denotes premium content | Nov 20 2008 Elderly Client Adviser archive
Volume 1 Issue 2
A theme underlying many of the articles in this issue of Managing Partner is the structure and working culture of law firms, and the extent to which firms will have to change their approach to legal practice in future. Sure, Wachtell, Lipton, Rosen & Katz LLP continues to enjoy phenomenal success off the back of a fairly traditional structure, with its attorneys working long hours because, they claim, the work is “so engaging, so cerebrally satisfying,” (see cover story, page 12). I tend to be sceptical about such statements, but the firm’s impressive productivity and profitability suggests a highly motivated workforce rather than one enslaved to horrific billable-hour targets.
And, while other firms might set similar targets to Wachtell (about 2,500 hours a year), few will be able to offer the same level of interesting and challenging work that will keep the most talented individuals working at their best. For these firms, there is growing interest in alternative means to growth and profitability that will enable them to keep ahead of the curve in a highly competitive legal landscape.
One increasingly popular idea is the leveraged volume-based model. Basically, this means partners being able to hand down less complex work to a larger number of more junior attorneys, or even paralegals, so that the partners can focus on doing the most sophisticated work at premium prices. Firms that operate in low-value, high-volume practices, such as immigration, are particularly well placed to maximise leverage (see the Fragomen Del Rey case study, page 20), with the small number of partners at the top of such businesses earning huge amounts of money and the firms as a whole enjoying impressive profitability rates.
For those firms that are neither at the top end of complex work, nor in the volume business, however, the competitive market can be hard. Some have responded by looking for merger partners, in the hope that greater size and geographic scope will aid profitability. But, as Melissa Proffitt Reese argues in the profile on page 18, merging for growth’s sake, with no real strategic vision for the firm’s client base or practice areas is a recipe for disaster, probably explaining why so many mergers fail.
Instead, such firms could look internally to their recruitment and retention procedures and how they could capitalise on the increasingly difficult search for talent. In particular, research shows that the younger generation is less likely see partnership as a goal, preferring to enjoy some work/life balance, even if that means less money. At the same time, however, the legal profession still has woefully low numbers of female partners, despite many years of a 50:50 ratio of male-to-female law school graduates (see ‘Women in law’ feature, page 15). The simple fact is that firms may continue to be able to recruit talented individuals but retention is going to be the major challenge of the years ahead. For those firms that can truly develop a diverse workforce of women and people of color, the business opportunities are significant, not only in pleasing clients who increasingly want to see diversity statistics, but also in building a workforce of talented and motivated individuals who will commit to the firm for the long haul.
Features
Women in law
Statistics show that an equal number of men and women are entering the legal profession, but few firms are succeeding in retaining women in the long-term. While this may not be affecting profitability now, evidence suggests that firms could be storing up serious trouble for the future. By Caroline Poynton
Opinion: Making rounds
E-mail has become an essential part of internal and external business communication, but it could seriously harm effective leadership in the modern law firm. By Mark Beese, marketing director, Holland & Hart
Masterclass: Top-ten tips for technology committees
Technology committees may be set up for the right reasons, but they can quickly go off-track, wasting time and resources, and little impacting technology use in your firm. This masterclass, however, provides practical guidance to getting the most out of your technology committee for firm-wide technology success. By Dennis Kennedy, solicitor and consultant
Leveraging profits
There has been a lot of talk of a commoditized legal marketplace in recent years, with many firms looking at the opportunities in providing bulk legal services. But few firms can demonstrate such an ability to make a profit in this space as Fragomen Del Rey Bernsen & Loewy LLP. Keiran Flatt reports.
Facing up to a new age
Marketing has evolved rapidly in the legal profession, with business development now proving essential to law-firm management. This masterclass demonstrates how firms can get the most out of their business-development professionals. By Dean Whiteford, global director of practice development and Armilene Coronel, marketing communications manager, White & Case LLP, New York
Wachtell’s winning ways: Deciphering the secret to success
Wachtell, Lipton, Rosen & Katz has enjoyed spectacular success in recent years, with profits per partner far exceeding other law firms. The firm is also run from a single New York office, which suggests there are some serious management lessons to be learnt from the Wachtell experience. By Keiran Flatt
Case study: Wiki's law
Allen & Overy found that implementing so-called ‘social software’ was key to moving the firm’s KM strategy from documents to a more people-centric knowledge strategy. By Ruth Ward, head of knowledge systems and development, Allen & Overy LLP
Regulars
Thought Leader
Extract from the ‘Leadership and change management in law firms’ report. By legal consultant Alan Hodgart
