In this blog, we discuss the importance of considering the ROI for hiring top law firm talent.

Evaluating When Its Time to Add to Your Firm’s Team

For many contingency fee law firms, the firm’s owners take on every task, from litigating to marketing, accounting, intake, and countless daily business operations. When a firm earns enough to hire staff, many owners choose to first hire administrative staff to ease the time-intensive burden of scheduling meetings and following up with clients.

Although hiring staff for the most time-intensive tasks can provide relief for overextended law firm owners, it may be more advantageous to think through a strategic hiring plan. Before hiring, law firm owners should carefully consider which positions to hire for and the ROI of that new hire. Finding ways to quantify each new hire’s ROI and exploring available alternatives can help determine whether hiring is the best course of action.

In today’s AI and tech-enabled office landscape, many administrative staff responsibilities can be delegated to more cost-effective software programs. Case management and client communications software can make case administration simpler and cheaper than hiring. Law firm owners may conclude that paying for software frees up funds for hiring staff with higher ROI, like an intake specialist.

Similarly, hiring a top litigator can be a costly expense, but could be worthwhile if they come with their own case inventory or list of clients. When calculating ROI for any new hire, it is important to consider the cost of the new hire against the fees they could directly or indirectly bring in, the time they are saving the firm, and the new business they are bringing to the firm.

When bringing on high-cost, top litigators, law firm owners must also account for the time it will take them to make their first big case fee. Usually, this can range from a few months to a couple years. Meanwhile, the firm will have to pay the top litigator’s salary. Many young firms are basically living paycheck to paycheck and will not be able to afford this salary which will hinder their growth ambitions. However, sometimes the age-old adage applies, “It takes money to make money.”

Financing Case Costs to Free Up Capital for Investing in Talent

Taking on financing to get the momentum rolling is a simple way to jumpstart growth. Case cost financing frees law firm owners from the feast and famine cash flow cycle of the contingency fee business where the firm’s earnings are reinvested into current cases and tied up until cases are resolved. With a Case Cost Line of Credit, firms get back the liquidity of their earnings to then invest in top talent to drive growth.

To learn more about case cost financing and how it can create the liquidity needed for hiring top law firm talent, read these additional blog resources:

• • Leveraging Debt to Invest in Law Firm Marketing, Technology and Talent
  • Leveraging Debt to Invest in Marketing for Growth
  • Case Cost Financing: The Key to Scaling Law Firm Growth