Improve the Profitability of a Small Legal Practice
If you wanted to lift profit per principal at your legal practice by $100,000 p.a. what might you do?
Let me digress for a minute.
When I started doing profit improvement work a number of years ago, naturally I attended a lot of seminars to see what others had to say about the topic.
A comment by celebrated business development specialist, Paul Dunn ( then of Results Accountants Systems) stuck in my mind.
“If you are working with a client to improve profits, they will expect to see some early results. The quickest and easiest way to achieve that, is to increase price. “
A number of years later, I can report that Paul was exactly right.
The standard comment that clients make when I discuss this topic, is that every client will leave.
Note, they almost never say that some clients may leave, but almost always they say that every client will leave.
In my experience I have never found this to be the case.
Of course putting up prices, like anything, is all about building an effective strategy and then implementing it.
I looked through my past articles and found two strategies that have certainly worked for small legal practices.
Link to: Become an expert strategy” article
Link to : “Fixed fee strategy” article
These are just two strategies and there are many more.
Of course in some cases, it is even simpler than that.
Some practices are just way too cheap and in that case it is just a matter of adjusting the price accordingly.
When thinking about price, let me quote from the seminar presentations of Colin Ritchie ( me):
“Whatever you charge, your client will think you are expensive… so don’t disappoint them!!”
I find this to really be the case.
Think of your interactions with other professionals.
Take a dentist.
Say you had a filling and the dentist charged you $200 . No doubt you would think to yourself, “Gee these dentists are expensive”
Say instead of $200, they had charged you $220, would you have said any thing different?
The $20 difference in price made little difference to you, but for a dentist turning over $500,000 p.a.that meant they earnt another $50,000 pa.
You see what I mean?
Little changes can give big results and they can give big results for you too.
This is just one profit improvement strategy.
Think if you did several profit improvement strategies together.
Possibly at the start of this article you felt that a $100,000 lift in profits was a big ask.
Do you still think that?
So what are you going to do to make it happen at your firm?
Want to read more?
– You may be interested in these articles: