Every institution is vulnerable, no matter how great. No matter how much you have achieved, no matter how far you have gone, no matter how much power you’ve garnered, you are vulnerable to decline. There is no law of nature that the most powerful will inevitably remain at the top. Anyone can fall and most eventually do. –Jim Collins

Confidence

Jim Collins, the author best known for his positive and uplifting books Good to Great and Built to Last, wrote another provocative volume in 1999. How The Mighty Fallwhich looks at the causes and stages of organizational decline.

Continue Reading Overconfidence and Law Firm Decline

It can’t be overstated. The legal services business is experiencing dramatic change.  For law firms as institutions, it is obvious because more work than ever before is brought in-house by clients, and alternative service providers are rushing into the competitive landscape.  Besides the increase in competition, there are technical and practice advances that have changed the way law firms do business.  Legal project management, once a novelty, is altering the focus law firms are expected to bring to a task.  Technology in law is evolving so fast that even law firms committed to investing in new tech have a hard time keeping up.  And artificial intelligence is finding its place in the ultimate objective of meeting the legal needs of clients.

With all the industry change, most firms know that settling on the status quo is risky. Still, more than a few firms are slow to change.  Some are overwhelmed by the idea of innovation itself or are worried about the appropriate time and capital to invest in its execution.  Without adequate experience or guidance, a firm can be paralyzed.

Continue Reading Sustaining Success in the Changing Law Firm World: Four Fundamentals

Most law partnerships begin with a sense of shared aspirations, enthusiasm and trust. The founding partners and those subsequently added presumably maintain a fiduciary commitment to conduct consistent with the welfare of the other partners, as well as clients.

The fact is that this is often not the case.

Continue Reading A Thief Among Us?

Despite the seemingly “good” year that 2018 was for many law firms, experience tells us that ”good” can be  a relative thing.  While 2018 performance data compares favorably to the data from the prior years following the Great Recession, all is not completely rosy.  Today’s law firms face more competition than ever as market share is shrinking, and the industry is being disrupted in multiple ways.

The recently released Thomson Reuters State of the Legal Market 2019report provides some industry information about how the 2018 results should be viewed.  The report concludes that despite good results last year, a robust round of “high-fives” should be tempered.  As Thomson Reutersnotes, shared competitive industry information, technological advances, client control of legal service use and terms, greater competition among law firms and other resources, have all greatly altered the legal services market. This change in landscape has, among other things, stimulated a war for talent, causing valuable lawyers with valuable clients to move from one firm to the next in free-agency run wild.

Continue Reading Four Ways a Strategically Designed Merger Can Strengthen Your Law Firm and Make it More Competitive

I have been thinking about  the results from a recent survey conducted by the Zeughauser Group. Although the survey covered a variety of issues, the responses related to succession particularly struck me.

  • When describing the top objectives for their firm, the most frequently stated objective was to “achieve long term stability.”
  • When describing the biggest challenge facing their firm in the next 3-5 years, the biggest challenge stated was “transitioning leadership to the next generation”, closely followed by “transitioning client relationships to the next generation.”
  • Finally, when asked about the biggest priority in the next 3-5 years the greatest priority was “building a more stable future.”

Continue Reading Will Your Firm Be A Victim of the Law Firm Succession Crisis?

No sooner than closing out 2018 than do law firm leaders confront the next challenge-2019.  Even firms not facing upheaval caused by attorney departures or declining client relationships will encounter other transitional events.  The contest never ends.

Whether 2019 preparations are just getting started or already developed, some areas deserve a firm’s attention.  Focusing on these select areas can deliver short-term and long-term benefits and aid in making a law firm stronger.  As the New Year dawns, the five areas that should receive a firm’s focus are:

Continue Reading Focusing on a Great 2019-Five Areas for Law Firms to Consider

Strength and growth come only through continuous effort and struggle. – Napoleon Hill

The market volatility during the last year and the increasing concerns about a coming recession foreshadow risk for many law firms.   Additional market disruption may lead to challenges for firms of all sizes and in most practice disciplines.

Continue Reading Is Your Firm Prepared For Major Disruption in 2019?

Although the final numbers are not in yet, 2018 has been touted as a good year for law firms.  Based on various reports including the 2019 Citi-Hildebrandt Client Advisory, revenues were up, billing rate increases held, and client demand increased.  These improvements are not shocking as law firm performance has been ascending in recent years.

