Weekly Update (October 8-12, 2012)
October 12, 2012
Here is a brief synopsis of the articles that I found interesting this week. As always, this list is not intended to be exhaustive and I encourage others to add any I’ve missed.
- Stephen Mayson’s Law Firm Partnership: the Grand Delusion: Stephen does for the Brits, what Bruce MacEwen’s “Growth is Dead” series so eloquently laid out to U.S BigLaw as a result of the “Great Reset.” The “Grand Delusion” on the other side of the Atlantic is:
- Partnership is still being granted because “the candidate has served their time,” rather than the firm “needs and can afford another profit taker.”
- Using Profit Per Partner (P.P.P.), rather than other better measures of a lawyer’s “true economic return to the business,” which “encourages immediate extraction rather than investment or creation of ‘rainy day’ funds … [which also encourages] the pursuit of personal or short-term gains at the expense of collective effort and reward over a sustained period.”
- Claiming to be “collegiate,” when in reality most firms are “an environment where personal and local interests are usually pursued in preference to the firm’s objectives,” i.e., work-hogging and a refusal to cross-sell.
- Trying to be an “international law firm,” but without the support and integration of the main firm, and
- Assuming they have “good business” sense because of all the “money we make,” when in fact it is a “broken business model” that is blinded to the need for change because of its past successes.
- Mayson concludes: “The issue is not what firms and their partners want; it is not even about what they are capable of doing. It is about what the market will expect and allow. To expect to make a lot of money on the basis of business practices that are not as tight, efficient or as valuable to clients as they could be is surely to invite scrutiny, at least. The conundrum remains: if law firms can have achieved so much in spite of themselves, just imagine what could be achieved if they really turned their attention to their fundamentals. The absence of delusion would be a sound starting point. The future is not what it used to be.”
- Cheers and bloody good stuff, sir.
- Integreon’s Contract Management – a New Collaborative Legal Services Delivery Model: Discussing the joint collaboration of Integreon’s LPO functions with Seyfarth Shaw’s high-level legal expertise, to form an efficient and integrated “end-to-end” packaging of legal services to corporate clients.
- “Unrelenting cost pressure, disaggregation, commoditization, globalization, and technological advances are forcing firms to reevaluate their business models and implement innovative solutions in order to deliver cost-effective, high-quality legal services to their clients. We believe that first-movers who embrace change will be better able to meet the demands of their clients, and gain a competitive advantage.” quoting Lisa Damon of Seyfarth Shaw
- According to Seyfarth and Integreon, “Neither LPO providers nor law firms can individually deliver the holistic, end-to-end services corporate clients require. While one could argue that those law firms with captive LPO units can do so, it is in fact difficult for them to accomplish this as cost-effectively as required by their clients.Under a new collaborative model, however, law firms can work with LPO providers to expand their offerings and deliver a complete, end-to-end approach, providing the appropriate level of legal services required for a particular work product.”
- Makes sense to me. You may also want to check out The Global Legal Post’s LPO Handbook 2012/2013.
- Validatum’s Keep Your Powder Dry – The Hidden Cost of RFP’s: Richard Burcher discusses the findings of a LexisNexis survey that found law firms are responding to an average of 5 to 16 RFP’s per month and spending between 19.6 to 25 hours per each proposal. Because of this large amount of time, Richard suggests that firms carefully vet which RFP’s they take part in so as to correlate effort to maximizing their “strike rate”:
- “Firms could save themselves a great deal of time, effort and cost and improve their strike rate by being a little more discriminating about which ring they throw their hats into. Keep your powder dry for the ones that pass your triaging process.”
- Otherwise, you are merely looking busy without being efficient, as pointed out in the New York Times’ They Work Long Hours, but What About Results?
- Precedent’s 5 Big Ideas – Stop Charging So Much: Jordan Furlong’s warning to lawyers about the emerging new world order.
- “Low-cost competitors are applying new technology, innovative processes and radically different funding models to deliver legal products and services faster, cheaper and often better than we [lawyers] do.”
- And lawyers have only themselves to blame: “We’ve been pricing ourselves out of the market. Most Canadians (and even many lawyers) cannot afford to hire us for anything but the simplest tasks, a long-standing fact that opened the door to alternative and non-lawyer providers of legal solutions.”
- Jordan’s solution: “Create an actual, defensible pricing strategy that aligns your prices with the true value to clients and this new reality.” Wait, you mean we can’t still charge $700 per hour for menial labor-intensive tasks? Life is so unfair!
May you all have an excellent weekend!