What makes a high-performance law firm?
The Australian legal services market is evolving rapidly. However, with downward pricing pressure, impacts of new technologies and the emergence of digital disruptors — many firms have had to change business models to lift profitability.
Yet despite these challenging market conditions, a significant number of firms continue to achieve outstanding profit growth.
In the 2015 benchmarking results, we take a look at behaviours and practices of law firms from around Australia to see what it takes to be a high-performing law firm. Scroll to find out more or view the 2017 Legal Benchmarking Results.
Let's look at the numbers
High performance: Increased annual profits by 20% or more.
Low performance: Increased annual profits by less than 20% or saw profits decline.
Room to grow
In the 2015 financial year, 27% of surveyed firms grew their profits by 20% or more – a similar proportion to our last report in 2013.
The sweet spot
Typically, we found that high-performance firms are an incorporated legal practice in NSW or Vic, between 4 and 10 years old – a peak growth period for maturing firms.
Let's look at financial performance
The superior profit growth of high-performance firms was largely driven by strong revenue growth. Yet they also made efficiency improvements, hired staff, increased marketing and added new services. In contrast, low-performance firms were more likely to rely on cost cutting.
High performers are more likely to see the ideal firm as professional, reliable, knowledgeable, proactive and entrepreneurial.
While both high and low performers see gaps between their ideal firm and their own firm's performance, high-performing firms were more likely to see room for improvement.
100% of high performers agree that responding quickly to clients is the most important client service attribute.
High-performance firms have invested heavily in technology, growing their online presence, mobile technology, practice management software and software integration. And they plan to continue that investment into the future.
High performance firms see low-cost virtual law firms having the greatest impact on their business in the next three years.
High-performing firms are also much more likely to invest in staff training, focusing on industry knowledge, customer relationships and communication skills.
66% of high performance firms believe retaining quality staff is a key driver of profit.
The year ahead
High performance firms are more likely to see online competitors as a threat when compared to their peers, who are more focused on competition from large accounting firms and international legal practices.
60% of high performance firms expect to lift profits by 10% or more in the year ahead.
Our full legal benchmarking results are online
For your convenience we have also emailed you a copy.
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