13 November 2018

How to run a successful law firm

Published on 13 November 2018

Being a good lawyer and running a successful law firm should not be mutually exclusive. However, while being a good lawyer is the focus of years of study and training, when it comes to running a successful firm, practical guidance can be hard to come by. Richard Hugo-Hamman is no stranger to this struggle. The former managing partner and Executive Chairman of LEAP is intimately familiar with the daily challenges of small law firms. Unlike their high profile corporate law cousins, small law firms and sole practitioners are often resource and time poor, with cash-conscious clients who may have much more to personally lose if their matter is not favourably resolved.

To assist, Richard has captured his top tips for running a successful law firm in a whitepaper and podcast, the 11 Habits of Highly Successful Law Firms. Both were based on his own experience of running a firm and working closely with firms to improve their workflow efficiency, client service and profitability through technology.  

 

Make efficiency a priority

“Successful small law firms, with extremely price sensitive clients, understand that their very survival depends upon efficiency,” said Richard. “Only a few brilliant lawyers in specialised niches can charge day rates high enough to trump efficiency. A competitive and impressive law firm needs to be efficient, because it is impossible to ‘lawyer’ confidently and well in a disorganised and inefficient environment.”

Efficiency can underpin almost every aspect of what a law firm does, from organising how enquiries are managed to ensuring files are digitally stored and ready to be accessed on a moment’s notice. While technology can assist with efficiency, it cannot be effective without a commitment by the firm to find more efficient ways of working.

 

Hire clever people and treat them well

This advice goes to the heart of good law firm culture. It is particularly important because at its essence, the law  is a service delivered by people, so it is important to ensure those people are happy and reflect well on the firm. 

“Your staff will be your biggest single expense other than yourself,” Richard observed. “It just does not make sense to treat staff badly, and yet in so many firms staff are undervalued and often abused by stressed lawyers. By this, I don’t just mean pay them well, but also ensuring they have the very best tools for them to do their job.”

Tools could include technology to automate document creation or bookkeeping, but can also range to practical incentives like comfortable chairs, standing desks or tidy work areas.

“In successful firms, staff are cheerful. What is important is the impression this makes because cheerful and motivated staff do better work, will attract new clients and will recommend you to their friends.”

 

Love the law, and practice in related areas

Enjoying what you do every day can make all the difference between competence and excellence.

“You can’t succeed in doing what you don’t enjoy,” said Richard. “Successful law firm managers recognise the important role small law plays in our communities and tend to proud of the role they play in upholding the rule of law and helping people in need. They have made conscious choices about the work they do, the clients they enjoy working with and who they prefer to work with. They are not stressed.”

Focusing on areas of law which complement each other ensures a steady flow of related work.

“In small law, there is a temptation to do any work that walks in through the door, particularly when starting out,” said Richard. “I understand the imperative of simple financial survival, but success requires choices. It is hard to build a reputation today as a generalist unless you have a monopoly in the region. Good firms build a recession proof business. For example, during the economic downturn of 2008, a firm that practiced in real estate might focus on foreclosure work. If they specialised in family law, they acknowledged the increase in divorce rates that comes with economic stress.”

By choosing related areas of law, it is possible to build a reputation as a specialist and gain referral work.

 

Provide service better than other law firms

Most lawyers are likely to interpret the law in a similar way, having received similar training and read commentary from similar journals and judgements. From a client’s perspective, the difference between a good, bad and great lawyer comes down to service - the impression that the lawyer both knows and cares about a client’s matter.

“The lawyers running successful small firms effectively embed obsessive customer service throughout the culture of the firm,” said Richard. “From the moment the clients walk through the door until the matter (no matter how big or small) is completed, they keep the client fully and repeatedly informed about the progress of the matter. By doing so, they consistently demonstrate how the firm values the client.”

 

Adopt technology early, or risk your competitors doing so

“Like it or not, if a firm does not keep up with technology, it will quickly become uncompetitive,” said Richard.
 “Leaders of successful firms are always looking for ways to provide better quality of service more efficiently, and at a lower cost. By running their operations on a low-cost, cloud-based system, tech-savvy law firms can use Smartphones and Tablets for mobility and save thousands otherwise wasted on traditional IT infrastructure and expensive IT support.”

Failing to adapt and upgrade technology can prove fatal to a law firm.

“Firms that embrace technology early steal a lead from their competitors. Firms that don’t ever embrace technology tend to merge into firms that do - or worse, go broke. I have seen this repeatedly over the years,” said Richard.