How to Succeed in BigLaw While Really Trying: A Four Act Unfinished Play, Now Playing at a Law Firm Near You

Posted on March 12, 2012 by kowalskiandassociates

The numbers for 2011 for law firms are dribbling out as they inevitably do at this time of year. The reports are fairly consistent all across the board: Gross revenues up at about 3 or 4%; net profits increased at double that rate. Expenses increased at rates at triple that rate. Law firms seem to be generally recovering relatively well from The Great Recession.

But some real cracks are surfacing. Partner free agency continues to be a boon to some law forms and a bane to others. Even some law firms that have attracted some real big hitters are groaning with the expense of paying for substantial books of business, Those firms that are losing producers are seeing a cash drain and some ominous publicity.

Law firms that saw their gross revenues increase did so by squeezing every possible cent out of their accounts receivable, leaving them with reduced inventories of A/R and weakened cash flow positions. Law firms that saw their net profits increase often did so by deferring accounts payable, leaving them with swollen accounts payable ledgers.

And the bill collector is at the front door for many of the steps taken by law firms in the last few years to escape the clutches of The Great Recession. The due bills are arriving for expansions.

The industry is at a cross roads as we all remain uncertain how this show will conclude. We are about to see the exciting finale – only, there remains great uncertainty as to what that last act will look like.

What are your thoughts as to what the next act will look like?

Filed under: Crisis management, Global law firms, Hiring and training lawyers, Lateral law firm partner, Lateral law firm partner movement, Lateral Partner, 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, Media Relations, 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 | Tagged: , , | 6 Comments »

Lateral Law Firm Partner Movement in This Winter of Our Discontent

Posted on November 28, 2011 by kowalskiandassociates

Major disruptions have historically always resulted in population shifts. The significant recent tumult in the legal profession are in fact causing a major population shift as lateral partner movement will likely reach record levels in coming months.

Citibank’s recent reports concerning declining revenues and increasing expenses not only served to remind us that we have been through some troubling times. Citibank’s admonition that the coming months will be fraught with further economic peril only confirmed what so many lawyers and law firms already know.

As a consequence, we are seeing more partners entering the lateral market than we have seen in many years before. Additionally, law firms are anxiously seeking lateral partners with portable business to plug holes in their leaking existing revenue streams.

Lateral partner movement, while frequently mutually rewarding, is often fraught with peril. These perils can be mitigated by taking careful steps to assure that the lateral move works well for both the law firm and the lateral partner.

While it is often said that second marriages are a prime example of the triumph of hope over experience, the same is not true of lateral law firm movement. Most laterals go on to achieve greatness for themselves and for their new firms.

Here, then, is a twelve step primer of how to assure a successful lateral move. Follow these steps carefully and the new firm and its new lateral partner will be assured of success.

Filed under: Alternative fee Arrangements, Hiring and training lawyers, Lateral law firm partner, Lateral law firm partner movement, Lateral Partner, Law firm financial reporting, Law firm management, Law firm management strategies, Law firm partner layoffs, Law Firm Risk Management, 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, Value Billing | Tagged: , , , | 8 Comments »

Are Law Firms Going to be Replaced By Internet Based Providers of Legal Services?

Posted on August 11, 2011 by kowalskiandassociates

Well, chicken little, the sky may indeed be falling. No, it’s not the specter of an unlikely global economic collapse, nor the danger of a double dip recession. Rather, it’s the new potent competition from Internet based providers of legal services. The major players in this space, Legalzoom.com and Rocket Lawyers are immensely well capitalized and are largely completely unregulated.

Add to that fact the new potent direct competition from legal project outsourcing companies, who are competing directly with law firms for significant parts of the corporate legal spend.

Bar associations do not have the will or resources to deal with these organizations. In the absence of anyone stopping either of these avalanches, law firms need to rethink how they are delivering legal services and reformulate their pricing models.

Filed under: Alternative Business Structires for Law Firms, Alternative fee Arrangements, Downsourcing legal services, Hiring and training lawyers, Internet based marketing, Law Firm Internet Based Marketing, Law firm management, Law firm management strategies, Law firm marketing, Marketing the Law Firm on the Internet, Strategic law firm planning, Tesco Models for Lw Firms, The Law Firm of the Twenty-first Century | Tagged: , , , , | 12 Comments »

It Takes a Village to Build a Successful Law Firm; Fewer Residents of that Village are Actually Lawyers

Posted on May 19, 2011 by kowalskiandassociates

It used to be all about having the talents, skills and connections necessary to attract clients and then hiring the best lawyers money could buy to give those clients the best legal service possible which were the keys for the successful growth of a law firm. It used to be all about belonging to the right clubs, the right civic associations and having the right family connections needed to grow a practice and a law firm.

Or all you needed to do was reasonably well in law school, get a job in a good law firm, work hard, make partner and you would inherit a practice that would provide for you and your family, as well as those at the law firm who would succeed you at the firm for generations to come.

All of that has changed dramatically. Clients won’t come flocking just because you have the right connections. Nor will they necessarily be at your door just because you are a smart lawyer.

Most startling of all is the fact that the clients won’t continue to come flocking just because you’ve successfully recruited a crew of really bright law school graduates from the best law schools.

What a law firm needs to succeed in today’s competitive economy is not just smart lawyers, you need excellent marketing talent, a top flight IT team, a smart risk management team, outstanding legal project management professionals and excellent managers of your firm’s legal knowledge process management team.

With all of that in place, you have a fighting chance – but beware of the fact that competition is coming from every quarter, not simply from the law firm across the street.

Filed under: Alternative Business Structires for Law Firms, Alternative fee Arrangements, Downsourcing legal services, Hiring and training lawyers, Law firm associate efficiency, Law firm associates, Law firm management, Law firm management strategies, Law firm marketing, law firm project management, lawyer training, 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 | Tagged: , , , , , , | 3 Comments »

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

Posted on April 18, 2011 by kowalskiandassociates

Law firms inexplicably eat their young.

Attrition of law firm associates has always been a blight on the profession. This attrition is financially painful as associates leave BigLaw in droves during their third or fourth years, at precisely the point when these associates become significant profit centers at the law firm. Attrition at these levels often reach the 60 – 80% level. The financial pain to law firms is compounded by the fact that law firms have by that point spent upwards of $500,000 to recruit and train each associate. In the current market, with clients by and large refusing to pay for the training of young associates, the financial burden to law firms caused by this attrition is further exacerbated.

But this financial drain is all too often self inflicted by law firms. Incivility visited on young associates in the form of arbitrary deadlines, sleep deprivation prompted by minimum hourly billing requirements as well as bonuses predicated upon hours billed is, well, virtually a form of torture. The result is a strong likelihood of malpractice and ultimately, associates clambering for the escape hatches.

Retention of associates and avoidance of expensive attrition can be achieved with having law firms take a more humane approach in dealing with associates. Substantively productive mentoring programs, keeping associates informed about matters affecting the firm and associates’ careers as well as minding and fostering a reasonable work/life balance enhances associates’ productivity. Most significantly, improving the quality of associates’ working lives costs virtually nothing in hard dollars, yet adds immeasurably to a law firm’s bottom line.

The answer is assuredly not throwing money at associates, either in the form of large salaries or year end or spring bonuses. The real answer is to create an environment in which associates don’t go home daily thinking “take this job and shove it. “

Filed under: Alternative fee Arrangements, Hiring and training lawyers, Law firm associate efficiency, Law firm associates, Law firm management, Law firm management strategies, Law Firm Risk Management, lawyer training, Legal Education, Legal Project management, 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 | Tagged: , , , , | 3 Comments »

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