The Profitability Matrix: 4 Levers to Grow Your Law or Accountancy Firm
There is a dangerous misconception in the professional services world that "Growth" equals "New Clients."
Walk into any boardroom in the UK whether it’s a Legal 500 firm or a boutique accountancy practice and the conversation is almost exclusively about the pipeline. How many leads? How many pitches? How many new clients?
But in my 18+ years in this industry and specifically during my 4.5 years entrenched inside a professional firm, I witnessed a different reality. I saw firms bringing in record revenue while their profit margins quietly eroded. I saw partners working 70-hour weeks while realisation rates plummeted.
Growth without discipline isn't success; it's just being busy. Sustainable profitability rarely happens by accident. It is engineered. It comes down to mastering four distinct, interconnected levers: Price, Productivity, Volume, and Margin.
Here is how you need to look at them in 2026.
1. Price: The Discipline of Value
When we talk about price, most firms immediately think of their rate card. “Should we raise our hourly rate from £350 to £375?”
That is the wrong question. The right question is: What is your Realised Rate?
You can have the highest rate card in the city, but if your partners are habitually writing down time, offering "commercial discounts" to win work, or allowing scope creep to go unbilled, your effective price is haemorrhaging.
The Strategy:
Embed Pricing Discipline: Pricing is a culture, not a spreadsheet. It requires training partners to have confident value conversations rather than defaulting to discounts.
Scope Management: The biggest killer of price is "ghost work"—the extra 10 hours spent on a project that never makes it to the invoice.
2. Productivity: The Art of Leverage
In professional services, "productivity" is often a dirty word. It conjures images of burnout, late nights, and the relentless pressure of the billable hour.
But smart productivity isn't about working harder; it’s about Leverage.
The traditional leverage model relies on pushing work down to the most cost-effective competent level. If a Partner is doing work that a Senior Associate could do, or a Manager is doing work a Paralegal could do, the firm is leaking money.
The Strategy:
Effective Delegation: Ensure work is pushed down to the lowest cost-effective level of competence.
Kill the Write-Offs: Write-offs often happen because a senior person did the work, blew the budget and then had to slash the bill. Better leverage solves this.
3. Volume: The Engine of Expansion
Volume is the engine, but you have to choose the right fuel.
Most firms are addicted to "New Business Volume" the thrill of the chase. While new clients are vital, they are also the most expensive form of volume to acquire. The most profitable volume sits right under your feet: Cross-Selling.
I have seen firms where the Tax department has no idea what the Audit department is doing for the same client. That is leaving money on the table.
The Strategy:
Farm Before You Hunt: Look at your top 50 clients. How many service lines are they buying? If the answer is "one," that is your immediate growth strategy.
Sector Campaigns: When you do hunt for new volume, don't spray and pray. Launch targeted sector campaigns where you have a "right to win."
4. Margin: The Ultimate Reality Check
Margin is the synthesis of the first three.
Price (What you charge)
Productivity (What it costs you to deliver)
Volume (How often you do it)
If you have high volume but low pricing discipline and poor leverage, you don't have a business; you have a charity. Sustainable profitability comes from managing the Service Mix.
The Strategy:
Analyse the Portfolio: Look at your practice areas. You might find that your "busiest" department is actually your least profitable once you factor in write-offs and senior time.
Be Brave Enough to Cut: Sometimes, improving margin means firing unprofitable clients or closing service lines that drag down the firm's average.
Which Lever Will You Pull?
As we move into 2026, the firms that will win aren't necessarily the ones with the flashiest rebrands or the biggest ad budgets. They are the ones who understand the mechanics of their own business. They are the firms that charge fairly for value delivered, leverage their teams effectively, mine their existing client base for gold, and obsess over margin rather than vanity revenue metrics.
So, I ask you: You likely have a plan for "Volume" this year. But do you have a plan for Price and Productivity?
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