As many as half of all lawyers in the U.S. are solo practitioners, with many others work in small law firms with just a few lawyers. So whether you dreamed of hanging out your shingle back in law school or migrating to a small practice after working with larger law firms or some other legal service role, you're not alone.
But running a small law firm is a lot of work. It requires balancing what you know about practicing law with business skills. Managing a small law firm is part science and part art, but it requires a constant presence and awareness of what it takes to run your own small business.
You don't need to hire a law practice management advisor; just follow the steps below to create a strong foundation for your firm and start off strong.
Create a Business Plan
Download your copy of our law firm business plan template here:
You started your own law firm because you have specific plans and goals. Your business plan is the roadmap to get there. Without a business plan, you have no direction and set yourself up for failure. Whether you're opening a solo law firm or partnering with a few other attorneys, you all need to be on the same page. Your business plan is your chance to get there.
Even if you already have a law firm business plan, you should revisit it and make sure everything inside still resonates with your goals.
Your lawyer business plan should include:
- An executive summary of the firm
- A description of the law firm's key people and general services
- A marketing analysis
- An explanation of the law firm's organizational structure
- Your marketing plan and services offered
- Financial projections
Niche Down
Many lawyers think it's the right approach to go broad when they start a small law firm. After all, this gives you the most possible clients to work with, right?
This is a case in which jack-of-all-trades thinking can be harmful to legal professionals seeking to build a brand. If you work in multiple practice areas when you start your own law firm, but you're not yet known for delivering results in one, it's hard to attract the right clients.
By narrowing in on the choice to master one service offering before branching out into others, you begin to earn a reputation from other lawyers, judges, and clients as someone highly knowledgeable in that field.
Starting small like this and scaling from there is not just about marketing. Niching down helps you balance the competing demands of running the business side of a law firm, too. When you first get started, you might be handling many admin or business management tasks in addition to marketing your small law firm and working with clients. Trying to be all things to all people sets you up to get burned out.
Benefits of Niching Down
Niching down offers other benefits for those in the legal industry, including:
- It's easier to market one practice area
- Your expertise/familiarity with one area of the law
- You'll get more personal satisfaction when you focus on a niche you love
- Being more experienced or focused in a particular area makes it easier to raise your fees above other law firms
Create an Exceptional Client Experience
Your client experience is crucial in the early days of your law firm. How your clients feel about working with you and what they say about you to others directly impacts the growth of your firm.
Think about your competitors and how they leverage the social proof of past clients. Statements and reviews from other clients appear on Facebook, Avvo, Google My Business, and the law firm's website. This proof is powerful because it shows a prospective client that someone else has already had a positive experience working with the firm. As a new small law firm, however, you don't have that track record or reputation to rely on, and you need to build it yourself.
The easiest way to start off on the right foot is to build an exceptional client experience. Your clients should walk away from working with you feeling so good about their experience that they cannot help but tell others about you.
Make Your Clients the Hero, Not You
The client experience is about so much more than winning your case. It's about putting your client in the position of success in a journey in which they are the hero. Too many lawyers position themselves or their firm's success as the story's hero. Give that focus to your client instead.
The client experience includes things like:
- How easy it was to contact you to discuss their legal situation
- How well they were kept informed across their case
- The resources you used
- How easy you make it for them to deal with a problematic legal situation
- How prepared you make them feel for what their case would look like
- Honesty and ability to break down the options in front of them at any given time
While all these are important, the most typical theme law firm clients cite in reviews is bad communication. When the firm as a whole and individual lawyers keep clients informed, there's a much better chance of word-of-mouth referrals as well as better reviews for the firm.
Even though there are a lot of benefits to outsourcing many things in your law firm, client engagement is not on that list. You and your law firm staff are responsible for ensuring you keep clients updated about their cases and deliver consistent communication throughout.
Hire the Right People in the Right Roles
You need the right people in the right positions to distribute the workload and set a foundation for growth.
Even in your early days of running a small law firm, evaluate which roles you can hire for that would have the most impact on growth and client experience. While you likely can't afford to hire everyone you want just yet, a few key hires can make a big difference by taking things off your plate.
These include an office manager or front desk manager to handle administrative tasks, calls, and scheduling and a knowledgeable paralegal to help with the research and writing of case materials. You may not even need a full-time paralegal to start, and you can potentially use someone online working as an independent contractor. As time goes on, you can scale up their hours and make other key hires.
For smaller law firms, hiring an office manager is vital. The client service hinges on the first impression your caller gets from connecting with this person. So make sure you've got the willingness and ability to train this person.
How to Find the Right People for Your Team
When hiring, develop a strong process for qualifying the right people. This means:
- Knowing your law firm's mission, vision, and core values to ensure the personality of the applicant is in line with them
- Looking beyond education and experience, but checking for the ability to do the job well
- Checking references and providing a trial/probationary period to see how someone performs
Learn to Delegate
You wanted to start and manage a law firm because of the control and flexibility it offers you. But that dream can quickly turn into a nightmare when you find yourself handling every open task. From juggling the accounting to answering the reception phone to responding to every email and logging paperwork, you'll be in for 80-hour weeks if you don't have a solid plan to delegate.
