Practice Management

Citing the low cost of entry and a steady flow of lawsuits, Forbes.com lists legal services as one of the most profitable businesses to start in America. Statistically, says Forbes, "[b]ean counters trumped all, with a 25% average pretax margin. Next came the legal-service firms, at 21.6%, followed by dental offices (20.9%) and specialty design shops (17.6%).  Specialization helps in health services, too. Chiropractors, optometrists, podiatrists, and physical, speech and mental health therapists--the fifth most profitable group as a whole, with a 17.5% margin."

I bet that comes as a surprise to many smaller law firms in the U.S. who are facing rising labor and real estate costs, but a slow-down in the rate of fee increases.  However, I have worked with a number of firms that will not settle for less than 25% pre-tax, and some who can raise that five or more points.

Still, it is nice to know that despite the demands of practicing law today, if managed properly, a firm can be among the most profitable businesses to launch and build today.