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Profitability

Profitability image for detail page, showing chart graph with large arrow pointing upward

ENHANCING FIRM FINANCIAL PERFORMANCE

In a recent survey conducted among 140 managing partners, we posed a straightforward inquiry: “What is your most pressing issue?” The overwhelming response, representing 55% of the participants, identified “Improving Firm Profitability” as their primary concern.

Indeed, few achievements resonate more profoundly with a firm’s partners than enhanced financial performance. However, navigating the complexities of today’s economic landscape presents significant challenges to achieving this objective.

To address this critical need, this section offers a comprehensive compilation of resources, encompassing proven strategies and actionable tactics, designed to optimize both the short-term and long-term profitability of your law firm.

  • Articles
  • White Papers
  • Books
  • Economic Surveys

15 Recession-Response Tips

Recession or not, this article from Law Practice magazine includes fifteen really good ideas for lawyers of law firms, regardless of firm size or practice mix. Many of Linda’s suggestions focus on client service and...
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A Broken Business Model

Henning asks "Will it take a revolution to change the way law firms operate?" Will today’s current economic crisis force law firms to rethink the old model of annual hourly rate increases? Radical ideas may...
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A Primer on Computerized Case & Matter Management Systems

Your firm’s case management system is the backbone of your organization. Whether you use it to calendar deadlines and court dates for your litigation practice or to track your firm’s experience in a particular area...
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Alternative Billing Ideas 

Alternative fee arrangements (AFAs) are a hot topic these days. Just about every agenda at law firm management conferences over the past few years has at least one or two sessions on the issue. The...
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Dealing with the Downturn: How Law Firms Can Meet the Challenges and Exploit the Opportunities

This two-part Lex Mundi article focuses on what law firm leaders can do to deal with the downturn through both aggressive law firm economics and strengthening client relationships. The suggested practices can help firms survive...
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Do Law Firm Compensation Systems Drive Profitability?

While there is certainly no such thing as the "right" compensation system, here’s an interesting article from our friends at Edge Group concluding that formula-driven compensation systems hurt firm profitability.   
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Ensuring Long-Term Firm Profitability – Folks, It’s Not Just the RPL!

Giuliani looks at the issue of law firm profitability – not just in the “short run,” but more importantly, over the “long run.”
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Five Ways to ImproveYour Law Firm’s Culture

In her article, Mary identifies five impactful ways to build and improve your firm’s culture so you attract and retain the best legal talent; so your lawyers and staff who work efficiently and effectively as...
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Is Mandatory Retirement a Fading Relic?

Should law firms require partners to retire at a certain age? Setting aside any legal issues (age discrimination anyone?), is this an archaic practice or is it critical to firm succession planning? This article argues...
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Is There a Sea Change toward AFAs? In-House Counsel Give It a Solid "Maybe" 

Over half of in-house counsel – 56%, to be precise – say there has been a "sea change" in how fees are paid to outside counsel. Prompted by the pressure to reduce the overall cost...
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Isn’t It Time That Your Firm Develops a Strategic Plan?

Do you and your partners have a written, cohesive firm strategy? Or are you merely sharing office space with other sole practitioners? Strategic planning is the key differentiator, but it’s not for the faint of...
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Keep an Eye on Your Firm’s Billing Practices

According to research conducted by Samford University’s Cumberland School of Law, 55% of lawyers in private practice admit to overbilling on occasion. The temptation only becomes more severe as there is less work to be...
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Law Firms Demote Partners as Pressure Mounts over Profits

BigLaw is aggressively demoting partners in the face of modern-day legal practice. In case you missed it, this article ran in mid-October in The Wall Street Journal. It profiles Shearman & Sterling and Chadbourne &...
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Legal Strategy 101: It’s Time for Law Firms to Re-Think Their Business Model 

This fascinating article from the Wharton Business School asserts that the global recession is forcing law firms to change the way they do business. 
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Marketing to Your Existing Clients: Three Can’t Miss Programs 

This classic article originally appeared in Law Marketing Exchange, LMA’s national newsletter, back in 1997. Although written almost 15 years ago, its lessons are more important and relevant than ever. Take great care of your current clients – the...
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Midsized Law Firms Report Things Getting Better

The ABA’a Law Practice magazine asked us to contribute an article for its finance column, drawing upon data collected at The MPF 2014 Leadership Conference. Eighty-five (85) managing partners, mostly from mid-size law firms, attended...
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Nine Vital Numbers for Your Law Firm’s Health 

What are the key metrics you use to assess your firm’s financial performance? For many firm leaders, it’s total firm revenue. Others look closely at billable hours and/or collections by lawyer. Others keep a watchful...
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Outsourcing Your Law Firm’s Information Technology

