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10 Signs Small Law Firms are leaving $10k a Year on the Table

10 Signs Small Law Firms are leaving $10k a Year on the Table

“If you’re not earning adequately, you’re probably not taking care of your clients adequately,” says law firm practice management consultant, Ann Guinn. Ms. Guinn believes a majority of solo and small firm attorneys are leaving money on the table, upwards of $10,000 annually and unnecessarily.

“In my 30-something years in the legal industry, I never met an attorney or law firm that I didn’t believe could make more money.”

Two Types of Underearning Attorneys

Not all attorneys are underearners, says Ms. Guinn, however any attorney earning below their potential is just that. This does a disservice, not only to the attorneys themselves, but is unfair to their best clients.

There are two types of underearners. Active underearners are those who knowingly do something that causes them to underearn, for example: an attorney who accepts a client, but knows they can’t pay quickly, or, one who quotes a lower fee just to land a client.

In contrast, passive underearners, are those who fail to do something that causes them to make less money. In this scenario, an attorney would either fail to raise rates when it is called for, or not invest in technology to work more efficiently.

“Whether active or passive, each underearner, is equally destructive to the overall earning potential of their solo or small firm.”

10 Law Firm Underearning Danger Signs

While just about every attorney Ms. Guinn encounters believes their situation is unique, there are some common denominators.  These signs almost always spell danger and fit squarely into 10 predictable categories:

  1. Marking down bills automatically (Active)
  2. Accepting too many pro bono cases (Active)
  3. Putting other peoples’ needs above those of your family and other firm members (Active)
  4. Not raising rates when it’s called for (Passive)
  5. Not making timekeeping a priority (Passive)
  6. Billing infrequently (Passive)
  7. Not requiring an adequate deposit (Passive)
  8. Allowing overdue bills to go unpaid (Passive)
  9. Being in denial about financial issues (Passive)
  10. Not taking credit cards (Passive)

In the complimentary white paper – Seven Secrets to Climbing out of the Underearning Rut – Ms. Guinn lays out a plan for overcoming underearning and provides small law firms with simple techniques for running a profitable small law practice.

* * *

Note: Ms. Guinn is also the author of the book Minding Your Own Business: The Solo and Small Firm Lawyer’s Guide to a Profitable Practice.

This post is byCarla Del Bove, who provides support to the business of law software product line based in the LexisNexis Raleigh Technology Center.

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Photo credit: Flickr, Chris Gerrard, money on table (CC BY 2.0)

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This bio page is used to publish submissions by contributing writers. We welcome contributions from the legal community and are especially keen for contributions from our customers. Please review previous submissions published here and the “About Us” section to get a sense for what topics work for this blog. All posts must be original content not published elsewhere for at least 30 days. To submit an idea for consideration, please email blsssocial@lexisnexis.com.