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Why You Should Update Your Law Firm’s Business Model

A lot of attorneys think the practice of law has always happened the same way.

In actuality, the current model for practicing law is a relatively new invention, especially with smaller firms and solo practitioners. The paradigm of today which uses billable hours and modern firm structure is a product of just the last 50 years.

When we realize law hasn’t always been practiced this way, we see that the original model of practicing law didn’t really need to be fixed.

 

Part of the problem is that, as attorneys, we’re precedent-driven. We’re trained that way.

We’re trained to follow precedent and use it with our ‘legal brain’, but when we shift to our ‘entrepreneurial brain’, precedent-bound thinking can be very destructive to creating a thriving practice.

When we take a look at the legal press and other firms, we notice that everyone does the same things — they’re all following the herd.

They show up at bar association mixers and call it ‘marketing’.

They bill by the hour.

They compete based on price.

They assume it’s how they’re supposed to practice law. In actuality, many of the assumptions underpinning that business model are no longer valid in the economy as it’s shifted.

Even in the last 10 years, attorneys have faced competition from non-legal players like Rocket Lawyer, Legalzoom, and other legal forms providers. These companies spend millions on marketing and challenge the price assumptions at the low end of the market.

This leaves most solo and small firm practitioners practicing law with an outdated model.

In our Practice Growth program, we encourage members to ask themselves, “What assumptions do I have that, if challenged, would radically change the outcome of my practice?”

For example, in my practice, we got off the billable hour entirely and moved to subscription billing. The billing became value-based instead of time-based. We’d only take clients who’d have a long-term relationship with us and then charged a fixed monthly amount for unlimited services.

When a lot of attorneys hear this, their heads explode. They think of all the what if’s and reasons why it can’t work instead of challenging their assumptions and running the experiment themselves.

We challenged our assumptions, ran the experiment, and ended up with a highly successful business model.

I want you to think about your business model. Even if you don’t realize it, you already have a business model.

If there’s something in your practice that’s not getting you where you want to go, it’s probably because you haven’t thought critically about what your business model is.

I want to challenge you to take some time to investigate — outside the legal profession — to find what actually works.

Find better ways to practice.

Find a better business model that works for both you and the client.

If you don’t take the time to think this through, it’s impossible to grow your practice from where it is now to where you want to go.

Raj Jha

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