As plaintiff law firm models have evolved over the past forty years it is apparent that leading law firms in most recent years are now combining the Practice of Law with the Business of Law. New advertising methods, technology, data, education, law firm financing and the placement of business talent within plaintiff law firms are now changing the dynamics of how law firms operate ultimately benefiting the consumers who have been harmed.
Below find just few basic and savvy business practices witnessed by American Law Firm Capital now being implemented nationally by many leading plaintiff law firms.
While only 33% of most entrepreneurs have a written business plan, historically very few plaintiff law firms have this basic written roadmap, let alone implemented, frequently revisited and hold themselves and staff accountable to accomplishing the plan. Of companies with written business plans statistics show that those with a plan get a loan or investment capital 2x that of a company without a plan and growth of the company with a plan is typically 50% greater.
Certainly, the practice of law remains the core of the legal model however at the end of the day a clear vision, goals and well thought out plan will be critical for the firm to scale, sustain their desired image and model while bringing justice to the clients they represent.
Go on line, find a template, engage your staff and start writing. You’ll be amazed where your efforts lead you and how much more profitable you may become.
Talent & The Team
The old model of a few lawyers, a gate keeper, multiple paralegals and an annual visit by the firm partner with one semester of high school accounting class to negotiate their law firm funding needs with the local bank are long gone. Today’s best firms include several staff Trial Lawyers, each an expert focused and diversified in different and targeted areas of law. They also include an IT expert who maintains all their data in the cloud, paralegals speaking many different languages, a business development person to grow the firm, an internal or external CFO to manage all financial aspects of the firm including the law firm’s capital needs and a COO that orchestrates the entire firm and plan allowing the Trial Lawyers to do what their best at, the practice of law.
Invest strategically in “The Team” they are unconditionally one of your most valuable assets.
Data & Technology
Also gone from the old model is a library full of old law books, numerous copiers and file cabinets holding volumes of paper. Today’s business of law is about scanning, clean data, sophisticated case management systems and access 24/7 in the cloud. Business today is all about technology. From communication to research, from data storage to analysis. Today’s law firms need to invest in up to date technology and the personnel to manage the process. Law schools are cranking out a new breed of attorney that will be comfortable in this brave new world of technology.
Be bold and take the initiative to embrace the new technology world. Invest in yourself by learning to leverage technology for both the Practice of Law as well as the Business of Law to differentiate yourself from the old school.
Managing Cash Flow
The two biggest reasons most companies fail are lack of capital and knowledge. Combine these attributes with no written business plan, an out of date staff and technology and the odds are highly stacked against your seven years of college. Plaintiff law firms have inherited a very difficult financial model with the IRS and Federal Banking guidelines stacked clearly against you. Thus, managing cash flow to assist all your hard work is one of the most critical functions in executing a plaintiff law firm and having a CFO or other savvy financial person in the firm to manage this and all other financial functions and capital needs of the firm is paramount to your success.
Recent surveys have shown that 86% of plaintiff law firms identified lack of capital and cash flow as their biggest obstacle to growth.