A subscriber asked for my thoughts on how to select, “more meritorious and profitable cases and eliminate smaller cases or “junk” that takes far too much time in proportion to profit potential.”
I thought he was talking about contingency fee cases but when I went to his website I saw that he handles everything but. It’s a general practice, handling everything from divorce to banking to foreclosure, construction law, even appellate work, but no personal injury or anything tort related that I can see.
Unless I’m missing something, as long as they get a retainer fee, they get paid. Even if the case isn’t that good.
So my oh-so-glib answer to the original question is, “Pick a number. Decide, in advance, that you won’t accept anything that won’t provide you with a minimum fee of X dollars.”
That’s easier to do when you charge flat fees instead of hourly, and that might be part of his challenge. If that’s so, and he wants to continue charging hourly, he might consider having a minimum fee, if this is ethically permitted. So, $400 per hour for that divorce case, with a minimum of $5000. Or whatever.
Okay, I realize it’s not always that simple. But I don’t know what else to say. Meet with your partners, pull out the spreadsheets, and see where you’re making money. Draw a line or two to demarcate the kinds of cases or clients you will focus on and the ones you will think twice about accepting or eliminate completely.
Before you make any final decisions, however, there’s something else to think about. It’s something I did in my practice and I recommend that you consider it in yours.
Think clients, not cases.
Essentially, that means you take the small stuff, even if it’s not terribly profitable, because you are serving the client who will have other matters for you, stick with your firm long term, send you referrals, and otherwise help your practice grow.
The lifetime value of those clients, and the collective fees earned from them, is many times what you might (or might not) earn on one particular matter.
If you don’t have those kinds of clients, or enough of them, start weaning the firm away from clients with “one time” cases and focus on clients with lots of repeat work.
Think clients, not cases.
