Can Harvard Law predict the demise of a law firm?

Harvard Law issued an article (see link at the bottom of this page) that highlighted a simple format that firms follow that leads up to collapse. Interestingly enough, they were able to actually track major firm collapses and were able to derive a pattern the developed in nearly all cases.

The most surprising part? The firms were still profitable when they collapsed.

The other surprising part? This applies to law firms of all sizes.

An overly simplified synopsis is that firms make a profit. A year later, the profit margin goes down to 90% of what it was the year before. In the third year of the cycle, the profit margin goes down to 80%. The interesting part is that the firms are still profitable and still current on debt payments.

Harvard Law noted that this starts a cycle of decline that, once it hits the 80% threshold, ends up with catastrophic consequences for the firm. Upon analysis of the data provided, if you are in a firm with multiple partners, some of them will start to leave. Those who do remain will ask for increased compensation to remain. This spirals into debts going from current to behind – all due to a slight decline in profits over an extended period of time.

Wouldn’t it be nice if there were an easy to use reporting platform that would instantly sync with your current practice management software to help solve this problem and help you be aware of matter types that provide you with the most profit?

We thought so, too. That’s why we created FirmTRAK.

FirmTRAK will sit on top of your current practice management system to automate reporting and analysis of key performance indicators that will help drive the success and growth of your law firm.  No more spreadsheets to analyze using a team of people.  The information is instantly configured and available at your fingertips.

You went to law school to follow your passion for helping people with their legal needs, not to become a software engineer.  That’s where we come in.

To see how simple it is for us to help your law firm, please check out this short video:
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https://youtu.be/pz_5kpUZ2PY?fbclid=IwAR3dahiGvJTmwYgDAHhjb4RvAm0-BzmGa-OvEjiYqT6zWiyeyU-AHaCAGtM

We are so confident that FirmTRAK can help your firm, that we are offering you a FREE 30 day trial of our program. Please click here to register for your FREE 30 day trial today.

Link to the Harvard Law article:
https://thepractice.law.harvard.edu/article/why-law-firms-collapse/

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