Planning

White Papers

• 2024 Bright Insight  ** NEW **
  by Cushman & Wakefield
  

  In case you missed it, 2024 Bright Insight, the annual legal benchmarking survey published by Cushman & Wakefield. The 45-page report is an easy read, with plenty of charts and graphs, and is divided into four main sections:

  • Legal Sector Performance
  • Business and Talent Strategy
  • Continued Workplace Evolution
  • Technology and the Future
  As the market leader in tenant representation of law firms, here are CW’s key findings about the workplace evolution in the legal sector.
   

• 2024 Client Advisory
  by Citi and Hildebrandt Consulting LLC
  

  One of the “state of the legal profession” reports that we classify as “required reading” for law firm leaders. For 16 years, our friends at Citi and Hildebrandt have published The Client Advisory and it is packed with important benchmarking data. The report runs 30 pages, and here are some of its highlights:

  • Average lawyer hourly rates increased by eight percent (8.2%) in 2023. 
  • Meanwhile, collection cycles have lengthened by five percent (5%) and WIP is up by more than ten percent (10%). 
  • Total expenses were up almost five percent (4.8%) for the first nine months of 2023. 
  Looking ahead to 2024. law firms face these five challenges:
  • Achieving growth
  • Attracting and retaining talent
  • Navigating flexible workplace options
  • Adapting to Artificial Intelligence
  • Managing expenses 
  This report also includes some interesting data about growth opportunities broken down by geography, by industry, and by practice area. This is another important report to circulate within your firm and discuss at future partnership meetings.

• 2024 Report on the State of the US Legal Market
  by Thomson Reuters Institute and Georgetown Law
  

  This is among the handful of annual reports that every law firm leader should read, digest, and share with others at your firm. The report runs 30 pages, including illustrative charts and graphs about demand growth by practice area, law firm profit drivers, and other key statistics. Here are some of its findings: 

  • Associate ranks at midsize law firms have grown aggressively since COVID, with different segments of law firms taking very different approaches to talent recruiting and retention strategies.
  • Increases in expenses have moderated compared to 2022 when associate salaries hit the roof!
  • Many law firms are experiencing stagnant profitability due to sagging productivity and declining realization rates.
  • Buyers of commercial legal services look for specialization and great service when selecting outside counsel.
  Much of this report was authored by Bill Josten, Legal Marketplace Innovations Strategist of Thomson Reuters Institute, who was a guest speaker in this month’s MPF Webinar on law firm profitability. Bill will also be joining our faculty for The MPF Leadership Conference in Atlanta.

• 2023 State of the Corporate Law Department
  by Thomson Reuters
  

  This report is based on interviews with more than 1,500 in-house lawyers and professionals through 2022, and here are a few note-worthy highlights:

  • Sixty-five percent (65%) of corporate legal departments report more matter volume, while fifty-nine percent (59%) say they are working with flat or declining budgets.
  • Regulatory compliance has emerged as the top concern for corporate legal departments.
  • In search of better value and service, work is being shifted among outside firms. We believe that this presents a big opportunity for smaller and midsize firms, which typically offer a much better value proposition than BigLaw.
  This a good report to digest if your firm works (or strives to work) with larger corporations and in-house legal departments.

• 2023 Client Advisory
  by Citi Private Bank and Hildebrandt LLC
  

  The first part of the report focuses on the first nine months of 2022, and offers little new insights beyond what other reports have provided. The "meaty" part of this year’s report starts on page 10 (Section B) which focuses on their insights and projections as to what will happen in 2023. While you may not agree with all of their conclusions, they should not be discounted without some serious contemplation.

• 2023 Report on the State of the Legal Profession
  by Thomson Reuters Institute
  

  This annual report is among a handful that we strongly recommend that you review, digest and circulate to your partners and colleagues. It reflects data collected primarily from BigLaw, but its relevance is important for leaders of smaller and midsize law firms, as well. It runs 28 pages, including plenty of charts and graphs. Among its highlights: 

  • There has been an overall decline in demand for legal services (especially transactional work) at AmLaw 200 firms.
     
  • Midsize firms financially outperformed their BigLaw counterparts in the second half of 2022.
     
  • Realization rates at midsize firms averaged just over 91% in 2022.
     
  • Associate compensation grew at staggering rates - nearly 10% per year - in 2021 and 2022.
     
  • Most law firm leaders, although guarded as to their predictions for 2023, are optimistic about a full recovery within three years.
     
  • Associate turnover for midsize law firms has hovered at about 20% per year.
     
  • A recent ABA study finds that 44% of young lawyers would leave their current firms for the ability to work more remotely.

• 2022 Law Firm Business Leaders Report
  by Thomson Reuters Institute
  

  The 20-page report reflects survey results from 50 firm leaders – mostly, managing partners, COOs and CFOs at midsize firms – that was conducted in October 2022. Among its key findings:

  • Expectations for PPL (Profit per Lawyer) and Productivity have dropped significantly for 2023
     
  • Top Three Risks to Firm Profitability: Security Breaches, Associate Compensation, Poor Economy
     
  • Ninety-eight percent (98%) of firms plan to Increase Billing Rates in 2023
     
  • Ninety-two percent (92%) say Maintaining Firm Culture is the biggest challenge in managing remote work policies

• 2022 Report on the State of the Midsize Legal Market
  by Thomson Reuters Institute
  

  Our MPF Featured White Paper is the 2022 Report on the State of the Midsize Legal Market published by our friends at Thomson Reuters institute. Overall, it presents good news for midsize law firms, and here are a few highlights:

  • Talent retention is better for midsize firms than their large firm competitors. This finding surprised us as we frequently hear managing partners lament about the challenges of retaining talented young lawyers and staff. In fact, the percentage of firms identified as “stay” law firms is disproportionately higher for midsize firms than for AmLaw 100 firms.
     
  • With lower pay scales, Midsize firms must create firm cultures that provide satisfaction in ways other than cash compensation. This includes work-life balance, socialization, mentoring and training, evaluation, and feedback. Young lawyers want to associate with a firm that truly cares about their career development and satisfaction.
     
  • Realization rates for midsize law firms average 92% which is very good and notably outperforms the AmLaw 100.
     
  • Expenses have skyrocketed the last 12 months, led by associate salaries which are up 7% over 2021. Associate compensation leapt 15% at BigLaw.
  This is an excellent report to circulate within your firm and discuss at an upcoming partnership meeting.

• 2022 Report on the State of the Legal Market 
  by Thomson Reuters and Georgetown Law
  

  This is one of a handful of annual reports that we recommend every managing partner and law firm leader read, absorb, and share with other leaders of their firms. It runs 25 pages and, at the end, dispenses some great guidance to firm leaders. Here are a few of our take-aways:

  • Talent Retention and Engagement Must Be a Top Priority for Your Law Firm.
    Beyond compensation, job satisfaction for many lawyers depends on intangible factors like firm culture, mentoring and training, feeling valued and appreciated, and opportunities for growth and professional development.
     
  • Increase Rates and Focus Your Attention on Improving Realization.
    According to this report, collected hourly rates increased by 4% across all time-keepers in 2021. So, if your firm has not increased its rates in a while, now just might be the time. In addition, improved time-keeping and billing practices will substantially  improve your firm's bottom line.
     
  • Invest in and Empower Your Firm's Administrative Team.
    Most lawyers hate administrative tasks, so we frequently advise firm leaders to hire and empower COOs, CMOs and non-lawyer professionals to help the firm run more like a business.

• 2021 Legal Trends Reports
  by Clio
  

  An MPF Featured White Paper, Clio’s 2021 Legal Trends Report, a 70+ page survey report reflecting data collected from 1,056 US lawyers and law firms earlier this year. Predictably, it looks at the impact of the pandemic on the practice of law in several areas including technology, client communication, service delivery and law firm economics. As well, the report includes lots of charts presenting hourly rates and other key performance indicators (KPIs) broken down by state, practice area and other variables.
  
  All in all, the 2021 Legal Trends Report presents some nice chunks of well-organized benchmarking information for law firm leaders to check out.

• 2021 State of Small US Law Firms 
  by American Bar Association, Association of Legal Administrators and Thomson Reuters
  

  Although geared toward law firms with 30 or fewer lawyers, we thought it relevant to many of our readers. It runs 28 pages with lots of charts and graphs. Generally, there is good news in its findings, including:

  • Fifty percent (50%) of firms have adopted new technology in the last two years
  • Forty-eight percent (48%) have increased billing rates in the last two years
  • Top challenges for 2022 are: too much lawyer administrative time, client development and technology
  • Top practice areas for 2022 are: real estate, trusts and estates and family law
  • Virtual client meetings, virtual hearings and remote working are here to stay
  There are much better times ahead! And, according to our research, most firm leaders participating in MPF programs are on the right track in leading their firms through and beyond the pandemic.

• 2021 Profile of the Legal Profession
  by American Bar Association
  

  The ABA 2021 Profile of the Legal Profession is a snapshot of the legal profession in July 2021. It includes data and trends in 11 subject areas, including demographics, law schools, the judiciary, technology and, of course, the pandemic. The report runs 140 pages with Chapter One dedicated to how the pandemic has impacted lawyers and law firms. Among the findings:

  • Thirty-four percent (34%) of all lawyers report increased stress due to the pandemic. For women, more than half report stress due the pandemic.
  • One-third of lawyers age 62+ have their changed retirement plans due to the pandemic.
  • Fifty-four percent (54%) of lawyers are working from home on a full-time basis.
  • BigLaw attorneys are worried about pay cuts, layoff and furloughs.
  We recommend that you circulate this year’s report to your colleagues. The ABA has produced a four-minute video capturing report highlights and worthy of presenting at your next firm meeting. 

• The World Turned Upside Down
  by Smock Law Firm Consultants
  

  Smock and his colleagues conducted 25 interviews with CEOs and COOs of a wide cross-section of law firms ranging in size from 18 to 1,000 lawyers. They asked how COVID has impacted their firms, the steps they have taken to deal with them, and plans for the future. The findings are very consistent with what we have learned, as well. The sky has not fallen, and most midsize law firms have adjusted quite well. 

• 2021 Report on the State of the Legal Market 
  by Thomson Reuters and Georgetown Law 
  

  This paper is among a handful of similar reports that we recommend law firm leaders read, digest and discuss every year. Change and disruption is everywhere, yet law firms are notoriously slow to evolve and adapt. When asked why their firms were not doing more, 70% said “partner resistance to change.” As has been the case for many years now, the top three challenges most law firms face in 2021 are:

  • Chronically underperforming lawyers,
  • Recruitment and retention of legal talent, and
  • Disciplined billing and collections practices.
  The report runs just 20 pages and is an easy read, with enough industry intelligence to make it worthy of your time and attention.

• 2020 Report on the State of the Legal Market
  by Georgetown Law and Thomson Reuters
  

  Every year, there are a handful of "state of the profession" reports that we think every managing partner and law firm leader should read and digest. This is one of them. This report presents the dominant trends impacting the legal market in 2019, and the key issues influencing the market in 2020 and beyond. We've highlighted sctions of the report to make it easy reading!

• ABA's 2019 Profile of the Legal Profession 
  by American Bar Association
  

  The ABA's 2019 Profile of the Legal Profession, a 97-page report that draws from numerous surveys, studies and reports about today's lawyers and law firms in the Unites States. As we read through it, we found some real "eye-openers" about what's going on out there. Here are a few factoids: 

  • The annual growth rate in number of lawyers in the US has slowed significantly over the past four years - to less than 1% per year.
  • The average US lawyer earns $144K per year according to the US Bureau of Labor Statistics. Doctors earn $210K on average.
  • Law school applications have plummeted over the last 15 years from 101,600 in 2004 to 60,700 in 2018, according to data complied by the Law School Admission Council.
  • The National Conference of Bar Examiners reports that first-time passage rates for the national bar exam has dropped from 82% in 2008 to 69% in 2018.
  • According to the ABA National Lawyer Population Survey, 36% of all US lawyers are women, 5% are African American, 5% are Hispanic, and 2% are Asian. Among major US cities, Miami has the most diverse lawyer population and Cleveland has the least diverse.  
  You'll find a treasure trove of data in this report. 

