How to Start a Law Firm: Goals and Strategy
12 February 2021
First, what do you want out of your law practice?
Too many lawyers decide that they are good lawyers and they’d like to be their own boss – so why not just practice law on their own?
We mean, look at these stats from Clio’s Legal Trends Report:
Lawyers spend 2.3 hours per day (that’s 29% of an 8-hour workday) on billable tasks.
Only 40% of firms that track time have hourly billing targets.
Only 50% of legal professionals can bill a case based on a set budget.
Lawyers spend 48% of their time on administrative tasks.
91% of firms can’t calculate a return on advertising investments.
94% of law firms don’t know how much it costs them to acquire a new client.
Startling, but not insurmountable.
You have the opportunity to build something great! A business that helps you fulfill your personal goals, provides exceptional client experiences and is an amazing place to work. But, that means breaking the mold. Thinking differently and being intentional with your business by deciding on the front end what you want to create.
Here’s what to think about.
Step #1: Personal Goals
What kind of life would you like to live?
Your business should exist to serve you and allow you to fulfill your personal vision and your career goals. Our Labster, Megan, knew she wanted to travel with her family. And we mean real trips — where she could explore a new country for four weeks and her practice wouldn’t fall apart while she was gone. To do this, her business plan emphasized great support staff and clear systems the staff could follow in her absence. It worked: She was able to take a month-long European vacation while her firm thrived at home.
So, you’ll need to dream a little about the life you’d like to create for yourself and your family. Some questions you might ask yourself:
What’s important to me? My family, friends, travel, hobbies, passions?
How many days off (and we mean true days off – not working while vacationing) do I want a year?
When do I want to retire?
What do I need time for in my life to be physically and mentally healthy?
How much money would I need to make to not stress?
What does success look like?
In the law world, the mantra seems to be to focus on work-until-you-drop. A couple of us actually completed billable work from the delivery room when we – or our spouses – were giving birth. You’re probably chuckling at that part because you’ve done the same or similar. It doesn’t have to be that way. When you start a new firm, you have the chance to make your personal life just as important as your work life.
Step #2: Business Vision
What do you want to create with your business?
You’ll hear people say that your vision needs to be a snappy one-liner you can throw out during networking parties. We don’t agree. Yes, your vision should be clear, measurable, and easy to talk about, but condensing your dreams and plans into one sentence can be confining. Use this time to write as much as you need. This is the first step to putting the foundation down for your law firm key performance indicators.
To complete your firm strategy, you’ll be able to check the box next to some of these concepts:
Your mission and values are clear and documented.
You have a documented business model built around solving client problems in line with their expectations at an appropriate price.
You understand trends that affect your firm and clients and you incorporate what you know into your strategy.
You’re working on projects and short-term goals connected to your long-term goals for your firm.
You use a set of key performance indicators (KPIs) to monitor your firm’s health and help you predict your future success. You review and update your KPIs regularly.
You occasionally conduct a competitive analysis and adjust your strategy to win in your market.
You’ve surrounded yourself with a supportive peer community or expert coach.
Consider, too, that you’re not going to figure this all out in one sitting. Take your time. Let your vision evolve over days, weeks, or even months.
As you start dreaming about your firm’s vision, keep in mind that your firm — and all law firms — should offer client-focused services, stay current with technology, use profit-oriented business models, and (hopefully) help our profession move the needle on access to justice and inclusion. We believe that these are the key elements to building future-forward firms.
Tip: If you want to know how your firm will measure up, check out our Small Firm Scorecard.
How to Build a Law Firm: Marketing & Client-Centered Services
Now that you have a vision for your personal life and your new business, it’s time to start putting the pieces in place. You’ll need to decide what kind of practice you’d like to build and how you’ll best serve your clients.
You’ll need a solid strategy to attract the right clients to your firm. Then, you’ll want to make sure you have systems and procedures and the right technology in place to consistently deliver a superior client experience.
Step #3: Client-Centered Services
Most lawyers would proudly tell you that their entire firm is focused on their clients. While in one sense this is true – lawyers do represent their clients and take care of their legal needs – that’s not what we mean by client-centered services.
It is time to reframe your law firm from your client’s perspective. What would it look like to create a client experience that shows you care about your clients, that you understand who they are and what they need, and that you are the right person to take care of them?
Building a firm focused on your client might require you:
Design your prices, rates, and fees based on the goals and needs of your clients. This means billing by the hour might not be your friend.
Put systems in place to make sure you keep client diversity, access, and inclusion in mind.
Communicate with clients using methods they prefer while following your data security needs.
