Avoid These Mistakes Immediately for Your Law Firm’s Growth: A Comprehensive Guide

December 8, 2023
lawyer at desk holding her head

Why your marketing strategy might be burning out personal injury and other contingent fee lawyers.

We need to start from the beginning: understanding your marketing strategy. I’ve had countless conversations with personal injury attorneys on this subject. When I bring up the topic of client sources, I often get blank stares in return. It’s as if I sprouted feathers and started clucking right then and there! Metrics such as your top three client sources seem to be a foreign concept to many. In fact, most can’t provide a realistic breakdown of where their clients are coming from. For instance, some might casually say, “Oh, about 25% of our clients come from pay-per-click advertising.” But when we dig a bit deeper? It turns out that number is much closer to 60%!

We’re talking both bread-and-butter details like case value, settlement time, and insurance company involvement, plus the juicy stuff they don’t teach you in law school. This kind of info can start to paint a clearer picture of what sort of cases and clients you should be targeting, like your own little courtroom crystal ball.

So the second part of the solution to that lingering marketing problem is a top-notch intake form. Why, you ask? Well, this vital tool will help you track where your clients are popping up from, how they stumbled upon your firm, and most importantly, analyze the data from your past clientele. This includes details about their insurance companies and the type of injuries they sustained.

Soon, you’ll begin to notice trends in your marketing efforts and the things you should be focusing on. From these insights, you should craft a marketing strategy that plays to your strengths, based on your unique data and your client base. This should read like a history of your firm’s last 12 to 24 months. Now, just a word of caution – avoid building your marketing strategy solely on an internet marketer’s advice or simply because a certain platform worked for another law firm. Imagine blindly walking into TikTok marketing because it worked for Smith & Co. Ridiculous right?

Engage in a thorough past client analysis and you’ll quickly notice patterns. An eye-popper could be this – about 30% of your clients actually came from a certain referring attorney. You may also note that the average settlement amount from these Attorney X referred cases was quite impressive at $45,000. On top, these cases settled in less than 6 months – that’s quick resolution.  Now, isn’t that worth your attention? Imagine connecting with ten similar attorneys to build robust networking schemes and cultivate referral relationships. Sounds worthy of investment, doesn’t it?

attorney and client speaking

How to deal with low value cases as a personal injury lawyer or other contingent fee based lawyer

Let’s consider this scenario: you’re inundated with low value cases. Good news, there’s a strategy to help deal with this. Ideally, you’d want approximately 50% of your cases to have quick settlements. These are your bread and butter— your cash flow. Then, aim to have 30% of your cases as medium-term settlements, which could take anywhere from 6 to 12 months. Finally, hold out for that remaining 20% to be your high value, albeit slower to settle.

Fascinatingly, many personal injury law firms find themselves submerged in 80% low value cases.  But this number is often met with incredulity or outright denial. “No way, we thought our cases were of higher value!” Sorry, but data is a tough correspondent; it doesn’t sugarcoat truths. It simply uncovers the facts and if there’s disparity between perception and reality, that’s often where the problem lies.

What the breakdown of high value case settlements versus low value case settlments should be for your law firm

Let’s break it down a bit further: for smaller settlement amounts, this could vary from firm to firm, fluctuating from half a million to a humble 50k. Hence, “low value” is largely subjective – depending primarily on your firm’s historical data. However, for simplicity let’s stick with $25k as a ballpark figure. Cases of this value typically settle in less than six months. Why? Because the injuries are minor, needing less time for treatment, and the settlement amounts are relatively lower. Picture the simplicity of these cases as a speedy drive-thru experience.

Your next case type might fall into the medium category – representing the 50k to 100k bracket. These cases usually take a bit longer to settle, say, between 6 to 12 months. These are like the standard dining experiences – fulfilling but need a bit more time.

Lastly, you’ve got the high-value settlements – we’re talking big bucks, six figures and beyond. These are the heavyweights of your cases, require more than a year to settle, sometimes even crossing the two-year mark. Imagine a lavish seven-course meal that takes time but offers a significant payoff.

These case classifications are not universal, and every practice would have its own versions. Understanding this spread is essential in crafting a sustainable growth strategy for your law firm. The key here is to not just blindly do “marketing” but do it the right way – one that is guided by past experiences and data.

The right marketing mix should bring in the right clients, balancing the low, medium, and high-value cases in the proportion that works best for you. This could be something like 50% low-value, 30% medium-value, and 20% high-value cases. But remember, it’s your law firm, and you get to set these percentages. So ensure they reflect your goals and capabilities.

image of computer and ppc

The Art of Deliberate Marketing within a Personal Injury Law Firm 

As a contingency-based lawyer, you are likely familiar with the importance of effective marketing. However, did you know that your choice of marketing strategies should be explicitly aligned with your desired client type? For instance, if a high percentage of low-value clients come from your pay-per-click (PPC) digital marketing strategy, then you need to ensure that this percentage matches your law firm’s needs. Let’s say you only require 50% of your clients to be of low value. Once you hit this point, it’s time to halt the PPC advertising and divert business elsewhere. Why? You don’t need to exhaust your resources on low-value cases when they could be better spent on landing that medium or high-value ‘whale’ client.

