How To Grow Your Law Practice From Solo To Small Firm
If you’ve begun a successful solo law practice, congratulations! You’ve already achieved a significant milestone in your career. You’re probably also discovering that no matter how many hours you put in and how organized you are, there is a hard limit to how many clients you can effectively handle, which, in turn, caps your income. Hiring more people costs money, so it takes smart analysis of your business and prospects, and careful planning to make a cost-effective jump from solo to small firm. It also takes a shift in your fundamental approach to tackling your workflow.
Begin As You Mean To Go On
When you begin planning to build a small law firm from a solo practice, you need a detailed plan for the run-up and first year, specific goals for the 5-year mark, and more general goals for your 10-year mark, which you can fine-tune future years’ plans to meet. It’s critical to start out with plans and goals that extend well into the future, to inform your decisions in the here and now, because making dramatic course corrections as you go forward is costly, inefficient, and will ultimately pull your focus and resources away from genuine growth.
1. Analyze Everything
Look over the past year’s work and billables. Make a list of how many clients you serve on a monthly average. Account for your time spent on administrative and business development work, and break those hours down as much as possible by task. As a solo practitioner, you’ve probably been doing everything from answering the phones to intake, forms and filings, scheduling, marketing, proposals and pitches. Drill down until you have a clear picture of what percentage of your time you spend on your various tasks.
2. Set Realistic Metrics
After you’ve got a solid analysis of your own work, you’re in a better position to set realistic metrics for the people you’ll bring in to your new firm, and you’ll be able to determine which functions you should get off your own plate first, in order to maximize your own billable time. If, for example, you learn from your analysis that you can effectively service 10 clients a month, and 40 percent of your time is billable, you can see that you actually have a lot more time you could spend on billable work, if you had more support for the overhead tasks. This example also shows that, with appropriate admin support, you could expect an associate attorney to be 80 percent billable and service 20 clients a month.
3. Do What You Do Best
Make an honest appraisal of those places where you’ve been doing the work “free,” recognizing the opportunity cost of that “free” labor, then shifting the tasks that prevent you from maintaining optimum billability onto someone else. This goes beyond simply hiring out administrative tasks. If you’re a rock-star rain-maker, you should absolutely stay on the business development tasks yourself. If you hate writing proposals and taking meetings with prospects, you’re not going to be efficient at those things, even if you get good results in the end. Hire someone else to do the overhead work you don’t like or want to do, and only keep non-billable tasks that you love doing, or where your effectiveness can’t be matched by an employee. For many solo practitioners, this shift from doing everything to making efficiency-based decisions on how to spend their time is a very difficult one, and it’s a common stumbling block.
4. Find Funding
There is no way around the fact that you’re going to need some capital to make this transition. You’ll find many options ranging from investments to loans or, possibly, grants, but you can take steps to reduce the amount of capital you’ll have to seek from outside sources by planning carefully. Consider starting with adding independent contractors in the roles of legal associates, paralegals, marketing and business development. This allows you to get the help you need to increase your firm’s income and building an environment where everyone is working as lean as possible on specialized tasks. As your cash flow grows, you’ll be able to fund office space, furniture, and equipment, and bring those contractors on as employees.
5. Automate Processes – Another streamlining option that can reduce administrative time is by using a software suite that automates many repetitive and time-consuming tasks. The EasySoft suite provides an efficient interface for your administrative staff to input information once, produce all the required forms and filing paperwork, track deadlines, benchmarks and compliance requirements. Free up your own time to do your most profitable work, and spend less on administrative support by cutting the time needed to manage the details.
In conclusion, growing your law practice is a big step for your business and future decisions that you make are critical for your growth. By implementing these approaches and developing a well detail plan your practice will be well on its way to growing from a solo to small firm.