Draft client communications and legal documents in a reader-centric way, with emphasis on plain language and readability.
Create a seamless intake, onboarding, and delivery experience for your clients that reflects the kind of client experience they want.
Structure a process for capturing client feedback to understand their level of satisfaction and you actively work to improve.
Client expectations are evolving fast. Small and solo law firm owners should reimagine and laser-focus on client service in order to deliver.
Step #4: Client Acquisition
The days of being a great lawyer and relying on your reputation for greatness to bring in all the clients you need are over. In a similar vein, many lawyers seem to think that referrals from other lawyers and clients are the only marketing sources they need.
In today’s world, clients are changing how they find lawyers and while referrals will always be a source of new business, this is only the start. We encourage attorneys to take a broader view and take advantage of the many avenues potential clients are using to find help solving their problems.
First, let’s get one thing clear: Marketing and sales aren’t dirty words. There are some basic marketing and sales strategies you can put in place that will help you effectively use your time and money to attract your ideal clients.
One more caveat: Your marketing activities should be just that – strategic! Too many lawyers run around doing things in the name of marketing without really understanding their costs or whether they are working. Similarly, these lawyers hear a colleague say they are killing it on LinkedIn – and then they run out and start doing things with a plan or real understanding of how that tool works.
Your marketing should be part of a larger, strategic plan. Sure, there is room to experiment to see what works, but even then it should be measured on the front and back end so you know if it is actually working.
The first step in any marketing strategy is asking yourself what an ideal client looks like, where those ideal clients currently look for solutions, and what kinds of messages resonate with them. With these questions answered, you can start putting together a strategy that is focused and easily adjusted based on measured results you can compare against your law firm key performance indicators.
When you’re done, here’s what success looks like:
Your firm has a glowing reputation in your community. People who refer you talk about how easy it is to work with you.
You have a written marketing plan and you use objective data to determine the success of your marketing activities.
You track your marketing efforts. You know how your marketing is reaching potential clients, existing clients, former clients, and referral sources
Your firm has a modern, mobile-responsive website that’s focused on communicating your brand message.
You use a variety of online and offline marketing activities to communicate your value in a way that resonates with your target client market, converting them into leads.
You have a system for converting potential clients into paying clients.
Branding and developing your marketing strategy takes time but is critical for the growth of your new law firm. Investigate all potential marketing avenues for your firm and then commit to implementing those that work best based on your firm’s overarching goals.
Step #5: Systems and Procedures
Law firms can be complex and fast-moving organizations. In light of this, you should be focused on building systems to deliver consistent, high-quality, and error-free legal work to your clients. Unfortunately, for many firms, their systems and procedures live in the attorneys’ heads.
Lawyers building client-centered firms recognize the importance of documented systems and procedures. You’ll optimize your work, create a better client experience, reduce mistakes, delegate work easier, better manage your team, and build a firm that is easier to scale and eventually sell. Forward-thinking lawyers get ahead of their office management needs by focusing on a few important principles:
Your firm follows clear, documented systems and procedures that reflect your core business model.
Your documented procedures include both administrative and client service workflows and you have a system for regularly reviewing these workflows to find opportunities for automation and improvement.
You follow personal productivity and time management practices.
Office management sounds stuffy, but it’s so important to get right in the beginning. Dive deeper into key areas to streamline your office management and set your firm up for success.
Step #6: Technology
To be a good lawyer in the twenty-first century , you need basic tech competency.
But just having technology isn’t the end goal. You want tools that allow you to solve problems and be a better lawyer. We have a saying here: Buy technology based on your workflows, instead of creating workflows based on your tech. That means sketching your ideal systems and processes and then buying the right software to support those systems.
As a new firm, create goals and determine the best way for your technology to support those goals. At a minimum, this also means:
Work hard to be technologically competent in general.
Conduct training often in your technology systems and tools to remain up-to-date with changes.
Run a paperless law firm to scan and digitally file all paperwork.
Run a mobile law firm to work productively and securely from outside of your office.
Conduct data security threat assessments to have an up-to-date threat model, develop a written security policy, and follow good data security practices.
Possess technology systems that reflect your firm’s security needs and those of your clients.
For more information on how Advantage365 can help your law firm, please call us on 0121 212 6580 or request a free call-back using our contact form https://www.advantage365.co.uk/contact to get free initial advice. You can also access a wealth of free business information for lawyers by visiting our digital Resource Centre https://www.advantageconsulting.co.uk/resources and view our free Business Factsheets https://www.advantageconsulting.co.uk/factsheets .
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