Why a Profits-First Business Model is Bad for Law Firms

All of the solicitations and promos I see from small law firm consultants seem single-mindedly focused on generating profit. The law firm is viewed merely as a profit center and everything is about how to squeeze more money out of the firm.

One of the biggest problems we have as a society is the monetization of everything. When everything is reduced to a monetary value, profit and greed become the sole driving forces behind our motivations and decisions. This is a recipe for perpetual dissatisfaction and is bad for people and society as a whole.

You see this with social media monetizing our attention spans; you see it in medicine where private equity is starting to become more prevalent and the focus is shifting from patient care to how to make money off patients.

I see this in my own industry: personal injury. When law firms focus solely on monetary growth goals and making money, the client gets screwed. Fees go up, traditional overhead costs get monetized as case expenses the client has to pay, attorneys and staff get saddled with too many cases, and cases get under-settled. There is some irony to this when so much of what we battle as trial lawyers are misconduct and wrongdoing that is often driven by profit motives.

We don’t have to do business this way. There’s a better way to do business that focuses on putting the client first, getting clients the best results even if it requires more work, not viewing them simply as a file number or commodity, and not trying to monetize every aspect of their case.

Of course, we have to make money to be able to serve our clients. But we can’t view our clients as commodities or assets. These are real people with real problems who come to us for help. If we have a service-oriented, client-first mindset, we will gain more professional satisfaction and fulfillment, improve the reputation of trial lawyers, and be part of the solution to the broader problem of people being reduced to dollar figures.

Here’s a better way to think of things: Focus on what level of service you want to provide, the quality you want to provide, the types of cases you want, and what you want to be doing in your business and in your cases. Then work backward to create a structure and firm that fits what you want to do as the business owner.

Yes, our firms are businesses, and we obviously need to make money to pay ourselves and our employees. But we can’t lose sight of the fact that the law is a profession. We owe certain duties to our clients. We have an obligation to put our clients’ interests above our own, and it is difficult–if not impossible–to do that when we look at our clients solely as a way for us to make money. If you take care of your clients, focus on quality, and always put the clients’ interests first, the money will come.

What do you think? Continue the conversation with me on LinkedIn here or reach out to me directly to share your thoughts.