4 tested tactics to improve financial health
Key takeaways
- Raising fees is just one of many tactics to consider to improve cash flow and profitability. Experimenting with your pricing model and how you package your offerings may also yield benefits.
- Before you implement a new approach, be sure to think through how it will work for your firm, employees, and clients. Researching how similar organizations have implemented the change can help.
- Look for operational improvements that can yield efficiencies and lift your bottom line. For example, tightening your collections process and streamlining administrative tasks through technology can free up time to focus on more profit-building efforts.
Raising fees is just one of several approaches you might take to strengthen your firm's financial position. Taking other measures — both short- and longer-term — could also help you boost revenue and cash flow.
Consider the following alternatives. Researching how organizations like yours have implemented them successfully can help improve your own chances for success.
- Unbundle services. Offering services that might normally be grouped together on an a la carte basis instead may help you win over clients who are cautious around costs. Examples of unbundled services include helping clients prepare court documentation, drafting written arguments, or making limited court appearances. Not all legal matters lend themselves to unbundling, and if you enter this type of arrangement, it's critical to clearly explain the tasks that you'll take on and what your client will take on. This American Bar Association piece provides more guidance.
- Explore a subscription model. Charging on a recurring basis for your services can make revenues more consistent. It can also help you appeal to clients that want more predictable costs. Under a subscription model, clients pay a set monthly fee for a fixed number of hours, projects, or services. Attorneys can also create a tiered offering, with prices corresponding with different service levels. Offering this type of arrangement may also help to strengthen client relationships by encouraging more consistent contact.
- Focus on realization. Increasing the portion of time worked that gets billed and the share of what's billed that gets collected can go a long way in improving profitability. Research by Thomson Reuters found that increasing realization through these efforts has a greater impact on profitability than does firm location or billing rates. Focusing on time tracking and shoring up billing and collections can help boost realization.
- Integrate technology. Used wisely, technology can help to streamline processes and improve efficiency, which can ultimately flow to your bottom line. A few tools for accountants to consider include online document management portals that allow for more seamless document exchange with clients; cloud-based tools that enable access to files from anywhere; and software that delivers client tax returns electronically.
A good banking partner can also help your law firm maintain sound financial health by offering tools and advice that streamline processes and improve efficiency. Learn more about how Citizens can help your firm thrive, or visit your nearest branch.
Related topics
Mastering the delicate art of raising prices
Rising costs and other factors may lead you to consider a fee increase. How you handle the move will help to shape clients’ responses.
Celebrating women leaders’ successes
October is National Women’s Small Business Month. To honor the many contributions of these innovators, we’ve created a guide that highlights the tactics of the fastest-growing women-owned organizations.
5 tested tactics to improve financial health
Raising prices is just one way to maintain steady cash flow and increase profitability. Experimenting with your pricing model and making operational adjustments can also strengthen your financial position.
© Citizens Financial Group, Inc. All rights reserved. Citizens is a brand name of Citizens Bank, N.A. Member FDIC
Disclaimer: Views expressed may not necessarily reflect those of Citizens. The information contained herein is for informational purposes only as a service to the public and is not legal advice or a substitute for legal counsel. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.