I hope this edition of KMS “Robservations” finds you in good health and prospering…best wishes for a great year in 2017…
In this email I have again briefly covered for you a few more issues that are impacting lawyers in small-medium firms in Australia and New Zealand…
I trust you continue to find the content of interest and value to you in your practice…
Robservations…
A really mixed bag of thoughts for you this issue, to kick off the new calendar year!
KMS Common Sense Law Firm Marketing… short sharp thoughts from the trenches…
These notes are not the place to try to set out exactly how small-medium law firm marketing should be done.
However, I will outline a few key points that should serve as a reminder this early in a new calendar year.
For most small firms the most effective marketing is done when what is happening, and what is desired, and the main activity needed to achieve that, are all broken down into very simple steps.
For an existing firm, understanding exactly where your new enquiries and files are coming from is a fundamental starting point for beefing up marketing.
Nearly forty-four years in the Profession has been more than enough time for me to be very confident that where work has come from in the recent past will be a very good pointer to where it will usually come from in the near future!
A review of your marketing efforts should involve an assessment of sources, and include consideration of whether there are obvious “normal” sources you are not currently getting enough enquiries and files from.
If you feel too close to the forest, feel free to run what you’re currently doing past us for a reality check.
The next step is to assess where improvement in your marketing footprint appears likely to produce most bang for your buck so to speak.
Few small firms have enough time and money to do everything that is sensible (let alone waste money on silly stuff) so prioritising will almost always be necessary and valuable.
Pick out a couple of key areas and attack them first.
It doesn’t take many files (and the eventually ensuing Revenue) when you are past break-even to dramatically improve your profit, and subsequent cash flow.
A simple example will suffice…If your WorkPlan for a team member working mainly in Estates Disputes shows that they have annual production capacity for handling five more files, and you know that the average file allows you to render $20,000, you want as soon as practicable to be opening five more files per annum than you do at present, or less than one extra file each two months.
That will in due course increase Revenues $100,000 at very little additional cost in Expenses. Very profitable indeed!
Be conservative in terms of when you expect to get there on the new files, but be aggressive in getting started now. That amalgam will usually make you very happy indeed.
There will be a couple of obvious areas where you can generate more enquiry…what do you need to start doing about that right way?
In later Robservations I’ll look at the basic kinds of things that can be done to quickly get those extra files coming in.
The “take-away”?
In small-medium law firms it’s useful to focus on a few sensible basics to lift new file numbers in desirable areas, and in due course drive profit up sharply.
Pricing Heads-up…
Pricing is far more important to your real profit, after Principals’ salaries, than most lawyers are prepared to admit.
Pricing was not a discipline typically taught to lawyers, far from it.
Pricing was actually avoided like the plague…probably because it was considered not particularly “professional”, and probably because somehow its mysteries seemed quite incompatible with the over-arching obligation to charge a reasonable fee.
Maybe it was because it was considered unnecessary for lawyers, given that for huge lengths of time many lawyers “pricing skills” were limited to very basic application of Scales of Costs.
Some of the basic elements that other businesses consider go into pricing were anathema to those considering if a lawyer’s fee was reasonable. Consider, for example, the client’s ability to pay, and market conditions.
Many lawyers still argue vociferously that charging two different clients a different fee for the “same” service is unprofessional conduct.
I commend to all readers interested in genuinely charging a reasonable fee in the particular circumstances of the client to do some basic reading on pricing.
I’m not suggesting that you urgently need to get your head around dynamic, penetration, skim, cost-plus, target return, value-based, or psychological, pricing!
It may well be some time down the track that you will benefit from really understanding most of the wide range of pricing strategies, but I’m sure that letting the light in more deeply now on pricing strategies generally will be most beneficial for your practice’s financial health.
The Professional Pricing Society is as good a place to start as any… http://pricingsociety.com
The bottom line… Pricing is much more important that most lawyers think, very often more important to profit than practice size and work volume, and is an area we are entitled to look at differently in this day and age.
Heaven forbid, I’d go so far as to say that legal services pricing is gradually maturing, we are growing up a bit, not complete babes in the wood compared to many other professionals.
