When it comes to the way your law firm operates - and what you expect your lawyers to do to keep it profitable - you might be surprised what your Associates and Senior Associates don’t understand.

Over the past decade, Sam Coupland, from FMRC, and I have run business skills workshops for lawyers. (Those who come along usually have more than 5 years of post-qualification experience under their belt.)

Here are three things they’ve raised that we’ve needed to set straight...

1. SURELY DISCOUNTING A LITTLE DOESN’T HURT THAT MUCH?

The short answer was ‘yes, it does’. But for the long answer Sam illustrates how something as innocuous as discounting fees by 5% can have a 38% impact on profitability.

After all, if you go by the old law firm rule of one-third of fees to salaries, one-third of fees to overheads and one-third of fees to profit, any reduction in fees immediately draws money away from the third pillar of that equation: profitability. Discount too much and there’s no profit left over at all (and therefore no Partner draws either).

While he is on it, Sam shows the impact regular invoicing has on cashflow and the impact cashflow has on profitability too.

2. WHY DO I NEED TO MARKET? IF I DO A GOOD JOB WON’T I JUST GET MORE WORK?

Sure, doing good work matters a lot. But that is a baseline expectation. Even the best lawyers need to amplify what they do through marketing and business development.

On a personal level, I tell the associates that the absolute minimum they should already be doing is identifying the markets they focus on and building their networks so that they can begin to attract the right type of work. I tell them they should also be using social media too - not just as a way of getting their message out but also to get it out to a broader network than they’d otherwise have.

Turning to more old-school methods, we talk about the power of doing the simple things, such as having a conversation at the end of a matter and giving contacts the occasional call to check on how things are going.

And I tell them where (and how) to look for addressable wins and low-hanging fruit because it’s the accumulation of short-term gains that builds a long-term practice. After all, didn’t someone once say that from little things, big things grow?

3. WHY DO I HAVE TO BUILD A NETWORK NOW? ISN’T THAT THE PARTNER’S JOB?

Here’s a tip, I say, ‘No’. These days everyone is responsible for building a network that brings in work. In fact, it’s often Associates who have more face time with clients and are well-placed to understand exactly what they want. Tomorrow’s partners will be using that to their (and their clients’) advantage today.

But there is another point I bring up too. For most lawyers the best source of referral work is… wait for it… other lawyers.

Given they are sitting in a virtual room full of other lawyers when I tell them this, it becomes the cue they need to post Linkedin links in the Chat section, ask each other questions about what they do and generally start building their own networks of referrers. There are lawyers from the city, lawyers from the bush, employment lawyers, litigators, estate and family lawyers. And they all walk away with at least one person they can pass work to and who would hopefully pass work back.

So there’s a sample of questions Associates and Senior Associates ask us about the mechanics of how law firms work.

Find out about the next virtual workshop on 26 March 2024 by Sam and me here.

WANT MORE?

Sue-Ella is the Principal of Prodonovich Advisory, a business dedicated to helping professional services practices sharpen their business development practices.

She works with firms that focus on positive client relationships, and with individuals who want personal, intelligent support.

You can contact Sue-Ella here or book a private 45-minute Business Development Session here.

© Prodonovich Advisory. This article was written by a human. Please respect our copyright and the effort taken to produce the original material in this document. This document or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the author.

REFERENCES & FURTHER READING

Furlong, J (2024) Metamorphosis: AI and The Law Firm

Sue-Ella’s articles

How To Get Junior Professionals Contributing To Your Firm’s Business Development (2016)

Seven Things Associates Would Change About Your Firm (2017)

How US Law Firms Are Building The Next Generation of Rainmakers (2015)

Ten Dumb Things Smart Professionals Are Asked to Do for Business Development (2021)

The Key To Successful Practice: Stop Focusing on Winning Work (2023)