Good Client Service vs. Firm Profitability . . . Why Not Both?
These days, clients are demanding better service for less. Providing good client service, however, does not have to come at the expense of your firm’s profitability. In fact, if approached properly, the two will go hand in hand. It’s all a matter ofmaking smart changes.
You probably already know where I’m headed with this: alternative fee arrangements (AFAs). Clients want law firms to explore alternatives to hourly billing in order to obtain legal services at prices that reflect how they value these services, not just how the law firm values them.
That’s not to say that the clients are the only winners with this type of arrangement. Alternative billing should be based on what’s fair and reasonable to the client and the lawyer—that way you both come out on top.
Of course, clients perceive value in a variety of ways. The key to pricing legal services effectively is to understand what your client values most in their engagement with you (reputation, speed, highly specialized expertise, etc.), and to establish pricing accordingly.
In addition to being a fairer way to price your services, AFAs demonstrate that you care about what the client values. Clients who feel valued become loyal clients, who are more likely to return and to recommend you to others.
As you well know, much of what goes on in legal work does not actually require highly experienced attorneys, so there’s no need to require clients to pay exorbitant prices for work that can be done for less. Several staffing alternatives offer equivalent work product at better cost-efficiency to clients.
Legal process outsourcing firms (LPOs) can provide routine contracts, legal research, document review, discovery, and intellectual property (IP) services. Experienced, former “Big Law” attorneys and in-house lawyers can be contracted on a project-by-project basis and their services provided directly to clients.
You can also reduce the costs affiliated with associates who are on track to partnership by hiring flex-time, part-time and temporary associates as needed. Traditionally, these attorneys accept lower salaries and ask for fewer benefits than lawyers on a partner track.
Another way to contain staff costs is to decrease the ratio of legal assistants to lawyers. Savings can go straight to the bottom line, or put toward the addition of personnel in litigation support, IT, marketing, project management, pricing, or any other area where your firm needs more staffing.
One of the biggest struggles for law firms today is increasing efficiency in order to remain competitive. Clients are happy when you do your work efficiently and happy clients are the ones that keep you in business, so it’s in your best interest to find ways to improve practice management, accomplish more work in a given time, and to do a better job. One of best ways to do this is to embrace legal technology.
Case management software makes it easier to manage, protect, and share information, as well as track and shape your cases to make them more manageable. Timekeeping software or practice management software helps you maximize efficiency by tracking and analyzing how firm personnel—including you—spend work hours.
Document automation software saves time for you and your staff by helping to select proper forms and completing them to the extent possible. Your team works with a database of forms to customize documents and build templates that can be used for individual cases and across the firm—reducing time spent on assembling documents, hunting for forms, and correcting inconsistencies.
Excellent client service and firm profitability don’t have to be competing goals. While it may require a little more initial effort, adopting alternatives such as AFAs, new staffing models, and legal technology is worth the investment. Your clients will thank you, and so will your bottom line.
JurisDOC provides document assembly software that makes it easier and faster for law firms to generate pleadings and other legal documents. The software also tabulates hours, prepares client invoices and tracks received payments. Learn more at our website or click here to download a free trial of the software now.