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Law Business Manifesto

What Is ROI & Why Do Lawyers Need To Master This Formula?

ROI Return On InvestmentAre you thinking like a lawyer or a law business owner? Here’s a quick litmus test:

Do your daily thoughts revolve around getting Income or ROI?

Most lawyers are not even sure what ROI is, let alone how to focus on it. In a nutshell, ROI or return on investment means that you:

“Never spend a dollar unless you can make or save MORE than a dollar.”

It’s that simple.

Getting income is crucial. Never take your eye off that ball. But do take a moment to examine your strategies for getting additional income because you might find you’ve been focusing in the wrong place. You’ll be glad you did.

The primary challenge you face when you’re focused on getting income is that you can only sell so much of your time.

Return on Investment means you’re leveraging systems, people and money (or, ideally other people’s money) to generate more cash than you could on your own

How can you make the shift from merely getting income to getting ROI?

Let’s say you’re billing at a reasonable $300/hr. Each hour of your time is a unit of inventory. The only way for you to make more money is to sell more inventory, and there are only so many hours available to sell. If you are chief, cook and bottle-washer in your practice, you have even less billable hours in your inventory because you have to do work that doesn’t pay $300/hr.

1.) Replace yourself – Learn to Leverage Other People’s Time

Hiring assistants at $15, $30, even $60 or $100 per hour to free up more of your $300/hr inventory is a no brainer. Just do the math:

ROI

ROI on a $30/hr assistant is easy to calculate: ($300 – $30)/$30 = 9 or 900%

Yes, you read that right, you’re getting a 9x return on your dollars invested. In today’s weak market, you quickly begin to see that your practice really is your best investment.

Granted, hiring and training take time.

Also, there will be hours your staff gets paid while you’re out of the office (enjoying lunch, seeing your child’s school performance, studying marketing and sales, working ON your business, getting coached, days off, etc…) but in this basic example, you can see the ROI is juicy.

In fact, an assistant who handles your marketing, client services and more is so affordable you’d be crazy NOT to hire (so long as you can quickly and efficiently train that assistant well.)

With the S&P 500 averaging 13.5% returns, even if your investment in hiring and training staff yields you a mere 100% or even 50% ROI (instead of the 900% in my example), hiring is still the smartest investment you can make. 

And the fastest way to get ROI from your hiring investment is to hire and train a team member to focus on getting you in front of a steady stream of new clients, and then turning them into raving fans.

Are you ready to make the changes you need to see your law practice thrive?

 

 

About the Contributor
Alexis Neely is a bestselling author and has been a frequent guest on numerous network talk shows and news broadcasts. After graduating first in her law school class from Georgetown Law, Alexis clerked for Senior Judge Peter T. Fay on the 11th Circuit Court of Appeals and then began her career at the #1 AmLaw rated firm of Munger, Tolles & Olson. She went on to build her own law practice into a million dollar a year revenue generator within just three years by creating a revolutionary New Law Business Model you’ll hear about on the call. She is a leading expert on teaching lawyers how to attract more clients, engage those clients at higher fees,* and to serve those clients using this completely different law business model. Lawyers using Alexis’ systems report far more happiness, bigger bank accounts, and that they love being lawyers again.

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