How to reduce your profit leakage
Thursday 24th May '12
How do other firms, who offer similar services and are no better than you, make more money? The answer might be that you are leaking profits, and need a plumber to help you sort things out. Here are some tips on looking for the leaks.
yourself with basic sales skills and processes so you and your practice are
better able to convert enquiries and opportunities into new work.
unprofitable work and unprofitable clients
now accept the importance of undertaking an initial (negligence) risk
assessment for new clients. Learn to risk assess whether any new client is
likely to be profitable – and be ready to turn them away if not.
are great negotiators for other people, but struggle to justify or raise their
own fees. Learn how to communicate value and justify your fees by talking (in
interviews, estimates and bills) about:
what you are doing
- why you are doing it
- the risks of not doing it
- why you do it in a certain
- how all this benefits the
your fees up by £5 !
estimates / Failure to send cost updates
write-offs, focus on improving the accuracy of initial estimates by using
historical time-cost data, and measuring estimate accuracy. Then program your
practice management system to alert you when WIP hits 70% of the original
estimate so you can consider whether costs update is required.
partner might assume that by doing the work themselves, they will generate more
revenue and that this will be more profitable. This, however, ignores the fact
that a partner’s time is more expensive and that delegating to a more junior
solicitor will actually be more profitable after costs are considered. Partners
should think twice before retaining work for themselves.
recording all your chargeable time
Should you be interested in stopping your profit leakage and releasing you hidden profit please contact us
Information taken was the Queensland Law Society