• 2019 State of Corporate Legal Departments  
  by Acritas & Thomson Reuters
  

  Published by Acritis and Thomson Reuters in collaboration with the Corporate Legal Operations Consortium and the International Bar Association. The report reveals that diversity initiatives, collaborative partnerships, as well as innovation in project management and process improvement, are in full swing within-house legal departments. Do you talk about these things in your law firm? More importantly, what are you and your law firm doing to keep up with the incredible pace of change? This article is must reading for leaders of forward-thinking law firms. We've highlighted the report to make reading it easy!

• 2019 Report on the State of the Legal Market
  A View from Mid-size Firms
  by Thomson Reuters
  

  MidLaw enjoyed solid growth in 2018, and client-driven trends may hold even more opportunities for well-run mid-size US law firms.

• Happy Days Are Here Again  
  by John Smock and Peter Giuliani
  

  This report summarizes the findings of Smock’s annual Survey of the Legal Marketplace in which John and Peter interview managing partners and leaders of thirty large US law firms. They report that 2018 was a very good year for most law firms. The booming economy and much improved attention to firm management issues are leading to record years for many large US law firms. Here are a few strategies, they say, that are really paying dividends:

  • Dealing with Underperforming Partners
  • Focus on Industry Expertise
  • Embracing Technology
  • Investing in Professional Development
  • Emphasizing Firm Culture
  Nothing new here, but it underscores the importance of running your firm as a business, not a hotel for lawyers.

• 2019 Report on the State of the Legal Market  
  by Georgetown Law and Thomson Reuters
  

  This is one of a handful of “state of the legal profession” reports we look forward to every year. Like the 2019 Client Advisory featured last week, it says that 2018 was a good year for many law firms. Yet, some firms, especially the AmLaw 50 and well-run midsize boutique firms, performed much better than others. That is exactly what last week’s report said! This paper challenges firms to get really clear on their “position” in the market and build a model accordingly. It divides the market into “Unique Legal Expertise” (about 20-25% of the market); “Comprehensive Legal Services” (60-70% of the market); and “Ancillary Support Services” (10-15% of the market). It’s an interesting way to look at things and, as we sometimes do, we’ve highlighted the report so you can browse through it quickly and easily. Here are some highlights:

  • Hot Practice Areas: Corporate, Litigation and Employment
  • Cold Practice Areas: Bankruptcy, Patent Prosecution
  • Firms Increasing Investment in Associate Compensation, Technology
  • Markets with Highest Percentage of Lateral Partner Moves: Chicago, Atlanta
  • Major Changes Since 2008 Recession: Shift to Buyers’ Market, More Aggressive Competition and Growing Use of Alternative Service Providers
  We recommend that you read it, distribute it, and talk about it with your partners.

• 2019 Client Advisory 
  by Citi Private Bank and Hildebrandt Consulting
  

  The Client Advisory is the first of several “state of the legal profession” reports we look forward to every year. It says that times are pretty darn good for the AmLaw 200 law firms, especially the top 50 firms, which continue to improve running their law firms as businesses, including strategic planning, empowered leadership and partner accountability. Yet, not all law firms are performing well in the strong market. We’ve highlighted the report so you can browse through it quickly. In addition, here are some of its highlights:

  • Good news: Total revenue growth for the profession is projected to grow 6-7 % in 2019. 
  • Bad news: Expenses – driven primarily by associate salaries and investments in technology – grew by 5.9% in 2018.
  • Well-run small and mid-size “niche firms” continued to perform well in 2018.
  • Firms with an industry-focused approach outperform firms that organize around areas of law.
  • The most successful firms invest in their most profitable core practice areas while addressing underperforming practices.
  • Alternative fees continue to grow and now account for 19% of aggregate firm revenue. 
  • About half of surveyed law firms have mandatory de-equitization policies in place, with an average age of 67 years.
  • Client transitioning always take longer than expected. Firm management must be involved.
  We strongly recommend that you read and digest this report, distribute it to your partners and discuss its implications at your next partner meeting.

• Law Firms in Transition 2018 
  An Altman Weil Flash Survey  
  

  Now in its tenth year, Altman Weil’s annual survey documents the forces reshaping the landscape for legal services and provides insight on how the nation’s largest law firms are responding. 398 firms with 50 or more lawyers participated, including half of the country’s top law firms. The full survey report runs 128 pages and contains lots of charts and graphs. The more digestible Executive Summary runs just fifteen pages.
  
  Key Findings:

  • Change is Everywhere
    Not one survey respondent said the pace of change to decelerate in the coming years. The good ole days are long gone and there’s no going back.
     
  • Complacency Has Set in at Many Firms
    Partners are underutilized at most firms with almost half of firm not meeting billable hour goals.
     
  • Most Firms Are Focused on Short-Term Tactical Improvements
    Few firms have not taken full advantage of disruption as an opportunity to run with an  innovative set of services to distinguish themselves from competitors.
     
  • Firms Need to Think More Long-term and Strategically
    Just 38% of firms are actively testing innovation. Look outwardly at ways your firm can improve efficiency and added value for clients in the long run.
     
  • Partners Are Your #1 Impediment to Change
    Improving productivity and dealing with chronic underperformance has yielded significant improvement firm profits in 84% of participating firms. In 69% of firms, partners are highly resistant to most change efforts.
  
  MPF Recommendations to Firm Leaders
  • Educate your Partners
    Most of them pay little attention to the “big picture” trends and challenges facing the profession. As a firm leader, make sure they know what’s going on, and why your firm must evolve and adapt to the changing marketplace.
     
  • Get Closer than Ever to Clients
    Never ever take clients you want to keep for granted. Show them you really care. Go visit. Learn about their companies. Learn about their industries. Become a trusted advisor.
     
