Better Business Practices: 7 Burning Questions Answered for Law Firms
Published on August 14, 2019
Business Development

I get asked ALL the time about what areas of business a law firm owner should be focusing on the most. How much time should I spend on my business versus client work? How should I be measuring the health of my firm? What are best practices for how much I should be spending? Should I be outsourcing my law firm accounting or is it okay for my legal assistant to do it? How much should I be investing in legal marketing if I want to grow?

What do we mean by “Better Business Practices?”

  • Plan for success. Winging it can work sometimes but will be frustrating.
  • Make good decisions using data and instincts. Too much of either can create lost opportunities or big mistakes.
  • Focus on culture from the beginning no matter how small you are.

Do I need to have a business plan/marketing plan for my law office? What’s the difference?

No. You really don’t need either if you plan on burning yourself out and not making much money. If you don’t care how much money you make or what kind of impact you can have in your community or the legal industry, then no need to waste the time. 😉 I say this in jest of course, but it’s true to a certain degree. You will spend a lot more money and time without a good plan and you won’t get the results you truly desire.

What general metrics should every law firm measure?

Revenue, net income, gross margin, average revenue per case, days it takes from a lead calling or emailing you until they are able to get into a consult, cost of marketing per lead you get and per client you get, administrative hours by all employees in addition to billed hours, days to collect your outstanding receivables (how long does it take for your clients to pay you after getting billed), customer satisfaction, quantity and quality of online reviews, employee engagement, profitability of practice area types, flat rate/fixed fee profitability.

What percentage of revenue should I be allocating for expenses? Use this workbook tool to compare your data to the benchmarks listed below.

Salaries for Attorneys and Staff 25% of revenue
Accounting Services 2-4% of revenue
Marketing Services 5-10% of revenue
Rent 5-7% of revenue
Other Operations/Business Administration 10% of revenue
IT Services 4-6% of revenue
Total expenses (non-compensation) 35% of revenue
Owner Compensation 40% of revenue

What are your strategic goals? If you generally are happy with where you are in your firm, don’t invest any more than you already are in marketing. Typically, 5% of your revenue will keep the phone ringing and allow you to maintain, generally speaking, and 10% of your budget when you are just starting out and until you have a more established brand and especially if you want to grow. This % of revenue could lessen over time as you get larger but will likely never be less than 8% and especially if you are looking to compete and maintain market share.

How can I determine where to spend my marketing budget?

What are your strategic goals? Are you seeing a trend;-)? Honestly, don’t wing it and don’t let an advertising agency just give you a proposal for everything they can do for you. Work with a knowledgeable consultant that can look holistically at your goals and help you draft a legal marketing plan that capitalizes on community/market opportunities, traditional advertising methods and looks at not just social media but also social engagement. You need a legal marketing partner that can help you pull in all the service provider options into one plan. If you are doing this yourself, look across all these marketing avenues for opportunities and set some goals but do trial and error that plans, initiates, measures and then re-calibrates. You can’t just pay out big dollars and then set it and forget it. You must manage this plan closely or work with a partner who can.

Does office “culture” matter if my office is only my assistant and me?

What do you think? What are your strategic goals? 😉 Are you looking to grow? Will your current assistant stay if you are a jerk? How do you define culture? Your clients will experience it, your service providers, colleagues and the court system if you don’t have an engaging and respectful culture. How you treat your Legal Assistant will directly impact how you treat your clients. How you treat your spouse or significant other or kids will directly impact how you are viewed in your market and professional circles. Does culture really matter if my home is just me and my spouse? You tell me! 😉

When hiring a new member of my firm, how important is it to consider their “fit” with my company as opposed to their experience and professional record?

Fit first, soft skills second, technical third. That is, assess for culture and attitude as a priority. Skills could encompass social, communication, work ethic etc…Technical is legal experience, specific practice area knowledge, ability to research, write etc…All are important but a great writer who is demeaning and belittles your staff won’t last long and won’t be worth your time.

What’s the best way to handle bad online reviews? Going forward, how can I get better reviews?

Your organization needs a voice and the biggest mistake firms make is not responding at all. The reader is left to only see one side of the story and come to their own conclusions. You shouldn’t respond defensively, however. This is hard to do especially if you feel they were dishonest. For egregious claims you can often get them taken down, but not quickly. Respond humbly, transparently and professionally. Give yourself or your firm the voice you want the viewer to hear that represents your brand. Set up a plan to get good reviews in an on-going way so when that bad one strikes it won’t have a big impact. Do customer surveys and ask for them to leave a review if they have positive feedback. if they share something positive, ask them for a review and send a follow-up email with the links to make it easy on them.

Check out blog articles on this very subject at for more specific advice.

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