While estimates may vary, it’s fair to say that there is at least a $300bn global legal market. In Australia, the market estimate is above $21bn. It’s equally fair to say that there is room and data suggesting those firms who innovate and utilise technology are increasing revenue and gaining more market share.
While there is no rule book for gaining a bigger slice of the legal market, there is a playbook – and it heavily involves the use of digital technology. In the digital age, getting that slice is about re-thinking how to find, engage and retain clients in new and innovative ways.
Growing law firms are constantly innovating and increasing revenue through the 3 Pillars of Innovation. The 3 Pillars are:
- Creating Efficiency
- Increasing Revenue
- Maximising Business Continuity
Last article we explored ways to innovate by Creating Law Firm Efficiency, now let’s delve in to Increasing Law Firm Revenue.
How to Increase Revenue for Your Law Firm 101.
Technology and innovation aside, the fundamentals of increasing revenue have remained the same for as long as trade has existed. The first and most logical way to increase business is to sell more of your existing services to the current market. If you’re a compensation law firm that means finding more victims to represent, if you’re an IP lawyer it means establishing more clients who wish to register or defend their trademarks. Simple huh?
Another way to increase revenue is to expand your product and service offering. The compensation firm may enter in to other specialisations like property and conveyancing allowing them to target a whole new prospective client base.
And of course, when you’re the big fish in your market you may consider expanding in to other territories both nationally or internationally because you see an untapped opportunity there.
Your firm may not be achieving revenue growth as much as you would like and it may be because technology and the ways in which we target new clients has changed. If we apply new technology however we see a whole new way to attract more business, innovate and increase revenue for law firms.
Innovation means taking the fundamentals and disrupting them and some of the most innovative ways to increase law firm revenue should be backed up by technology in at least one of these three areas:
- Digital Marketing
Digital marketing has gone well beyond setting up a Facebook page or sending out an occasional tweet. Digital Marketing must be a conscious activity in your law firm if you want to increase revenue.
While some law firms delay venturing in to Digital Marketing for fear of risk within this medium, other firms are managing risk and gaining considerable ground forging online real estate for their brand. If your firm hasn’t captured the attention of the existing market or wants to expand in to a new market it’s difficult to ignore having digital marketing as a core innovation strategy.
Not sure how evolved your firms digital marketing strategy is? Ask yourself these questions:
- Is my firm measuring who is visiting our website and at what frequency? Top performing firms not only build user friendly websites, they know who is visiting and capture new opportunities through this technology.
- Does my firm use inbound marketing tools like ad driven content or landing pages to capture new leads? Law firms who are increasing revenue make use of online advertising systems to capture the right type of client and drive them to the right service or product.
- Is there a systematic approach to digital marketing or is it ad hoc? Assigning a busy lawyer or part time administrative resource to look after your online marketing strategy is inconsistent – with consistent marketing your firm has a much higher likelihood of experiencing consistent revenue growth.
Digital marketing is the new shopfront for your law firm. Your physical presence is becoming far less relevant than your online presence and making use of Digital Marketing is a key to revenue growth.
2. Digital Sales
Digital sales help remove the guess work out of a law firm’s sales funnel. Instead of wondering how much new revenue is coming down the line, new forms of CRM (Client Relationship Management software) or sales estimating tools exist to streamline your sales process. Digital sales can also include selling online by transforming your traditional services in to automatic streams of revenue. Firms are appearing online every day with fixed fee approaches to decimate the hourly rate law firm – Digital Sales must be considered in the new law as a key revenue growth strategy.
Digital Sales may mean that your firm:
- Can systematically predict referrals and repeat business from clients.
- Uses a CRM to capture and follow up with prospects and leads.
- Reduces the sales cycle with electronic contract, agreement, and signature management, to ensure a very quick response and feedback cycles to strike while the iron is still hot.
Small changes to your client engagement process can mean the difference between innovation and just looking like the rest. For example, law firms who present documents electronically to be digitally signed can save their clients significant time, reduce administrative overhead for the firm and the client and make it easier for your clients who are increasingly mobile to do business with you.
3. Digital Client Loyalty
It’s easier to sell to an existing client than it is to gain a new one, yet many law firms looking to increase revenue often focus on trying to obtain new clients rather than cultivating existing relationships.
The probability of selling to an existing client is 60 – 70%. The probability of selling to a new prospect is 5-20% so it makes sense to focus a percentage of your growth and innovation strategy on client loyalty.
Law firms who have mastered Digital Client Loyalty are:
- Measuring their clients experience by sending a short electronic survey at the end of a transaction or on an annual basis
- Using automatic systems in place such as CRM software to remind partners about key events in their clients lives like birthdays, personal anniversaries, anniversaries of when the client engaged with your firm and key events like the purchase of the client’s first home
- Automatically notified when a client makes a key transaction and can suggest other revenue streams from that client – for example, once a home is purchased the system might flag an opportunity to recommend insurance
Your firms revenue growth is fundamentally tied to how you apply the basic principles to grow, but more importantly how effective you are at making use of technology and shedding your traditional business processes.
Next article we’ll explore our 3rd Pillar on how to maximise business continuity and minimise risk in your law firm – until then.. to your success,
About the Author: James Vickery is the founder and CEO of I Know IT, a transformative IT services provider. James connects law leaders to their strategy through technology with a firm belief that lawyers must re-enter their profession as innovators, thinking and acting as technology companies do in order to survive, compete and prosper in a digital economy.
James enables this new way of thinking and executing through consulting, coaching and delivery of technology solutions to Australian and international organisations. More from this author.