Should your firm outsource its IT department? As the first sentence of this article reveals, the decision can be a real pain. Better inform your decision by taking an honest assessment of how your much...
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Small Firms Had It Right All Along

Smaller and midsize firms performed much better than their “BigLaw” counterparts during the recession according to this article summarizing the findings of the Small Law Firm Economic Impact Report 2009. The reason? Less leverage, lower rates and...
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Study: Location, Firm Size Key to Billing Rates 

Here’s an interesting study that puts law firm billing practices under the microscope. It examines invoices received by 36 large corporate clients finds that location and firm size – not lawyer expertise – are the biggest...
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Ten Tips to Improve Profit in 90 Days or Less

In our November MPF Flash Survey, managing partners reveal that the most effective ways their firms have improved firm profitability over the last three years. Their answers, in order of effectiveness, are 1) Improved Billing and Collections Practices, 2) Marketing and...
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The AmLaw 100: Signs of a Slowdown 

Here’s yet another report about the overall sluggish marketplace for legal services for even the largest US-based law firms. It’s a buyer’s market, and corporate clients are taking advantage as they work to reign in...
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The Eight Habits of Highly Profitable Law Firms

This short article highlights BTI Consulting’s analysis of more than 330 law firms and reveals that firms with the highest profits (reported or not) exhibit eight key traits that are largely responsible for their exceptional...
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The Next Best Thing After Cutting Expenses: Collections

In recent years and as the Great Recession drags on, many law firms have been challenged to maintain, much less increase, their profitability. At first, they looked for ways to cut expenses. They let staff and associates go, cancelled firm...
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Wasted Time and Money: The Top 10 Ways That Firms Squander Precious Marketing Resources

Counting down the Top 10 ways that law firms often squander their marketing resources. Is your firm guilty of any of these?
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What is Your Law Firm Worth?

Determining the value of your law firm is much more complicated than you think. See this article to find out why.
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2017 Report on the State of the Legal Market

The past decade has seen unprecedented change and disruption in the legal market. Sparked by the Great Recession of 2008, the pressure on today’s law firms is more intense than ever. As the market evolves...
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Future Law Office: Technology’s Transformation of the Legal Field 

Many vendors and consultants to the legal industry publish self-serving articles and White Papers as part of their marketing programs. In many cases, however, they’re little more than poorly disguised sales brochures promoting products and services...
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Guide to Value-Based Fees

Companies are changing the way they buy legal services – gradually in some instances, drastically in others. The hourly rate billing model that has ruled for decades is giving way to a greater focus on...
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Legal Pricing in Transition  

Legal pricing is changing as a result of client pressures for efficiency on both hourly and non-hourly matters and the increasing use of alternative fee arrangements, and law firms are being forced to rethink their...
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Practical Advice to Improve Your Firm’s Profitability

From the inaugural issue of the Managing Partner Forum newsletter, firm leaders reveal their top management concerns and thoughts on strategic planning. Our response? It’s time to assume the role of CEO in order to...
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The Current Economic Environment – What Firm Leaders Are Saying

Forum Faculty member John Smock and his partners recently wrote this assessment of how law firms are performing in the midst of the current economic downturn. And it’s not as bad as you might think for the...
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The MPF 2010 Annual Conference A Summary of Discussion Points and Findings 

Over 90 managing partners, firm leaders and top consultants to the legal industry participated in The MPF 2010 Annual Conference on April 29th in Atlanta, Georgia. This comprehensive White Paper summarizes the key findings revealed through...
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Managing the Professional Services Firm

If you had to pick just one book to read to be more a more effective managing partner, this is it. Managing the Professional Services Firm ($26.00, Free Press), written by David Maister, covers a wide array of topics ranging...
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The Lawyer's Guide to Increasing Revenue:  Unlocking the Profit Potential in Your Firm

Increasing Revenue ($79.95, ABA Publishing) provides specific action steps – including practical advice in areas such as billable hours, rates, collections and intake – to improve the revenue and profitablty of your firm. The book includes a...
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The Successful Lawyer Powerful Strategies for Transforming Your Practice

I've known of Gerry Riskin for many years and finally had the opportunity to hear him speak at the ABA Annual Conference in 2009. I bought his book – The Successful Lawyer ($74.95, American Bar Association)...
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Mid-Size Firm Report Is the Market for Mid-Size Law Firms Finally Stabilizing?

This is a two page snap-shot of the marketplace for mid-size law firms so far in 2014 according to Peer Monitor. Although lagging the AmLaw 200 firms in key performance measures, the market appears to...
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