How to Increase Law Firm Profitability

Fixed costs have affected a lot of personal injury practices, and are likely to be introduced for all civil litigation claims up to £250,000 in the foreseeable future.  With many law practices already shutting their doors, it is crucial that those who have yet to be firmly effected by fixed costs get their house in order to ensure they remain profitable going forward.  So what can be done to increase law firm profitability?

Go Paperless

You may have been told this time and time again, and I personally found it difficult to transition from good old-fashioned paper to working digitally (and I still like to analyse data on paper form).  But it really is a revelation.  Think how long each staff member in your office takes looking for paper files, fetching them from a cupboard and searching for endless bits of paper. 15 minutes? 30 minutes?  Taking the lower of those two figures, multiply that by the 261 working days this year and you have just freed up 3915 minutes, or 65 hours per staff member.  Taking into account the saving on all the associated storage costs, and it doesn’t seem like such a bad idea does it?  Oh, and the use of two screens is highly recommended!

Bespoke Case Management Software

There are lots of options out there for case management systems, but not many that do it well.  Proclaim is an obvious choice.  It has a great reputation, is endorsed by the Law Society, and most importantly it can be developed.  But what does that mean?  Imagine how many times you re-write the same letters, party names or waste time searching for information.  With Proclaim you can develop standard letter templates that integrate the information of the case, automate emails being sent to the client regarding updates, have Court forms automatically completed.  The opportunities for improving efficiency and increasing law firm profitability are endless, and further with In case your clients can remotely monitor progress of their file when they want (you can customise everything they see) to improve the client experience.  Every improvement you make may only be a 1-5 minute time saving, but think about that on every task your team complete and it stacks up.

Stop Wastage

This sounds like an obvious one, but with the massive increase in Court fees the tolerance for wastage has significantly reduced.  Systems need to be implemented to ensure cases are pleaded at the correct amount.  Is that £5,000 issue fee really necessary, or is the claim only going to settle for £50,000 (equivalent Court fee would be £2,500)?  In all likelihood, even if the case succeeds the paying party will be successful in at least making some reasonable argument as to why the full Court fee should not be recovered for settling for half of what was pleaded.  That’s a loss that your practice could have avoided.  Set up proper review practices when a file is being issued, with Proclaim you could automate a Manager to be informed if a case is being requested for issue and for their to be an authorisation process.

Report Analysis

Handily with Proclaim, any data entered into it can be reported upon, which provides endless analysis opportunities.  Want to know what your average spend on Court fees is per fee earner, or what you are recovering in Court fees per month?  Who is recovering the most profit per case and why? Where are the bottlenecks in your processes? Or even if you simply want to know at glance how many cases each file handler has.  The scope for analysis is infinite and can vastly assist in focusing your attention on key areas.  And the reporting can be automated too so you have it ready on your computer waiting for when you get into work.

Invest in your Staff and Monitor Performance

We’ve seen a lot of firms re-structuring to ensure they focus more on hiring less experienced staff at reduced cost in order to maximise their returns:

“If you think it’s expensive to hire a professional to do the job, wait until you hire an amateur.”

It’s obvious that retaining high salary staff contributes significantly to your overheads, but we have seen time and time again the associated cost implications of inexperienced fee earners taking conduct of cases.  Failure to run cases expeditiously, difficult work being put to one side for months, strike out of claims or simply missed opportunities to maximise costs by making non-competitive Part 36 Offers, or none at all!  As always, the balance must be right and the need to retain talent remains stronger than ever.  When it comes to checking your overheads, don’t just look to cut the most expensive staff in your team.

In addition, keep your team motivated by giving them realistic targets and being open about their performance.  Wouldn’t it be nice to know how you contribute to the company and where you stand.  If employee X is generating 8x their salary for the business and employee Y is only generating 2x their salary, let them know and speak to them about why they are doing so well or how they can improve.  That’s what people want, feedback and opportunity to progress!

Closing Remarks

With fixed costs predicted to be expanding across the board, it makes sense to be the most efficient practice you can be to help increase your law firm profitability.  There are a lot of those who see fixed costs as a bad thing, and yes it does reduce the profitability you can make per file.  But that doesn’t mean law cannot be profitable, and we just need to focus more on how we can reduce overheads, improve our capacity and maximise the speed at which tasks can be completed.  If you need any free advice on maximising your firm’s potential, contact us here or contact the writer via email at 

If you are interested in developing Proclaim to increase your firm’s efficiency, take a look at the Proclaim development pages on our website to see how a Proclaim developer  can assist your firm.