Starting and managing a personal injury law firm is different and much more difficult than any other type of business or law firm. But I’ll show you how to grow a personal injury law firm without a lot of money or work.
Learning how to grow a personal injury law firm is like learning how to grow a bank that loans money interest-free for 3-4 years.
Three Unique Attributes of a Personal Injury Law Firm
There is no business on the planet with these four distinctive attributes of a personal injury law firm:
- Extremely profitable. So profitable that badly mismanaged law firms still make a lot of money.
- Substantial money is needed not only for overhead, salaries, and advertising but also to advance substantial case expenses on behalf of clients.
- Cash flow of two to five years, and
- Commercial banks won’t provide financing because they don’t understand the personal injury business and view it as speculative. Personal injury financing is available from some lawsuit funding companies at usurious rates but is still worthwhile because of #1 above.
You may dream of getting 10, 30, 50, or even 100 new personal injury clients every month. I did. But how can you grow a personal injury law firm and manage that kind of growth without being independently wealthy and working yourself to death?
The Traditional Way Most Personal Injury Law Firm Grow
If you’re starting a new personal injury practice or looking to grow, you’ll examine how to grow a personal injury law firm by looking at how other law firms grew.
How personal injury law firms usually grow:
- Rent office space.
- Hire a paralegal and/or secretary.
- Look for a few clients including personal injury clients.
- Spend money on advertising for personal injury clients.
- Hire lawyers and more paralegals, secretaries, and other employees.
- Lay out money for case expenses that can cost thousands of dollars per case. We have had cases where we spent as much as $25,000 to $50,000 on a case.
- Reinvest a lot more money on advertising for personal injury clients.
Almost all personal injury law firms grew the same way. The biggest difference is how much money they reinvested in advertising.
How much money do law firms reinvest in advertising? I once read that large law firms reinvest an average of 17% of gross fees in advertising.
And you’ll need a lot of money for all of this because it takes on average two to five years to settle cases!
But there is another way!
My Personal Story
I Wanted My Own Large Personal Injury Law Firm
I always wanted to have my own large personal injury law firm. I trained at a large personal injury law firm and left to start on my own. I knew I had to differentiate myself from other personal injury lawyers advertising on TV, so I made business cards advertising personal service and gave them to everyone everywhere. This was before I got 1-800-HURT-911®.
My First Problem
I started getting a lot of cases but I immediately ran into a problem. I needed to hire employees to work on the cases but I was working out of my apartment and couldn’t afford to rent an office or hire employees. I tipped my doorman well who was my receptionist.
My Second Problem
I had another problem. I liked working out of my apartment! I had a large apartment with a large terrace and a propane BBQ. Life was good. I often settled cases while relaxing on my terrace.
A Partial Solution
I became highly organized and was an early adopter of personal injury case management software. In fact, I bought, probably, the very first personal injury case management software called the Pleading Processor and quickly switched to SAGA when it came out months later. Today, we use SmartAdvocate®.
Several years later, I built a large custom house. I wanted to build a house that I wouldn’t mind staying in all the time, working. I often settled cases while relaxing on my terrace with ice coffee and listening to two giant waterfalls pouring 10,000 gallons per hour into a pond.
At some point, I hired a personal injury defense lawyer but fired her after a few months because she wasn’t experienced enough and had no clue how to use computers. I found it too difficult to delegate work knowing that I could always do it better.
I had 135 cases, the maximum number of cases I could handle without any employees, and burned out. I gave up my law practice for several years. During that time, someone made an offer of $3M to buy 1-800-HURT-911® but I declined because I thought I might need to get my law practice going again.
Sure enough, I needed to make money again and I started my law practice back up. Again, thanks to 1-800-HURT-911® I quickly grew my practice back to where it was. Then I took on a partner to avoid burning out again.
Why a Personal Injury Practice Is Like Being a Plumber
If you have a master plumber’s license without employees there is a limited number of jobs you can do during any one day. You’ll never get rich unless you start hiring workers and making money from their work.
If you’re a personal injury lawyer without lawyers working for you, you’re limited to how many cases you can work on at one time.
How We Built a Large Personal Injury Practice Without a Lot of Money and Burning Out
Taking on a partner was definitely worthwhile. I was able to work a little less and made more money than when I was alone. But my partner and I continued taking on new cases and we both started to burn out.
We Needed to Raise Money, Rent an Office, and Start Hiring or Find Another Solution
We chose a better and more affordable solution that required no money for overhead, salaries, or case expenses. We only needed money for a small advertising budget.
Even better, we don’t have any management headaches and don’t have to do any legal work on personal injury cases and there is no limit to the number of cases we can retain.
We formed a partnership with a large personal injury law firm. They do all the work and incur the case expenses. We get 50% of the legal fees.
What We Do Now
Now, we’re semi-retired. My partner moved to South Beach and actually does his work while working out on Muscle Beach.
Just before writing this article, I was relaxing on my terrace with ice coffee while listening to two giant waterfalls pouring 10,000 gallons per hour into a pond. Now, instead of working on cases, I wait for the mail to come with checks for referral fees and have time for other things.
Change Your Future!With 1-800-HURT-911®
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We also maintain control of the cases so we can make decisions if we want to. I have substantial expertise in negotiating, so I get involved in settlement negotiations for high 6-figure and 7-figure cases.
We began making more money than we ever had, without doing any work, but the law firm didn’t want some small cases and some other cases. Our agreement allowed us to force them to take some of the cases but we didn’t want to force them to take all the small cases.
To prevent losing those cases, we started working with two more personal injury law firms. This enables us to retain more leads. The previously lost leads that we now retain pay for our advertising budget and more.
How We Get Personal Injury Cases
We get our personal injury cases by advertising 1-800-HURT-911® in the title of Google Ads. See the results of our Google Ads for personal injury advertising.
How Much Money Can You Make for Every Dollar Spent on Advertising for Personal Injury Cases?
How much money can you expect to earn in personal injury legal fees for every dollar spent on advertising? You should earn approximately $20 for every $1 spent on advertising.
How Much Money Can You Make Referring Personal Injury Cases?
How much money can you expect to earn from referring personal injury cases from advertising? Since we get 50% of the gross legal fee, we make approximately $10 for every $1 spent.
We’re not alone. There are other law firms that just refer personal injury cases to personal injury law firms.