Profitability Isn’t Just About Revenue — It’s About Leverage

The Revenue Mirage

It’s easy to equate growth with revenue. Many firms celebrate big top-line numbers while quietly struggling with thin margins.

Here’s the truth: profitability isn’t about how much you bring in — it’s about how you use your resources. And the biggest driver of profitability in a law firm is leverage.

What Leverage Really Means

Leverage is simple in concept: the right people doing the right work at the right pay grade.

• Partners focus on rainmaking, client relationships, and high-stakes strategy.

• Associates handle substantive legal work.

• Paralegals and staff manage support tasks.

When this balance breaks, margins shrink.

Where Firms Lose Profitability

1. Partners Doing Staff Work.
If partners are drafting documents, reviewing routine contracts, or managing admin tasks, their time isn’t leveraged.

2. Associates Handling Intake.
When highly paid associates are fielding new client calls, it’s not just inefficient — it’s expensive.

3. Flat Teams.
Firms that resist hiring paralegals or coordinators often overload attorneys with non-billable tasks, which reduces overall productivity.

4. Lack of Delegation Discipline.
Even when support staff exist, attorneys hoard tasks out of habit or perfectionism. That mindset eats profits.

Example: A Firm With Growing Revenue but Shrinking Margins

I worked with a firm that had doubled revenue in three years. On paper, growth looked fantastic. But profitability hadn’t budged.

A review showed the problem:

• Partners were doing work paralegals should have handled.

• Associates were buried in admin.

• No one was tracking utilization by role.

Once we restructured work allocation, hired two support staff, and enforced delegation discipline, profitability improved by 22% without adding new clients.

The COO’s Role in Driving Leverage

A fractional COO helps firms:

• Audit utilization rates by role.

• Build accountability around delegation.

• Redesign org charts to balance workload and cost.

• Install KPIs so leaders see not just hours billed, but who is billing them.

The goal isn’t just more work — it’s more profitable work.

The Bottom Line

Revenue looks exciting, but revenue without leverage is just busywork. If you want sustainable, profitable growth, you have to align people, roles, and resources.

At ING Collaborations, I help firms design structures that maximize leverage and protect profitability. If your revenue is rising but profits aren’t, let’s fix it.

Check out our previous blog to uncover the silent profit killers you may not realize are impacting your growth.