For law firm management, most delegation mistakes fall into one of three things:
- Not delegating anything, landing you buried in work and exhausted, or worse, making mistakes
- Failing to hire the right people to delegate to
- Delegating with poor instructions, leading you to take back the work yourself anyway
Once you know how to delegate and what to hand off to someone else, you're much more likely to be happy with the end product.
Determining What to Delegate
The holy grail of what to delegate falls down to just a few factors:
- Things that are not in your zone of genius (if it helps, business development, client work, and meeting with prospective clients are probably in your zone of genius and where most of your time should be spent)
- Things that don't make you money directly but must be done (Paperwork, accounting reports, etc.)
- Tasks that are below your pay grade and pulling your focus away from what matters (answering the phone)
- Things you don't enjoy doing, aren't good at, require too much time to understand or execute or take you much longer than someone with that skill set (web development, SEO)
The more of these factors apply to a task, the more critical it is that you delegate it to someone else.
Know When to Outsource Outside the Firm
Regarding delegation, remember that you're not limited to in-house hires alone. There are plenty of things that it makes sense to hand over to freelance contractors or agencies. Bookkeeping, for example, is detail-oriented, time-consuming, and extremely important all at the same time.
Similarly, a content marketing strategy with valuable SEO articles can put your law firm on the map, but it's also overwhelming and time-consuming for plenty of small law firm owners. You can get the same benefits from content marketing and SEO by working with an outside agency like Rankings.io. You'll reap the rewards of solid results over time when your agency knows what to do, but you won't have to learn and keep up with every detail in the industry yourself.
If you have a project unsuitable for in-house staff due to the scope of work, the expertise required, or the infrequency of need, consider outsourcing it to an agency or contractor.
Create Processes and Systems
A good workflow management software with built-in automation is powerful for recapturing time in a small law firm. It also helps each of your team members become more efficient.
Systems, procedures, and processes make for repeatable work and enable your team to get things done faster and more consistently. This goes hand in hand with delegation. Law firms lose as much as 30% in revenue due to inefficiencies and a lack of clear systems, so this is also a proven path towards making more money while also reducing stress.
It shouldn't matter which case, which phone call, or which client you're working with: the systems and processes supporting your business should be the same.
Crucial Areas to Develop Streamlined Processes
Here are some important places to create systems and processes for your law firm:
- Your phone/intake process
- Your billing process
- Your calendar process
- Your methods for reading and responding to email
- Your strategies for filing paperwork/meeting all deadlines for each case
- How to thank referrals
- Onboarding for new employees
You can use anything to create standard operating procedures, even a Google Drive folder of processes or a dedicated SOP tool like Process.st. The important thing is to keep the documentation fresh by revisiting it over time and making sure that each employee knows how to access it. These evolve over time, but they also become a resource hub for any new hire to cross-check their work.
Don't feel the pressure to create all the procedures yourself, either. Engage your employees in helping you to document these procedures. Include screenshots, examples, and additional resources throughout so that your staff can get many of their questions answered on their own without interrupting you.
Find the Tools That Will Make Your Firm More Productive
It's easy to go overboard with new law firm software, but you don't need to. Selecting a handful of high-powered software solutions will automate a lot of work and speed things up, too. Law firm management doesn't have to take all of your time, and many tools can also make your employees happier and more productive at the same time.
Before deciding if something is the right fit for getting more of your time back, adding more consistency, or a better client/employee experience, think through each of these factors with legal technology:
- Can it be accessed remotely?
- Is it cloud-based?
- Will you be able to deliver better legal services to your clients when using this?
- Is there an easy learning curve for staff relying on this software?
- How much time savings is realistic compared with the cost of the software?
- Will your team be able to collaborate more easily because of this software?
- Does this software reduce law firm risks (such as mistakes, missed deadlines, etc.)?
- Does the technology streamline a process, such as receiving payments?
Legal Technology You Should Consider Leveraging
Here are some legal tech types well worth considering for a small law firm:
There is no shortage of legal technology to make things easier for law firms, but don't forget that the best system and software you select are the ones you can use and look forward to using every day. If something has more bells and whistles than you really need, it's okay to skip over it.
Keep a Close Eye on Your Financials
You have to know your budget if you're going to stay in business and continue to provide the same high-quality service to all new clients. Your budget should be created for the firm overall and also within individual departments or initiatives, such as marketing.
If you want to manage a small law firm effectively, you must be in touch with these financials regularly. Unfortunately, too many lawyers leave law school without a firm grip on small law firm business strategies, especially around finances. It's not necessary to become a CPA to run your finance department, however.
Key Financial Metrics
Here are some things small law firms will want to track each week and month, then use that data to make informed decisions about new initiatives or management tools:
- Accounts receivable: Work that has been billed to clients but remains unpaid at this time
- Works in progress/current client revenue: This section of your finances captures work you've already completed but haven't yet billed for or work you're currently doing that will lead to billing in the near future.
