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1 Law Firm Economics Attorney CLE Series – Fall 2015 Attorney CLE Series – Fall 2015 Law Firm Economics Attorney CLE Series – Fall 2015 Attorney CLE Series – Fall 2015 INTRODUCTION
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Law Firm Economics
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
Law Firm Economics
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
INTRODUCTION
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Law Firm Economics
INTRODUCTIONINTRODUCTIONManaging the practice of law
– How best to “monetize” the practice of law
• Initial investment
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
• Years of study
• Years of experience and expertise
Law Firm Economics
INTRODUCTIONINTRODUCTIONCurrent Business Issues
– Pricing pressures
– Efficiency/delivery pressures
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
– Over-abundance of attorneys/law firms
– Alternative non-traditional providers
– Cost/expense increases
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Law Firm Economics
INTRODUCTIONINTRODUCTIONCritical Elements for Firm Leadership/Primary Responsibilities
– Revenue growth
Cost control and containment
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– Cost control and containment
– Practice management
Law Firm Economics
INTRODUCTIONINTRODUCTIONPractice Management
– Personnel management
– Knowledge management
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– Legal project management
– Fiscal and economic management (today’s discussion)
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Law Firm Economics
INTRODUCTIONINTRODUCTIONFiscal and Economic Management
– Revenue
• Alignment of billing practices to market conditions and client expectations
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client expectations
Law Firm Economics
INTRODUCTIONINTRODUCTIONFiscal and Economic Management
– Revenue
• Understanding the “value” proposition
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• Cost equals value
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Law Firm Economics
INTRODUCTIONINTRODUCTIONFiscal and Economic Management
– Cost Control and Containment
• Personnel
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Direct costs
Indirect costs
Law Firm Economics
INTRODUCTIONINTRODUCTIONFiscal and Economic Management
– Cost Control and Containment
• Occupancy
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General
• Rents, Mortgage Debt Service, utilities, etc.
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Law Firm Economics
INTRODUCTIONINTRODUCTIONFiscal and Economic Management
– Cost Control and Containment
• Other
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Library, software, supplies, etc.
Law Firm Economics
INTRODUCTIONINTRODUCTIONFiscal and Economic Management
– How best to address these issues?
– Starts with a fundamental understanding of fiscal and economic concepts
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economic concepts
• Today’s program intended to address this need
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Law Firm Economics
INTRODUCTIONINTRODUCTIONTable of Contents
Introduction
I. Understanding financial statements/cash basis versus accrual basis
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
accrual basis
II. Financial management initiatives/identification, qualification and modification of key profitability components
Law Firm Economics
INTRODUCTIONINTRODUCTIONTable of Contents
III. Financial management initiatives/identification, qualification and modification of key profitability components
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IV. Law firm analytics/trends
Conclusion and practical considerations
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Law Firm Economics
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
CASH vs. ACCRUAL BASIS FINANCIALS
Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSCash vs. Accrual
– Under cash basis record revenue when cash is received and expenses when paid
Under accrual basis record revenue when it is earned and
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– Under accrual basis record revenue when it is earned and expenses when incurred
– Accrual basis provides a better picture of financial status
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Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSModified Cash Basis
– Recognition and recording of fees receivable
– Recognition and recording of receivables due from clients upon paying expenses on their behalf
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upon paying expenses on their behalf
– Recording advances and deposits
– Insurance and other expenses paid in advance
Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSModified Cash Basis
– Capitalization and depreciation of fixed assets
– Accrual of retirement plan contributions
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– Recording of loans payable
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Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSTax Reform Legislation
– Proposed legislation would require all personal service businesses with annual gross receipts over $10 million to use accrual method
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– Has far reaching implications for law firms which generally report for tax purposes using the cash basis
Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSFinancial Statements Inform Partners About Ability to:
– Meet obligations,
– Generate a profit, and
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– Provide a return to equity partners
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Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSFinancial Statements
– Balance sheet
– Income statement
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– Statement of cash flows
– Statement of changes in equity
– Disclosures/footnotes
Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSBalance Sheet
– Presents assets, liabilities and equity as of a point in time
– Assets presented in order of liquidity
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– Liabilities presented according to timing of settlement
– Components of equity can be presented here, in a separate statement or in the footnote disclosures
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Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSIncome Statement
– Covers a period of time
– Is a process of “reduction” beginning with total revenue
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– Primary operating expenses include personnel compensation, occupancy costs, business development, professional dues and education
Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSStatement of Cash Flows
– Operating activities
– Investing activities
