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As law firms grow in size, and expand geographically and across practice areas, the use of firm-wide profitability tools has become a business necessity. But understanding the urgency to adopt or update a profitability model doesn't guarantee its successful implementation.
The road to success begins with the ability to anticipate the pitfalls that may impede the process. In addition, firm managers should consider what they're seeking to learn from profitability analysis. The model they select should meet these goals and provide the data needed to move the firm's business strategy forward.
In helping deploy more than 75 profitability models over the past five-plus years, our firm, Redwood Think Tank, has learned that certain key components will determine how effective a model becomes in enabling a firm to improve its performance.
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