  • Focus Attention on Practice Groups
    We like industry-focused practice groups for a slew of reasons.
     
  • Exercise Passionate and Purposeful Leadership
    That means implementing tough decisions from to time. Enough with the “managing” and “consensus-building”
    already.
     
  • Appoint the Right People to Leadership Positions
    Not always the senior lawyers and lawyers with big books of business, but individuals with firm-first mindsets and the ability to run a good meeting.
     
  • Address Bad Behavior and Chronic Underperformance
    If you don’t, it may kill your firm’s long-term success. Your firm’s “dynamos” don’t want to carry dead weight.
  This is one of the best “state of the profession” reports out there, and we strongly encourage you to share it with your partners and senior staff.

• 2017 State of the Industry Survey
  by Corporate Legal Operations Consortium (CLOC)
  

  If you have not yet heard about CLOC, it’s time for you to check it out. Among other things, its mission is  to bring leadership, knowledge and experience necessary for corporate legal operations officers to drive peak in-house legal department performance, including implementing policies, processes, and technologies to increase value to the company while driving down costs and fostering a globally connected culture. Yikes! There’s some fascinating information in this report, in which 156 companies in 32 industries participated. Here are a few of the highlights that caught our attention:

  • The legal spend for outside counsel averages $607K per in-house lawyer.
  • For every dollar spent on overall legal costs, 62 cents is spent on outside services.
  • Legal spend as a percentage of total company revenue varies considerably by industry. “Biotech/Pharma” tops the list, by far, at 2.4%. Next is “Entertainment/Media” at 1.4%, followed closely by “Technology,” “Non-Profits” and “Financial Services” at approximately 1.3%.
  • 83% of survey participants use e-billing systems, with Thomson Reuters Legal Tracker leading the way. Yet, nearly half (46%) do not have contract management systems in place.
  • Despite the recent proliferation of Alternative Service Providers (ASPs), nearly 2/3s (65%) say they don’s use them. Of those that do, Elevate Services and Axoim top the list.
  • Surprisingly, 1/3 of in-house legal departments do not have any mechanisms in place to measure the performance of outside counsel. “Matter outcome” and “Responses” are high on the list among in-house legal departments that do evaluate the performance of law firms with which they work.
  We keep hearing more and more about CLOC, and we think there’s much more to come.
   

• 2018 Survey of the Legal Marketplace 
  by Smock Law Firm Consultants
  

  Here’s another annual report – this one published by Smock Law Firm Consultants – that we call to your attention. It’s based primarily on interviews with CEOs and COOs of 41 large and midsize law firms, along with review and analysis of recent reports on the legal marketplace. We especially like the one-page overview that presents lots of information in a simple and focused manner. Here are few of the report’s major findings:

  • 2017 was a very good year for most US law firms, with many reporting their best year ever.
  • Transactional practices (like corporate, real estate and tax) performed well, while litigation remains flat now and into the foreseeable future.
  • Although billable hours were down slightly for all types of time-keepers, rate increases - averaging 2-5% - made up for much the lost productivity.
  • 2018 is projected to be another good year for US law firms, but there are several potential negatives looming on the horizon, including an economic downturn, more demanding clients and continued flat demand for litigation services.
  • Larger firms consistently bring a more business-like approach to running their operations, including dealing with chronically under-performing partners and eliminating excess capacity within their associate and paralegal ranks.
  John Smock and his colleagues bring a hard-nosed approach to how a successful law firm needs to operate, and we agree with almost all the comments and recommendations they make at the end of the report.

• 2018 Report on the State of the Legal Market
  by Thomson Reuters and Georgetown Law
  

  This annual report does a great job highlighting significant trends that are reshaping the market for legal services, including observations that future success is unlikely to be achieved by traditional strategies and approaches. Here are a few of the report’s highlights:

  • Overall, US law firms have experienced sluggish demand growth since the Great Recession. In fact, the overall demand for legal services has remained flat since 2010.
  • Despite a flat market, the AmLaw 100 firms have seen slightly improved growth. On the other hand, the AmLaw 100-200 firms have seen a noticeable decline. MidLaw is holding steady.
  • Demand growth was slightly positive in corporate, tax and IP litigation, but was negative in all other practice areas.
  • Productivity (measured in terms of billable hours worked) for all categories of time-keepers continues to trickle downward, most notable among the “Of Counsel” ranks.
  • Although it appears that law firms are “holding their own” since 2008, the market is not as healthy as it may appear on the surface. A deeper look suggests that there are a variety of issues in play that should concern firm leaders, especially the future impacts “alternative legal service providers,” such as accounting firms and legal staffing services.
  • Law firms that proactively implement changes in the way they deliver legal services will emerge as the big winners, while those that do not will remain static at best.
  • Dynamic and growing law firms invest considerably more in marketing/business development and technology than static firms.
  Times are changing. Is your firm keeping pace?

• 2017 What’s Hot and What’s Not
  in the Legal Profession 
  by Robert W. Denney
  

  For nearly three decades, Bob Denney has been sharing in insights in an annual report he calls “What’s Hot and What’s Not in the Legal Profession.” As always, we’re happy to share it with our readers, and here are a few highlights for 2017:

  • Hot Practice Areas: Health Care, Immigration and Cybersecurity
  • Getting Hot: Sports and Gaming
  • Hot Markets: Dallas and Louisville
  Bob says this will be his last “What’s Hot” report, and we’ll certainly miss it.

• 2017 Chief Legal Officer Survey 
  An Altman Weil Flash Survey 
  

  Since 2000, our friends at Altman Weil have conducted an annual survey of general counsel about the state of in-house legal departments. This year, the survey drilled down on what they’re doing to improve efficiency and control costs. 280 in-house counsel participated in this year’s survey.
  