Just because industry performance this past year was on the whole very good, not all law firms can look back on 2018 with such positive thoughts.  Indeed, the overall industry uptick is pulled along by strong performances among the AmLaw 100, especially the top 25 firms.  Performance among the second AmLaw 100 (or 101 to 200) generally was not as positive. Similarly, firms outside the second 100 did not, as a class, enjoy the kind of robust financial performance logged by the bigger firms.  Specialty firms (obviously focused in the right specialty) were the exception among smaller firms.

Continue Reading Law Firms Enjoy Positive 2018-What If Your Firm Didn’t?

Most firms are in the final stretch for this year, wrestling with collections, budgets, promotions and compensation decisions. All of these are important activities. But, while focused on wrapping up 2018 let me suggest one more subject that deserves attention — something that stands a chance of making a real long-term difference.

Continue Reading Preparing Your Firm For 2019 and Beyond

Law firm leaders understandably see lucrative client work as an important key to overall firm profitability.  Left to their own devices, those leaders would eagerly raise rates or otherwise take steps to ratchet up the yield on work.  In contrast, their clients often consider the containment of legal costs as a key component to valuable legal services.  If clients were in control, they frequently would reduce rates, or seek other ways to manage down their legal bills.

While these respective objectives may seem incompatible, they don’t need to be.  Hitting the sweet spot of simultaneous law firm profitability and client satisfaction is possible—it simply requires greater effort in managing the law firm/client relationship.

In recent years, some firms are learning that achieving firm profitability and client satisfaction can be aided through the use of a law firm pricing professional.  The recent Thomson Reuterspaper Law Firm Pricing Insights – Value, Profitability, and What Comes Next provides an informative overview about this breed of professional and some of the successes enjoyed to date. Law Firm Pricing Insights makes the case for using pricing professionals to meet law firm financial objectives while growing client relationships and satisfaction.

It’s review of the growth, use, and roles of pricing officers at law firms is commended for your review and will not be repeated here.  But it may be worth looking at five of the more practical benefits for a law firm that utilizes a substantively empowered pricing professional:

Enhances the Understanding Between Firm and Client.  By already knowing the firm’s financial strategies, the firm’s pricing professional can concentrate on listening to the client to understand its objectives. Instead of acting as an advocate to convince the client that it mustaccept the firm’s financial terms, the pricing professional takes what is learned from the client to arrive at a solution that works for both sides.  Communication improves understanding, the client relationship, and in many cases, financial results.

Brings a Bigger Toolbox to Fixing the Profitability and Value Conundrum.  Most pricing professionals are aware of numerous ways to price legal services.  With a firm pricing professional involved, creative financial arrangements can be discussed to keep the firm/client discussions from getting bogged down.  The bigger pricing solution toolbox reduces the likelihood that an impasse with the client will arise.

Can Foster the Institutionalization of Clients.  While working on an acceptable financial arrangement with a client, a pricing professional may see opportunity beyond the immediate engagement. Instead of the analysis being limited to a short-term pricing arrangement, the pricing professional may recognize ways the client’s fundamental requirements can be leveraged long-term. An astute pricing professional may see how it may be worth strategically investing in a new relationship in order to build a long-term one.

Let’s Lawyers Concentrate of What Lawyers Do Best.  A pricing professional can free a lawyer to focus on client service.  Once an acceptable arrangement between the firm and the client is endorsed by the firm, the firm’s backing may make it be easier for the lawyer to concentrate on achieving substantive results.  While a priced arrangement does not excuse a lawyer from managing a file correctly, it can establish a clear understanding between firm and client that engenders the efficient delivery of client service.

Improves Lawyer Morale. Too often lawyers are told to raise their rates beyond their comfort zone.  It’s not as if lawyers don’t value their own worth, but they see firsthand the impact of being priced out of the market.  The firm’s desire for higher rates versus the lawyer’s desire to not rock the client boat can amp up the pressure at the firm.  By moving outside the attorney rate merry-go-round, a capable pricing professional can find a solution that satisfies firm leadership, the lawyer, and the client.  A busy lawyer is a happy lawyer.

More and more law firms are turning to pricing professionals to improve the client experience and financial results.  Is it time your firm does likewise?