April 27, 2024
Whether you’re preparing for an acquisition, seeking investment, or striving for growth, here are ten actionable tips to boost your market value.
Build & Strengthen Client Relationships:
This could be waffly business nonsense, but put this into practice and you add lots of value to your firm. Building strong, long-lasting relationships with clients is a key way to add value. How do you attract regular work from repeat customers? Buyers love this type of customer – it demonstrates potential for ongoing future profits.
Specialise and Differentiate:
In a crowded market, differentiation is key. Does your business have a niche area of law, a niche industry it services, a sector it concentrates on, and most importantly evidence of this? A niche can set your firm apart from competitors and add value.
Embrace Technology:
This goes without saying, but firms operating via paper based systems still or paying only lip service to time recording and CRM systems, are not going to have the same value as firms operating a paper-less office system. Any additions to this can only add value – eg chat bots, document automation etc.
Develop (and Retain) Your Talent:
The value of your firm is directly tied to the quality of your team. Investing in CPD and training ensures firstly that your staff is up-to-date, but secondly it demonstrates to your staff that you are prepared to invest in them. Your staff team is quite often the most important part of your business when it comes to value, and not all owners realise this. Losing key staff = losing lots of value.
Optimise Efficiency:
Review and refine internal processes regularly to eliminate inefficiencies. Check your subscriptions, your bills, costs paid, staffing levels. Consider adopting Lean Management techniques to improve productivity and reduce waste. Look at your billing levels – are current salaries justified? Do you need to increase or incentivise some or reduce (hours) for others?
Expand Your Service Offerings:
Diversifying your service offerings can open up new revenue streams. Can you set up a separate non-regulated consultancy firm to provide non-regulated but related services as a multi-disciplinary practice? For example accountants seem very keen to break into the legal profession, but we haven’t seen many lawyers acquiring accountancy practices!
Foster a Strong Workplace Culture:
A positive workplace culture not only attracts top talent but also increases employee satisfaction and retention. Cultivating an environment that promotes work-life balance, diversity, and inclusion can enhance your firm’s reputation and appeal. Couple of things here – firstly buyers seem to like remote working law firms. It means the law firm is more portable than a traditional office-based practice. Secondly, good workplace practices encourage staff to remain – eg the 4 day working week principle and a good management/staff relationship.
Focus on Financial Management:
Sound financial management is crucial for any business looking to grow. Producing regular management accounts and discussing these with a view to improving certain aspects continually – eg cash flow – can make the practice more attractive to buyers once the effects are seen.
Enhance Your Online Presence:
We could probably write a full book on the improvements and changes that can be made to most law firms’ online presence, although some are positively excellent! We are well and truly in the digital age, whether we like it or not, and a robust online presence is indispensable. A professional website, active social media engagement, and high-quality content marketing increases your visibility, attract new clients, and position your firm as an expert. What’s not to like? A positive online presence increases value.
Pursue Strategic Partnerships and Alliances:
Forming alliances with other firms or related businesses (financial advisers, accountants, surveyors etc.) can provide mutual benefits, such as expanding client bases, providing scope for cross-referrals or enhancing service capabilities. Collaborations, whether through formal partnerships or referral agreements, can significantly increase your firm’s reach and value. When it comes to valuations, paid referrals add value. Whether you agree with the principle of paid referrals, they should not be seen as a bad thing necessarily when it comes to looking for a sale of your business.
