3 Secrets to Small Law Firm Success
Sluggish demand for legal services. Stiff competition for client business, including new DIY legal websites. Administrative tasks that cut into billability. Keeping up with technology.
In an industry facing new challenges and change, how are U.S. small law firms and solo practitioners holding up?
Thomson Reuters 2017 State of U.S. Small Law Firms study asked more than 300 small law firms and solo practitioners about both the pressures they’re facing and the opportunities they’re finding. While most respondents characterized their firms to be at least “moderately successful,” it also revealed some interesting traits that set “very successful” firms apart from the rest.
Three key secrets to their success may surprise you.
#1: Successful firms track client satisfaction
Almost all (90%) of survey respondents said that client satisfaction ratings were key to measuring the success of their firm, with 22% listing it as the primary way they defined their success. Surprisingly, however, just a fraction of firms actually measure it: Only 34% of respondents report that they actively track client satisfaction ratings as a metric within their firms.
Firms that do track client satisfaction ratings report improved business outcomes. In fact, 45% of firms who track client satisfaction say that they’ve seen their overall client satisfaction ratings improve in the last 12 months.
It makes sense: Tracking client satisfaction illuminates what you’re doing well and what you can improve so you can intelligently focus your efforts. The simple exercise of measuring your clients’ satisfaction increases your chances of improving it.
#2: Successful firms spend less time on admin tasks
Efficiency is also a major component of firm success. On average, respondents reported that nearly 40% of their time is spent on tasks other than the practice of law, up 1% from last year.
Attorneys at “unsuccessful” firms reported spending nearly twice as much time – 15.3% of their working time – on administrative tasks than “very successful” firms. Around 70% of respondents recognize that spending too much time on admin tasks posed at least a moderate challenge. What is surprising, however, is that of those firms who say they’re spending too much time on administrative tasks, 81% admit they’re not doing anything to address it.
In 2017, successful firms saw improvement when they deliberately focused on becoming more efficient. In fact, at 39%, improving internal efficiency was the second-highest-rated priority (only business development ranked higher).
#3: Successful firms invest to drive change
Firms that consider themselves successful are putting their money where their challenges and opportunities lie. When asked to identify their targeted areas of higher investment over the coming 12 months, respondents identified business development and marketing (35%) and technology and infrastructure (25%) as their top two.
Most firms already know from past experience that investments in these areas have a tendency to pay off: Small law firms who invested in business development and marketing within the past 12 months reported an increase in client acquisition and retention.
And the 47% that adopted new technology in the past two years did so to both improve quality and reduce costs. For those firms that consider themselves “successful,” overall business efficiencies from new technology resulted in increased revenue and better work/life balance as well.
It’s no question that today’s legal market demands proactive approaches. It’s also clear that the firms that plan, track, and analyze their efforts – as well as invest in resources that advance their priorities – are in line for future success.
View the full Thomson Reuters 2017 State of U.S. Small Law Firms study.
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