If it could talk, the billable hour might be inclined to quote Mark Twain: “The news of my death has been greatly exaggerated.” As one colleague puts it, “They’ve been predicting the death of the billable hour for my entire career — and I’m about ready to retire!”
If the billable hour is alive, though, it’s not exactly kicking. Clients have been railing for years that law-firm expenses are out of control. Regular fee increases, combined with lack of real accountability for what the work on a matter really costs, has left the field ripe for change.
In last month’s column, I introduced the notion that strategy
is a function of what the firm wants to achieve, where
it wants to realize its achievements (geographically, for instance,
or in specific practice areas) and the time frame for
doing so. These elements define the firm’s goals. Achieving these
goals, however, is primarily a function of the talent available —
think of it as the “who” in the equation.
In the old days, talent was hard to define, but most people were
sure they knew it when they saw it. This could hardly be called
a recruiting strategy, but up until the ’60s, most businesses were
actually run this way. Find good people from good schools with
good grades, and voilà — the formula for successful hiring.
Reprinted with permission from the September 2009 issue of Lexpert Magazine. © Thomson Reuters
In last month’s column, I introduced the notion that strategy is function of what the firm wants to achieve, where it wants to realize its achievements (e.g., geographically or in terms of practice areas), and the time frame for success. These elements define the firm’s goals. Achieving these goals, however, is primarily a function of the talent available – the “who” of the equation.
Any review of the legal press or conversation with the leader of a major law firm reveals there is growing interest in alternatives to the traditional lockstep compensation and promotion system used for associates. It is clear that law firms are moving in the same direction as most other professional service firms, and switching from a system of promotion and compensation based on time-in-grade, to a system of individualized performance assessment and more variable progression, often referred to today as a “lockstep-to-levels” or performance-based system.
In fact, a number of large international firms have recently put such systems in place, and an even larger number have committed to introducing such systems in 2010. While these performance-based systems are relatively new to large firms, their use is well proven among midsize and smaller firms for more than a decade. The experiences and challenges these firms have encountered in their movement to merit compensation offer lessons that can help others in implementing performance-based systems. In this article, we will cover some of the common problems, and innovative solutions, that can help guide any firm thinking about making this same transition.
SOMERSET, N.J., September 21, 2009 – Hildebrandt, the leading management consulting firm to the legal market, today announced the introduction of LawVision™, a new consulting service that helps law firms adapt their business models to changing market conditions.
The current economic downturn has focused attention of the legal profession on the basic structural, economic, and work process models that have dominated law firms for many years. Some of the key aspects of currently prevailing models include hourly pricing, lockstep progression and compensation for associates and a profit model based on growth and expansion.
SOMERSET, N.J., and HOUSTON, Dec. 4, 2009 – Hildebrandt and Baker Robbins & Company, the two leading consultancies serving the legal market, announced today that they will merge into a single company, effective Jan. 1, 2010. Both are part of the Business of Law group of Thomson Reuters.
Hildebrandt is the premier management consulting firm serving law firms and corporate and governmental law departments throughout the world. Baker Robbins & Company is the leading technology and business process consulting firm for the same market. Together, the new firm – which will be known as Hildebrandt Baker Robbins – will be the largest and most diversified consultancy serving the legal market, with more than 120 consultants working around the world in a broad range of practice areas.
SOMERSET, NJ, November 18, 2009 – Hildebrandt, the leading management consulting firm to the legal market, today announced the global expansion of Hildebrandt services in Beijing, Hong Kong and Sydney effective January 1, 2010.
The potential growth of the legal profession in Asia is impressive. Global firms continue to invest in the region although many lack a strategic business plan for their offices. Local and regional firms are also growing and we envision some potential consolidation of the market. The biggest challenge for local and regional firms is to put in place a structure and systems that will allow them to compete effectively in this changing market. We would not be surprised if there were consolidation between the growing Chinese firms and a major US or UK firm.
Most US law firms of any significant size find themselves today locked in a growing war for talent that is as highly competitive and as important to the future of the firms as the competition for new clients and new business opportunities. The purposes of this White Paper are to explore the causes of this talent war; the changing strategies of law firms in responding to it, focusing particularly on a renewed emphasis on lawyer training and professional development; and "best practices" that appear to be emerging among large law firms as they redesign their training and professional development programs.
Historic Approaches to Law Firm Training Programs
Historically, most American law firms viewed professional development for lawyers as training in substantive legal skills directed primarily at new lawyers. Training was viewed primarily as a form of quality control, a necessary process to make associates more effective and to guard against malpractice. While some firms did see the possibility that effective training programs could provide a tactical advantage in recruiting, few were prepared to invest significant resources in a comprehensive training effort. Except for some litigation skills training (offered through organizations like the National Institute for Trial Advocacy), most programs were fairly ad hoc and aimed only at associates. Professional development programs for partners were rare since the competence of partners in substantive legal skills was presumed.
To be sure, as more states adopted mandatory Continuing Legal Education ("CLE") requirements, lawyers – both associates and partners – were required to complete a few hours of substantive CLE training every year. Most of this training, however, occurred outside the firms themselves and had to be sought out by the individual lawyers even though the firms typically picked up the costs. Only rarely were CLE certified programs included as part of a firm’s own comprehensive internal training program.
