Clients around every industry are demanding more transparency within pricing, access to information, and processes pertaining their dealings. Basically, clients want to be able to trust their professional service providers. Law firms are not immune. And who among us could contradict them?
In the midst of a technological revolution, and a rise in bureaucratic complexities, the general public is becoming more estranged from what happens with their data. In this landscape transparency is the key to improving client relationships and growing your legal business.
Biggest problems/challenges law firms face
Being a lawyer is not easy. It can still be a prestigious and lucrative vocation, and it requires a great deal of intellect and resourcefulness. But the day to day for attorneys and paralegals can be very stressful and demanding. Very long hours, complicated clients, and some myths that surround the characters who deal in legal procedures.
In times of hardship, one can be tempted to simply keep working harder, but this is when a detailed evaluation of the workflow is most necessary. Let’s see two of the most common challenges law firms face.
Long (and non billable) hours
The simple amount of paperwork a lawyer needs to go through is alarming, and the hours dedicated to a client are not billable in its entirety. Some reports even say that the billable hours out of an average 9 to 5 workday are only around 2.5. The other tasks done in the day have a bureaucratic and administrative nature that is necessary legal work, but can be done by someone who isn’t an attorney.
There’s a chance in this legal issue, a chance to analyze if there’s a way to improve these practices, by implementing better legal technology solutions and more administrative support. When you can understand how any employee uses their hours, across your firm, you can start to see the pattern of the internal workflow.
Chances are, attorneys dedicate a lot of their day to clerical tasks that could be allocated to a support role. Freeing this time for them, by hiring another employee or using software solutions with automation, can be beneficial for the legal firm and for them! They can use their expertise on more suitable and interesting enterprises, or doing legal research. This way you can improve the value of each billable hour across the business. Letting them take care of the client’s needs.
Understanding Clients
There’s a phenomenon that plagues various industries, and is very persistent in the legal industry. A great amount of a law firm’s client pool needs that service due to an issue or a big problem. Just think about the difficulties other types of professional services have when it’s time to get payment, now add another layer of hardship when charging a fee to a client that reluctantly needed a legal service.
This is not only an issue for the little guy, it also affects corporations and bigger companies. Even the bigger spenders try to lower their legal fees to the minimum either by hiring in-house legal teams or acquiring new technology at lower costs. The legal market has a saturation problem, and many clients threaten firms with going over to the competition, because someone out there is surely charging less than you. And this is a key aspect of the issue we are raising today.
Lowering the price of your legal service or fixed fee is not the way forward. You need to show your client the ways in which you add value to their operation. And a great way of doing so is via a transparent relationship with them: explaining where fees come from, showing progress in real time, and having a clear and open way of caring for the bond with clients.
Transparency: What is it and how can you achieve it?
The trend of having a transparent business is only rising. And it’s not a fashion or a fad, it seems to be here to stay. And it’s not hard to see why businesses can have a better process to show, and a larger accountability for client’s projects. They can be more trusting, and more willing to spend their hard earned dollars when they know how their projects are being carried out.
You can start your transparency path with a crystal clear message across your law firm, and throughout your communication channels. Your website and social media should showcase this message to loyal and new customers. Most people that search for legal advice are doing so in a desperate manner, and should encounter a simple and straightforward answer to their needs. Your firm’s site should simplify the acquisition of this information. Use everyday language, be upfront on your practice areas, and legal services provided.
Pave the way for clients to contact you in a better state of mind, and not in a frustrated way due to an incomprehensible website. Or even increase the referral rate, there’s no better advertising than a happy client.
Why is transparency so important?
Transparency can also be an amazing negotiation tool. When you are in a transparent state of business making, you managed to reach a position that allows you to:
- Have a clear operational process.
- Know the cost of each service offered.
- And thus have the information needed to know how much to charge in order to be profitable.
- You can explain in detail why you are charging a certain fee to your client.
With this type of data, fee negotiations can be more open, and the client can better understand the work that goes into the legal service provided, and the value your firm grants them. It’s also a good way to better understand client expectations.
Transparency can also lead the way to new types of relationships with customers. Within certain professional services here’s an underlying distrust that is born out of an understandable incomprehension. Let’s look at a very common example: if you have an electrical problem you will most likely call an electrician for help. When they are done working on the issue they will charge you, and unless you have a deep understanding of the craft you won’t know what goes into the calculated fee.
If ignorance is the reason distrust happens, then information is how you become trustworthy.
This same problem arises for common folk when they need a legal service, by employing a transparent strategy from the get go you can increase the trust clients feel towards your firm. Knowing how your operational procedures work, while knowing what exactly goes into a fee, allows you to clearly explain this to a client.
Incorporating Transparency into your culture
As many professions, a law practice can fall into a star-culture operation. This is not a good thing for business, since it limits collaboration, and could even present a difficult work environment. It hurts internal relationships and can make it tough for non-star-designated employees to bring clients and share responsibilities.
Transparency goes both ways, it also needs to be an internal operation. Star systems often depend on personality, not on metrics or hard work, and can hinder the progress of very capable, but less charismatic, individuals in your firm.
When you manage to create clear channels of communication, training programs and rewards systems, you can help the talent improve and grow in a positive environment. In order to create a better firm, you will need to listen to your employees. And to take a close look at the organization as a whole.
Effective Client Development
Like we mentioned earlier, transparency inside the law practice can be a great tool for improving your client pool. Centralizing information across the different areas can be a great way for your employees to capitalize on existing clients and to show what other services you provide.
If you offer different practices, it can be beneficial for you to make sure everyone is up to date with the current resources your firm has to offer. Breaking down information silos is one of the many things transparency can help with. Everyone can be on the lookout for new client relationships, for example, imagine a paralegal in one department can let another one know if there’s a possibility a client needs another service. This can strengthen attorney-client relationships, create a collaborative space within separate legal departments. As well as improving the bottom line, if done right.
Transparency as a Grow Strategy
If you have an unprofitable business, and you start to grow it, you will have a bigger unprofitable business. Many people are tempted to think that simply working more, getting more clients, and increasing in size is the way to make it. But that’s not the case. You need to work smarter.
Profit is the key to any successful business. And since the legal profession is a service, attorneys are not immune to an unprofitable disaster. At COR we made it our mission to help professional business services improve margins and become profitable.
And how can you become more profitable? With data and a transparent billing process.
With our time tracking feature you can count each billable hour a type of service usually requires. With this information our tool can successfully estimate the cost and resources needed, and how much you should change in order for that project to be profitable.
You can also take into account if your employees are doing ok. Our all-in-one solution can improve the working environment, by helping with realistic scheduling, and letting everyone know how many tasks each employee has on their plate. This way you can reduce burnout and take care of talent.
With our automated reporting capabilities you can get to know which are the most profitable clients, and let them know the value you give their own operation. You can even let them inside the software, and share in a transáretn way how their projects are doing. This improves client-lawyer relationship and trust.
With the correct information, and the right transparent disposition you can improve billable time, margins, profit, and client communication. Let us know if you want to take a step in the right direction, and request a demo today.
