Managing the business of a law firm can be a complicated affair. There are numerous financial and operational levers to push and pull, and buttons to press, each in turn accelerating or decelerating some aspect of the business. Which button should I press? For how long? What if I move this lever up and move this other lever down? Which should I move first? Will I improve my outcomes if I prioritize these objectives and dial back our efforts elsewhere? How a manager prioritizes and acts on the available business drivers is a function of the organization’s strategy, which in turn is a function of its resources and capabilities and how well these are poised to address the available market opportunities. Since these are all perpetually moving targets, it should come as no surprise that prioritizing and reprioritizing these variables is a challenging, stimulating, frustrating and time-consuming exercise.
In my cover article the the September/October Finance issue of the American Bar Association Law Practice magazine, I delve into these issues. I discuss the challenge facing law firm leaders, particularly those trying to maintain a full-time legal practice, who must tackle many inter-related and nuanced decisions to drive their organization forward.
Savvier clients are forcing law firms to accept, if not fully embrace, non-hourly pricing models or alternative fee arrangements
Non-hourly pricing will dilute profits, unless a firm adapts the delivery of legal services to become more efficient
Transforming the delivery of legal services requires a nuanced understanding of profitability at the matter, timekeeper, and even client level
Embracing the tools of transformation, such as process improvement and project management, should be easy for experienced lawyers, but efficiency is often dangerous to partner compensation
Adjusting partner compensation to drive new behaviors forces the question of what’s the highest and best use of the firm’s partners/owners
Holding everyone accountable to the metrics of the new marketplace requires managers who are able, and willing, to address partner performance
Do law firms value the appropriate skill set in its current and future leaders, or do they continue to ascribe credibility and therefore leadership roles primarily to those who are good lawyers?
There are no easy answers. Yet in too many law firms, partners and leaders aren’t even asking the right questions. You can read the full article here. Enjoy!
Timothy B. Corcoran is principal of Corcoran Consulting Group, with offices in New York, Charlottesville and Sydney and a global client base. He’s a Trustee and Fellow of the College of Law Practice Management, and is a member of the Hall of Fame and was 2014 president of the Legal Marketing Association. A former CEO, Tim guides law firm and law department leaders through the profitable disruption of outdated business models. A sought-after speaker and writer, he also authors Corcoran’s Business of Law blog. Tim can be reached at Tim@BringInTim.com and +1.609.557.7311.