Coming off the “batten down the hatches” response to the recession, a common concern among law firm leaders is how to create in their organizations, and particularly among their partners, a greater long term perspective. But, while many leaders characterize their short term perspective as a natural reaction to economic adversity and being focused on [...]
If there is a key to alternative billing, it is not in the technical aspects of estimating costs or managing work process. The real challenge is developing a trust relationship between lawyers and their clients that permits a change in the basis on which legal services are purchased. However, the only way to create the [...]
One of the interesting features of managing large professional partnerships in the United States is that, apart from the tax code, there are no standards for financial reporting. This flexibility can be a powerful tool for law firm managing partners and I suspect 2009 was a banner year for the careful management of financial statistics [...]
Over 20 years ago, Steven Brill, creator of the American Lawyer, predicted that among the most successful law firms in the future would be what he referred to as “Super-regionals.” However, as the legal industry evolved over the past couple of decades, many growth oriented law firms managed to hopscotch over regionalism to become national [...]
Warren Buffet once said, “It’s only when the tide goes out that you learn who’s been swimming naked.” A rough economy tends to reveal those companies and firms that have been trying to “swim naked” and are now getting caught by the receding tide. When you consider the most recent large-scale law firm collapses: Wolf [...]
To the extent that there is anything good about an international economic meltdown, it can be credited with having forced a lot of law firms to reconsider their globalization plans. As the recession drove red ink for the international investments of many firms, more than a few of them are looking at their international offices [...]
A lot has been written about the huge paradigm shifts that will result from the recession. I’m not sure that all the changes will actually stick–which doesn’t mean they aren’t good things anyway.
An important element of strategic planning for many law firm is the identification of specific areas of practice where the firm wants to emphasize its growth. This means that law firm leaders must find a politically acceptable way of providing increased resources to some while limiting support to others.
Over the past couple of decades, the strength of US law firms and the growth of legal markets have been measured by the size of transactional practices. From this viewpoint, litigation, at least among law firms listed in the AmLaw 100 and 200, is an important but supportive practice to the M&A and securities engines [...]
The natural reaction of most lawyers is to deal with an economic downturn in the same way they would handle a hurricane — hunker down, don’t take any unnecessary chances and try to survive until it is over. Given the risk adversity of most law firms, avoiding action may indeed be the best plan for [...]
While there are continuing differences between compensation practices between U.S. and Canadian firms, and law firms in the rest of the world, findings from the latest Kerma Partners’ survey reveal that global harmonization of performance and compensation management may be more likely than ever.
The basis and process used to compensate partners is becoming increasingly similar [...]
A simple question: should a law firm design its business model to best serve the clients it already has or should it select a business model and then go out and find clients who benefit from it? It’s sort of the old “chicken and egg” question because one can argue either side. Since it is [...]
Most law firms have a limited number of options to improve their profitability. They can ask their lawyers to work harder —which in many firms is a function of having the work to do, as well as a culture that inspires and rewards hard work.
Another alternative is to cut costs but, for most law offices [...]
The biggest factor in most law firms’ success is the quality of their client base. In large measure this is because different clients have differing volumes of work, complexity of legal needs and price sensitivity. Appropriately, therefore, many law firms’ strategic plans are built, at least in part, around improving their client base. Unfortunately, there [...]
As the global economy moves toward an eventual recovery, there will be some huge opportunities for law firms, as well as some minefields. How firms deal with these issues may determine their short and long term success. There are all sorts of possible scenarios but the five issues discussed below certainly appear to be the [...]
The silver lining for law firms in the recession may just turn out to be alternative pricing. For years, sophisticated managing partners have realized that changing the basis for pricing legal services could enhance profits more than any other available action. The only problem was that neither their lawyers nor their clients were willing to [...]
Communication Problems in Law Firms
It does not much help that in good times and bad there are some significant structural barriers to good communication, even in firms that try hard to be transparent and open in their information sharing. The use (or misuse) of email, and stilted discussions at formal meetings become a poor substitute [...]
A lot of law firms talk about using pricing to attract clients who don’t want to pay New York prices for top quality legal work. But, for most firms, the Low Cost Provider strategy has not been particularly successful. The answer may be for firms to learn from the pricing experience of businesses in the [...]
The economic downturn has caused many businesses to reconsider the viability of their strategic direction. This is especially true for law firms that primarily deal with business clients and are impacted by both the global decline in business transactions and clients’ overall desire to reduce costs by using less legal services. For many law firms, [...]
The term “acquisition” is used quite often to describe the manner in which law firms bring in experienced lawyers. Sometimes firms describe the hiring of lateral partners as an acquisition and bringing in groups of lawyers or a whole practice group from another law firm is viewed as an acquisition. When the consolidation of two [...]
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