Many of us are infected with an “expansion” virus. We want to grow. We look at new geographic areas and practice areas and see expansion targets and opportunities.

Someone mentions a new type of product (think “hoverboards”), and we immediately visualize new advertisements we can create to grow our businesses. We see the restaurant employee leave the restroom without washing his hands and start counting the money we’ll make when we expand into class actions. We see people at the courthouse without lawyers and think “virtual lawyers” could solve the problem. We see growth opportunities with each turn of our head.

But expansion isn’t always the right path to increasing profits.

Sometimes a better approach is to contract. Sometimes it’s smarter and more lucrative to restrict our geographic area of service. Sometimes it’s smarter and more lucrative to restrict the types of cases we’re willing to accept.

The Downsides of Growth

Geographic expansion results in travel time, mileage expense, increased rent, and, most significantly, increased management issues.

Practice area expansion results in spreading ourselves thin and sometimes disqualifying ourselves from the most challenging and complex matters in a lucrative arena.

Sometimes it’s better to narrow the focus and become known as a guru in a particular practice and geographic area.

Compare the three-office law firm handling traffic cases, minor criminal offenses, and low-dollar personal injury matters to the firm handling nothing but complex injury cases. Look at your market and judge who’s winning and who’s losing in that competition.

My sense, based on having seen some numbers over the years, is that the lawyer who goes deep on complex injuries wins. That lawyer builds a reputation for handling the big matters as a result of the narrow focus, allowing the lawyer to develop the expertise required to handle the matters. The lawyer is known, respected, and trusted by everyone, and others refer the big cases to that lawyer. The narrowly focused lawyer wins big, as do the clients of the firm. The expertise and experience pay off.

Don’t automatically assume that expansion makes sense. More offices and more practice areas don’t always mean more money. They often mean more time in the car, more employees causing more problems, and more upset clients.

Examine your practice closely. Look at what’s working and what’s not. Look at what’s profitable and what’s causing problems. Go deeper with what’s working and jettison what’s not. Growth of the bottom line is good. Growth for the sake of growth is not.