You help your clients plan for the unexpected, but have you done the same for your law firm? To ensure that your law firm stays healthy and profitable during a disruptive event (whether it’s a recession, unexpected health event, or natural disaster), attorneys should make sure they have a well thought out contingency plan for their business.
Failing to prepare can result in hasty, poor decisions and lost revenue. Instead of waiting for an unanticipated event or for your business to show signs of distress, attorneys should work on creating a plan now. Sometimes simply improving your law firm operations can provide the protection it needs during unexpected events or uncertain economic times down the road.
Below are four key considerations to improve (and protect) your law firm:
1. Improve productivity
Look for ways to utilize technology to improve processes and workflows. Doing so will increase output while decreasing input (i.e. time and effort). Audit your day: Is what you’re doing the best use of your time? Are you spending hours drafting documents from scratch or editing forms from a database? Look at whether your practice would benefit from using an automated document drafting system like Wealth Docx® for estate planning and Business Docx® for business planning.
2. Create a sensible budget
Getting a handle on your law firm’s budget is one of the most important ways to ensure your law firm’s success during the good times and not-so-good times. What percentage of your revenue are you spending on certain expenses such as payroll, rent, insurance, technology, memberships/subscriptions, marketing, and continuing education/professional development? Consider whether it would be possible to re-negotiate or terminate leases for nonessential office equipment, rental spaces, or meeting areas. Before you slash expenses, consider whether they actually help you get more business—networking and marketing expenses are investments in your business development! But keep track of these expenses throughout the year to make sure you are getting a return on your investment.
3. Automate your billing
Maintaining a healthy cash flow is vital to the survival of any business during an unexpected economic downturn or other disruptive events. One way to ensure that money continues to come in is by modernizing your billing practices. There are many case management systems with integrated billing capabilities, making it easier than ever to generate and send invoices. Consider setting up a system where your clients can pay their invoices online and make sure your law firm accepts credit cards. You can also outsource your billing, or hire a part-time bookkeeper to help you stay on top of billing and receivables.
4. Consider hiring
Once you have audited your workflow and added sensible systems and technology to make your law practice more efficient, you may discover another investment in your law firm is to hire help. This may seem oxymoronic—especially when most of the goals surrounding your contingency plan are aimed at scrutinizing expenses and maintaining positive cash flow. However, staff members can become profit centers by performing work that can be delegated to less experienced associates or non-lawyers (paralegals or assistants). This might free up your time to generate new business or allow you to focus on more advanced revenue generating work.
When creating your contingency plan, make sure to loop in any other players (board of directors, partners, managers, etc.) whose support you may need in executing your plan when the time comes. With their buy-in early in the process, your plan can be carried out efficiently and successfully, and with fewer hurdles and less resistance.
If you’re looking for ways to streamline your workflow processes and outsource some of your firm’s marketing efforts, then consider becoming a WealthCounsel member. With access to Practice Development support and intelligently, automated drafting software, WealthCounsel can help your law firm operate as efficiently as possible. Learn more about membership benefits by contacting us today.