Profitability

Articles

• Firms' Billing Rates Inched Up During 2009 
  by Karen Sloan
  

  It's hard to believe but, even during the worst economic recession in over 70 years, US law firms managed to increase their billing rates in 2009. The average was 2.5% according to a recent survey of the nation's largest law firms conducted by The National Law Journal. That increase compares to a 7.7% rate climb in 2007 and 4.3% in 2008. The survey also indicates that a larger percentage of revenue for most firms was generated from alternative billing arrangements.   

• Associate Pay Cuts Here to Stay, Say Firms and Analysts 
  by Julie Triedman
  

  According to this article that originally appeard on AmericanLawyer.com in December, a growing number of law managing partners and consultants say that steep cuts in associate compensation are here to stay. "We do not see any movement to reinstate pre-recession pay levels," says Altman Weil consultant Jim Cotterman.  Starting salaries for first-year associates reached a staggering $160,000 a year at blue-chip firms in New York, Los Angeles and Washington.

• Keep an Eye on Your Firm's Billing Practices
  by Law 360
  

  According to research conducted by Samford University's Cumberland School of Law, 55% of lawyers in private practice admit to overbilling on occasion. The temptation only becomes more severe as there is less work to be dome. Don't let this happen at your firm! Not only is the practice unethical, it may also cause irreparable damage to one of your firm's most valuable assets - its reputation.

• 15 Recession-Response Tips
  by Linda Oligschlaeger
  

  Smaller law firms can't afford to take a "stick-your-head-in-the-sand" approach to dealing with this economy. If you're in denial, you are likely to perish. If you want to survive - and who doesn't? - get moving on this practical to-do list.

• Small Firms Had It Right All Along
  by Law Office Management and Administrative Report
  

  Smaller and midsize firms performed much better than their “BigLaw” counterparts during the recession according to this article summarizing the findings of the Small Law Firm Economic Impact Report 2009. The reason? Less leverage, lower rates and better service. It also reports that 86% of small firms (defined as 10-90 lawyers) have had no layoffs in the last six months, and that 83% intend to maintain current compensation levels for lawyers and staff in 2009. The article appears in this month’s issue of IOMA’s Law Office Management & Administration Report. Click here to purchase the full report for $399. 

• Law Firms 'Over the Worst' of Recession, PwC Report Reveals
  by Rachel Rothwell
  

  The world’s largest law firms are starting to enjoy the rebounding economy. According to this article from the UK’s Law Society Gazette, profits per partner are up sharply – 18% for the world’s ten largest law firms and a whopping 41% for firms in the 11 to 25 spots – since January 1st says a just reased research report by PricewaterhouseCoopers. The report says that “profit margins also saw a boost in firms of all sizes.” 

• A Broken Business Model
  by Joel Henning
  

  Henning asks "Will it take a revolution to change the way law firms operate?" Will today's current economic crisis force law firms to rethink the old model of annual hourly rate increases? Radical ideas may not only require a change in business model, but a change to the code of professional responsibility.

• Dealing with the Downturn: How Law Firms Can Meet the Challenges and Exploit the Opportunities
  by Stephen Armstrong, John Claydon, Tony King and Norman Letalik
  

  This two-part Lex Mundi article focuses on what law firm leaders can do to deal with the downturn through both aggressive law firm economics and strengthening client relationships. The suggested practices can help firms survive the downturn and strategically position themselves for the recovery.

• Do Law Firm Compensation Systems Drive Profitability?
  by Edge International
  

  While there is certainly no such thing as the "right" compensation system, here's an interesting article from our friends at Edge Group concluding that formula-driven compensation systems hurt firm profitability.   

• Legal Strategy 101: It's Time for Law Firms to Re-Think Their Business Model 
  by Wharton School of Business
  

  This fascinating article from the Wharton Business School asserts that the global recession is forcing law firms to change the way they do business. 

• Isn't It Time That Your Firm Develops a Strategic Plan?
  by John Remsen, Jr.
  

  Do you and your partners have a written, cohesive firm strategy? Or are you merely sharing office space with other sole practitioners? Strategic planning is the key differentiator, but it's not for the faint of heart.

• Ensuring Long-Term Firm Profitability – Folks, It's Not Just the RPL!
  by Peter A. Giuliani
  

  Giuliani looks at the issue of law firm profitability – not just in the “short run,” but more importantly, over the “long run.”
  

• Is Mandatory Retirement a Fading Relic?
  by Peter A. Giuliani
  

  Should law firms require partners to retire at a certain age? Setting aside any legal issues (age discrimination anyone?), is this an archaic practice or is it critical to firm succession planning? This article argues that retirement has nothing to do with a partner's age.

• A Primer on Computerized Case & Matter Management Systems
  by Andrew Z. Adkins, III
  

  Your firm's case management system is the backbone of your organization. Whether you use it to calendar deadlines and court dates for your litigation practice or to track your firm's experience in a particular area of law, you can't afford to overlook this important tool. Here's an unbiased primer to guide you from selection to training and implementation.

• Outsourcing Your Law Firm’s Information Technology
  by Andrew Z. Adkins, III
  

  Should your firm outsource its IT department? As the first sentence of this article reveals, the decision can be a real pain. Better inform your decision by taking an honest assessment of how your much technology your firm is currently using and how many people are using it. This read will help you consider all the options.

• What is Your Law Firm Worth?
  by Peter A. Giuliani
  

  Determnig the value of your law firm is much more comlpicated than you think. See this article to find out why.

• Wasted Time and Money: The Top 10 Ways That Firms Squander Precious Marketing Resources
  by John Remsen, Jr.
  

  Counting down the Top 10 ways that law firms often squander their marketing resources. Is your firm guilty of any of these?