Citibanks’ Fourth Quarter Report on Law Firm Profitability: Bleak, But, on the Bright Side, That’s As Good As It Gets

Posted on February 13, 2012 by kowalskiandassociates

Citibanks’ Fourth Quarter Report on Law Firm Profitability: Bleak, But, on the Bright Side, That’s As Good As It Gets.

Filed under: Crisis management, Downsourcing legal services, Global law firms, Lateral law firm partner, Lateral law firm partner movement, Lateral Partner, Law firm associate efficiency, Law firm associates, Law Firm Crisis Management, Law Firm Dissolution, Law Firm Dissolutions, Law firm financial reporting, Law Firm Implosions, Law firm management, Law firm management strategies, Law firm partner layoffs, Law Firm Risk Management, Navigating the Perfect Storm: Recruiting, Public Relations, Retaining and Training Lawyers in the Coming Decade, Strategic law firm planning, The Law Firm of the Twenty-first Century | 1 Comment »

Citibank’s Fourth Quarter Report on Law Firm Profitability: Bleak, But, on the Bright Side, That’s As Good As It Gets

Posted on February 13, 2012 by kowalskiandassociates

Citibank’s 2012 year-end report on law firm profitability tells us that 2012 was the Dickensian best of times and the worst of times. Only more worst than best.

It was the best of times because law firms reported a marginally insignificant increase in revenues and profitability. It was the worst of times because even as revenues and profits increased, expenses rose at three times the rate of increase for profits even as law firm managers fruitlessly sought to stem the tide of increasing expenses. It was the worst of times because the increased level of revenues and profits were attained by slogging accounts receivable and squeezing blood from rocks, reducing firms’ inventory of A/R, leaving them slightly limping as they gird to meet the challenges of 2012. It was the worst of times as realizations dipped and average annual hours billed dipped to 1.642, setting the stage for another round of layoffs.

But, ever looking for the silver lining, Citibank tells us that 2012 was ”not a bad year and we suspect likely to be the new definition of a good year for the legal industry at least for the foreseeable future.” Is that as good as it gets?

Filed under: Crisis management, Global law firms, Lateral law firm partner, Lateral law firm partner movement, Lateral Partner, Law firm associate efficiency, Law firm associates, Law Firm Crisis Management, Law Firm Dissolutions, Law firm financial reporting, Law firm management, Law firm management strategies, Law firm partner layoffs, Law Firm Risk Management, Navigating the Perfect Storm: Recruiting, Public Relations, Strategic law firm planning, The Law Firm of the Twenty-first Century, Value Billing | Tagged: , , | 24 Comments »

It Shouldn’t Suck to be an Associate at a Law Firm, Part II

Posted on January 30, 2012 by kowalskiandassociates

It Shouldn’t Suck to be an Associate at a Law Firm, Part II.

Filed under: Global law firms, Hiring and training lawyers, Law firm associate efficiency, Law firm associates, Law firm management, Law firm management strategies, Law school recruiting, lawyer training, Navigating the Perfect Storm: Recruiting, Retaining and Training Lawyers in the Coming Decade, Strategic law firm planning, The Law Firm of the Twenty-first Century | Leave a Comment »

It Shouldn’t Suck to be an Associate at a Law Firm, Part II

Posted on January 30, 2012 by kowalskiandassociates

With law firm expenses rising at a rate three times higher than revenues, law firms have been working feverishly to cut the expense side and maximize revenues, to rather good effect, thus far. This has resulted in a perfect storm adversely affecting many law firm associates.

The Wall Street Journal reports that law firms have drastically cut their professional headcounts and have been squeezing an extra 50 hours a year out of those who still had seats when the music stopped playing. Fifty hours a week may not sound like much, but in an already crushing 60+ hour work week, these additional hours only serves to enhance partner profitability, while further squeezing the last drops of energy out of already overworked associates.