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– Financing activities
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Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSFinancial Statement Disclosures
– Description of the firm
– Significant accounting policies
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– Commitments to former partners
– Bank and other borrowing arrangements
Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSFinancial Statement Disclosures
– Lease commitments
– Retirement plans
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– Custodial assets
– Equity structure
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Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALSBest Practice
– Accrual basis financial statement (economic picture)
– Cash basis for identification of taxable income
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• Conversion
• Common problems
Law Firm Economics
CASH ACCRUAL BASIS FINANCIALSCASH vs. ACCRUAL BASIS FINANCIALS
– Ideally, accrual basis statements should be prepared by practice area/group and “rolled up” into a consolidated picture for larger firms
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Law Firm Economics
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FINANCIAL MANAGEMENT INITIATIVES
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESFocusing on the identification, quantification and modification of the key components of profitability in a law practice
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESEmbracing stakeholders
– Anyone whose fortunes rise and fall with the well-being and success (or lack of success) of the business/practice
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESIdentifying stakeholders
– Source-accrual basis financial statements
• Stakeholders can be identified directly through financial statement analysis
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statement analysis
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESIdentifying stakeholders
– Clients• Receivables/cash/revenue
V l iti
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• Value propositionQuality/Efficiency Equals Worth
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESIdentifying stakeholders
– Employees/staff
• Payables/accruals/payroll expense
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• Value proposition
Compensation/Comfort Equals Worth
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESIdentifying stakeholders
– Others• Suppliers/Vendors• Lenders
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• Lenders• Landlords/Lessors• Employees• Government
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESStakeholder Value Proposition Basic Assumption
– All stakeholders’ value propositions must be satisfied
– All are interrelated
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– All ultimately affect equity partner profit
– Residual income
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability
– Simple in concept
Revenue In $xx,xxxExpenses Out $xx xxx
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Expenses Out $xx,xxx
Residual $xx,xxx
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESUnderstanding Product
– What is the product?
• Quality legal services
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProduct Quality
– Absolute requirement, due to ever-increasing competition
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESInitial product challenge
– Differentiation
– Quality of competition
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– In-sourcing
– Alternative nontraditional providers
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESUnderstanding Product
– Not entirely unlike any other product
• Sell for value
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• Direct/indirect costs
• S, G & A Allocations
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Three (3) pronged function
• Chargeable hours/utilization
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• Standard billing rate
• Realization
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Chargeable hours
• Effort measured in units of time to complete a specific l l t k
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legal task
• 90% of law firm billings currently based on chargeable hours
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Chargeable Hours – Issues
• Equity partner hours
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• Chargeable hours – expectation by class
• Total hours worked expectation
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics (Example)
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See chart on pg. 18
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Utilization
• Percentage of chargeable hours divided by the total hours k d ( t d t b k d)
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worked (or expected to be worked)
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Managing and Enhancing utilization
• Can add significant dollars to the bottom line
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• Due to costs generally being fixed
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics (Example)
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
See chart on pg. 19
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Standard billing rates
• Intended to capture all costs plus a profit override
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Law Firm Economics FINANCIAL MANAGEMENT INITIATIVES
Profitability – Mechanics– Standard billing rates (see page 21)
Calculating Rate per Hour: Single Attorney Calculating Rate per Hour: Multiple Attorneys
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Standard billing rates
• By professional class
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See page 22
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Standard billing rates
• 2015 Altman Weil Survey
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90% of respondents feel stress on hourly rate increases is a permanent phenomenon (versus less than 50% in 2008)
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Realization
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
See chart on pg. 23
Law Firm Economics FINANCIAL MANAGEMENT INITIATIVES
Profitability – Mechanics– Realization
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
See chart on pg. 23
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESProfitability – Mechanics
– Realization
• Separating realization and understanding overall realization
illi li i
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Billing realization
Collection realization
See page 24
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESExpenses and Costs
– Two most significant costs
• Occupancy
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• Nonequity Professional Compensation
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESExpenses and Costs
– Occupancy
– Altman Weil 7%-10% of gross income
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESExpenses and Costs
– Personnel – attorneys
• Base compensation/salary
• Bonuses
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• BonusesLegal meritContributions to profitabilityProfit sharingBenefits
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESExpenses and Costs
– Alternatives to permanent staff
• Lateral Associate Hires
B i i b d “ l d t i d” l ith k l d b
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Bringing aboard “already trained” lawyers with a knowledge base and, perhaps, a client base
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESExpenses and Costs
– Understanding leverage
• Staff and nonequity partner to equity partner ratio
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESExpenses and Costs
– Leverage will be critical to future process of providing services in law firms
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESExpenses and Costs
– Personnel – non-attorney
• Total cost: $41,225 per attorney
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• 15.7% of gross income
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Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESExpenses and Costs
– Others
• Marketing/Practice development
Lib ft
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• Library, software
• Insurance
• Payments to retired partners
Law Firm Economics
FINANCIAL MANAGEMENT INITIATIVESFINANCIAL MANAGEMENT INITIATIVESSummary
See Example on page 29
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Law Firm Economics
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MANAGEMENT REPORTING AND BUDGETING
Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGInformation used in conjunction with strategic planning, budgeting and making sound business decisions
Form and content of reports will vary as well as frequency
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Current environment is dynamic and extremely competitive
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Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGReview of Actual Versus Budget
– Important exercise to measure performance
– Results should be viewed on a monthly as well as year-to-d t b i d d t i i d i f ti
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date basis and compared to prior period information
– Results should be broken down by partner, client, practice areas or location
Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGIncome Statement
– Focus is on professional fees billed
– Major expense categories include compensation, occupancy, f i l d d ti iti ti d l t
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professional dues and activities, practice development
– Compare to budget and prior year(s) to identify strengths and problem areas
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Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGBalance Sheet
– Level of receivables and turnover
– Unbilled fees
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– Assess working capital
– Investigate whether variances are caused by an insolated event or start of a trend
Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGAnalysis of Operating Statistics
– Billing realization
– Attorney utilization
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– Analysis of leverage
– Expense analysis
– Billings and collections
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Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGBillings and Collections
– Aggregate amount and age
– Determine collectability
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–Monitor turnover factor
Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGTurnover Factor
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See chart on pg. 34
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Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGBilling and Collections Practices
– Ensure time is properly charged to clients
– Check on unbilled time between billing cycles to prevent i
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surprises
– Prepare invoices promptly
– Educate clients on payment expectations and follow up
Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGBilling and Collections Practices
– Implement and adhere to collection policy
– Understand when and what level to discount bills
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– Cash is not available to be distributed until bills are rendered and cash is collected
– Borrowing funds and equity infusions to finance uncollectible and unbilled fees should be avoided
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Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGBudgeting
– Integral component of managing your practice
– Allows management to look forward, plan and establish i t l t l d t t i f
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internal controls and a system to review performance
– Should be undertaken at the practice group level then aggregated
Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGBudgeting – Revenue
– Project billable hours for each practice group for both existing and new clients
Billi t li d t h f i l f h li t d
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– Billing rates applied to each professional for each client and expected utilization/realization
– Collections, alternative fee structures and discounts should also be considered
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Law Firm Economics MANAGEMENT REPORTING AND BUDGETING
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
See chart on pg. 36
Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGBudgeting – Expenses
– Generally follow revenue expectations
– Consider total cost per employee
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– Monitor staffing levels on a regular basis
– Occupancy -rent, maintenance and non-capitalized items
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Law Firm Economics
MANAGEMENT REPORTING AND BUDGETINGMANAGEMENT REPORTING AND BUDGETINGBudgeting – Final Thoughts
– Process should consider capital expenditures
– Budgeting establishes expectations for partner compensation
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– Increases accountability, improves productivity and increases profitability
– Use of non-attorney professionals in managing the firm
Law Firm Economics
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
LAW FIRM ANALYTICS AND TRENDS
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Law Firm Economics
LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDSUnderstanding firm-specific current financial performance data and how it compares to industry data is critical
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Law Firm Economics
LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDSLaw firms no longer have room or patience to carry “comfort zoners” and non performers
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Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Distinguishing Critical Factors
– Discussed in chapter II
– Set out on pg. 40 of the handout in Algebraic form
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Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Profitability
– NIPP = ( 1+L) x (BR) x (U) x (R) x (M)
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See explanation on pgs. 40-41
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Law Firm Economics LAW FIRM ANALYTICS AND TRENDS
Profitability
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
Law Firm Economics LAW FIRM ANALYTICS AND TRENDS
Profitability
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
See chart on pg. 41
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Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Profitability – Important Strategies
– Increase leverage
– Increase utilization
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– Increase realization
Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Profitability – Controls/ Management/Monitoring
– Preset utilization for all staff
– Preset billing realization goals
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
– Open matters/backlog
– Net income by firm/group
– Annualize and allocate net overhead
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Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Profitability – Controls/Management/Monitoring
–Work in progress - (WIP) - unbilled
– Days Receivable - Uncollected
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– Uncontrolled A/R - Bad Debts
Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Critical Trends
– 2014 Revenue Up (2015 AW Survey) – 69% of respondents
• 40% – Up only 1%4%
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• Inflation is 2.5%
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Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Critical Trends
– RPP – Up for 77% of respondents
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Critical Trends
– Overhead – Up 1%- 4% for 36% of respondents
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Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Critical Trends
– Low growth
• Due primarily to too much capacity (especially in larger firms)
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Critical Trends
– Only 57% are focused on realization
– Only 65% are focused on utilization
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
– Reflects a real misunderstanding of the importance of these concepts!
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Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Critical Trends
– Barriers to growth
• Corporate law groups/insourcing work
• Technology advances
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
• Technology advances
• Nonlaw firm providers
• Overabundance of attorneys/firms
Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Critical Trends
– Growth initiatives – the following are being undertaken to support pricing strategies
• Developing data on costs of services sold – 64.4%
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• Training attorneys to talk with clients about pricing – 46.0%
• Setting margin goals in firm and practicegroup plans – 31.9%
See page 44
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Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Critical Trends
– Growth initiatives – the following are being undertaken to support pricing strategies• Identifying each client’s unique pricing preferences – 29.5%
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
• Incorporating pricing into all planning efforts – 27.7%
• Adding a pricing director/assigning pricing responsibilities – 26.0%
• None of the above – 17.0%
See page 44
Law Firm Economics LAW FIRM ANALYTICS AND TRENDSLAW FIRM ANALYTICS AND TRENDS
Critical Trends
– Alternative Pricing Strategies
• Used by 93% of respondents
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• However, only 10% of total firm revenue in those firms
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Law Firm Economics
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
CONCLUSION AND PRACTICAL CONSIDERATIONS
Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONS 7 Key Trends
– Greater use of technology
– Focus on “knowledge” management
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– Greater use of contract/temporary lawyers
– Shift more work to paraprofessionals
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Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONS7 Key Trends
– Re-engineer project delivery process/training
– Reward efficiency and profitability in compensation decisions
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– Adopt a strategy of using non-law firm providers/vendors if possible
Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONSThe trend is to gradually move a lot of these services from lawyers
Pennsylvania: headcounts out-grew most of the United States
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Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONSOther challenges
– Recruitment
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONSOther challenges
– Recruitment
– Training/education
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Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONSOther challenges
– Recruitment
– Training/education
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
– Compensation
Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONSOther challenges
– Recruitment
– Training/education
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
– Compensation
– Automation/technology
54
Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONSOther challenges
– Recruitment – Data Security
– Training/education
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
– Compensation
– Automation/technology
Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONSOther challenges
– Recruitment – Data Security
– Training/education – Risk Management
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
– Compensation
– Automation/technology
55
Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONSOther challenges
– Recruitment – Data Security
– Training/education – Risk Management
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
– Compensation – Equity Partner Succession
– Automation/technology
Law Firm Economics
CONCLUSION AND PRACTICAL CONSIDERATIONSCONCLUSION AND PRACTICAL CONSIDERATIONSOther challenges
– Recruitment – Data Security
– Training/education – Risk Management
Attorney CLE Series – Fall 2015Attorney CLE Series – Fall 2015
– Compensation – Equity Partner Succession
– Automation/technology – Other
