Cut the lower branches back if it's in your way. Here is a page that talks about rejuvenating lavendar: http://treesandshrubs.about.com/od/pruning/a/how-to-prune-lavender.htm . You don't say where you are, and obviously that matters in the timing of things, but there is some good advice on that page, and on several others on the net.

Clip it over with the hedge shears straight after the flowers fade. Lavender doesn't always grow back if you cut into old wood so it is best to keep it regularly clipped rather than leaving it too long and then having to try to rescue its form.

For me, Lavender was a complete disappointment in my yard. Its stems would become gnarly and woody, no matter how much and how often aggressively pruned. If you discover a way to keep it lush and soft like a young lavendar, please share.

I find it works best to cut lavender back in early spring, just as it is starting to leaf out. Cut it back hard - I remove 1/3 to 1/2 of the plant - and the new growth will cover up the older woody stems. You'll never get rid of the woody growth because that's just how lavender grows, but with pruning you can keep it mostly hidden. And, hard pruning encourages more flowers - the best part of the plant in my opinion.