Before we can make an impact on firm growth and bring about stable practice management, we have learned you must address critical deficiencies in law firms. We call this the Vitamin C deficiency; i.e. Cash. Cases, Clients and Control.
Cash (or operating cash) or lack thereof is typically known as feast or famine. Time and time again we see that law firms don’t know the income needed because they don’t know what their operating costs are. When we step into a firm, particularly one that is on the edge, we want the financials. We immediately create a budget based on past performance and we create a budget based on bare bones operating needs so the firm can loosen up the monies.
Cases feed the budget. We next have all cases within the firm audited to determine active, inactive, or closed. We categorize by type and by fee (fixed or billing). We review all billing, collectibles, and past dues. We shorten time frames on billing and/or getting contingency fee or fixed fee work out quickly. We concentrate on generation of fees, billing and collections. We then work with the law firm owner and create projections of income from in house cases to see if the budget can be met. We do this month by month. Every attorney is on the hook to do this.
Clients are different than cases. Clients can be the backbone of immediate sources of cases simply by creating some simple marketing strategies that are virtually free of cost but get the word out to refer cases. If you have been doing a good job you get immediate response. We also create an immediate implementation of Client Relationship Marketing. The firm has to have a buy in but it is a quick way of getting new cases driven to the firm.
Control is crucial in bringing yourself out of a down swing. The old adage If you say the way you are you will always be the way you are is absolutely true in curing deficiencies within the firm. You cannot hide one’s head in the sand and win. The cold hard truth is better than a misperception of the true condition of the firm. This is the first step to being a stable law firm.
Get healthy. Cure your Vitamin C deficiencies. Allow yourself to make a plan to stabilize and growth. And then you can be a healthy, wealthy and wise law firm owner.
Coming June 1st, Dave Favor’s book From Planning to Profitability, Creating a Strategic Plan for Building a For Profit Law Firm. Contact firstname.lastname@example.org if you wish to be notified when the book is available.