Running a successful legal practice requires wearing multiple hats, including accounting and finance. To create a financially thriving law firm, it's crucial to have a clear understanding of your business's purpose, challenges, and growth levers. Clayton Oates, a global leader in accounting technology, shares practical insights based on his 30+ years of business and technology experience to help legal professionals enhance their practice's performance and financial rewards.
Read on and access the full session recap to discover all the valuable insights that were shared.
1. First, Know Your Why
To build a financially thriving practice, start by understanding the purpose of your business, the challenges it faces, and the levers that can drive growth. By reconnecting to your business, clients, and the reason you started the business in the first place, you can gain clarity, re-ignite your spark and build a better client experience.
2. Business as a Vehicle
A business should be a means to achieve your goals and dreams, creating freedom and flexibility. However, many small business owners get caught in the "busyness" trap, limiting their freedom.
3. Three Types of Businesses
Clayton identifies three types of professional services businesses: those built to sell, those built to keep for personal fulfillment, and those unintentionally burdened by the owner. The goal is to create leverage and transform the business into a fulfilling and sustainable venture.
4. Creating Leverage
According to Peter Drucker, the purpose of a business is to find and retain customers, not solely focus on profits. By prioritising innovation and marketing, you can effectively attract and retain clients.
5. Metrics that Matter
To build a thriving practice, focus on key metrics such as generating leads, conversion rate, number of matters/clients, average money per matter, and margins. Generating leads, improving conversion rates, managing workload, increasing revenue per matter, and optimizing margins are essential for sustainable growth and profitability.
6. The Key Financial Reports You Need
Understanding financial reports is crucial for effective business management. Key reports include budget overviews, budget vs. actual performance, profit and loss statements, previous year comparisons, balance sheet movement, AR ageing summaries, and owner's report packs. Regularly analysing these reports allows informed decision-making and keeps your business on track.
Access the full recap
To learn more about ways to build a financially thriving legal practice, download the full eBook here.