Profiting from the Learning Curve

A recent study published by Altman Weil listed the ways in which chief legal officers would like to see their outside counsel embrace service improvements and innovation. The top four responses were greater cost reduction, non-hourly pricing, more efficient project management and improved budget forecasting. To anyone paying even cursory attention to the legal marketplace in the last half decade, these should not come as a surprise. In fact, as the study goes on to report, a significantly higher number of law department budgets experienced reductions in 2012 than in the three years prior, so the pressure on outside counsel is likely to increase rather than abate. But are law firms listening? Several managing partners speaking on a panel at the recent College of Law Practice Management Futures conference reported that their greatest leadership concern is increasing revenue, and the leading tactic to accomplish this is attracting lateral partners with portable, healthy and profitable books of business. Of lesser importance, though certainly on the radar, is the desire to institutionalize clients so they are less likely to depart when partners go. It's unclear whether these leaders see the irony. What is clear is that many law firm leaders struggle with the apparently opposing goals of improving client service and improving law firm financial performance.