- Trust accounts: Make sure you always have access to balances on trust accounts for all clients, and verify that you've reconciled them in line with state bar rules
When you're in touch with these metrics on a regular basis, you can decide how you're going to handle problems such as overdue accounts receivable. Ignoring these numbers can lead to major problems, but staying on top of them also helps you create new policies going forward, such as switching from hourly to flat rate billing with clear deadlines for funds owed.
Even if you're not the finance manager at the firm, you need to know these numbers in order to run a small law firm. You can work with an accountant or bookkeeper to help answer questions and verify that all materials are properly recorded and reported, but as the firm leader, you should always take the responsible role of staying involved with this work.
Set Key Performance Indicators
Setting and measuring important performance indicators for a law firm keeps your business on track. It's not enough to set goals and KPIs; you should also verify that different team members understand how these items will be tracked and how staff will be held accountable for them. Whether you're marketing a solo law firm or a bigger law firm team, you must set and track KPIs.
Start simple with KPIs and go from there. You don't want employees feeling like they have to chime in on 10 metrics during your weekly team meetings, and focusing on too many at once will also dilute the efforts any staff member can reasonably put toward meeting your meaningful KPIs.
Some of the best KPIs to track for small law firms include:
- Law firm website traffic
- Client retention rates
- Potential client calls vs. actual converted clients
- Average fees per client
- Cost to acquire a new client
- Billable hours or weekly revenue target
- Conversions on landing pages or paid ads
These are just a few examples of KPIs that tell you how well the law firm is meeting goals. Empower employees, especially those in senior positions, to make recommendations around actions that might push the firm closer to meeting KPIs.
For example, perhaps your office manager notices that the number of calls vs. converted clients is impacted by the firm's lunch hour when many prospective clients reach out for intake help. This person might suggest a lunch hour swing shift rotating between employees or an outside law firm answering service that takes these calls and funnels leads into the next step in your intake process.
When employees are aware of what they're accountable for and equipped to see where there are ways to improve things, the weight of growing the law practice doesn't fall on you alone.
Develop a Marketing Strategy
If you want to keep your doors open, you need a full marketing strategy and investments in marketing. You'll fuel your business and start to build a reputation that makes new client acquisition easier over time, too.
When trying to find an attorney, 57% of new clients searched on their own, and 59% asked for a referral. This means you need a thorough marketing strategy that gets your law firm's name out there in multiple ways. You need both SEO and a referral plan to ensure your name is at the top of prospective legal clients' minds.
Effective marketing plays a key role in properly managing your small law firm effectively. With the right marketing message, materials, and strategy, ideal clients are attracted to your small law firm, and fewer undesirable cases show up in your firm, too. This is a huge value add since your intake specialist will spend less time disqualifying people who are not a good fit for your firm. Bringing in more of the right clients also helps you grow so that you can continue to invest in the right resources and people to take you to the next level.
According to the ABA, less than half of law firms have a marketing budget. Without the funds set aside to support attracting clients to your law firm, you won't be able to meet any of your KPIs.
A SWOT Analysis Marketing Plan
Your attorney marketing plan is part of your bigger business plan but should incorporate things like:
- A strengths, weaknesses, opportunities, and threats (SWOT) analysis
- Why there's a need for services and your firm in the market
- Marketing and financial goals for the firm as a whole
- A monthly marketing budget
To hit the ground running with your marketing plan, you must know who your ideal client is and how you'll reach them with your marketing efforts.
In the early stages of your law firm, you'll have more time than you do money. For that reason, plenty of lawyers take on the marketing work themselves or build a small bootstrapped team of freelancers. As time goes on, you'll be busier serving clients and may not have the time to dedicate to marketing tasks. Instead of time, you'll have more money that you can dedicate to your marketing efforts.
To reflect back on the delegation section, once you're busy, this is one area where it makes a lot of sense to outsource the work. Marketing is extremely important for a growing law firm, but it also takes a lot of time and business savvy. That's not necessarily a good use of your time, especially since the pace of digital marketing in particular is very fast.
Keeping track of all the moving pieces can be very tricky for a small law firm owner. Instead of taking that on yourself, consider space in your overall law firm budget for marketing support.
Hiring an outside party, however, is very hard for a new law firm. Thankfully, we have extensive resources on best practices in law firm marketing for a small law firm owner. When you begin to see returns on your early investments, hand over your marketing to someone like the experts at Rankings.io.
Supercharge Your Marketing with Rankings.io
By now, you know all the steps involved with starting and managing a small law firm. You might even recognize that your firm is outside of those early stages and that now you need someone to help you execute all the tasks so you can meet goals and continue to grow. If you've already built a book of business but need more leads, organic SEO is a sound strategy for putting your law firm on the map and keeping it there.
You don't need to invest days and nights learning all the details of SEO, either. You can hand that over to Rankings.io for a full SEO strategy that brings more traffic and ideal clients to your website while also growing your online presence and authority overall. If you want more help figuring out how to make this work for your firm, contact us today.
