Last week, the New York Times ran an entire Dealbook special section of the changes and challenges that confront the legal industry as a whole. While the topics–shifting law firm financial models, crises of confidence in the value of a law school education, new model purveyors of legal services–are hardly new ones for the Times (or for the times), their concentration in one place seems like a new high-water mark. Disruptive change is upon us.
Dealbook editor Andrew Ross Sorkin penned one of the articles, titled: BigLaw Steps into Uncertain Times. In the article, Sorkin runs briefly through several familiar memes–some high-profile firms have collapsed, new-model firms like Axiom (whose website touts in simple, huge typeface “WE DO LEGAL WORK EFFICIENTLY“) are expanding rapidly, etc.
Then he settles on a culprit: an industry-wide fixation on profit per partner. Too much PPP, as a measure of firm health and primacy, leads in Sorkin’s mind to a divergence between client and firm interests. It also creates a treadmill that can be difficult to get off.
Sorkin cites Michael H. Trotter, partner at Taylor English Duma in Atlanta, and author of the book Declining Prospects: “There are only a few ways to increase profit per partner. One way is for firms to “charge their clients more for what they do”; another is for them to “do more work for their clients by working more hours or using more lawyers”; a third is to acquire more clients; and the last option is for firms to “reduce their overhead by paying less rent, restraining the compensation of their lawyer-employees and other personnel.”
In the above list, Attorney Trotter runs through much of the business playbook for boosting profits:
1. Raising prices
2. Increasing production or productive capacity
3. Focusing on new client acquisition
4. Cutting costs
But he leaves out a few glaring ones:
5. Elevating efficiency
6. Boosting perceived quality
7. Developing new client channels
8. Improving efficiency/productivity
If you look at these two lists, Trotter’s and ours, and you find yourself thinking that #1-#4 sound like the sort of thing your firm traditionally does when concerned about profits, you should probably contact us. Because #5-#8 is what Brightleaf is all about.
So, kudos to The Times for raking these recurring themes into one big pile. Maybe it’s appropriate that it’s the special Fall Dealbook.
Because the season seems to be changing.