Jonathan: I recently spoke to Jan Roos of CaseFuel with the goal of learning the key factors to creating a seven figure law firm. Below is an edited version of our conversation.
Jonathan: What does it take to build a multimillion dollar (law) practice?
Jan: At CaseFuel, we’ve spoken to literally hundreds of law firm owners ranging from solo practitioners who are just starting out to massively successful firms. Fortunately, success leaves clues, and after speaking to many practice owners we’ve uncovered the four commonalities among practice owners that reached 7 figure annual revenues.
Jonathan: What’s the first factor?
Jan: Know your numbers. Focusing on objective measures for your business is one of those truisms that’s trotted out by many but implemented by few. Sure, we all check bank account balances and see a profit and loss sheet at least once a year when we file taxes, but the firms that grow know a lot more than that. They set goals. For example, if you take $1,000,000 and divide it into 12 months, it’s $83,333.33 per month. If your goal is to hit seven figures you need to average $83,333.33 per month. Going deeper, fast growing firms are able to easily convert this into case files required to hit that number by knowing their average case value. Let’s say you run a family law practice and made $30,000 last month on 6 new cases. Doing some quick math, the average case value is $5,000. If 7 figures is your goal, you now have the much more tangible figure of 17 cases ($83,333.33/5000, rounded up) to hit for that seven figure monthly run rate. Now you can take this further along and think about how many of these 17 cases can you expect from referrals, your website, networking, etc.
Jonathan: So the goal is to know what you need, and how you can get there, by breaking the entire practice into smaller, more manageable parts?
Jan: Yes, by breaking things down into manageable chunks, you’re setting yourself up for incremental gains that will result in real money in your checking account regardless of whether you make seven figures this year or not. And that’s worth investing time into.
Jonathan: What’s the second factor?
Jan: Practices need to focus their energy on predictable and scalable channels. We all want to get referrals, but it’s not possible to know with certainty how many referrals you are going to get next month. In our world of search engine marketing, we can easily look up the number of people searching for ‘divorce lawyer + CITY’ in a given month, usually numbering in the thousands. It’s knowable. You could also host workshops, doing “lunch and learns” with captive audiences, and you’ll get real good knowing how many will attend. Once you get a scalable channel locked in, it’s just a matter of how much you want to keep investing to keep the leads coming in. One more point about knowing what your predictable and scalable channels will yield for your practice, you should know what the cost per case file for any predictable channel you have, so that when you get a windfall you can choose where to invest that money to get the highest return if growth is your goal.
Jonathan: How many different channels would you suggest a firm pursue?
Jan: I definitely recommend having multiple channels established so as not to become dependent on any one, but how you get there is a different question. If you don't have a lot of time I don't recommend pursuing more than one channel at a time without the help of a professional. The learning curve can be steep, and the old adage of chase two rabbits and get zero will apply more often than not. If you have the resources (time/money/manpower) to pursue multiple channels, especially with the help of a specialist, you can go up to two or three at a time.
Jonathan: Excellent. What’s the third factor?
Jan: Owning the intake process. I recently interviewed someone on our podcast who concluded that firms are leaving millions of dollars of cases on the table by not focusing on intake.
In one instance, his company was able to help a firm post 200 new case files from leads that hadn’t been contacted in over 9 months. To think that this was accomplished on the coldest of cold cases paints a frightening picture of what could be possible by following up on people that are not on your radar. An interesting fact from the business world at large is that the top compensated person aside from the CEO in most cases is the person handling sales. In law firms, the person handling sales is typically the lowest compensated person working at the front desk.
Jonathan: Yikes. The lowest person on the totem pole is determining so much of firm’s success.
Jan: Yes. There are certainly firms out there that are losing out on potential case files due to manners on the phone, slow to call back, missed calls, or lack of follow up on ‘maybes’ and appointment setting. Putting this into numbers, we’ve seen firms with the best intake booking 20% of inbound leads from the internet into case files. This is double the 10% industry average, and the best part is that you don’t have to change your existing spend or marketing activity. We like to ask (practices) if you have 20 minutes a day to pick up another case file per week. If you’re committed to growing a practice, the answer is probably yes.
Jonathan: What’s the final factor that multimillion dollar practices have?
Jan: All of them are committed to success. For example, calling back someone who said ‘not right now’ is going to be a less pleasant conversation than calling back a hot referral. This is one of the major reasons firms trying out new marketing channels slide back to networking after a few months. If you’re committed to growing, you need to commit to ownership of the results you’re getting from all of your channels. In almost every city and practice area in the country, there are people posting case files from the same opportunities you have. The onus falls on you if they’re getting results and you’re not. Commitment is the difference between the client of ours that has been posting multiple high value personal injury cases per month for the last 3 years and the one the next town over that insisted that online marketing was impossible to build a business on after 2 months. Both of them were getting similar lead volumes and levels of qualification.
The first was focusing on the 20% that closed, treated every case as a potential opportunity and did their best to follow up; the second was focused on the 80% that didn’t, took their negative expectations into their calls and it affected the entire business.
Jonathan: I suspect that once these four factors are in place, the practice will operate at a higher level, even if it does not become a seven figure practice. Jan thank you for your time
Jan: Thank you. If anyone would like to speak to me about the process we use to generate case files for growing practices all over the country, feel free to drop a line over at casefuel.com. You can also listen to the Casefuel podcast and hear what some experts have to say about marketing your practice.