This is the next post in my discussion on how attorneys can increase their profits in 2017 (or any year for that matter). My last article provided an overview of topics this series is going to discuss and also mentioned the fact that many law firms are going to fail in the coming year (which is something I’ll be discussing in an upcoming article). The short and simple is that if you decide to make some of the changes I’ll be discussing in my next few posts then you can spend the upcoming year looking like this:

Happy business woman

While many other lawyers will wind up looking like this:

Closing down sign

I’m assuming you would rather look like the former. If you prefer to look like the latter then stop reading now. If you like prosperity then read on as I’ll spend the rest of this post discussing why your law firm’s profits are lower than they should be. And…… yes……this post applies to you. The reason for this is simple; if you’re like most attorneys then you’re not receiving the full value for each case you handle. The thing is, however, that I’m not talking about how much money a particular client pays you; I’m talking about the amount of business a client will send you in the future.

Attorneys fail to get the full value from clients, and have lower profit margins, due to poor customer service

Your law firm’s profits are the function of two things. These are revenue and expenses. When you can increase revenue and decrease expenses then you wind up jumping for joy like these fine folks:

Jumping for joy

The simplest way to start jumping is to grow your revenue without having to grow your marketing costs. The best way to do this is customer service. Let’s look at why this is and why most law firms just end up costing themselves extra money, and not increasing revenue, by failing to provide good service.

Let’s say you spend $1,000 on pay-per-click advertising this month (you should be investing in marketing assets you own rather than paying for ads but that’s another discussion). Now say you get five cases for that $1,000. You paid an average of $200 per case. The first of these five cases was that of Joe Client, who is getting a divorce. You competently handle Joe’s divorce matter and at the end of the day he’s not dissatisfied but, at the same time, you didn’t provide him with a level of service which exceeds that of other law firms. Here’s a few examples of how you handled Joe’s case:

  • You returned his phone calls but didn’t always do so as soon as possible
  • You didn’t copy Joe on all pleadings, correspondence, and other documents
  • You didn’t take some steps which could have moved Joe’s case through the system faster and, as a result, it was a little longer before he could just get on with his life

Joe may or may not become a referral source the next time of one of his friends needs a divorce or other family law help. Most attorneys aren’t overly concerned about this because they’re happy to just bring in new cases at an average advertising cost of $200 per case (using the numbers from above). The thing is, however, that this mindset is killing your law firm’s profits.

Now let’s say you went the extra mile in handling Joe’s case.  The next time one of Joe’s friends needs help he refers them to you. This means that you just got a new case without having to pay any more money and the $200 you spent to acquire Joe has just brought in two cases rather than one. Provide that referred client with a “knock their socks off” experience and they’ll also become a referral source while Joe also refers you cases. This is how you grow revenues without having to increase advertising costs. Now I know right now you’re saying “duh” but here’s the thing – most attorneys don’t get it. It’s time to ask yourself some questions.

Ask yourself how long you have been practicing. Can you say that every year you’ve gotten more referrals than the year before? Unless your number of referrals has grown each and every year, it’s time analyze your client service policies. This is because a client you made happy will always be out there and as you continue to service new clients they should also become referral sources. As you provide quality service to those who were referred then your base will snowball. Take a look at your practice. Are you mostly reliant on business from advertising and do you receive few referrals? If so then you’re in the worst possible place regarding your customer service polices. If you do get referrals, can you honestly say that the number of referrals you receive has grown every year? If you’re not seeing this growth then you’ve got customer service problems.

Not providing quality service means that the $200 you spent to obtain Joe Client is gone once you wrap up Joe’s case. You then have to spend $200 to get the next client. In other words, you didn’t get all the value out of the $200 you spent to acquire Joe as a client. If you up your customer service game then your client base will grow without having to increase your marketing costs. This is how you get the “full value” from clients you currently represent.

Attorneys can improve profits by providing “extra” ordinary client service

You get the “full value” from a case you handle when the client becomes a referral source. You will make more clients referral sources by providing extraordinary service. The difference between extraordinary and ordinary is the word “extra.” This means the following:

Most attorneys just don’t get it when it comes to growing their business. They think the first place they should look for growth is marketing. If you want to grow and make money then marketing is important but, the bottom line (no pun intended), is that you need to first look at your customer service polices. That’s how you grow revenue without growing marketing costs and, as a result, you increase profits.