More Exclusive Survey Results: How Small Law Firms Measure Success

SuccessCharacterized

How small firms characterize their success.

I’ve been writing about the findings of a new survey of small-solo law firm management conducted by Thomson Reuters Solo and Small Law Firm group to which Thomson Reuters has given me exclusive access. Today I am going to discuss what firms say about their goals and priorities, how they measure success, and how successful they consider themselves.


Prior posts:


The survey asked three questions related to how firms measure their own success and how successful they consider themselves to be. The first of these asked lawyers to identify the top goals they have for their firms. Here are the top five they list overall:

  • Enhancing their reputation in the local community (46 percent).
  • Increasing or improving business development and marketing (45 percent).
  • Being considered the best of the best (42 percent).
  • Providing better service to their current clients (39 percent).
  • Growing while maintaining quality (39 percent).

GoalsAndPriorities

When the top goals are broken down by firm size, the survey shows that larger firms are much more focused on marketing and business development than smaller firms. For the largest firms in this survey — those of 11-29 lawyers — their top five goals and priorities are:

  • Increasing or improving business development and marketing (75 percent).
  • Differentiating their firm from their competition (51 percent).
  • Being consider the best of the best (51 percent).
  • Providing better service to their clients (48 percent).
  • Growing select practices (45 percent).

For solos, the top five goals and priorities are:

  • Enhancing their reputation in the local community (51 percent).
  • Providing better service to their current clients (39 percent).
  • Improving internal efficiency (39 percent).
  • Increasing or improving business development and marketing (34 percent).
  • Growing while maintaining quality and differentiating their firm from their competition (two-way tie at 33 percent).

Thus, while three-quarters of lawyers in larger firms list business development as their top goal, just a third of solos do. Rather, solos’ top priorities focus on their reputations in their communities and the service they provide their clients.

Overall Measures of Success

The survey next asked lawyers two questions specifically pertaining to success: Which of a list of factors are relevant to defining success at their firms and which of those factors is the primary measure of success.

The top five factors by which lawyers measure success overall are:

  • Client satisfaction ratings (88 percent).
  • Repeat business (87 percent).
  • Overall profits (82 percent).
  • Work/life balance (81 percent).
  • Overall revenues (76 percent).

Interestingly, solos rate work/life balance as their top overall measures of success (with 88 percent listing it) while just 71 percent of those in firms of 11-29 lawyers list it. For that latter group of lawyers, their top overall measures of success are overall profits and repeat business (both being listed by 91 percent of those in firms of 11-29).

Primary Measure of Success

When then asked to identify the one factor that is the primary measure of success, the top five shift:

  • Overall profits (26 percent).
  • Client satisfaction ratings (20 percent).
  • Overall revenues (15 percent).
  • Repeat business (14 percent).
  • Work/life balance (13 percent).

The measures of success vary by firm size. For solos, the top five primary measures of success are:

  • Client satisfaction ratings (29 percent).
  • Overall profits (24 percent).
  • Work/life balance (16 percent).
  • Overall revenues (14 percent).
  • Repeat business (12 percent).

For those in firms of 11-29 lawyers, the top five primary measures of success are:

  • Overall profits (32 percent).
  • Client satisfaction ratings (20 percent).
  • Overall revenues (10 percent).
  • Work/life balance (10 percent).
  • Repeat business (9 percent).

Characterizing Their Own Success

Having asked how lawyers measure success, the survey then asked them to characterize their own firm’s success. Overall, 36 percent say their firms are very successful and 49 percent say they are successful. Only 4 percent say they are not successful and 11 percent say they are neither successful nor unsuccessful. More solos describe themselves as unsuccessful (8 percent) while more lawyers in firms of 11-29 describe themselves as very successful (44 percent).

The chart at the top of this post shows how this breaks down by firm size.

To me, this last set of findings is among the most striking in this survey. As I wrote in my initial post about this survey at Above the Law, it seems to fly in the face of conventional wisdom, which holds that many lawyers — particularly those in solo and small firms — are struggling and miserable.

Instead, this survey finds that 85 percent of small-firm lawyers consider themselves successful or very successful. This is generally true across the firm sizes surveyed, ranging from 78 percent of solos t0 96 percent of those in firms of 11-29 saying they consider themselves successful or very successful.

More solos consider themselves unsuccessful than in any other sized firm, but even then, it is just 8 percent.

No survey is definitive on issues such as these, of course. But it is encouraging to read results that suggest that small-firm lawyers are doing better than is generally believed.