Thoughts for the day…
Reflecting over the long Summer break on our work in 2016, and long term trends we’ve observed since starting consulting to law firms in early 1988, it seems that one of the most persistent problems in small-medium firms is still there, in spades.
Too many involved in law firm management, and of course in smaller firms that’s mainly Principals, know that effective management of individual team members is important, but in the main don’t follow through and actually ensure it happens consistently.
My observation is that the main reasons usually are a fundamental aversion to the (incorrectly) perceived “confrontation” involved, and a perception that there isn’t enough time available given the many other “important” things that they need to do also.
My heads-up… Most if not all Revenues come directly from the performance of your human resources, so nothing is more important to achieving the Revenue potential of your resources, strong profitability, good cash flow, and the overall financial health of the firm.
Ironically, getting it consistently right will significantly reduce pressure, improve satisfaction, save time spent in negative aspects of cash flow management, reduce debt, and create greater opportunities for holidays, and the cash to fully fund them.
The bottom line…it’s very important to be clear what needs to be done, to always make the time, and do the people management well.
Your CPD etc.…
Four-hour March Workshops on Profit Improvement/Practical Business Development…
You will know that I’ve been vitally interested in assisting small-medium law firms improve their profitability for well over forty years.
Larger firms have big budgets for training and many specialised management/marketing people in-house…resources small firms (and many medium-size firms) simply do not have.
Large and mid-tier firms are actively looking for help in the areas of profit improvement and business development, and the time is certainly ripe for a serious refresher for many small-medium firms in Australia…
There are many issues facing firms in these challenging times and strong profitability is essential to provide the funding needed, not to mention the confidence, to invest in all appropriate aspects of the inevitable change.
* better business management
* getting resourcing right
* correct application of technology
* better marketing
* much more sophisticated pricing
* and most critically, better human resource management and revenue budgeting…
…to deliver profits that will reward owners properly and sustain practices well into the future.
To address the issues for you I’m again in March 2017 holding four-hour intensive workshops on Profit Improvement/Practical Business Development…in Brisbane on 1 March, Sydney 2 March and Melbourne 8 March. All sessions will be morning starts, and run from 9am to 1pm.
For guidance, the first 1.5 hours of each session will focus on Profit Improvement and the next 2.5 hours on Practical Business Development.
CPD points available… 4…in the category of Practice Management and Business Skills…category varies slightly in different jurisdictions.
For further information, pricing, registration, please email us at …
robkkms@bigpond.com
NB We also run these sessions in-house as required, anywhere in Australia and New Zealand…
Numbers… experience shows that these sessions in-house work best from 4 practitioners upwards…
Your Investment… tailored to each firm’s particular situation…please email robkkms@bigpond.com or phone Freecall 1800 621 270 (Australia only).
KMS Services…
Planning sessions at “Knowsley Park”, O’Connell, on the western fringe of the Blue Mountains…
Many small firms have enjoyed doing their strategic business planning under the guidance of a very experienced facilitator at “Knowsley Park”, some traveling from as far afield as New Zealand on multiple occasions.
We have three guest bedrooms…two double and one twin, and two guest bathrooms, each with separate vanity, toilet, and shower…Attendees have at their disposal floodlit championship tennis court and pool/spa, and free high-speed NBN Broadband for all communications.
Your all-inclusive fixed investment covers accommodation, all high-quality meals and refreshments, and your facilitator.
Pricing is guaranteed to be exceptional value compared to hiring conventional facilities.
We are located 2.5 hours’ drive West of Sydney, via good quality roads…or fly from Sydney with Regional Express, and we’ll transport you to and from Bathurst Airport.
Enquiries by email please… robkkms@bigpond.com
More??
If some of this content has been of interest and value, you will find other related content here…
Blog… http://lawfirmprofit.blogspot.com.au/
My LinkedIn posts…
KMSWebsite including archive of all earlier newsletters… www.lawfirmprofit.com
LinkedIn Discussion Group… Excellent Management In The Small Law Firm