  Here are a few highlights:

  • 37% of legal departments have a law department operation manager. This a relatively new position not unlike your firm’s COO or Executive Director. Check out Corporate Legal Operations Consortium (CLOC), their newly formed association.
  • 58% of legal officers say that technology (including artificial intelligence) is the primary pathway to improve the efficiency of the in-house legal department. Check out this year’s Futures Conference presented by College of Law Practice Management that focused its agenda on artificial intelligence (“AI” for short) and its impact on the legal profession.
  • 64% say that extracting price reductions from outside law firms is the most frequently used tactic to control costs. In our view, this presents opportunities for smaller and mid-size firms that can typically provide a much better value proposition than BigLaw.
  • Almost all survey participants say they receive discounts, averaging about 10%, on standard hourly rates.
  • 80% of in-house law departments provide billing guidelines to outside counsel, only sixty percent (60%) say they actually enforce them.
  The pressure on corporate in-house legal department to reign in the overall spend and provide predictability on the overall spend for legal services is intense. And it’s growing.
  
  At MPF, we believe that these trends present exciting opportunities for smaller and mid-size firms willing to look forward and adapt to the marketplace. It’s up to you to go seize the day!

• 2017 Law Firms in Transition
  An Altman Weil Flash Survey
  by Eric A. Seeger and Thomas S. Clay
  

  Now in its ninth year, Altman Weil’s annual survey continues to document the forces reshaping the landscape for legal services, and how the nation’s largest law firms are responding. 386 firms with 50 or more lawyers participated, including half of the country’s top law firms. The full survey report runs 124 pages and contains lots of charts and graphs. The more digestible Executive Summary runs just eight pages.
  
  Key Findings

  • Stagnant Demand for Legal Services. The reason to get closer than ever to your clients and ramp up your firm’s marketing program.
  • Oversupply of Lawyers. It’s a buyer’s market, and don’t think for a minute that sophisticated clients aren’t taking advantage of the situation, especially governments, banks and insurance companies.
  • Inefficient Service Delivery. Standardized processes and procedures will make your firm more efficient and profitable. But partners have to give up some autonomy for the good of the firm.
  • Proactive Approach. It can create a competitive advantage for your firm in areas like alternative fee arrangements. Don’t wait for clients to come to you.
  • Resistance to Change – It’s not so much firm leaders, it’s their partners who don’t feel a sense of urgency to evolve and adapt.
  MPF Recommendations to Firm Leaders
  • It’s Time to Lead. Enough with the managing and consensus building already.
  • Appoint the Right People to Leadership Positions. Not always the senior lawyers and lawyers with big books of business.
  • Address Chronic Underperformance. Your dynamos don’t want to be around (nor carry) dead weight.
  • Focus Attention on Practice Groups. We like industry-focused practice groups for a slew of reasons.
  • Get Closer than Ever to Clients. Never ever take the clients you want to keep for granted. Go visit. Learn about the company. Learn about its industry. Become a trusted advisor.
  • Educate your Partners. Most of them pay little attention to the “big picture” stuff. Make sure they know what’s going on, and why your firm must evolve and adapt to the changing marketplace.
  This is one of the best “state of the profession” reports out there, and we strongly encourage you to share it with your partners and senior staff.
  
  Click here (or above) to download the complete 124-page survey report.
  Click here to download the 8-page executive summary.
   

• 2017 Report on the State of the Legal Market
  by Georgetown Law and Thomson Reuters
  

  The past decade has seen unprecedented change and disruption in the legal market. Sparked by the Great Recession of 2008, the pressure on today’s law firms is more intense than ever. As the market evolves over time, there will be winners and there will be losers. According to this year’s report, here are four important areas to which your law firm should pay close attention:

  • Unrelenting Focus on Profitability
  • Focus on Expanding Your Leverage Model
  • Clear Focus on Your Firm’s Core Practice Areas
  • New Focus on Supply Chain Management
  This is a great report to circulate to your partners and discuss what it means to your firm at an upcoming partnership meeting. As Charles Darwin observed in his theory of evolution, the species with the best chance of survival are not always the strongest and the smartest. They are the ones most adaptable to changes in the environment.

• Generally Excellent 2016 Performance,
  Virtually Non-Existent Growth, and Some Clouds on the Horizon
  by Smock Law Firm Consultants
  

  As always, John Smock and his colleagues, have produced an accurate and insightful report on the legal services marketplace, mostly from the perspective of the mid-size law firm. This year, they conducted 35 interviews with managing partners and executive directors from law firms across the US. Here are some of its highlights:

  • 2016 Was a Great Year for Most Law Firms
  • Litigation is Flat and the Future Forecast is Not Good
  • Teams and Practice Groups are Where the Action Is
  • Firms are Getting Better at Addressing Difficult Issues, such as Underperforming Partners
  • Firm Management is Leaping Forward, with BigLaw Outpacing MidLaw
  Smock’s analysis and conclusions are consistent with what we presented in MPF Insight, the report we published in December. See below.

• 2017 Client Advisory 
  by Hildebrandt Consulting and Citi Private Bank
  

  We’ve been including the annual Client Advisory by Hildebrandt/CitiBank as an MPF Featured White Paper for many years. Why? Because it’s a darn good report! Although focused primarily on BigLaw, the information presented in this 10-page report is timely and relevant for smaller and mid-size law firms, as well.  We recommend that you and our firm pay special attention to the last few pages that focus on how law firms will succeed in 2017 and beyond. Going forward, the most successful firms will adhere to a model that:

  • Focuses on Revenue Growth
  • Improves Profit Margins
  • Builds and Maintains Leverage
  • Promotes a High-Performance Culture
  • Compensates Performance
  • Exercises Deliberate Lateral Hiring
  • Plans for Transition and Succession
  • Govern Efficiently and Effectively
  We talk about these issues all the time at MPF programs and conferences. We hope that you and your partners talk about (and act on) them, too.

