Profitability in Law Firms

Insight and Analysis

Häftad, Engelska, 2024

2 247 kr

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Beskrivning

Profit. What a simple term. To determine it, all one needs to do is take revenue and subtract costs and there you go: profit. From there it’s easy to determine a percentage and margin. So what’s so hard about law firm profitability? Profitability in Law Firms: Insight and Analysis provides practical and proven strategies for law firm leaders and managers who want to take their firms to the next level of performance and profitability.How can they increase their profitability and efficiency without compromising their quality and reputation? How can they leverage the power of technology, data, and innovation to create value for their clients and themselves? Law firms are facing unprecedented challenges in the current financial climate and therefore need profitability strategies to survive and thrive in a competitive and changing market.

Produktinformation

Utgivningsdatum:2024-01-31
Mått:156 x 234 x 12 mm
Vikt:452 g
Format:Häftad
Språk:Engelska
Antal sidor:211
Förlag:Globe Law and Business Ltd
ISBN:9781787429970

Utforska kategorier

Juristyrken inom Juridik
Juridisk kompetens och praktik inom Juridik

Innehållsförteckning

Executive summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ixAbout the authors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xvChapter 1: The law firm profit primer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1By Toby Brown, CEO, DV8 Legal StrategiesLet’s get started . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2Moving right along . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4Putting it all together . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8Core challenge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10Chapter 2: KPIs for aligning strategy to enhanced client value and partner profitability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11By Steven Campbell, consultant, Acumen KPIAvoiding unintended consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . 12Don’t confuse margin (net income) and profits per equity partner (PPEP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Dashboards should focus on areas of greatest impact . . . . . . . . . . 14Vision drives strategy – strategy drives effective KPIs . . . . . . . . . . . 17Example law firm mission, values, and vision . . . . . . . . . . . . . . . . . . . 17Non-financial KPIs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18New tools to help measure and prioritize strategic action . . . . . . . 20Effective KPIs should inspire action . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22Chapter 3: Applying battlefield lessons during peace time – learnings from the COVID-19 pandemic . . . . . . . . . . . . . . . . . . . . . . . . . . 25By Tim Corcoran, BringinTimThe standard playbook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26The onset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31Lessons learned . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32The long view . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45Chapter 4: Linking partner and associate compensation to the achievement of a firm’s strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47By J. Mark Santiago, managing partner, SB2 ConsultantsVision and strategy development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47How did we get here? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49Compensating the rain dancers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51Contribution roles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52Individual partner goal setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Assessment and evaluation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54Communicating pay decisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55The partnership compensation system . . . . . . . . . . . . . . . . . . . . . . . . 55Closing the loop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56Chapter 5: Pricing approaches and firm profitability . . . . . . . . . . . . . . . . . 59By Shaun Jardine, founder, Big Yellow PenguinBusiness development, clients, and positioning strategy . . . . . . . . 63Understanding clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67Create a pricing strategy and vision . . . . . . . . . . . . . . . . . . . . . . . . . . . 69Lead the change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76Chapter 6: The roadmap to £1,000,000 extra profit in three years . . . . . 79By John McCarthy, profit coach, Summit BusinessIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79The P.R.O.F.I.T. system . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79The nine-step roadmap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80Implementing the P.R.O.F.I.T. system . . . . . . . . . . . . . . . . . . . . . . . . . . 83The business blueprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84Not following the business blueprint . . . . . . . . . . . . . . . . . . . . . . . . . . . 85Following the business blueprint . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86How poor cash flow almost sank a law firm . . . . . . . . . . . . . . . . . . . . 89The five cash flow levers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90The five cash flow levers being implemented . . . . . . . . . . . . . . . . . . . 93Profitability and efficiency first, marketing second . . . . . . . . . . . . . . 94Profit exercise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97Implementing the profit maximizer . . . . . . . . . . . . . . . . . . . . . . . . . . . 99Don’t do what many other law firms do . . . . . . . . . . . . . . . . . . . . . . . 