Saddled with huge student loans and impacted the dwindled job market, associates seem to have little alternative but to groan further under the weight of yet more work, even as their work days have become more complicated and difficult as support staff often no longer exist to assist associates with clerical and administrative duties. In the face of these factors, law firms have further put the squeeze on associates, as described in today’s Wall Street Journal.

The result has been a windfall for law firm partners. PPP has continued to rise, even in the face of The Great Recession. But, at what price? Perhaps it’s time to consider sharing some largesse with those who slave away in the ship’s galleons.

Filed under: Hiring and training lawyers, Law firm associate efficiency, Law firm associates, Law firm management, Law firm management strategies, Law school recruiting, lawyer training, Navigating the Perfect Storm: Recruiting, Retaining and Training Lawyers in the Coming Decade, Strategic law firm planning, The Law Firm of the Twenty-first Century | Tagged: , , , , | 29 Comments »

I Know You Hate Keeping Time Sheets, but Even in the New Era You Must Still Do So and Here’s Why

Posted on December 20, 2011 by kowalskiandassociates

I Know You Hate Keeping Time Sheets, but Even in the New Era You Must Still Do So and Here’s Why.

Filed under: Hiring and training lawyers, Law firm associate efficiency, Law firm associates, Law firm financial reporting, Law firm management, Law firm management strategies, law firm project management, Law Firm Risk Management, lawyer training, Legal Project management, Legaltech, Navigating the Perfect Storm: Recruiting, Project management for law firms, Retaining and Training Lawyers in the Coming Decade, Strategic law firm planning, The Law Firm of the Twenty-first Century, Value Billing | Leave a Comment »

I Know You Hate Keeping Time Sheets, but Even in the New Era You Must Still Do So and Here’s Why

Posted on December 20, 2011 by kowalskiandassociates

Time sheets – the bane of lawyers everywhere – you can’t live with them and you can’t live without them.

The endless debate continues as to whether in this era of AFA’s, fixed fees and the like, lawyers and law firm managers continue to debate the question of whether we still need to be bound to the ball and chain of time sheets. The answer is a resounding “Yes!”

There are numerous reasons: First, in any fee application in which a court approves fee awards, courts require detailed and contemporaneous time sheets.

Second, The Model Code of Professional Responsibility does not explicitly recite AFA’s as a permissible method by which to charge a fee. The hourly rate remains the Model Code’s gold standard.

Next, some courts have actually held that fixed fees are unethical and unenforceable and the only method to recover on a quantum meruit basis is through time based billing.

With project management becoming such a key fixture in the profession, contemporaneous recording of time is key to the success of project managers.

And recording time spent on all firm-related matters is key to management; assuring that time-keepers are on task and then, at year end, assessments of the contributions made by all members of the law firm can only be objectively made by having a full and complete record of every lawyer’s contribution at every level.

Filed under: Alternative fee Arrangements, Hiring and training lawyers, Law firm associate efficiency, Law firm associates, Law firm financial reporting, Law firm management, Law firm management strategies, law firm project management, Law Firm Risk Management, lawyer training, Legal Education, Legal Project management, Legaltech, Navigating the Perfect Storm: Recruiting, Project management for law firms, Retaining and Training Lawyers in the Coming Decade, Strategic law firm planning, The Law Firm of the Twenty-first Century | Tagged: , , , , , , | 14 Comments »

A Cost Way Too High to Pay: The New York Times on the Price of Law School Tuition

Posted on December 18, 2011 by kowalskiandassociates

A Cost Way Too High to Pay: The New York Times on the Price of Law School Tuition.

Filed under: Hiring and training lawyers, Internet based marketing, Law firm associate efficiency, Law firm associates, Law firm management, Law firm management strategies, Law school recruiting, lawyer training, Legal Education, Legal Project Outsourcing, Navigating the Perfect Storm: Recruiting, Outsourcing legal services, Retaining and Training Lawyers in the Coming Decade, Strategic law firm planning, The Law Firm of the Twenty-first Century | Leave a Comment »

A Cost Way Too High to Pay: The New York Times on the Price of Law School Tuition

Posted on December 18, 2011 by kowalskiandassociates

Is there any rational basis for the outrageous cost of law school tuition? Not by any measure.