• MPF INSIGHT
  Re-Envisioning the Law Firm:
  How to Lead Change and Thrive in the Future 
  by Managing Partner Forum, Jaffe, TheRemsenGroup
  

  This hard-hitting and ground-breaking report, which includes an abundance of benchmarking data drawn from two MPF surveys conducted earlier this year, serves as a wake-up call for leaders and owners of smaller and mid-size US law firms. We strongly maintain that to be successful in the future, law firms must be run more like a business and less like loose confederations of sole practitioners. For most firms, this involves change and accountability. And lawyers don’t like either. Leadership and planning are required. Here are some of our report’s major themes:

  • Firm owners must accept the fact the profession is undergoing unprecedented change and that your law firm must adapt if it wants to survive and prosper.
  • Strategic planning is no longer optional. Firms need a vision for the future and a plan to get where they want to go. “Hope and pray” is not a good strategy in a rapidly changing marketplace.
  • Firms must invest in the leadership and business development skills of their young lawyers. They are the future of your firm.
  • Importantly, law firms must proactively address issues involving problematic partners. They are affecting the culture and profitability of your firm much more than you realize.
  • The time has come for firm leaders to exercise “more leadership” and “less management.”
  You need to review this report. You need to share it with your partners. Importantly, your firm must respond to the changing marketplace. Otherwise, you may find yourselves selling buggy whips when the rest of the world has moved beyond them.

• Report on the Future of Legal Services in the United States
  by ABA’s Commission on the Future of Legal Services
  

  Earlier this year, the ABA’s Commission on the Future of Legal Services issued its long-awaited report on the future of the legal profession. Its findings and recommendations should be of little surprise to those who read our newsletter and attended our conferences.

  • Many recent law school graduates are underemployed, or unemployed altogether.
  • The traditional law firm model (including the almighty billable hour) constrains innovation to enhance the delivery of legal services.
  • Lawyers' resistance to change further hinders innovation in the profession.
  • New providers of legal services (e.g. Avvo, Axiom, Legal Zoom and Rocket Lawyer) are proliferating and providing additional choices to both clients and lawyers.
  • Lawyers must learn more about entrepreneurship, innovation, law firm economics, and the business of law.
  • The ABA should establish a Center for Innovation.
  • The ABA should continue to explore the feasibility of Alternative Business Structures (ABSs), including non-lawyer ownership of law firms.
  We encourage you to take a look at the attached report and consider its implications for your firm. We’ll be discussing the fall-out of this report in future issues of The MPF Weekly.

• Law Firms in Transition 2016
  An Altman Weil Special Report 
  by Thomas S. Clay and Eric Seeger
  

  Now in its eight year, Altman Weil’s annual survey continues to document the forces reshaping the landscape for legal services and how law firms are responding. 356 firms with 50 or more lawyers participated, including half of the country’s top law firms. The full survey report runs 132 pages and contains lots of charts and graphs. The more digestible Executive Summary runs just twelve pages.
  
  Key Findings

  • Stagnant Demand for Legal Services. The reason to get closer than ever to your clients and ramp up your firm’s marketing program.
  • Oversupply of lawyers. It’s a buyer’s market, and don’t think for a minute that sophisticated clients aren’t taking advantage of the situation, especially governments, banks and insurance companies.
  • Inefficient Service Delivery. Standardized processes and procedures will make your firm more efficient and profitable. But partners have to give up some autonomy for the good of the firm.
  • Proactive Approach. It can create a competitive advantage for your firm in areas like alternative fee arrangements. Don’t wait for clients to come to you.
  • Resistance to Change – It’s not so much firm leaders, it’s their partners who don’t feel a sense of urgency to evolve and adapt.
  Recommendations to Firm Leaders
  • It’s Time to Lead. Enough with the managing and consensus building already.
  • Appoint the Right People to Leadership Positions. Not always the senior lawyers and lawyers with big books of business.
  • Address Chronic Underperformance. Your dynamos don’t want to be around (nor carry) dead weight.
  • Focus Attention on Practice Groups. We like industry-focused practice groups for a slew of reasons.
  • Get Closer than Ever to Clients. Never ever take the clients you want to keep for granted. Go visit. Learn about the company. Learn about its industry. Become a trusted advisor.
  • Educate your Partners. Most of them pay little attention to the “big picture” stuff. Make sure they know what’s going on, and why your firm must evolve and adapt to the changing marketplace.
  This is one of the best “state of the profession” reports out there, and we strongly encourage you to share it with your partners and senior staff.
  
  Click here (or above) to download the complete 132-page survey report.
  Click here to download the 12-page executive summary.

• The Race Belongs to the Swift and the Contest to the Strong:
  Legal Market Place Outlook for 2016 and Beyond
  by Smock Law Firm Consultants
  

  Each year, John Smock and his colleagues conduct an online survey, as well as series of interviews, with leaders of large and midsize law firms. Among other things, they ask about financial performance, hot practice areas and strategic initiatives. Seventy-four (74) firm leaders participated in the online survey and forty-three (43) participated in the interviews. Here are a few highlights:

  • Hot Practice Areas: Real Estate, Corporate and Health Care.
  • Cold Practice Areas: Bankruptcy, Commercial Litigation and Insurance Defense.
  • Rate Increases are Back: All (100%) firms reported that they raised rates in 2016 and that rate increases held 60% of the time.
  • Alternative Fee Arrangements (AFAs): Really taking off with 60% of firms reporting that 10-25 % of revenue is achieved through them.
  • Top Strategic Initiatives: Dealing with Underperforming Partners, Hiring Laterals with Books of Business, and Investments in Technology and Business Development.
  This is a solid, well-researched survey report that mirrors much of what we’ve been reading in other “state of the profession” reports published so far this year.

