Four Steps to (Sustainably and Consistently) Grow Your Law Firm

Expanding your law firm at a sustainable cadence can be a daunting prospect—especially if your tools, strategies, and data sources are all over the place. Being scattered means it’s difficult to find a foothold in your client base, practice areas, and revenue sources.  

To succeed, you need to follow a strategic, step-by-step approach. 

Methodically follow these four steps, and you’ll be well on your way to expanding your legal practice while sidestepping the “growing pains” businesses tend to face as they scale up. 

Step 1: Assess your firm’s current situation 

Before you can set goals and come up with specific plans for achieving them, you’ll need to identify your law firm’s most significant areas of improvement. That’s why step one of this process is conducting a comprehensive assessment of your firm’s current status and processes, including: 

• Caseload: Look over your current client base and caseload. Identify your strengths, including particularly successful practice areas or standout lawyers, along with any weaknesses.  

• Finances: Evaluate the firm’s financial health and stability, focusing on revenue, expenses, and profitability. 

• Market position: Analyze your firm’s market position and competitive landscape. What sets you apart from other firms, both in your region and in your field(s)? Where might you be able to capitalize on underexploited opportunities in the legal market? 

• Internal operations: Evaluate your internal operations and tech stack—that is, the tools your firm uses to conduct day-to-day operations. These tools can help with routine functions like time tracking, invoicing and payments, project management, and more. (We’ll elaborate further on the role of these tools in steps four and five.) 

A thorough assessment facilitates the next step in this process: setting concrete goals for your firm. 

Step 2: Establish clear goals 

Setting clear, achievable goals is essential to growing your law firm. These goals should be specific, measurable, and achievable (in other words, SMART goals). They should also include a mix of short- and long-term objectives.  

Short-term goals 

Here are some examples of short-term goals for a law firm seeking to expand: 

• Increase your client base: Acquire at least five new clients within the next three months. 
• Improve client satisfaction: Send out client satisfaction surveys to identify and rectify any issues within three weeks. 
• Expand your practice areas: Hire a new attorney with expertise in your chosen practice area in the next six months. 

Long-term goals 

Here are some longer-term goals to consider: 

• Increase your market share: Achieve a 10% market share in your primary practice area in the next three years. 
• Achieve financial growth: Increase annual revenue by at least 5% over the next five years. 
• Establish lasting client relationships: Retain at least 90% of your clients over the next five years by consistently offering exceptional service. 

With these goals in mind, it’s time to set specific KPIs to help you assess your progress. 

Step 3: Make a plan to monitor KPIs 

Now that you’ve set goals for your firm, the next step is to establish the KPIs (meaning key performance indicators—i.e., quantitative metrics for tracking performance) that you’ll use to periodically measure how close you are to achieving those goals.  

Naturally, the KPIs you set will be a direct result of your specific objectives, so we can’t suggest a one-size-fits-all list of KPIs for every firm. However, we can provide some examples of useful KPIs for law firms pursuing growth, separated into four broad categories. 

Financial KPIs 

• Monthly revenue 
• Firm’s total debt 
• Collection rate (the amount of earnings collected divided by the amount billed) 

Marketing KPIs 

• Marketing cost per client 
• Email marketing performance 
• Firm website traffic (e.g., number of visitors per month) 

Client acquisition and satisfaction KPIs 

• New client acquisition rate 
• Client retention rate 
• Client satisfaction ratings (based on surveys) 

Productivity-related KPIs 

• Total number of billable hours 
• Utilization rate (the number of billable hours worked divided by the total hours in a workday) 
• Average bill rate 

One piece of advice: as tempting as it may be to focus on financial KPIs in your pursuit of growth, don’t neglect these other categories—they’re important contributors to your firm’s overall success. 

In addition, be sure to establish a plan for how often you’ll check these KPIs to ensure they aren’t forgotten as time passes. 

Step 4: Get the right tools in place 

In the pursuit of growth, leveraging the right technological tools can be a game-changer for your law firm. They make it not only possible but even easy to automate administrative tasks and standardize day-to-day business functions—so you can put your energy toward furthering your legal expertise and maximizing client satisfaction. 

Here are some examples of tools you can use and the advantages they give your firm: 

• Time-tracking software makes it possible for attorneys to monitor their billable hours with meticulous precision so none of their valuable time goes unaccounted for (and unpaid). 
• Automated expense tracking tools simplify the process of recording and categorizing firm expenditures. 
• Invoicing and payment software streamlines billing to improve cash flow. 
• Project management software keeps your team organized and allows for more effective case progress tracking. 
• Advanced reporting and centralized dashboards offer a big-picture view of your firm, providing easy access to the data you need to make better business decisions. 

As you integrate new software solutions into your firm’s workflows, be sure to plan plenty of employee training sessions. Thoroughly training your employees in how to use these technological tools will maximize the benefits your firm receives from them. 

Grow your law firm with TimeSolv 

Although you could seek out separate software for each of these functions—time tracking, expense tracking, invoicing and payments, and project management—why not centralize them all in one application? 

TimeSolv makes it possible to do just that, handling all these functions with software designed specifically for legal practices (so you can maintain regulatory compliance while maximizing your firm’s efficiency). Our powerful, flexible, web-based practice management solution makes it possible to achieve sustainable profitability and growth.  

To discover how TimeSolv can help you increase your firm’s size and reach, begin your free trial. 

More useful posts: