The beginning of the year is the traditional time to take stock of where we are and to make resolutions for the year ahead. Here are some thoughts and resolutions for the business of law as we head into 2016:Read More
The financial results reporting season has begun in earnest. Last week, Citi Private Bank and Hildebrandt Consulting released their “2016 Citi/Hildebrandt Client Advisory.”
Last year’s report suggested, at least to me, that the pace of change, especially efficiency advances, at large law firms would accelerate in 2015. That appears not to be the case; indeed, this year’s Advisory sees operating expenses on the rise.
What does appear to have accelerated, however, is the client pattern of moving legal work away from the largest law firms in pursuit of cost efficiency from other providers. This trend, together with others, increase the imperative for systemic change.Read More
The market will no longer tolerate the inefficiencies of the traditional law firm model. Persistently and progressively, clients are insisting that legal service be provided in ways that are more tailored to their precise needs and for fees that bear a more reasonable relationship to the value provided.
Until recently this insistence has shown up as pricing pressure — clients demanding discounts. It has now moved to a more significant stage: clients moving massive amounts of their legal work to other providers — in-house, alternative providers or more efficient law firms — that deliver what they need more cost effectively.
The game has changed. And the change will only accelerate. Law firms that want to flourish in the world ahead must adapt.Read More
More and more law firms are adopting meaningful profitability analysis tools to measure their financial performance. This is a noteworthy and positive development.
The development is noteworthy because firms traditionally have been reluctant to assess profitability explicitly because of the risk of incentivizing undesirable partner behavior, particularly the risk of undermining collaboration and the assignment of the most appropriate lawyer to matters. A combination of a greater appreciation for the value of profitability assessment and an increased confidence in the judgment of firm partners appears to have overcome these concerns. As well it should have.
The development is positive for several reasons, some more obvious than others. Most significant, in my view, is the capacity of profitability analysis to guide firms to more efficient ways of delivering service.