Setting Growth Goals for Your Law Firm

March 31, 2022
4 min
Sasha Berson
Law Firm Growth Goals

To build a successful, profitable, valuable law firm, you need to have a dream. A goal is not enough, you need a burning desire, a dream you think about every day.

Something that fuels you.

Maybe you want to create a lucrative law firm that you can sell for $10MM when you’re ready to retire or move on.

That’s a fine and attainable dream.

Now you need to figure out the steps between you and your dream. Let me show you the first steps.

Setting Goals & High-level Planning

setting goals for a law firm

To reach a dream, you need to set long-term, intermediate, and short-term SMART goals. These are Specific, Measurable, Attainable, Relevant, and Time-Bound.

Again, say you want to create a company you can sell for $10 million in 10 years. In order to do so, you need to build a firm with $10MM in annual revenue and 15% EBITDA (earnings before interest, taxes, depreciation, and amortization). This is your long-term goal.

How are you going to get there? Where do you need to be in 5 years? How about 1 year?

If your firm is at $1 million now, maybe in five years you need to be at $5 million. That’s a good medium-term SMART objective.

Create a specific high-level plan to get there. For example: if every client is worth $10,000 in gross revenue to your firm, you need 100 clients to add $1MM in revenue. It takes 5 leads to get one client. So, you need 500 leads to generate an additional $1mm in revenue per year. So, to get from $1MM to $10MM, your high-level plan may look like this:

  • Marketing. Hire a high-performance marketing team to increase lead flow from 500 to 1,000 leads per year, and have them prepare a long-term plan to generate 10,000 leads per year in about 5 years.
  • Sales. Train the customer-facing team to improve the close rate from 20% (1 out of 5 prospects becomes a client) to 25%. You will be able to lower the costs of marketing and advertising to reduce client acquisition costs. Once the close rate is 25%, you will need only 400 prospects to add $1MM in revenue.
  • HR. Each associate can bill $800k in cases per year. Develop a recruiting plan to build out the team to deliver services. So, if you on your own produce $1MM but plan to get to $2MM within 14-18 months, you will need to start recruiting fast as soon as your caseload increases any more, you will start dropping balls.  

Set up other training systems and reporting standards so that your staff knows what to do and how to do it without being told. And you get the reports and data on these actions that will help you make decisions.

Those would be good, attainable, medium-term steps that would improve your bottom line and move you toward your dream.

Once your medium-term goals are set you establish the short-term SMART objectives. For example: reach a $2MM annual run rate (12 months of revenue) within 14 months. And then plan what must be done to get there.  

Identify Your KPIs

identifying KPI for law firm marketing

The next step is to establish your key performance indicators (KPIs), so that you can measure your progress toward these goals.

You should establish KPIs for every one of your impact zones in the business, including marketing, sales, operations, and HR.

You may not think you even have these impact zones or departments. Not every small law firm has a marketing department. But every functioning business does marketing at some level. Everyone that comes through the door as a potential client is the function of your marketing department. How you convert those prospects into paying clients is the function of your sales department.

Set KPIs for each one of these aspects of the business.

Have regular progress review meetings, so you can keep track of how things are going. Analyze your data.

Uncomfortable Yet?

If you’re starting to squirm, thinking this is all very corporate and unlike the law firm you know – good. To build a viable, successful business you can sell for a profit, you have to take these steps and push yourself.

In order for your firm to grow, you have to grow.

And in order for you to grow, you have to become comfortable with being uncomfortable. Remember, you’re no longer a lawyer. You’re now a CEO.

You have to challenge yourself to develop new skills and explore new areas. You have to make tough decisions and build your business acumen.

As you grow as a businessperson, you’ll be able to create a better, stronger, more profitable law firm.

The only limit to your business is you.

If you follow these steps and grow, you’ll build the kind of company you want - and one that will help you reach your $10 million dream.

Contact Us, and let Grow Law Firm help you to fulfill your dream.

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