Increasing Revenue Means Increasing Value

Over at Above the Law, Jeff Bennion is a lawyer who understands business. He has succinctly described the formula that accounts for a lawyer’s salary:

Salary = $(my worth to my firm) – [$(the administrative expense of keeping me employed) + $(the amount of profit my firm plans of making off me)].

He then sums up the ways in which an attorney may increase his salary:

If you want to increase your salary, you can either increase your worth to the firm, decrease your administrative expense, or talk your boss into making less money off of you. I recommend increasing your worth.

At Privileged Communications, we believe Jeff Bennion is 100% correct. Individual attorneys can (and should) capture more upside when they increase their worth to the firm, either by delivering better performance or bringing in more revenue.

Likewise, law firms can (and should) be able to increase their revenues when they increase their value to their clients, either by delivering better (and/or cheaper) legal performance or by helping their clients with their non-legal objectives.

A firm that is good at business development provides its clients with quality legal advice which causes the clients to return. A firm that is great at business development provides its clients with quality legal advice and uses the firm’s resources to advance the client’s business goals.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>