There are currently billions of dollars in defaulted law school tuition loans, much of it guaranteed by the federal government. At the same time, the number of law school graduates obtaining meaningful employment continues to plummet, while law schools continue to raise tuition and increase the number of seats for law students. Even as the number of jobs for recent law school graduates continue to plummet, starting salaries for lawyers are also on the decline to the point that recent graduates cannot afford to amortize their student loans and provide themselves with food, clothes and shelter.

In a classic game of passing the buck, the law schools blame the ABA for imposing costly requirements, law school professors disclaim any responsibility, claiming that to attribute blame to them is akin to blaming the proliferation of roaches because of the ban on DDT is akin to blaming the roaches. They also claim that the high cost of legal education is due to outmoded guild rules and that law firms need to justify high hourly rates to pay for recent graduates. Law firms blame the schools because new associates need to earn enough to pay for their student loans. Law firm clients are saying “whoa, this is none of our business; we’re not paying for training first and second year associates.”

This whole Alphone and Gaston thing is slowly crumbling, while nobody seems to be paying attention, as unregulated providers of legal services, not having even attended law schools or having been admitted to any bar, are gaining significant market share.

The entire existing eco structure is simply crumbling before our very eyes.

Filed under: Law firm associate efficiency, Law firm associates, Law school recruiting, lawyer training, Legal Education, Navigating the Perfect Storm: Recruiting, Retaining and Training Lawyers in the Coming Decade, Strategic law firm planning, The Law Firm of the Twenty-first Century | Tagged: , , | 2 Comments »

The Key for Law Firm Growth and Survival for the Coming Years is Contingent on Mastering Collaboration

Posted on December 8, 2011 by kowalskiandassociates

As we face a challenging 2012, it is obvious that among the critical tools each law firm must master is the art of collaboration. For law firms to survive what will be a bumpy road, collaboration and full engagement at every level is critical. Just like “plastics” was the magic word in 1967 and .com in the early 90’s, collaboration is the magic word for the months to come.

Clients continue to place pressure on outside counsel on pricing and efficiency. More work is done in house and by alternate vendors. More work is outsourced and sent offshore. More work is downsourced.

The key to being relevant and prosperous is to develop a culture of collaboration and engagement.

This collaboration must be vertical, lateral and horizontal. Full collaboration and engagement with the client is essential. Full collaboration with alternate vendors and other law firms representing the same client is equally critical.

At the same time, the law firm partnership itself must be fully engaged in a fully collaborative mode.

Thus, we present the essential primer of collaboration on the new playing field in which the legal profession finds itself.

Learn the art of collaboration and thrive. Ignore it at your peril.

Filed under: Alternative fee Arrangements, Downsourcing legal services, Electronic Document Discovery, Hiring and training lawyers, Lateral law firm partner, Lateral law firm partner movement, Lateral Partner, Law firm associate efficiency, Law firm management, Law firm management strategies, law firm project management, Law Firm Risk Management, lawyer training, Legal Project management, Legal Project Outsourcing, Navigating the Perfect Storm: Recruiting, Outsourcing legal services, Project management for law firms, Retaining and Training Lawyers in the Coming Decade, The Law Firm of the Twenty-first Century | Tagged: , , , , | 14 Comments »

The End of Alternative Fee Arrangements?

Posted on November 30, 2011 by kowalskiandassociates

The End of Alternative Fee Arrangements?.

Filed under: Alternative fee Arrangements, Crisis management, Downsourcing legal services, Hiring and training lawyers, Law firm associate efficiency, Law Firm Crisis Management, Law firm management, Law firm management strategies, law firm project management, Law Firm Risk Management, lawyer training, Legal Project management, Legal Project Outsourcing, Navigating the Perfect Storm: Recruiting, Outsourcing legal services, Project management for law firms, Retaining and Training Lawyers in the Coming Decade, Strategic law firm planning, The Law Firm of the Twenty-first Century, Value Billing | 1 Comment »

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