These 3 Common Mistakes Prevent Law Firms from Growing…Are You Making Them?

Anybody can start a law firm straight out of law school, but not everyone will find success. Even those who do land enough clients to get their solo practice off the ground may struggle to stay afloat long term. In order to build a sustainable law practice, you’ve got to treat it like a business. But unfortunately, law schools don’t teach many of the important business lessons required to succeed in the real world. In this post, we’ll walk through three of the most common business mistakes that lawyers make which tend to inhibit law firm growth and provide tips to help you avoid them.

3 Business mistakes that stifle law firm growth

At Lexicata, we work with thousands of small and medium law firms from all over the world. We’ve seen it all – the good, the bad, and the ugly.

Below, we’ll explain the three most common things we’ve seen lawyers doing wrong and why these mistakes make law firm growth very difficult to come by.

We will also provide some tips for how you can avoid these mistakes at your firm and set yourself up for success.

1. Not having a marketing plan

Getting clients as a solo lawyer or a small firm is one of the biggest challenges you will face. Some form of marketing is essential if you intend to grow, even if that’s just going to conferences and networking with other lawyers.

Marketing, along with sales and product, is one of the three critical pillars of a successful business:

  1. Marketing creates awareness for your services.
  2. Sales converts that awareness into paying clients.
  3. The “Product” is the legal services you provide to clients.

Most struggling law firms put all their focus into delivering their product and totally overlook the importance of marketing and sales.

Sure, you can sit around and hope for referrals to come in, but this is not a reliable way to grow. You simply never know when the next referral will come.

How to avoid this mistake

In order to take your law practice to the next level, you need to create and implement a law firm marketing plan.

A marketing plan doesn’t just mean throwing money into random ads or lead generation services. It also doesn’t mean hiring some “expert” you met on LinkedIn, and having no idea whether or not they are really helping you.

It means taking the time to learn the basics of law firm marketing. And it means sitting down and putting together an actual written marketing plan with goals, a budget that you adhere to, and a way monitor your results and adjust your strategy over time.

If you don’t find a way to market your firm, it will be extremely difficult to bring in enough revenue to hire more help and grow the practice.

Download our free Law Firm Marketing Plan Template to start creating your own growth strategy today.

2. Not having systems in place

When running a solo practice, you are personally responsible for every aspect of running the firm.

Of course it can be difficult to manage all of the work, but you still don’t really need systems in place. You just know how to do everything yourself, and you know where all your information is kept. You can pretty much get by with basic tools like email and calendar.

However, as your law firm grows, it becomes impossible to do everything yourself. You have to gradually take more and more responsibilities off your own plate and assign them to other staff members.

The more people you hire, the harder it becomes to manage all of the processes and keep communication flowing. It becomes necessary to systematize your operations.

Many firms struggle with this transition. The result is disorganization, inefficiency, lost business, and worst of all, costly mistakes which can expose you to liability. All of these things will act as barriers to future law firm growth and success.

How to avoid this mistake

In today’s world, adopting a software driven approach to everything you do is the best way make your operations more systematic. Software creates a structured platform upon which you can build and organize all your processes. It also allows you to streamline and automate tedious, manual tasks.

As an example, here are two manual processes at most law firms which Lexicata can help streamline:

  • Filling out client intake forms on paper requires you to spend an enormous amount of time re-entering the data into other systems and scanning the files into a computer.
    • With our intake software you can capture this data online and save it into a neat, structured format automatically.
  • Printing and signing client fee agreements by hand not only wastes thousands of dollars on printing costs, but again requires you to manually scan the files and upload them to your hard drive.
    • With our e-signature software you can get your documents drafted, signed, and automatically uploaded to a database electronically with one smooth process.

If you feel like chaos is the norm at your law firm, it’s probably due to a lack of systems. Leveraging the power of software tends to be the most effective and inexpensive way of creating good systems and optimizing processes which are manual and inefficient.

3. Not having a “business owner” mentality

Finally, the biggest mistake lawyers make that prevents law firm growth is failing to adopt the mentality of a business owner.

Lawyers often believe they are “too busy” to take charge of the business and do things like direct the marketing strategy, implement new software, or make changes to the firm’s workflow.

We often see firm owner attorneys delegating what are actually major business decisions to lower level staff members because they feel their time is too valuable.

Do you really think a $25/hour office manager (or worse, an unpaid intern) is the best person to put in charge of launching a marketing campaign, making a software purchasing decision, or implementing a significant process change at your law firm?

Not even close! As good as your staff might be, they frankly do not care about your business enough to be tasked with these responsibilities. They will likely do a lackluster job or fail altogether.

At many law firms, this ends up becoming a never-ending cycle. The business never grows because it can’t break free from it’s old bad habits without a leader to guide it. But the person who should be captain of the ship “doesn’t have time” to steer the ship in a different direction.

How to avoid this mistake

As the principal of a law firm, you are much more than a lawyer. You are the owner of a business, and you are the person who is responsible for leading your organization toward success.

Perhaps it’s the deeply ingrained culture of the billable hour that makes lawyers feel like their time is too valuable to do anything other than bill clients. But in reality, as your firm grows, your role must shift away from legal work and toward operating your business.

There will never be a “right time” to make changes. You will always be too busy. You will always feel overwhelmed.

To break free from the cycle and set your law firm up for growth, you simply have to force yourself to take a step back and re-evaluate the way you do things. It’s often a painful process, but no business can grow without reinventing itself multiple times along the way.

In order to achieve consistent law firm growth, you need to act like a business owner. Take charge of the situation, make the important decisions, and lead the implementation of changes that will get your firm where you want it to be.

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