Knowing where to start scaling your law firm to increase profitability can be difficult. Should you focus on getting more clients? Or do you need to begin with investing in new growth technologies to keep your business afloat?

Finding the right answer to these questions and knowing where and when to focus your efforts is a powerful way to set your legal business apart from your competition. Take a look at the 5 tips to scale your law firm effectively and grow your profits.

1. Assess and Adjust Legal Technology Early On

If boosting profitability is the focus of your business, you should build a legal tech infrastructure as soon as you can after establishing your law firm. Technological tools – especially automation software – are some of the most cost-effective solutions for your business.

Relying on legal technology will help your firm run smoothly as it is going to streamline processes, and make it easier for you to carry out regular yet important administrative tasks such as billing and collecting invoices.

According to Clio’s 2021 Legal Trends Report, 85% of law firms use some form of software to manage their firm. Out of these, firms that report using tools twice as much as other firms witness 20% more year-over-year revenue growth.

As helpful as technology is, it can be easy to get lost in all the choices. You may want to jump in with every cool new software that you come across. However, you need to be strategic in your choices by using tools that are secure and address a specific issue that your firm deals with.

Automating What You Can

Many law firms still spend a sizable portion of their day on non-billable tasks. This not only adds to the ever-growing list of things a lawyer has to do but the consequent stress that often leads to lackluster service in other important aspects of the business.

Nowadays, using technology for automation is a necessity. Automate your administrative tasks, such as legal billing, expense and time tracking, and client management.

This will save time and free you up for billable work, ultimately raising your law firm’s profitability.

2. Map a Growth Strategy for Your Law Firm

As you get more clients and your firm begins to grow, you need to have systems in place that are able to grow with it.

A simple yet effective way to do that is by using cloud-based technology solutions.

Cloud computing gives you the ability to access computing resources, such as databases, software, storage, etc., over the internet (the cloud) without requiring premise-based software and hardware.

That means all your information will be stored outside your office in the cloud and you can access it remotely through your browser.

Thanks to their ease of use, your cloud-based software are very convenient to adopt as firms scale up and experience growth.

They also boost your firm's security and make way for mobility and flexibility within the organization as employees are able to work from the office, home, or anywhere where there is an internet connection. Thanks to this remote access, cloud-based tools also increase employee collaboration and teamwork, making way for a more productive work environment.

Here are some of the most basic features that cloud services will let you enjoy:

• Access important documents on the web anytime and anywhere

• Organization of files and folders

• Organization of client data

• Data encryption

• Multi-factor authentication (MFA)

• Version management of documents

• Integrated email management

• And a lot more!

3. Plan Quality and Consistency in Your Service

Your service is what your clients pay for and without prioritizing it, you cannot scale your law firm successfully. You can have the best marketing strategy but if your customer service is subpar, you can kiss your firm’s long-term profitability goodbye.

Client satisfaction is the most crucial metric in achieving sustainable growth for your firm. This is especially true if you have repeat business, in which case you are making money without spending any additional money to acquire new clients.

A few ways to better serve your clients is by:

• Replying to your client within 24 hours of them contacting you, regardless of the method of contact.

• Walking your new customers through the basics of the services you provide. This prevents any future miscommunication from occurring.

• Listening to and understanding what the customer wishes to achieve. Take notes whenever you hear a client speaking about their concerns and issues. 

4. Operate Transparently and Create Accountability

To increase your law firm’s profitability, you need to set strategic goals that are SMART. Your firm should then work on those goals transparently and in a way that creates equal accountability.

You can’t simply assume that your efforts are working. Remember, what gets measured is what gets managed. Therefore, you should track, evaluate, and adjust your business strategies accordingly.

To create accountability, you should focus on measuring important KPIs. A few examples of the KPIs your firm can keep track of are:

• Collection rate – the amount collected divided by the amount invoiced.

• Realization rate – the number of billable hours invoiced divided by the number of billable hours worked.

• Utilization rate – the number of billable hours worked divided by the number of hours in a workday.

5. Build a Network of Influencers

To scale your firm, you need to expand your network. And what better way to do that than with the help of your own clients?

If you are going to be a successful business, you need people coming back to you. Not only that, but you should ideally have your existing clients recommend you to people they know. This can be done by building valuable relationships that then lead to new opportunities and referral sources.

Here, you should:

• Focus on your relationship with your existing clients before the professional benefits

• Be a giver and go above and beyond in helping your clients

Additionally, you should also keep in touch with your past satisfied customers so that you stay top of mind with them. If they don’t forget about you, they are more likely to refer you to their friends and family. Staying in touch with past clients can be done successfully through social media, targeted communications, and blogging.

Furthermore, you should be proactive in your communication and responses with your existing clients throughout the span of their legal cases. You have a great opportunity to build rapport by providing excellent service and turn your existing client into one that not only keeps coming back to you but also brings more people with them.