Short Term Fixed, Short Term Solutions
Attorneys today have some enormous opportunities not open to attorneys 20, 10 or even 5 years ago. Equally those in private practice also face a variety of challenges that we have not seen before some of which include:
• intensified competition and cannabalisation (and not just from other law
• the increasing rapidity of change.
• the commoditisation of many attorneys’ traditional sources of income,
• the rise of online and virtual legal providers,
• the use of technology to reduce the time it takes to perform many tasks and
to increase an attorney’s efficiency and effectiveness of service and product
• the reduction in margins and profit levels for many firms,
• succession issues,
• the difficulties of securing and retaining the right people
• clients seeking to pay less for more
to list just a few.
For many there will be no return to ‘the good old days’; the ‘new normal’ is here to stay and the challenges will only increase.
To the credit of the legal profession, given that most firms can no longer increase their profitability simply by upping their charge-out rates annually, firms have taken some steps to find solutions to these challenges. In addition to placing a greater emphasis on their service offerings, adopting technology, and even diversifying their practices, most firms have focused on improvements to the financial aspects of their practice, usually utilizing the traditional profit levers we were all brought up on, such as:
• improving time recording and WIP management;
• better rate realisation;
• reducing lock up;
• slashing expenses where they can;
• offering fixed fees;
• putting pressure on everyone in the firm to ‘perform’,and
• generally “tweaking” their business model.
This is all well and good, but I think most of these solutions are short term in focus and are, at best, only dealing with some of the symptoms rather than addressing the root cause of what ails our once great profession.