Law Firms: Don’t Cut Costs, Increase Revenue Instead

Originally published by Cordell Parvin.

In 2015, after seven years of the “new normal” for law firms is your firm still reducing expenses to maintain “profits per partner?”

I remember the law firm recession in 2001. The leaders of my old firm spent hours in meetings focusing on where we could cut costs. Then, they took bold action:

• They cut our client development/ marketing budget by more than half,
• They cut our development and training budget, and
• They laid off over 30 lawyers and more of our staff.

I disagreed with that approach then, and I don’t think it makes sense now. The simple truth is that there is only a small percentage of costs that can be cut, and unfortunately the very areas (marketing and training/development) that are most likely to be cut are those that can help increase revenue.

Suppose your firm focused on how to increase revenue rather than how to cut costs. I believe that would be a more successful exercise.

How would you do it? You might use a couple of the exercises I use with my coaching groups.

Gather your Top 10, 20 or 25 business producers for a summit. These are the lawyers in your firm with a proven track record.

Divide them into three groups. Have the first group brainstorm ideas that will increase revenue during the last three months of this year and in 2016.

Have the second group brainstorm ideas that will increase revenue from 2016-2018.

Have the third group brainstorm ideas that will increase revenue long term (2019 and beyond). I think you will be surprised by some of the creative ideas your best producers generate.

Then, develop 25 actions to take to increase revenue.Those might include:

• Identify the firm’s top 50 clients and have the lawyer responsible for the client, visit them.
• Have all the firm’s partners prepare a business plan with goals and a minimum of 240 non-billable hours devoted to client development.
• Create industry teams.
• Have a group study what is going on in the world and how that is creating and will create new legal work.

What you come up with is less important than the brainstorming that develops the ideas.

The post Law Firms: Don’t Cut Costs, Increase Revenue Instead appeared first on Cordell Parvin Blog.

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