Possibly the most critical profitability issue for many small law firms is the lack of a systematic, consistent approach to quality assurance. Law firms can lose an enormous share of their potential profits and also suffer serious secondary financial effects by failing to make "quality" more than a slogan on their websites.
This is the final installment in a five-part series of posts that focuses on profitability in small law firms and solo practices.
In our experience and observation, the most dangerous profitability mistakes that these law firms make usually fall into four categories:
- continuing to serve unprofitable clients when there is no reasonable prospect that they ever will become profitable
- continuing to offer unprofitable services when there is no reasonable business case for doing so
- continuing to tolerate unprofitable performance by partners
- failing to make minimal investments in quality assurance tools and methods to improve productivity
moving from quality control to quality assurance
Every law firm says that they delivery quality.
For most of them their quality program is nothing more than a slogan on their website.
Quality assurance is not the same thing as quality control. Many law firms claim to have "quality assurance" measures, but they rely primarily on proofreading and review by another fee earner, two notoriously unreliable tools for ensuring a quality product. Quality control focuses on catching and correcting mistakes after they happen, after the firm usually has lost significant time and potential fees doing flawed work that must be redone, which in turn consumes even more unbillable time. By contrast, quality assurance focuses identifying the most frequent causes of errors in the delivery of services and preventing them from happen.
Quality assurance creates permanent improvements through the compilation and analysis of information that is readily available even in the smallest firms. Quality control merely responds to client service emergencies and is based on crisis-to-crisis improvisation. Few of the quality control "fixes" provide lasting solutions.
Quality control procedures such as proofreading and peer review of drafts have value, to be sure, but they seldom produce permanant improvements. Quality assurance, by contrast, can be an important risk management tool to address the three of the most serious challenges for small law firms.
Risks in law firms appear in three major areas:
- business risks -- which result in poor productivity, operational inefficiencies, and low profitability
- client service risks -- which can cause your firm to lose your best clients to your competitors
- professional risks -- which can produce professional indemnity claims, malpractice accusations, and a bad reputation in the legal market
In short, quality assurance improves your firm's ability to do the work correctly and completely the first time and every time. Even a relatively simple improvement can produce a major measurable results, such as greater productivity of fee earners and fewer fee write-offs, in a matter of months and usually with no additions to your staffing or significant additional operating costs.
Click here for more information about how Walker Clark can help you firm build a simple, highly-effective quality assurance program that delivers solid, sustainable results.