• 2016 Report on the State of the Legal Market
  by Georgetown Law and Thomson Reuters’ Peer Monitor
  

  Every law firm leader should carefully read this report, digest it, and consider its implications for his/her law firm. Beyond that, firm leaders should distribute the report to partners and discuss what it means to the firm at an upcoming partnership meeting. Importantly, the firm must develop strategies and action plans to capitalize on the opportunities in the market. Although the overall demand for legal services remained flat in 2015 (as it has since 2008) there are exciting opportunities for firms willing to break the mold and try something different. Here are some the report’s highlights:

  • The overall demand for legal services remained flat in 2015. Real estate and corporate were up. Litigation, employment and bankruptcy were down.
  • Litigation represents 31% of the total market for services. Although litigation was down for BigLaw, midsize law firms reported slightly positive increase in this area.
  • Generally, law firms have been very slow to respond to the changing marketplace and, in those instances where firms are evolving, it’s usually driven by the client, not the firm.
  • BigLaw raised its standard hourly rates by 2.7% on average in 2015. Making the increase stick, however, is another story as client pushback has resulted in plummeting realization rates for many firms.
  • Marketing and technology budgets for most firms continued to grow at a 3-4 % rate in 2015, compared to 2014.
  • Midsize law firms outperformed Biglaw in Revenue per Lawyer (RPL) and Profits per Equity Partner (PPEP) growth, two very important metrics to asses a firm’s financial performance in 2015.

• STRATEGIC PLANNING: KEY TO SMART GROWTH
  2015 Survey of Smaller & Mid-Size US Law Firms
  by Managing Partner Forum and Thomson Reuters 
  

  Earlier this year, we partnered with Thomson Reuters to conduct the largest and most comprehensive survey on the state of smaller and mid-size US law firms. One hundred and forty five managing partners and firm leaders participated, representing firms with 10 to 174 lawyers. This ground-breaking White Paper highlights many of our survey findings, including:

  • Ninety percent (90%) of firms met or exceeded their profitability goals in 2014. 2015 is looking even better for most firms.
  • The top three strategies to improve financial performance are: 1) Strategically growing profitable practice areas; 2) Providing value to win new business; and 3) Becoming more efficient in the delivery of services.
  • Seventy percent (70%) of firm leaders are “very confident” or “extremely confident” in their firm’s long-term success.
  • The larger the firm, the more likely it has a firm-wide strategic plan. Among firms with fewer than thirty (30) lawyers, sixteen percent (16%) report having a strategic plan, compared to sixty-three (63%) of firms in the 80-174 lawyer range.
  • Marketing and business development is the #1 strategic priority for seventy-five (75%) of firms in the survey.

• International Review - Spring 2015
  by Patrick J. McKenna
  

  This issue of Internatinal Review, published by Patrick McKenna, runs 24 pages and features five great articles every firm leader should read. They include numerous practical ideas, tips and techniques that will make you a more effective firm leader and that you can put to use immediately. The articles in this issue are:

  • Recovering from a Leadership Misstep
  • The Leadership Succession Process
  • Stimulating Innovation in Your Firm
  • Inquiring Leaders Want to Know: Ten Important Questions
  • When Job Descriptions Don’t Do the Job
  We especially recommend the fourth article and its ten important questions.

• Strategic Planning: It’s Not Just for “BigLaw” Anymore
  by John Remsen, Jr. and John Sterling
  

  We surveyed law firm leaders earlier this year about strategic planning and implementation.  120 managing partners, mostly from mid-sized law firms, participated. As this White Paper reveals, more and more small and mid-sized law firms are getting into strategic planning and they report good results. Consider these findings:

  • Fifty-nine percent (59%) of firm leaders say they have a firm-wide strategic plan.
  • Just nine percent (9%) say they’ve done “very well” on implementation. Forty-three percent (43%) say they’ve done “pretty well.”
  • Even then, seventy-seven percent (77%) say the plan’s impact on firm performance is “very successful” or “somewhat successful.”
  Imagine the positive impact on performance if law firms did a better job on the implementation side of the planning process!  In addition to fresh data on the topic, we share the keys to success.

• 2014 Legal Market Reports - Chicago, New York, Cleveland and Atlanta
  by Smock Law Firm Consultants
  

  Over the course of the year, Smock Law Firm Consultants has published and distributed a series of reports on four major US legal markets. The markets they cover are Chicago, New York, Cleveland and Atlanta. To develop these reports, John and his colleagues conducted numerous interviews with managing partners and firm administrators to learn about current trends and happenings, and hear their predictions for the future. The consultants also provide their analysis and commentary, as well. Here are a few highlights:

  •  2014 has been a strong year for most mid-size law firms. 2015 looks promising, as well.
  •  Profitability, industry-focused marketing and client service are major areas of focus for many mid-size firms.
  •  Most mergers, acquisitions and lateral hires – 75% says Smock – are not successful, often due to lack of due diligence and failure to fully integrate the combined entity.
  •  Improved planning and project management are  more important than ever for mid-size firms.
  •  In many firms, young lawyers are not “stepping up” to assume important leadership and ownership roles.
  These reports contain some great insights and recommendations, even if your firm has no presence in these four markets.
  
  Click here for Chicago Legal Market Report.
  Click here for New York Legal Market Report.
  Click here for Cleveland Legal Market Report.
  Click here for Atlanta Legal Market Report.

• International Review - Fall 2014
  by Patrick J. McKenna
  

  For several years now, Patrick has been kind enough to share his bi-annual collection of articles with our readers. It invariably includes some of the best, most thoughtful articles on law firm leadership and the role of the managing partners. This issue includes five articles, and the one I liked best is entitled “When Firm Leaders Transition.” His advice for the incoming leader includes:

  • Insist on a detailed job description,
  • Create a “things-to-stop doing” list,
  • Hit the ground listening, and
  • Focus on just a handful of priorities.
  He also dispenses guidance to the outgoing leader to effect a smooth, easy transition when law firms change leaders.

• International Review - Spring 2014
  by Patrick J. McKenna
  

  Twice a year, Patrick publishes his International Review, a collection of articles on law firm leadership and management. It’s geared mostly toward those who lead larger firms, but its teachings apply to managing partners of law firms of all types and sizes. The Spring 2014 edition includes articles on the following topics:

  •  The Seeds of Competitive Disruption
  •  Firm Leadership Is Not for Wimps!
  •  Six Factors that Impede Effective Firm Leader-COO Relationships
  •  A Novel Approach to Compensation
  •  Are You Getting the Minutes from Practice Group Meetings?
  You’ll notice that we feature a number of Patrick’s articles on the MPF Website. It’s good stuff.

