Revenue is one of the imperative factors that signify the success of a business. Business across the globe strive hard to increase their profit and sales. Increasing revenue for a law firm can be a daunting task. many law firms have an alarming concern about their growth and profitability. Due to the increased competing among the law firms the viability of the firms is uncertain. Being in a legal industry the business bottom line of the law firms can be thriving by adopting efficient business tactics.
To stay ahead of the curve, firms adopt certain marketing methods and processes to gain the desired revenue. However, not every firm accomplish its goals and objectives to increase its revenue. Few firms keep relying on traditional methodologies and some just copy other firms marketing practices blindly. As a result, they never win the game. This is because they don’t have a clear strategy to propel their business goals. Although firms come up with new strategies to fuel their sales funnel, not every effort works well. This article will outline the ten important factors that negatively affect the revenue of a law firm.
1. Lack of strategy
Strategy comes first in the list. A strategy is an impeccable factor that greatly impacts any business. Undefined strategy can hamper a business and its objectives. Many law firms don’t focus on building a core strategy for their business. Instead, they just go with marketing that doesn’t yield results. A sound strategy should be the grounds for marketing efforts to perceive a better ROI( Return on Investment). Lack of strategy is a significant aspect that impedes the revenue as the business is not inline with the purpose of the mission. An indefinite strategy is definitely a pain point for business revenue and should be addressed immediately.
2. Wrong marketing
Marketing us yet another incredible factor for the success of a law firm. Many lawyers choose on ad hoc marketing plans or never concentrate to market their firm. Some are not ready to invest money on marketing. Others adopt wrong marketing methods that don’t suit their law firm or merge with their business objectives. With the growth of legal firms and due to the hyper-competitive markets, lawyers tend to follow wrong marketing processes or dislike the idea of old marketing. Others just stick on the old traditional marketing which will never work for the digital customers living in the modern era.
3. Being too sales-oriented
This is another big blunder made by lawyers. To sustain in the market, law firms frantically focus on sales which would impact their revenue. Here the law firms don’t have a profound strategy or a peculiar marketing process, instead, they just want clients. They never anticipate the needs of the clients and don’t frame plans to prosper. Focusing on sales only can cause the law firm to divert from the genuine path of legal service to people. This may lead to loss of customer trust and satisfaction which will negatively impact the revenue.
4. Not investing in Digital Marketing
Marketing changes day by day. What works today may not work tomorrow. Due to the vast internet penetration, there are people who are always on the internet and use mobile to search for a product and services. People have become more digital-savvy and law firms should invest in online marketing to get customers. Unfortunately, many lawyers do not understand the potential of digital marketing and simply neglect it. They are not ready to spend money on digital marketing. This is a great mistake made by lawyers and evading digital customers could seriously hamper the revenue. You can consult internet marketing company or digital marketing consultants to improve your digital market presence.
5. Not targeting the right customer
Targeting the right audience is essential to increase sales and revenue. Lawyers have a marketing plan and just put their efforts by targeting the wrong customers. If you are a divorce lawyer, you should definitely try to target married people and follow people by demographics. Your marketing campaigns should be made for the right audience otherwise all the efforts world be in vain and not generating enough revenue.
6. Irregularity in the type of cases
Often there is an imbalance in the type of cases handled by the lawyers. Improper contingency and non-contingency cases can hinder the cash flow of a law firm. Irregularities in the cases handled by the lawyer’s cause confusion and finally they cash flow stagnates. Caseload should be reviewed properly by the lawyers to avoid both time and revenue loss.
7. Unclear Fee Agreements
This is yet another important factor that hinders revenue of a law firm. Some lawyers are improper with their fee agreements and opt for a contingent fee agreement. This contingent fee agreement could be frustrating for both the client and the lawyer. This is because one of them gets a bad deal. Therefore it is essential to choose the right fee agreements with proper methods for fee payment governing the firm’s policy.
8. Inadequate Firm Management
Many law firms lack sound management that would take care of day to day activities and administration. Overseeing the firm’s finances and operation is a must and a dedicated team should monitor the law firm to check on the lackings. Management of the firm should be able to find and recover the pitfalls that adversely affect firm revenue and increase income. Proper management of the law firm can positively create an impact to gain the desired revenue.
9. No revenue control
Revenue control is needed to eliminate waste and unnecessary expenses. Many lawyers do not have a cost reduction strategy to keep their revenue in check. The expense structure should be made based on the budget plan, this improves the law firms profitability. Taking no steps for financial performance and not controlling the revenue will negatively affect the firm’s bottom line.
10. Not using Social Media
Not having the right social media channels for your customers can hurt your business. Lack of social media presence can materially affect a law firm. Using social platforms can increase brand awareness and visibility. It is a diligent idea to connect with your clients, where they love to hang on especially Facebook, Twitter, LinkedIn and Instagram.