7 Reasons Why Law Firms Fail
By: Courtbuddy.com
According to the American Bar Association, approximately 70% of lawyers in private practice work in law firms with 10 or fewer attorneys. Another 48% are solo attorneys. Because law firms of these sizes are considered small businesses, and only a third of small businesses survive 10 years or more, let’s examine why a few law firms succeed and most law firms do not.
Lack of Differentiation. The most successful law firms know how to differentiate themselves from the competition. For example, an estate planning law firm may differentiate itself from the competition by marketing itself as a mobile law firm that visits clients. Maybe their advertisement is “We Come To You”. Those that fail do not offer anything unique to differentiate from other law firm competition, or what they are using to differentiate themselves is not significant enough to make a client choose them over a competitor.
Lack of Understanding Of Client’s Needs. A law firm cannot exist without clients. Successful law firms take the time to understand their client’s needs and remain nimble enough to accommodate their clients. Unsuccessful law firms treat their clients as a file or number. When clients provide valuable feedback such as requesting a meeting to discuss their bill or to discuss the direction of their case, unsuccessful law firms refuse to meet or ignore them entirely. This type of client treatment puts you on the fast track to being out of business.
Poor Choice of Location. Successful law firms are in locations that in close proximity to their clients or potential clients. For example, criminal defense attorneys have law offices near the criminal courthouse. Successful law firms also find locations that will create the perception of success to a client. If you have an office that is hard for your clients to visit or that looks rundown and uninviting, then your location will cause clients to choose another law firm.
No Focus. Successful law firms set short and long-term goals and focus on achieving them. Successful law firms also focus on the big picture, which is to get clients, keep clients, and do the best job possible for clients. Unsuccessful law firms fail to focus on what matters. Instead, unsuccessful law firms are entangled in non-income producing activities and other time-wasting matters that do not help them achieve their goals.
Lack Of Financial Management. Successful law firms learn how to monitor cash flow, read WIP (Work In Progress) reports and ledgers regularly, and study accounts receivable and accounts payable. Successful law firms constantly monitor their financial health. Unsuccessful law firms fail to manage their finances, which eventually leads to the law firm’s demise.
Lack of Perseverance. Successful law firms understand that success is a road that is always under construction. Not everything will go your way, but you persevere and embrace the challenges anyway. Unsuccessful law firms crack under pressure and fail to persevere when the going gets tough.
Failure to Learn and Change. Successful law firms understand that learning and changing when necessary are the keys to surviving and thriving. Unsuccessful law firms fail to learn from setbacks or fail to make changes to their systems and processes when necessary.
In business, you are either getting better or getting worse. Successful law firms are getting better. Unsuccessful law firms are getting worse, if they are even in business. Choose success and choose to be one of the few that make it, rather than one of the many that do not.
DEMO: Our Attorney members love getting instantly matched with clients through Court Buddy.
Click below to see why!
Attorneys have generated over $1 million in new business through Court Buddy. Now you can use Court Buddy to get new clients and generate additional revenue for yourself or your law firm. Click here to get started today!
