In 2019 law firms are expected to yield a 6% revenue growth nationally. A portion of this growth will come from the pharmaceutical and health care segments. With the impending opioid mass tort litigation on the horizon and new states being added to the list daily, can your firm position itself to capture the windfall and also position itself for sustained growth?
Here are some methodologies that high-performing firms employ to capture new revenue and support sustained growth:
Be Data-driven
- In high-performing firms data drives everything they do. Pricing experts help determine if a case is accepted. All team members know the average value of cases closed in the last month as well the dollar amounts converted by your marketing team vs. junior associates. Tracking and responding to any fluctuation in these KPIs will determine your firm’s success and drive growth. But equally important is the team’s ability to internalize these metrics and begin to view their own success in terms of meeting these benchmarks.
Make the shift from practice area to industry vertical
- In order to gain alignment with an audience use the messaging they understand. When you genericize your offering, you miss the opportunity to connect with an audience that has a specific need in mind. Successful firms know this and work to create marketing materials and messaging which demonstrate to the marketplace that they have the subject matter expertise within a vertical and are equipped to manage the work. While messaging is key, you will of course need to make sure that your team is primed to support a more niche segment. In cases where you are not, consider engaging an outsourced legal team to augment your expertise.
Build a Brand
- One of the core tenants of high performing teams is clarity of purpose. This directly ties to brand. If all parties aren’t clear on your mission, how can the marketplace pick you out of a crowd? The segments which grew in 2018 were comprised of firms with strong brand. But it wasn’t just the blue chips firms, 33% of boutique law firms captured 5+% growth in 2018 as compared to 39% of the nation’s top 50 firms. Those remaining firms unable to seize such revenue figures, could not stand on brand.
Be Lean: Accept Expense Pressure as the new norm
- Expense pressure isn’t going away. To meet marketplace expectation of continued growth, expenses much be consistently managed. Consider incentivizing your organization not just on revenue growth but also on cost-savings. Remember, some of the best ideas come from staff who see opportunities for change but may not be empowered or incentivized to voice the improvement.
Know the profitability of every segment in your firm’s portfolio.
- While pharmaceutical and healthcare sectors are known revenue generators, it’s important to be able to quantify what it takes to manage those behemoths. If your firm isn’t staffed to navigate large class action or tort cases but still want to include that sector in your portfolio, do what nearly 8% of firms did in 2018 and outsource the work that you cannot manage yourself. Outsourcing firms like De Novo Review can handle nearly every practice area that your own firm can and save you time and money while not requiring a long-term financial staffing commitment.
Implement processes for continuous innovation
- It is not by accident that technology teams (whose developments seem to enter the marketplace almost non-stop) are able to work in a way that supports the rapid pace of innovation. The ability to scale, adopt new tech tooling and communicate are all intrinsic to a tech team’s ability to move quickly and synthesize change. Your practice can benefit from their internal business methodologies and adopt a more fluid and effective process. One way to move faster is to improve communication amongst the firm. Consider adopting Slack for internal messaging to eliminate the time it takes to craft an email. There are a slew of other techniques and tools teams can use to be more efficient, but since every firm is different, do your homework to find the tools that will work best for you.
Build a structure that is scalable
- To be scalable you need to be able to quickly ramp up or down to manage demand. During mass litigation and tort cases know that your team may need to augment to capture excess workload while not impacting other areas of your practice. Proven outsourced firms like De Novo Review can help in areas where you lack the in-house capacity and expertise.
Partner Succession planning: financial readiness and impact to clients.
- An onslaught of retirements is slated to impact top firms in 2019. There are both financial implications to those attritions but equally important is the potential client impact. Top firms have run financial models to understand how they can navigate with a high-density partner attrition event. Ideas on ways to support the can include retaining a proportion of annual earnings. Whatever the method, it is important to begin communicating the outcomes before the attrition event occurs. Additionally, client engagement during the transition should be high as it is the most vulnerable time in the account life cycle and one that your competitors will try to leverage to their advantage.
Be flexible
- Those firms that will succeed in 2019 understand not just their practice strengths but are flexible and work to continuously shore up their internal business practices and employ new technologies and outsourcing models to seize opportunity for growth and expansion.
If you would like to learn more about the ways that De Novo Review can support your firm’s revenue goals and promote sustained growth in 2019 and beyond, please send us your contact information and one of our team members will be in touch.
We look forward to helping you capture your share of the revenue and promote your sustained growth in 2019!