Far out at the edges of unchartered space exists the mostly uninhabited planet of Profitable AFAs.
This isn’t science fiction comedy. Profitable AFAs do, in fact, exist. We partnered with our friends at Law360 to survey more than 750 attorneys. What we discovered is 22% of partners are prospering in what many consider a desolate land.
AFAs are old news. Clients demanding AFAs is old news. Turning a clear profit from AFAs is new.
Nearly 80% of law firm partners can’t figure out how to get to Profitable AFAs. Mismanaged scope, poor budgeting skills, and not enough flexibility to change internal work processes are the most common culprits to undermining profitability in AFAs.
Fortunately, 22% of partners have charted the path to profitability for everyone else to follow. Good tools and processes are the most massively useful things a lawyer can have to reach Profitable AFAs.
- Develop detailed budgets to understand and manage costs
- Track and monitor budgets like a hawk at least weekly
- Assign all work to lawyers on the team with time-specific deadlines and the number of hours budgeted for the task
- Review your clients’ objectives with the entire team
- Solicit suggestions from the team on how to eliminate unneeded work steps
- Discuss case progress with your clients as a normal course of business—a regular dialogue about progress
- Track changes in scope or underlying facts and share any budget impact with your clients immediately upon discovery
- Actively challenge the team to beat deadlines and deliver early
- Develop high trust relationships with your clients
AFAs only work when your client relationships are at the absolute highest levels of trust—not just a good relationship—but a deep, embedded relationship. Part of the simplicity and certainty delivered by AFAs comes from the client believing their lawyer will deliver. Lawyers who have a history of breaking budgets, have infrequent dialogue with their clients (with or without AFAs) or don’t believe in the power of budgets are more likely to end up in make-less-money column—far, far away from planet Profitable AFAs.
PS. Click here to learn more about the results of our recent survey on What Clients Pay and What Law Firms Charge: BTI's Billing Rate Reference 2014.