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HOW DO LAW FIRMS FIND MORE CAPITAL?

Every law firm understands how important it is not just to market, but to do it well. So, when you look at two law firms that have equally talented staff and equal financial resources, how can one firm dramatically outperform the other? The secret… (Hint: learn from what large corporations have done to put their competitors out of business)
OK, here’s the answer and it’s not as pretty as you think. In fact, there are some who will be downright repulsed by my very mention of the word. Offshoring. I will say it again — OFFSHORING. Are you still with me?

Let’s face it. No one enjoys offshoring. I would rather not deal with it. It involves inconvenient change, can be challenging to manage and has a number of inherent risks. Never mind that, at least in the short term, it puts Americans out of work and creates additional reprofiling pains and outcries of unfairness.
My answer to this: suck it up—this is America and our flexibility and adaptability to change have made us the greatest country in the world. Our standard of living has increased by virtue of China making our clothes and India coding our software. There will be more functions we may have to let go of. One of them will soon be online article writing. I can’t wait.
My point is that the competitive advantages gained in the form of cost-savings and increased legal marketing capital cannot be ignored.
As an example, let’s imagine two identical competing plaintiff’s law firms, each with $2.5 Million in annual revenues, $2.0 Million in expenses, including a marketing budget of $225,000.
Now, envision this: one firm saves $200,000 a year in operating expenses by offshoring redundant legal support functions, as well as some document production and research. They reallocate the entire amount to marketing. This firm now has a $425,000 annual marketing budget.

Normally, the firm would dedicate 20% of the marketing budget to online marketing ($85,000 of the new budget of $425,000).The firm has also offshored part of its online marketing efforts, so instead of spending $85,000, they are now spending $40,000 for the same results. The firm chooses to reinvest the $45,000 in savings and more than double its online marketing investment. The end result is the marketing budget equivalent of $470,000, versus the original $225,000 budget.
That is where the overwhelming competitive advantage in offshoring lies. Mid and large firms that fail to embrace it will not be able compete with ones that do. In fact, the margins on smaller bodily injury cases are already so low that it is not profitable for many firms to handle them. By offshoring redundant tasks, you can now handle these profitably and spend more money on marketing and land larger homerun cases.

John Zissu

John Zissu is the President and Founder of LitigatorEdge Marketing. We specialize in high return on investment strategies. For more information on attorney marketing best practices please visit the LitigatorEdge Web site.

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Filed Under: Business ManagementFeatured Stories

About the Author: John Zissu is the President and Founder of LitigatorEdge Marketing. We specialize in high return on investment strategies. For more information on attorney marketing best practices please visit the LitigatorEdge Web site.

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