How to Grow Your Law Firm by Focusing on Your Profit Core (Ep. 187)
For many law firm owners, growth means adding another practice area, opening a new office, hiring more people, or entering a new market. But according to host Darren Wurz, these moves can create the illusion of progress while actually weakening profitability.
On this episode of The Lawyer Millionaire, Darren explores the powerful idea of “profit from the core” and explains why the smartest growth strategy may be to get narrower before getting bigger.
Your Practice Area Isn't Your Core
Saying “we're an estate planning firm” or “we're a family law firm” doesn't tell you what actually makes the business profitable.
Your true core is much more specific. It may be a particular type of client, a specific type of matter, a referral source, and a service model that work together to produce exceptional results.
Two firms can operate in the same practice area, have similar teams, and serve similar markets while having dramatically different profit margins. The difference often comes down to which clients and matters they choose to build their businesses around.
Growth Can Become a Distraction
Expansion feels exciting. A new office can be announced. A new practice area can be added to the website. A new market can create the appearance of momentum.
But not every opportunity is a good opportunity.
Darren explains that success often creates even more opportunities and some of those opportunities are simply distractions disguised as growth. The stronger your core becomes, the more tempting it can be to move away from it.
The Gucci Lesson: Sometimes You Grow by Cutting
Darren uses Gucci as an example of what happens when a successful brand moves too far away from its core.
The company expanded its product range dramatically, putting the Gucci name on thousands of products and distributing them through more than 1,000 locations. In the process, the exclusivity that had made the brand valuable began to disappear.
The turnaround required painful decisions. Gucci dramatically reduced its products and points of sale and returned its focus to its premium, exclusive positioning.
The lesson for law firms is simple: sometimes growth requires subtraction.
A firm that becomes known for premium work can gradually dilute its reputation by accepting lower-value matters, unrelated cases, discounts, or clients outside its ideal market.
Maximize Your Core Before Expanding
Before launching a new practice area or opening another office, Darren recommends looking closely at where the firm's profits are actually coming from.
Analyze your business by:
Client profile
Matter type
Referral source
Hours worked
Revenue generated
This can reveal which segments are truly driving profitability.
Instead of immediately searching for new clients, firms should also look for opportunities within their existing relationships. Past clients, referral partners, established workflows, and strong reputations in specific niches can all represent valuable assets that the firm has already invested in.
When Should You Add a New Practice Area?
Expansion isn't necessarily bad. The key is whether the new opportunity strengthens the existing core.
A new practice area is more likely to make sense when it serves the same clients, through the same channels, using similar capabilities.
For example, estate planning and business succession planning may complement one another because they can serve the same business-owner clients and referral sources. By contrast, adding an unrelated practice area can create operational complexity and weaken the firm's positioning.
Build a Core Profit Map
One of the most practical recommendations from the episode is to create a Core Profit Map.
Take the previous 12 months of collected revenue and break it down by client profile, matter type, and referral source. Then estimate the hours your team actually spent serving each segment and calculate revenue per hour.
Rank those segments from most to least profitable.
Your top segment may reveal your firm's true profit core.
From there, Darren recommends spending the next 90 days directing more time, marketing, and attention toward that segment before committing to major expansion.
The Bottom Line
The central lesson of Episode 187 is that bigger doesn't automatically mean better.
Law firm owners should first identify what makes their firm profitable, strengthen that core, maximize existing client relationships, and build leadership within their niche. Only then should they consider expanding into new practice areas, markets, or locations.
As Darren's own experience launching The Lawyer Millionaire demonstrates, adjacent businesses can take considerably more time, money, and energy than expected. Expansion can work but firms need to understand the real cost before making the leap.
The smartest growth strategy may not be to do more. It may be to become exceptionally good at doing the right things.
Before you add another practice area or sign another office lease, ask yourself:
Have you truly maximized the profit potential of your core?
Resources:
Profit from the Core: A Return to Growth in Turbulent Times by Chris Zook with James Allen (Book)
Law Firm Financial Reporting Template Pack (Exclusive content)