Here’s Why Settling Should Be a Top Priority for Your Law Firm
While doing my “Saving the World One Personal Injury Law Firm at a Time” show, I recently visited a client that was stressing over expenses.
Yes, it can be expensive to run a law firm, or any business for that matter. However, in my experience, cutting expenses should NOT be the primary focus.
For most law firms, it is the intake that drives the machine. But, I ask you, ‘What if it were settlements, instead?’
What if settling became what drove the NEED for more cases? What would happen if it were the ‘end of the line’ screaming at the ‘front of the line’ – “WE NEED MORE!”
Having worked for over 70 law firms either as a Consultant or General Manager, I have seen so many firms get caught in “bottlenecks” prior to the settlement phase.
Missed bills and records being collected, missed liens, unwritten demands, and inattentive adjusters are among the many weak excuses I’ve heard. What if we could ignore these excuses and just get the job done? Cool beans. But what is the job, anyway?
So, let’s say that your law firm brings in, for the sake of easy math, 100 new case files a month on average. These are net cases that you keep and work. Given that there are 4.3 average weeks in a calendar month, that would mean you’re bringing in 23.2558 a week. But let’s just call it 23.
Now, if 23 cases a week are coming in the door – remember these are net cases, or ‘keepers’ – then, in MY experience, a healthy machine would need at least 23 OR very close to 23 cases a week to settle.
With this in mind, your firm should also have 23 cases a week leave signups and start treatment. Meanwhile, another 23 should be released from treatment and advance into demand, negotiation, and finally, dare I say it, settlement.
This cycle is important because, if you have 100 net cases coming in a month, you most likely have an inventory of 1,000 open case files currently being worked by your office staff. This amount of open case files in inventory is a BEAR; literally, a BEAR to deal with. I have worked in firms that have 1,000 to 10,000 plus open case files. While a ‘bear’ is a good problem to have, it must be fed. Only SETTLEMENTS can feed it!
If you need help managing your open inventory, call me. I know how to tame the BEAR!
Our CFO and lead consultant, Felix Eckhardt, is ready to help your law firm reach your financial and business goals. Call us today at (615) 577-1010 to discuss your practice with Felix. For more information, visit our law firm consulting page.