The report, ‘Lean, focused, profitable’, out this week, found 62% of firms (up 4% on last year) have increased their revenue in the past 12 months, with growth fairly evenly spread across practice areas. Most firms are focusing on improving existing client relationships to drive revenue, a strategy that is paying dividends—a ‘whopping’ 84% rate their firm’s client experience as ‘good’ or ‘excellent’, while only one per cent rate it as ‘poor’.
Watkins Solicitors partner Sophia Ramzan explains growth is about ‘building trust so clients come back and refer others’.
AFP Bloom partner Zoë Bloom highlights the importance of understanding what makes your client offering different: ‘A cookie cutter law firm, replicating the others around it, will find it harder to grow than a firm which is confident in its own identity. Firms that try to replicate others tend to lose clarity and direction.’
The highest profits are to be found in two areas—litigation and dispute resolution, and private client work such as wills and probate. Volume-based or commoditised work, on the other hand, is considerably less profitable.
However, challenges persist. Most firms believed they could do more to lower their overheads and that too much time is absorbed by back-office processes, matter handling and document work. More than half said their biggest workflow issue is administrative tasks while case management and document drafting and reviewing are also eating into their time. Consequently, firms are planning to increase their investment in technology, artificial intelligence (AI), standardisation of documents and profitability tracking. However, they remain cautious about AI governance and prefer careful, gradual change that preserves their individual culture.
