At first glance your law practice might not seem to have much in common with Silicon Valley companies like Facebook and Google. However, in today’s rapidly evolving world, the ability to innovate and adapt is crucial for any business…including large legal firms and upstart solo practitioners. Here are seven lessons you can learn from successful tech startups in order to grow your business and improve your practice’s bottom line:
1. Understand the key metrics shaping your business
As clients increasingly push for lower legal costs, it’s all the more critical to understand how metrics like realization rates (the difference between recorded time and the percentage of that time paid by clients) are impacting your short- and long-term profitability. According to Georgetown Law’s 2014 Report on the State of the Legal Market, the average overall realization rate in 2013 was 83.49%, down 8% from 2007, and well below the ideal target of 95%.
You should track metrics like billing, collection, and overall realization rates in order to see how you are trending over time, as well as compare your data with other lawyers in your firm or even with other firms. You can find more details about how to measure and apply metrics to your business in the paper “Realization Rates in Law Firms.”
2. Differentiate: Don’t commoditize
To survive in the era of LegalZoom and RocketLawyer, you need to identify market opportunities beyond commoditized services. Think about the unique value you can bring to your clients by positioning yourself as a trusted advisor, instead of a billing agent.
If you do not bring added value to the table by building relationships and guiding your clients, you risk losing business to someone who does or being undercut by the low prices of an online service. Richard Susskind’s book, Tomorrow’s Lawyers, is a must-read for anyone interested in going beyond the commoditized offerings of other firms and legal services.
3. Focus on the customer experience
Tech companies like Apple understand the difference between delivering an experience and selling a product. Lawyers need to think about the overall customer experience from intake to billing. According to Matt Dixon, the author of “The End of Solution Sales”, in an interview with the Harvard Business Review, numbers show that a customer experience with a trusted advisor leads to more repeat business, referrals, and revenue.
4. Build out a team
Too many lawyers go the “pure solo” route, handling anything from client intake to billing to answering the phone themselves. However, successful startup founders have learned that no one person can build a successful business. Having the right team in place can yield massive productivity gains.
Audit your time on a daily basis and ask yourself: Is each thing I’m doing the best use of my time? What tasks can be delegated?
5. Culture matters
We have all heard the stories of startups going to extreme lengths to shape company culture and keep employees happy: onsite massage therapists and yoga classes, along with free dry cleaning, hair cuts and oil changes. However, culture is more than just the perks; it’s what your company stands for, your missions and beliefs. When employees embrace a firm’s culture, they put their best work forward. A strong company culture increases employee loyalty, encourages teamwork, improves productivity, and leads to better customer relations.
6. Leverage technology
Clients today don’t have any patience for firms that insist on dragging out work by using outdated tools. They want real-time updates via client portals, after-hours services, and instant delivery of completed work.
The right technology platform, whether it’s for billing or document automation, can be a strategic partner to help you scale and operate more efficiently. Let technology handle the busy work, so you can focus your time on your client’s needs that require individual attention and are worthy of your law degree.
7. Think about the big picture
It is easy to get bogged down in the day-to-day grind…the next hearing, brief, or meeting. However, without high-level thinking, your firm can stagnate. Reflect on where your firm is now and where you want it to be. Point the ship in that direction and lean on your technology, team, and company culture to take you there. Don’t be afraid to think big and experiment.
Attendees at the upcoming Clio Cloud Conference can learn more about the future of law and the rapidly evolving technology landscape, including a keynote presentation from Richard Susskind, author of “Tomorrow’s Lawyers.” Save $100 when you register with this exclusive discount code for Lawyerist readers: Lawyerist-CCC14.