Organizational Management

This article reprinted with permission from American Lawyer.  © 2009 by Incisive Media US Properties, LLC, futher distribution or reproduction without permission is prohibited.

Sometimes a firm is less than the sum of its parts. In a struggling economy, business misalignment can be fatal.

 

IT'S NO SECRET THAT WE ARE IN A period of significant economic stress. Many firms are struggling with declining revenues, lower billable hours, slower-paying clients, and, inevitably, declining partner incomes. A few firms have already called it quits. Time to circle the wagons and ride out the storm, right? Maybe, for some. But many firms will face radical restructuring, and some will fail, for reasons that go well beyond the downturn.

 

There are two reasons for this. The first is that the economy is not just in distress--it is being remade at a remarkable pace, in ways we do not yet fully understand. The second reason is more fundamental. Many firms are in greater-than-expected distress, because they were fundamentally misaligned as businesses before the economic crisis hit. The economy has simply forced some to come to grips with these challenges faster and more aggressively than they likely would have otherwise.

 

Firm-level alignment problems tend to fall into three primary, but sometimes interrelated, categories--economic, strategic, and cultural. Each has different roots and implications.

This article reprinted with permission from The Recorder.  Further reproduction or distribution without permission is prohibited. © 2008 ALM Properties, Inc.

In his "On Language" column in the Nov. 14 issue of The New York Times Magazine, William Safire educates us on the origins of "interregnum":

"After a presidential election that deserves the word it was given in headlines — historic — welcome to the newly irenic but still newsworthy period in American politics that goes by the ancient Latin name of interregnum , "between reigns." That was brought into the English language in 1579: 'The Romaines call this manner of regiment in vacation Interregnum : as you would say, rule for the time.' ... In today's American parlance, it is the period between Election Day and inauguration day, shortened by the [Twentieth] constitutional amendment in 1933 to about 11 weeks."

This article originally appeared in the November 2008 issue of Accounting and Financial Planning for Law Firms.  ©2008  by ALM Publications, further reproduction or distribution without permission is prohibited. 

Do you know who your firm’s next leader will be? Do you have a short list of viable partner candidates? If your answer to these questions is no, you are not alone.

In the course of our recent work with law firms across geographic markets, we have observed a disturbing trend: a growing number of law firms today face an alarming void in their next generation of leaders.  In management meetings across the country, partners in law firms are looking around at one another and frighteningly acknowledging that no one person is prepared to step forward and take up the leadership helm. Despite the fact that a number of these firms have provided the right opportunities for young practitioners to transform into respected and admired mid-level partners, they are now confronting the reality that these individuals are either unprepared or unwilling to lead the firm. The reasons for the void in firm leadership are numerous and varied, and most are tied to the large number of disincentives to partners considering the leadership path. And unfortunately for firms, the consequences of a leadership vacuum are severe: with no clear successor in sight, firms experience increased instability and often enter into a state of strategic drift, putting the firm’s clients and its practice at risk.

This article originally appeared in the Early July issue of the Pro Brono Wire.  Reprinted with permission from the Pro Bono Institute, © 2008.  Further distribution or reproduction prohibited.

What do associates really want? We’ve all heard the question, with its attendant frustration and complexity, and perhaps even asked it ourselves. Do associates want more money? A better life style? Flexible hours? Multiple career tracks? What approach to associate satisfaction hasn’t been tried?

But behind every question is a set of assumptions and this question is no different: "What do associates want?" implies that associates are all of a type, and that one answer fits all. Our data suggests that this particular assumption is categorically untrue and may lie at the heart of our struggle to adequately answer the question. We don’t know what associates want because there is no single type of associate. In fact, our data reveals at least four distinct types of associate, and each type expects something different from his or her law firm career. Let’s ask the question with a bit more focus and see if we can’t do better.

This article reprinted with permission from the July 2008 issue of Accounting and Financial Planning for Law Firms.  Further reproduction or distribution prohibited.   © July 2008 ALM Publications.

Despite over a decade of widespread discussion of innovation within the corporate environment, innovation within law firms remains a relatively unfamiliar topic. The meaning of the word innovation (often defined as ‘the act of introducing something new’) remains foreign within the context of law firm services, processes, and operations. Very few law firms recognize the opportunities associated with innovation or the market and competitive pressures which will ultimately drive successful firms towards this important business concept. In many ways, innovation represents an untapped opportunity for law firms - the next great frontier for firms looking to expand their businesses and improve their competitive positions.

One of the most interesting developments in the practice of law over the past several years has been the evolution of so-called "ancillary businesses"—the establishment by law firms of business enterprises that offer a wide range of law-related services to clients who may or may not be clients of the law firms themselves. Notwithstanding the proliferation of ancillary businesses, however, there has been little information about these enterprises—how they are structured or owned, how they are managed, how they are capitalized, how they relate to their affiliated law firms, how they are marketed, etc. This Handbook is intended to assist firms in the process of identifying and assessing ancillary business opportunities, structuring ancillary business enterprises, conforming procedures to ethical requirements, and marketing ancillary business activities. It includes an analysis of these issues, as well as specific recommendations for law firm leaders confronting the challenges of organizing and managing ancillary businesses.

In these challenging times, it is critical to have up-to-the-minute, actionable information about the performance of your firm and how it compares to peer firms. Hildebrandt Peer Monitor is an innovative real-time benchmarking program delivered online anywhere and anytime you need to access your data. Peer Monitor provides law firm decision makers with benchmarking data as current as the most recent monthly financial statements. Key metrics such as demand, rates, productivity and expenses are broken out by practice groups, offices and individual timekeepers. Key insights on a member firm's performance relative to peers are available via a Web-based dashboard, along with an economic index and custom analytics. I have included a link to the just-published 2008 Q4 Peer Monitor Index to give you a firsthand look at the type of information available.  I think you'll find the insights on the marketplace to be interesting reading.

Over the last few weeks, many of the top 100 UK firm’s 2010¹ provisional revenue and profitability figures have been announced. The full and underlying financials are yet to be published (we are awaiting more detailed information on productivity, leverage, costs, margin, etc.) but in the meantime enough indicative data is available to begin to discuss the potential drivers of this year’s results and expectations for the future.