December 19, 2005
Best Law Firm Practices for Increasing Margin
Always keep in mind that the approach to raising per-partner income should be done with long-range considerations. First, determine how the firm stacks up against its peers. Use survey benchmarks like those available from Altman Weil, http://www.altmanweil.com. Take corrective steps where you fall short.
The list below is a reminder of steps that you can take, among others, to increase margin and improve per-partner income.
Steps for Increasing the Firm’s Margin
- Consider relocating for a lower cost per-square-foot
- Pursue alternatives for lower communication cost
- Conduct a general cost reduction campaign and work with administrative staff to improve on-going cost controls
- Take advantage of outsourcing for lower or variable cost
- Improve marketing, especially to existing clients to increase fee revenue
- Improve productivity both at support staff and professional level through capital investment—technology, equipment, training, etc.
- Increase professional and front office direct access to systems and information
- Reduce support staffing ratios through use of technology
- Plan office space to enhance workflow
- Establish systems and controls to improve recovery of client expenses and soft costs
- Implement an administrative charge (3%-5%) of fees billed to cover soft costs
- Budget firm expenses and compare to actual for improved performance
- Engage in structured strategic planning to reduce the cost and impact of off-track or poorly planned activities
- Set goals and hold people accountable
- Invest in better business systems that eliminate duplicate work and increase performance and efficiency of the accounting and administrative staff
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Filed under Law Firm Bus Model by Tom Collins