Running a large, established law firm is hardly a stroll in the park. It gets even more challenging if you want to grow the business by expanding your footprint, growing in size, and increasing your profitability.
Having the right growth strategies that support your firm's long-term objectives is the foundation of effective business development and law firm marketing.
Here are four main ways to support law firm growth:
- Diversification of Offerings
You can offer professional services to new markets that are either related or unrelated to your current practice areas. The most common diversification strategies are concentric/horizontal diversification, conglomerate diversification, and vertical diversification.
When you build a multidisciplinary practice, you need to consider how social, economic, and political factors, as well as client demands, will affect the success of the expansion. You should also leverage your core competencies and implement an efficient case management system to optimise efficiency and profitability.
Expanding into a related market (i.e., horizontal diversification) is a common approach among law practices. It allows you to capture more revenue from the current client base by offering an expanded menu of legal services to meet their needs.
- Geographic Expansion
Expanding your law firm to new geographic areas can help drive sustainable growth for your law practice. This growth strategy is particularly effective if you face a maturing or saturated market and need to grow your client base.
The key to successful geographic expansion is to identify regions with the highest growth potential for your practice areas. Besides market demands, consider how your credentials and reputation can be transferred to build instant credibility in the new market.
When you open a new office at a new location, you should set up a centralised system to streamline workflows, consolidate administrative tasks, and facilitate communication across the various locations so you can minimise delays and improve operational cost-efficiency.
- Mergers and Acquisitions
You can accelerate growth by acquiring capabilities and resources that you don’t have internally. Doing so can improve your competitive strength, build capacities, expand your client base, and improve financial and tax efficiency.
While M&A can expedite the growth of your law firm, you also need to consider the various logistic hurdles that may come with it. For example, it could be challenging to unify the workforces, objectives, and philosophies of the different practices.
In addition, if the IT environment and legacy systems of the acquired firm is vastly different from yours, you may need to invest substantial time and effort in reconciling the workflows and processes to ensure data integrity, security, and cost-efficiency after the merger.
- Restructuring for Profitability
Making changes to the financial and operational aspects of the firm can help you increase revenue and/or lower expenses. This involves evaluating the current business procedures, IT infrastructure, and cost structure, then making necessary changes to increase profitability.
In today's digitalized business environment, many areas of improvement (e.g., optimising operating procedures, maximising cash flow, reducing management costs, increasing marketing effectiveness, and improving client relationships) can be facilitated by implementing a holistic and agile case management and legal practice management software.
It's therefore important to involve your IT team early on in the restructuring process to device a technology approach that supports the overall efforts and goals. This will allow you to configure the software and integrate it with your current processes to optimise ROI.
As your law firm grows, there is more to juggle. From practice management and client services to cash flow management and compliance, you can't afford to have anything fall through the cracks.
Regardless of your growth strategy, the key to success in today's competitive environment is to modernize your case management and legal practice management processes with the right technology stack.
Here at SOS Legal, we provide our clients with a full suite of practice management tools that facilitate more efficient business processes, better customer communications, and more effective reporting.
Book a demo to learn more about SOS Connect’s case management, practice management, legal practice analytics, and legal CRM, marketing, and customer service features.