• Guide to Develop Individual Attorney Marketing Plan
  by John Remsen, Jr.
  

  There are two kinds of lawyers in private practice: Lawyers with clients and lawyers who work for lawyers with clients. That said, we believe that every lawyer in private practice should want to take the time to develop and implement an individual marketing plan. The reasons are many:

  • Clients hire lawyers, not law firms.
  • Clients hire and refer lawyers they know, like and trust.
  • Lawyers with clients better control their futures.
  • Lawyers with clients make more money and have more clout.
  We recommend that partners invest about 200 hours a year in marketing and business development. Associates should invest about 100 hours a year. Studies show that most successful rainmakers invest much more. To make sure that time is invested wisely, a plan is essential.
   

• The Diamond Law Firm:
  A New Model or the Pyramid Unraveling?
  by William Henderson and Evan Parker-Stephen
  

  Back in the go-go days of the 80s and 90s, law firms built pyramids and it was all about leverage to ramp up firm profitability. Back then, it was a seller’s market. There was plenty of work. Partners brought it in and fed it to a growing legion of highly profitable associates.
  
  But times have changed, and US law firms are now facing the stark realities of a buyer’s market. As a consequence, many firms now find themselves with a “diamond” structure characterized by a small number of junior associates at the bottom and a growing number of non-equity partners, of counsel and staff attorneys in the middle. But is such a model sustainable over the long term? This paper says no.

• 2012 PCPS Succession Survey: Gearing Up to Wind Down 
  by American Institute of CPAs and Succession Institute, LLC
  

  In recent years, we’ve been helping quite a few firms with succession planning issues on the consulting side of our business. Consequently, we’ve done extensive research on the topic and this is by far the best White Paper we’ve read on succession planning for professional services firms. Although geared toward CPA firms (which I believe are paying more attention to succession than law firms), it discusses the same issues to which law firms should be paying diligent attention, including:

  •  Retirement funding,
  •  Firm infrastructure,
  •  Mandatory retirement,
  •  Transitioning clients,
  •  Compensation considerations, and  
  •  Grooming future leaders.
  Nearly 1,000 CPAs from 500 multi-owner firms participated.

• We've Gotta Run This Place Like A Business:
  A Primer on What Many Law Firm Managers Say They Must Do, But Often Do Not
  by Smock Law Firm Consultants
  

  Collectively, MPF Faculty member John Smock and his colleagues have more than 150 years’ experience working with professional services firms. They draw on this experience to regularly publish thoughtful articles on law firm leadership and planning. This one sets forth a strong approach to whip your firm into shape, including planning, governance, compensation and dealing with partners who aren’t pulling their weight.

• International Review - Fall 2013
  by Patrick J. McKenna
  

  Twice a year, Patrick publishes a great set of articles in a magazine he calls International Review, and he distributes a hard copy to selected leaders of the very largest law firms. He also provides us an electronic version to include on the MPF Website and pass along to our readers. Of particular interest in this edition are the articles entitled “Are You Developing a Star Culture?” and “The Hurdles to Initiating Change.”

• International Review - Spring 2013 
  by Patrick J. McKenna
  

  Twice a year, Patrick McKenna distributes International Review, a magazine for law firm leaders. Although most of his work focuses on Am Law 100 firms, much of what he writes is also timely and relevant to leaders of smaller and midsize law firms. His spring 2013 does not disappoint and includes four articles. Perhaps the most interesting of the bunch is one entitled "Malignant Leadership," which was also published in American Lawyer earlier this year.

• International Review - Fall 2012 
  by Patrick J. McKenna
  

  Twice a year, Patrick publishes and distributes International Review, a magazine featuring insightful articles on law firm leadership. This issue examines compensation systems, retirement plans for senior lawyers and several other thought-provoking ideas and concepts. There's some good stuff here, and much of it is worth circulating to your partners.

• International Review - Spring 2012 
  by Patrick J. McKenna
  

  Twice a year, Patrick publishes a collection of articles written by him and others on law firm leadership. He calls it International Review. One of the articles we especially like in the current issue is entitled "Confronting the Underperforming Partner: A Persistently Unmet Challenge." This topic is much discussed MPF conferences, as well.

• International Review - Fall 2011
  by Patrick J. McKenna
  

  Twice a year, MPF faculty member Patrick McKenna publishes and distibutes his magazine called International Review to leaders of firms with 50 or more lawyers in the US and Canada. He is kind enough to make it available to our readers, as well, in PDF format. This issue includes articles about strategic planning, leading change and handling difficult partners.

• International Review - Spring 2011
  by Patrick J. McKenna
  

  Twice a year, McKenna Associates publishes a magazine called International Review. Each issue strives to contain a "balanced blend of contributions covering the subjects of law firm strategy, economics and leadership," and this issue includes articles by David Maister, Patrick McKenna and others. 
  
  It is distributed in hard copy format to firm leaders of US and Canadian firms with more than 50 lawyers. Going forward, we're pleased to make a PDF version of the magazine available to our readers, as well.

• What's Hot and What's Not in the Legal Profession 
  by
  

  Every December, Bob Denney presents his annual report entitled "What's Hot and What's Not in the Legal Profession." This is the 22nd year he has compiled his observations and shared them with clients and friends. In this year's edition, Bob reports that law firms are adopting formal social media policies and, after a one or two-year hiatus, are getting back to holding their annual Firm Retreats.

• The MPF 2010 Annual Conference
  A Summary of Discussion Points and Findings 
  by Charles F. Huxsaw and John Remsen, Jr.
  

  Over 90 managing partners, firm leaders and top consultants to the legal industry participated in The MPF 2010 Annual Conference on April 29th in Atlanta, Georgia. This comprehensive White Paper summarizes the key findings revealed through the use of state-of-the-art Audience Participation Technology. It focuses on how law firms approach strategic planning and the role of the managing partner; including what they do, how much time they spend in the role and how they get paid for all that non-billable effort. This is really good stuff.