As we prepare to bid farewell to 2023, it’s time for law firms to take stock of their yearly performance to see where they stand as an organization.
If things have been going well for your firm, it might be tempting to stick to the game plan that’s gotten you this far, but if you want to take things to the next level, it’s the perfect time of year to start developing new strategies to help your firm grow and scale.
For busy legal professionals who find themselves strapped for time this holiday season, we’ve created this list of strategies for law firms that want to ring in 2024 with a bang.
Lay the groundwork for success with a proactive plan
Planning for next year goes beyond simply creating a to-do list of goals you want to achieve—it’s about strategically laying the foundation for success. And the most effective plans? They include the following activities:
Identify your firm’s Strengths, Weaknesses, Opportunities, and Threats. Evaluate your internal processes, team capabilities, and market trends to ensure you have all the data you need to set realistic goals for growth.
Set SMART goals
A thorough SWOT analysis unfailingly turns up useful information, but don’t let it sit there on the SWOT grid. Use your observations to build SMART (Specific, Measurable, Attainable, Relevant, and Timely) goals for your law firm.
For example, if your SWOT analysis uncovered an opportunity to incorporate estate planning services into your family law practice, you can make this a SMART goal by:
- Specific: Offer wills and trusts estate planning packages for clients
- Measurable: Onboard 20 new clients for this service
- Attainable: Focus on basic estate planning packages for the first year
- Relevant: Promote service to current family law clients
- Timely: Add services by the end of the year
Communicate plans to all team members and stakeholders
Make sure that team members are involved in the planning process to create a plan full of diverse perspectives and fresh ideas for your firm’s future. If there are any external stakeholders, make sure they’re kept abreast of plans, as well.
Create a strategic roadmap for financial success
If you want your firm to reach a financially sound destination, you need a roadmap to get there. By conducting a thorough financial review of your firm’s previous financial performance and adjusting your strategies as needed, you can ensure you’re always on the road to success.
Review historical data
Sit down and analyze previous financial data to identify trends and patterns. Evaluate the performance of different practice areas, attorneys, and client segments.
Create a detailed budget for the upcoming year and carefully consider all operational expenses. Allocate your resources based on priority areas identified in your financial forecast and any upcoming initiatives for the year.
Cash flow management
Assess your cash flow over the last year. At what points did cash flow slow down? While incoming cash can decrease in predictable fashions (summer slowdowns, for example), consider where there are strategies you can implement to decrease those impacts, like optimizing your billing processes and making it easier for clients to pay you.
Manage your leads better
Client relationships are paramount, but you can improve the client experience (and make client intake easier for your team) by incorporating client relationship management software (CRM).
A legal-specific CRM will allow your firm to track interactions with potential clients, manage follow-ups, and streamline communication. The more responsive your firm is to leads, the more likely they’ll become clients.
Ensure ethical and legal integrity with trust account compliance
Trust accounting compliance is a key ethical responsibility for lawyers. With trust accounting, you’re responsible for ensuring that client funds are always where they need to be and that nothing slips through the cracks.
Proper trust accounting processes can help you:
- Maintain client confidence
- Ensure that your firm adheres to compliance regulations
- Prevent penalties and reputational damage that come with trust accounting violations
Here are some things you can do to ensure your firm stays in the clear with trust accounting in the new year.
Conduct regular audits
Make sure that all your accounts are in good standing and that no client funds are commingled or mismanaged by conducting regular audits. Constantly checking for issues with your accounts will help you rectify any inaccuracies before they become more significant.
Train your staff (or provide a refresher!)
Provide comprehensive training to your staff members responsible for trust accounting and ensure they’re up to date with regulatory changes affecting trust account management. Even if your staff has already been trained, it never hurts to revisit best practices and processes!
Embrace trust accounting tools
Find a legal practice management solution with robust trust accounting features that automate trust accounting activities and help with activities like:
- Managing client ledgers
- Safeguarding against trust accounting mistakes like ledger overdrafts or commingling
- Facilitating payments
- Tracking and disbursing third-party lien claims
- Importing electronic bank statements and auto-reconciling books
- Supporting three-way reconciliation reporting capabilities
Review credit card processing fees to keep expenses in check
One operational expense that can negatively affect your firm’s bottom line is credit card processing fees.
If you’re using a processing provider, pay close attention to the fees they charge. You may want to check what other providers are charging to get the best possible deal for your firm.
To make sure your firm isn’t overspending, it’s essential to:
- Compare credit card processors to find the most cost-effective solution and negotiate terms and fees to ensure you’re getting the best deal possible.
- Set limits on credit card transaction amounts to reduce fees and encourage your clients to use ACH or other lower-cost payment methods.
- Conduct regular audits of credit card processing fees and stay up to date on industry trends and technology that may impact the price you pay to process.
Start the new year strong with CosmoLex
CosmoLex has everything your firm needs to succeed in 2024, from robust data and analytics to legal CRM software to integrated payment solutions. Our mission is to provide the essential tools law firms need to grow and succeed in their practices.