When looking at areas of missed revenue opportunities, a good place to start is by reviewing the accuracy of your Fee Earners’ billing habits. Most firm Partners are challenged by understanding that all fee earners need to be earning at least 3 TIMES their cost base, to grow business and ensure profitability.
I refer to this concept as the Rule of 3. The trick is getting your Fee Earners to generate MORE than that 3x amount. Keep this example in mind:
A typical Fee Earner salary is say $100,000 x 3 = $300,000. That is how much they need to be invoicing out. 1/3 of that amount goes to the Fee Earner salary, 1/3 goes towards firm administrative costs, and the rest, most importantly, goes to firm profit. What you want to do is ensure that your Fee Earners are not giving discounts or billing less than that, otherwise you will see your profits diminish.
In Lesson 4 of my new Lawyers Toolbox online course, I provide an in depth discussion of the Rule of 3, as well as some strategies you can apply starting now. You can access the course at www.lawyertoolbox.online, and preview Lesson 4 absolutely free. I would invite you to review the content, and if you find it useful, enroll in my course for the full 30 lesson curriculum that will empower you with new strategies to increase your Firm’s profits. For a limited time, the course is $49 AUD with the discount code LAWYERS, so make sure to sign up now.
If you would like to know more about my personalized business coaching services, and how I can develop a bespoke business plan to suit your Firm or Business, visit my website at www.thebusinessdoctor.com.au or email me – jeff@thebusinessdoctor.com.au