ability to maintain the same amount of revenue has become the muse of business and administrative innovation for the modern law firm. Beyond hiring Paralegals, there is more that can be done:
A universal rule of labor is that the employer will see diminishing returns on the quality of hours invested past a certain point. Expecting lawyers to invest more hours in a day will significantly reduce the quality of work that they produce. Nobody can maintain 100% productivity at all times of the day, which is why lawyers should capitalize on the best quality hours instead of simply adding more hours onto a schedule.
You need to pay the lawyer to work for those additional hours, but you won’t get the same value for them. Is it worth paying a senior lawyer more money for a lower quality of work when alternate avenues might exist? Paralegals help to reduce labor costs and serve as a lucrative alternative to full-salaried lawyers.
Does every document need to be drafted specifically for the lawyers or clients using it? Some undoubtedly do-but does everything need to be drafted independently? Some legal documents are routine and quite common. Invest time in drafting a single sophisticated document that can be altered according to the names of different clients. Treat the time investment required to create these drafts as a fixed cost that diminishes to virtually nothing when measured against the number of times you perform the service and the number of lawyers that use it.
The General Counsel (or Chief Legal Officer, in some cases) can draft these or delegate those tasks to specialists within the firm. Many lawyers do this for their own clients already; the difference lies in the ability to make these reusable drafts accessible to other lawyers within the firm. Some organizations have five different drafts created by five different lawyers, making it incredibly difficult to establish a support system for lawyers taking time off for a vacation or an illness.
This relates directly to the debate surrounding the target number of hours a single lawyer should invest per month. Why pay one lawyer for diminishing returns on hourly investments when you could pay another lawyer? The answer usually involves the word “benefits,” but do the additional benefits outweigh the cost of hiring a junior lawyer to cultivate long-term relationships with clients for years or decades? There is certainly no shortage of entry-level lawyers hoping to begin their careers.
Clients expect a great deal from lawyers as high performers. Keeping clients engaged and satisfied over a lifetime outweighs the short-term benefits of assigning more clients to an experienced lawyer. Consider pairing new lawyers with low-profile clients who can become lucrative sources of repeat business.
Determining the best division of labor is no easy task. Many law firms have hired paralegals to handle small-scale duties regarding articling and assisting senior lawyers with the basic footwork to tackle larger problems with finesse, but these hires need to be balanced against their value to the firm as a whole.
You also need to consider how to organize subsidiary responsibilities in the firm. Do you need a dedicated sales division? Should your lead salesperson also lead all marketing efforts? The answers depend on the organizational structure and goals of your practice. Should low-risk and routine responsibilities be billed by the hour or according to services rendered? Would changing your model with lower prices give you a competitive advantage?
You need to find the right clients, not just more of them. Marketing has become much more refined in the last fifteen years. You no longer need to spend tens of thousands of dollars without seeing the results. Set aside money for a dedicated marketing budget, but make sure that you choose avenues with measurable metrics. Internet marketing has filled this gap in marketing and it’s here to stay.
Your marketing reach needs to target specific people rather than casting a wide and expensive net across the population. AdWords is a good place to start because it lets you tailor your advertisement visibility to certain geographic areas, time-sensitive searches, and searches according to particular key words. You can compete in these key word niches to invest a relatively small amount of money to attract clients who bring repeat business to your organization.
Examine your workload closely to see when your productivity drops on your timesheet. Would you save more time-and therefore money-by hiring a paralegal, centralizing the administrative structure, or centralizing client acquisition efforts? General Counsels have become a more popular means of bridging the gap between legal expertise and business decisions, but the need for specialist expertise remains strong. How will you find the right balance for your organization?
With so much ambiguity surrounding the workforce in recent years, a healthy work environm...Read More