Inflation is hitting record highs. Unemployment is at record lows. Interest rates keep climbing, alongside cost of living pressures. It’s a tough environment for any business. How can you navigate this economic uncertainty, and through it, grow your law firm?Here are a few quick tips to get you started.
Keep the cash flowing so there’s a ‘war chest’ to grow
Cashflow tops the list of what keeps most law firm owners up at night. For many, ‘risks and cashflow’, ‘securing enough business to pay staff’, or ‘workload’ were concerns pressing enough to prevent a good night’s sleep.
So how can you better manage cashflow?
- Track time as you go. Efficiently recording time as you work through each task in a matter can ensure you record the true time spent on each task. It can also save you time at the end of each day or week ‘guessing’ your way to billable hours. Even if you charge fixed fees for certain matters, tracking time spent on a matter as you go allows you to accurately value how much each matter is worth. This may mean you adjust your fixed fee amount, or list the hours spent and your regular hourly rate against your fixed fee in the invoice, to outline value and any comparative discount to your client. Innovations like LEAP’s Matter Activity Recording make it even easier for you to record time while you work, and seamlessly integrate with interactive invoicing.
- Provide clear interactive invoices. Disputes over your invoices can hold up cashflow. However, challenges to legal fees are among the most common client complaints lodged with legal oversight bodies. To keep cash flowing and minimise client disputes over billables, switch to interactive invoices. Generated within LEAP and shared via a secure URL, you can link to important documents, provide detailed information, and receive payments online. They are designed to provide clients with the clarity they need to pay your legal fees promptly, so you can keep your cash flowing.
- Setup automated payment reminders. Chasing up overdue invoices is not why you became a lawyer. Automated payment reminders can automate an often awkward client exchange, and provide clients with a polite, professional nudge to pay outstanding legal fees, or make arrangements to pay a bill that is nearly due.
- Receive money up front. Avoid bearing any out-of-pocket costs by using our Anticipated Trust Deposit feature to receive client money up front. This reduces your operating capital and allow you to run lean and efficiently.
Build the business through trust-based marketing or business models
Here are a few tips to grow your law firm as a business:
- Encourage reviews, referrals and repeat business. Law firm advertising is highly regulated, so it can be counterintuitive to engage in much active marketing. However, simple marketing initiatives like encouraging clients to leave reviews on your firm’s LawConnect listing or Google Business Page, or keeping clients engaged through a quarterly newsletter, can encourage repeat business and referrals. It can be as easy as including a review request in your final client meeting concluding a matter, with a link to your firm’s review page. Or asking permission to include clients in regular newsletters; client mailing lists can be generated within LEAP.
- Post on LinkedIn on a theme consistent with your areas of practice, at the same time every day or week. Consistency of content and timing make all the difference on LinkedIn. It’s how lawyer Suet Koon Lai grew her LinkedIn following to over 29,000, and built her executive coaching business. Or how construction lawyer Jason Feng attracted over 20,000 followers on LinkedIn with his how to guides for junior lawyers. Finding a niche topic in which you can be helpful is the key to success on LinkedIn, and can prove to be an excellent way to digitally network beyond your local community.
- Step up to present CPD. As CPD season rolls around every year, demonstrating your expertise by delivering a CPD can be a fruitful way to network. Being open to PR opportunities or other networking events can also strengthen your local community networks alongside a strong LinkedIn game.
- Explore different revenue streams and business models. As fixed fees become a regular offering of many law firms, innovative firms are embracing more radical business models, such as subscriptions. Such models are favoured by NewLaw firms like Legalite. In fact, LegalVision has foregone all fixed fee work in favour of a subscription model. This has seen LegalVision record 30 per cent revenue growth annually for several years, riding growth through the pandemic. Exploring new models like subscriptions can help you keep clients and stabilise your cashflow over the long term.
Expand to new areas of law to grow revenue and mitigate risk
The past decade has seen an unusual level of economic turbulence, driven by political tensions between rival superpowers, pandemic and war. As lawyers, this can result in demand abruptly abating for a particular area of law, while another may boom. One of the most common questions we get asked is, “How do you expand to a new area of law? Is it worth it? How can you test out an unfamiliar area while managing costs?”
This is exactly the issue that faced Jan Domantay, who used LEAP to conduct the conveyancing for his law firm office.
Through LEAP, you can use By Lawyers to upskill in all common areas of law. By Lawyers provides Australia’s most comprehensive online library of legal precedents, forms, guides and matter plans, and are designed to take lawyers step-by-step through less familiar areas of law.
Have a property settlement? Don’t send it to someone else. Through InfoTrack’s SettleIT solution, you can keep conveyancing in house. For a fixed fee of $220 per conveyancing matter, you can outsource all your Australian conveyancing work to SettleIT. All you do is focus on the contract of sale and manage the client relationship.
Interested in more tips to grow your law firm? Download our ‘How to grow your law firm’ guide here.
This sponsored content article represents the views of the sponsor and does not necessarily reflect the views of Queensland Law Society