Applying sound management practices is essential for a firm to be a success, especially after enduring a prolonged economic downturn.
Here are six areas to closely review as you go forward.
- Leadership and organizational structure. Has responsibility been assigned and accepted for practice management, and do others in the office function effectively? Do you have the respect and support of your staff?
- Specialties and niches. Is the firm particularly adept in one area that could be further developed and promoted? Does one practice area no longer provide a reasonable return? Are higher fees generated from your specialty than your general practice?
- Client matters system for effectiveness. Does your system give credit to the attorney originating the case? Does it establish time and dollars records within one day after acceptance? Are net profits provided on each case?
- Delegation of work and efficiency of support staff. Are incentives for high-level job performance and value billing offered by the compensation methods? Do morale and attitudes indicate a healthy competitiveness and a client-service perspective?
- Financial controls. Do you use trend analysis to compare prior and current performance periods, budget and projections? Does your time and billing system encourage prompt billings while tracking all time and costs expended by client matters? Do you track number of days in accounts receivable and collection percentages?
- Overhead. Does the money spent on overhead support the firm in its effort to produce a healthy net income? Are all fixed expenses identified and reviewed for possible, less costly alternatives? Are major variances in overhead expenses highlighted in reporting? Before money is expended, is the current or future benefit reviewed?
A little foresight and more awareness of conditions are important precautions to keep your firm on track and to increase your bottom line.