Connecting Marketing, Intake Team Size, and Operating Costs 

Your choice of marketing methods won’t just shape the clientele your firm attracts. It’ll also influence how large your intake team needs to be. If you’re extensively using digital marketing or using billboards, be prepared, you’re likely going to need a sizeable intake team. The requirement for multilingual call answerers will also increase, and this, in turn, will likely inflate your team expenses. Not just because you’ll need more hands on deck, but because the skills these team members need to have are highly specialized. It’s a tricky business because that just starts a domino effect on your operating expenses.

Avoiding the Costly Competition and Financial Bleed 

Moreover, bear in mind that PPC and billboard marketing often attract stiff competition. It might seem like nothing to spend $100 or $500 on PPC for soliciting truck accident or motorcycle incident cases, but if you’re doing this repeatedly and not securing any cases, the costs will accumulate. This scenario might push you into accepting smaller cases just to fund your larger, more desirable cases. However, I would advise against using this system. It’s messy and can lead to cash flow issues in your law firm.

lawyer with calculator

Is your personal injury or contingency fee law firm litigation heavy?

Imagine this: your common-or-garden PI firm has a mix of 30% small cases, 40% medium-sized ones, and the remaining big boys that can really chew up your time and experience. If you’ve got your plate full of these big, litigation-heavy cases, where in the devil do you get the bandwidth to handle those other bread-and-butter ones? The right approach might just be to bulk up on the smaller cases. Why, you ask? Simple. It’s a smart way to offset the hefty operating costs of those marathon legal battles.

Here’s something I’ve noticed over my years covering the legal beat: many PI firms drive themselves to burnout. They take on a deluge of cases without doing their homework and end up swinging between days spent twiddling thumbs in their office and staying up late dealing with settlement negotiations and litigation. What we need, my dear reader, is to harness the power of data to bring some calming consistency to this legal seesaw.

Let’s play pretend: you’re examining a complex, multi-party car buy-and-bust that resulted in a life being snuffed out. Another party is laid up in a hospital bed, recovering from serious back surgery, with a 10-month-long recovery window. Add to that a spicy side-dish of dispute over who’s at fault. This one’s going to test your mettle, isn’t it?

“Who’s at fault?” Perhaps it was poor visibility due to unfavorable weather conditions. Or, maybe it’s a confounding case with no clear answers. Let’s say the on-site police officer designates blame to one party, but you want to challenge this. Your challenge is based on the consistent number of accidents occurring at that exact curve over the last three years. Let’s face it, this will be a challenging case. If you’ve already got three pending litigations, all burdened with existing liability issues, it’s probably not the best time to take on another.

Why not consider taking the referral fee? Believe me, there’s nothing inherently greedy about wanting to land a lucrative $1,000,000 or $2,000,000 case. My point is, let’s approach it strategically. Remember, there’s no harm in accepting a referral fee when it’s sensible. It’s about precisely leveraging the opportunities that come your way, considering the resources you have at hand, and avoiding overstretching yourself. You see, time and resources are crucial, and correctly managing them is essential in growing and scaling your personal injury law firm without burning out or experiencing cash flow issues.

Don’t just blindly accept every case that waltzes through your door. Instead, be methodical and tactical about the cases you take on. Make sure they fit your law firm’s client case profile and align with your profit and revenue targets. Why waste time fretting over the what-ifs and if-onlys? Surprise, surprise! You might actually make more money from those smaller, quick-to-settle cases during a 10-month period than you would from chasing that one big whale of a case. Plus, these smaller cases provide a constant cash flow. They cover your office expenses and lay down the foundation for a smooth-running practice. Sounds splendid, doesn’t it?

That’s not all. These smaller cases are excellent training ground for your newbie paralegals, admins, and attorneys. So, before you dismiss these cases as ‘too small’ or ‘beneath your level,’ give them a second thought. Sure, you might pledge loyalty to cases above a million. But do you realize the enormous amount of time they take to settle? As an experienced attorney, you must pause and recall those times when cash flow was an issue because one mammoth case wouldn’t settle. You waited breathlessly for the big pay-off day– a $300,000 payday. But sadly, it kept getting repeatedly postponed. Doesn’t sound too appealing now, does it?

The spectre of increasing debt must be familiar to some of you; pulling out the credit card or contemplating a home equity loan just to cover the expenses of your office space, paralegals, new attorney, and interns. Are you nodding your head yet? I bet some personal injury attorneys out there can really resonate with that, especially if you’re thinking, “I have no idea how to carry out all this client analysis, but I know it could be a game-changer. I’m spending a fortune on marketing that seems to make zero impact. What should I do now?” The fear of turning off those marketing engines, ceasing to invest in pay-per-click—it’s real, isn’t it?

If you’re a personal injury lawyer caught in this maelstrom, if you see yourself in the words I’ve shared just now, if you’ve been detrimentally lured by the promise of lucrative settlements, why don’t you drop me a line? My email is nermin@ws-lawyers.com.