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Do you have a profitable law firm that can run without you? Falguni Desai
I
t was a pleasure to deliver a webinar to WHLS members on 15th December 2020 entitled “Six Steps To A More Profitable Law Firm.” I started in private practice and then worked in-house for most of my 20 year legal career. In my last role, I worked as In-House lawyer and Company Secretary for 14 years, for a commercial property company, with a premium listing on the London Stock Exchange. I have been coaching small and medium sized companies on how to scale their business since 2017. I work with a wide range of sectors, including professional services. I use a growth model (explained in the webinar), that puts a corporate structure into a business which enables the business to grow sustainably and efficiently. I work with established businesses, with 5 or more employees, that are doing well but the business owners know that there is potential to do much better. The main issues I have found that face lawyers (equity partners, managing partners) and members of the professional services specifically are: They really have (well-paid?) jobs as they trade their time for money. This means that the idea of a commercial, profitable enterprise that can work without them is really challenging to envisage. The leaders of a law firm are often on the highest hourly rate so when cash is tight they look to do work “in” the business rather than “on” it so fall into a cycle of working “in” not “on” when times are challenging – it makes short-term sense, but not for long-term growth. There is often very little structured marketing and limited sales processes as solicitors “don’t do sales”.
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Solicitors in the UK have been working on the income vs cost model of a model of 1/3 of income to solicitor, 1/3 of income to costs and 1/3 of income to profit. I believe this model is now invalid and is more like 1/3 of income to solicitor, NOW, 1/2 of income to costs as a result of increasing costs of running, marketing, insuring etc., leaving only 1/6 left in profit. As a result, solicitors have seen profits radically decline because of this – they need to rethink this model fundamentally and that is where I can help. One of the most important Key Performance Indicators (KPIs) for law firms is utilisation of the fee-earners as they are often on significant basic salaries which are paid irrespective of how many hours they bill so anything below 100% utilisation of their fee-earning time is a loss of potential profit and so an opportunity to make more profit. As consistent sales and marketing are usually a weakness for small and medium sized firms, the 5-Ways Formula (as explained in the webinar) is a really valuable opportunity to increase sales and thus the utilisation rate and thus the profit. The concept of coaching is not new and the aim of coaching is about continuous improvement and tracking progress. As a coach, my role is to be the catalyst for that change. A personal trainer in a gym helps with reaching goals, motivation, accountability and development. The same applies in business – why shouldn’t it? It can be looked at as “business fitness”. ■
Falguni Desai
Business Growth Coach Action Coach falgunidesai@actioncoach.com