99Focusing on effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100Putting this into practice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100Closing thoughts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101Chapter 7: How a sound matter pricing strategy canelevate law firm profitability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103By Jack Kingston, account manager, BigHandBringing in the best matters for your firm . . . . . . . . . . . . . . . . . . . . . . 104Differing approaches for payment of legal services . . . . . . . . . . . . . 105Chapter 8: Questioning the value of law firm rack rates . . . . . . . . . . . . . . 111By Richard Brzakala, senior director, Global External Legal ServicesBackground . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111Why RRB discounts are so attractive to CLDs . . . . . . . . . . . . . . . . . . . 112The credibility of cost savings based on RRB data . . . . . . . . . . . . . . 113The utilization of supplementary fees . . . . . . . . . . . . . . . . . . . . . . . . . . 114Zero negotiation strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114What are CLDs looking for? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115Law firm reliance on pricing specialists and business intelligence tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117What CLDs want to see from firms utilizing a RRB strategy . . . . . . 118The importance and value of transparency . . . . . . . . . . . . . . . . . . . . 120Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123Chapter 9: The next frontier in pricing strategy – capturing value from legal technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125By Stuart Dodds, principal, Positive PricingMaking sense of the legal technology landscape . . . . . . . . . . . . . . . 126The partner’s perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128The client’s perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129The pricing professional’s perspective . . . . . . . . . . . . . . . . . . . . . . . . . 130Pricing approaches adopted to date . . . . . . . . . . . . . . . . . . . . . . . . . . . 134Key considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135What we can learn from the early adopters . . . . . . . . . . . . . . . . . . . . 136Chapter 10: Harvey Specter – the ghost of a law firm reality yet to come . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139By Phil Nixon, senior sales executive, Elite TechnologyWhat is available and how will this impact legal services? . . . . . . . 141Will you take the blue pill, or the red pill? . . . . . . . . . . . . . . . . . . . . . . . 143Building the foundations for technological success . . . . . . . . . . . . . 143Can technology actually help us become more profitable? . . . . . . 144Improving profitability and WIP to cash with technology available today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147Improving profitability and WIP to cash with one eye on the future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148A technology roadmap – getting your house in order . . . . . . . . . . . 150Chapter 11: AI and what it means for law firm profitability . . . . . . . . . . . 155By Wayne Hassay, managing partner, Maguire Schneider HassayThe ethics objection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 156The fear of change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157The risks and emerging power of AI . . . . . . . . . . . . . . . . . . . . . . . . . . . 158Making a smarter, more profitable, law firm . . . . . . . . . . . . . . . . . . . . 161Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163Chapter 12: Sustaining success along the profitability journey . . . . . . . . 165By Madhav Srinivasan, CFO, Proskauer, and Mitch Spradlin, pricing director, Hunton Andrews KurthOverview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165Positioning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 166Goal setting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167Matter management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168Matter lifecycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169Resourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172Chapter 13: The seven profit zones formula for higher profits – without working more hours . . . . . . . . . . . . . . . . . . . . . . . . 175By Michelle Peters, former practicing solicitor and founder, The Business InstructorIntroduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175A different approach – the seven profit zones formula for profitable growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177Getting practical – how to increase each profit zone . . . . . . . . . . . . 182Beyond ten percent increases – doubling your profits without doubling your clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191How long does it take to double your profits? . . . . . . . . . . . . . . . . . . 193The implementation paradox – information vs action . . . . . . . . . . 194Getting started . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196Chapter 14: The human cost of boosting profitability . . . . . . . . . . . . . . . . 197By Richard Martin, principal consultant, Byrne Dean and CEO of the Mindful Business CharterMental health in the legal profession . . . . . . . . . . . . . . . . . . . . . . . . . . 197A couple of caveats before we start . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199Why lawyers become lawyers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199Where’s the balance? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202How profit is increased and the impact of that . . . . . . . . . . . . . . . . . 203Doing more work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204Reducing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205Charging more or differently for work done and improved financial management . . . . . . . . . . . . . . . . . . . . . . . . . 206A different approach . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207About Globe Law and Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211

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