We are a five attorney personal injury plaintiff firm in the central Missouri. In the last few years we have gone through tort reform, increase competition from other law firms doing extensive advertising, and now trying to weather the recession. From a profitability standpoint - we are holding our own. However, we are concerned about the future. What are your thoughts for firm such as ours?
We are hearing this question quite often and have provided some thoughts in past blogs and articles.
The majority of our PI law firm clients are advising that they are having to work much harder at getting clients and investing more heavily in marketing - both time and money. PI firms were feeling the most of these challenges before the recession. However, the recession may accelerate the pace with which law firms reevaluate existing processes and consider new business models. PI firms may want to begin by:
1. Develop a firm strategic plan and individual attorney marketing plans which include aggressive network/contact plans for past clients, attorney referral sources (non PI attorneys), attorney referral sources (other PI attorneys), and other referral sources.
2. Evaluate the feasibility of adding an additional practice segment to reduce the level of risk in the case portfolio and reduce cash flow variability.
3. Reduce case portfolio risk and improve case profitability by implementing a case intake system whereby all new cases over a specified level of projected case value are reviewed and approved by the partnership (or a client intake committee) in order for the case to be accepted by the firm. In other words - don't let one attorney expose the entire firm to either excessive levels of case risk or case investment (time and client cost advances) without other partners having a say on the matter.
4. Analyze the profitability and return on each case and ascertain what can be done differently on future cases. Metrics might include effective rate, return on LOADSTAR, dollar case profit after allocation of all appropriate firm overhead, etc.
5. Review and measure present marketing investments (time and money) and determine what is working and what is not. Reallocate resources if appropriate.
6. Insure that you are using an appropriate mix of marketing tools in your program.
7. Consider increasing marketing investments (time and money). Suggest a marketing budget be developed in the range of 8-12 percent of fee revenue. Also suggest that non case production (non-billable) time be budgeted for business development and marketing activities as well.
8. Look into defensive advertising.
9. Insure that you have a first-class website that goes deep and demonstrates expertise.
10. Maintain a yellow page presence - but gradually reduce investment and shift into website and other online vehicles.
11. Find ways to enhance the client's experience and deliver exceptional client service.
12. Use exceptional client service and bedside manner as a primary means of differentiating you from your competitors. Under Promise - Over Deliver in everything you do for the client.
13. Make your office client friendly.
14. Use end-of-case satisfaction surveys to measure the client's experience with the firm and to improve future service.
Click here for our blog on law firm strategy http://blog.olmsteadassoc.com/olmstead_associates_law_p/strategy/
John W. Olmstead, MBA, Ph.D, CMC