How do you gauge the health of your law firm? While there are many ways to measure the health of a business, it is hard to call yourself successful if you can’t keep the lights on.
If you are just starting out, use your break-even point to set your revenue targets. Job number one is just keeping your firm going. Once you have exceeded your revenue targets enough to save up a cushion of a few months, come back and bump your income goal to set new revenue targets.
If your firm is financially healthy, you will be hitting your goals more often than not.
What To Do with Your Revenue Targets
Save them or write them down, first of all. Then use your revenue targets as motivation. At the beginning of each day, ask yourself what you can do to help bring in your daily goal before you leave the office.
Do not be shortsighted, though. Always be thinking about what you can do to hit that revenue target regularly. Cutting your fee to sign up a new client isn’t worth it just to hit your revenue target. Look beyond the next client for long-lasting opportunities to increase your revenue.
For example, if you allowed people to sign up and pay for a consultation right from your website, would you get more paid consultations? Is there a relationship you could strengthen (by having coffee, sending a note, or inviting someone to join a bar committee) that could result in referrals? Is there a service you can unbundle that would get more clients in the door? Is there a document you could responsibly offer for free (or in exchange for an email address) that would bring more potential clients to your website?
Consider telling your staff about your revenue targets and making a deal with them: if the firm exceeds its weekly goal, you will give them a bonus. If it regularly exceeds its goal, you will give them a raise (and then set a new target). You are all in this together, after all.
Do Regular Checkups
Check up on your revenue targets often enough to gauge the health of your firm. If you can’t hit them regularly, you probably need to try something different. If you are hitting them regularly, good for you! Use that momentum to grow (or just use the profits to go on vacation).
Featured image: “A value increase for this statistical data report.” from Shutterstock.