Law Firm Analytics are a smart and proven way to turn the data your firm already collects into profits. While every law firm is unique, our research and clients have proven that every law firm has about 10% of its revenues “trapped” inside of their time and billing data
We typically point to ten business issues that cause revenue and profits to remain “unrealized”, or trapped inside of a firm’s data. In this article, we will highlight two:
- Allowing certain lawyers to split time between client service & marketing
- Excessive write-downs associated with a specific case, task, or lawyer
Allowing Lawyers to Split Time Between Marketing & Client Service
Many lawyers split their time between marketing endeavors and client service. Sometimes, it is assumed that such arrangements are providing sufficient value to the firm, regardless of whether a rigorous financial analysis would prove otherwise.
Firm politics can spoil, resentments can build, and difficult conversations can take place when managing partners begin to suspect that they aren’t getting all they have bargained for. Other times, it is simply assumed that such arrangements are “ok” because lawyers are only compensated for work produced and new clients retained. But how do you really know?
Allowing lawyers to arbitrarily split their time between marketing and client service can result in a variety of undesirable consequences:
- Lawyers act in whatever way maximizes their compensation (regardless of whether such activity maximizes firm profits)
- Lawyers spend too much time marketing to clients that are not in the Firm’s best interest to retain
- Lawyers spend too much time billing client work that could otherwise be completed by a less-senior attorney (sacrificing the growth and prosperity of the firm)
How do you eliminate these undesirable consequences that occur when lawyers fail to properly balance their marketing and client responsibilities? The first step is to start using Law Firm Analytics. Seeing your firm’s data brought to life in a “financial roadmap” will help you identify whether lawyers are devoting too much (or too little) time to their marketing responsibilities.
Law Firm Analytics constantly measures the value and efficiency of each attorney’s work product and book of business. Bridgesphere not only provides its clients with the data, reports, and insights that unveil inefficient activity, but we also provide expert guidance and recommendations on how to take corrective action.
Furthermore, using Law Firm Analytics in tandem with a custom analysis of your firm’s compensation data yields powerful insights during compensation and performance reviews. One phone call to Bridgesphere, and your Firm will be armed with the financial and performance data that takes your compensation decisions to the next level. Achieve income partner agreements that make the most financial sense for your law firm. Incentivize lawyers with client and marketing responsibilities with a compensation formula that maximizes revenue growth and profits per partner.
Write-downs are an unfortunate reality of the business of law. Where are your firm’s write-downs coming from? Are they concentrated in a certain type of case? Are they largely attributed to a particular group of associates? Or, are they primarily occurring when the “wrong” lawyers are assigned tasks at which they are inefficient? Law Firm Analytics dissect your write-downs so that you can take targeted action that improves your bottom line.
Several years ago, one of our clients cut their write-downs by more than half. All of these dollars flowed directly to the bottom line, allowing management to make additional hires and boost compensation.
How was our client able to do this? Law Firm Analytics targeted exactly where their write-downs were concentrated. Using our analysis and expert guidance, management was able to re-direct client work that was being completed in an inefficient manner, improve associate training in particular functions, and more closely monitor the handful of cases that were generating most of the write-downs.
These three initiatives reduced write-downs by over 50% — significantly improving cash flow available for compensation.
Law Firm Analytics provide our clients with the data, reports, and insights that unveil inefficient activity. Bridgesphere’s expert guidance and recommendations help you take corrective action — improving revenue and profit.
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