It is easy to get pulled into the weeds of your day-to-day and lose sight of the strategic direction of your law firm. You probably started a firm because you love law and because you envisioned a lifestyle of more freedom, impact, and control over your financial destiny.
That is why in today’s article we are going to cover the only three things you can do to increase your law firm revenue. They will allow you to strategically allocate your resources toward the activities that accelerate growth.
Way #1: Increase your number of clients
Most people think about attracting clients as the only way to grow your law firm. The reality is that it is only of three strategies.
To increase your number of clients, you want to engage in activities that attract them, such as networking. While gaining new clients is a necessity for any business, the reality is that scaling using only this strategy rapidly increases expenses when hiring new associates and support staff.
That is when strategy #2 comes in.
Way #2: Increase your pricing
Imagine your business revenue like a simple calculation:
Number of clients x Pricing = Revenue
A simple 5% increase in pricing can create a surge in cash, which is, all things being equal, 100% profit. That is why maintaining a high-quality service and premium position is paramount. It sets your pricing power, which impacts your revenue greatly.
For example, if a lawyer is able to go from $150 an hour to $250, that $100 increase goes directly to profits. Here at Amata, we provide access to AM 250-level offices, so you can stand out and position yourself as a high-end law firm.
If increasing prices is so good, why isn’t everyone doing it? Because prices excessively above the market standard can negatively impact your ability to attract new clients and retain them.
Way #3: Retain clients for longer
If you can a) Retain clients for longer, b) Have them invest in your services more frequently, or c) both, you can also increase your law firm revenue. Of course, this is said on the basis that we always want to provide tangible value to our clients and solve real problems for them.
Like most service-based industries, law firms are in the recurring revenue business. Acquiring new clients is doable but costly, so maintaining the ones that you have and deepening the relationship with them is a more profitable way to scale your law firm.
Here at Amata, we see our clients as partners. We constantly ask ourselves how we can add value to your life, solve new and bigger problems, and be at the forefront of innovation. This is what allows us to maintain such strong client relationships. Most of our clients know our staff by name and come to the office just as if they were working from home.
It is also what inspired our new service: Fractional Support.
In the same way, seeing your clients as relationships that you can strengthen and expand places your focus on being of most value to them. It is that relentless obsession with your ideal clients and solving problems for them that allows you to:
- Attract new clients
- Increase your prices
- Retain clients longer
Thus creating predictable revenue growth and a reputation you can be proud of.