Law Firm Profitability

  • 2017 Roundup: Equity vs. Non-Equity Membership

    Last Year Saw a Number of Interesting Decisions Concerning the Identity, Rights and Obligations of Non-Equity Owners, Including Partners and Shareholders

    2017 saw a number of interesting decisions concerning the identity, rights and obligations of non-equity owners, including partners and shareholders. As more firms utilize non-equity members to play vital roles within their firms, it will become more important for them to take note of these decisions and the guidance they provide.

    January 01, 2018Arthur J. Ciampi

  • Do Mergers Increase Profitability?

    The Numbers Say Yes, But Not for the Reasons Many May Think

    Conventional wisdom has it that mergers enhance profitability through increased revenues and reduced costs. However, the numbers contradict this view: post-merger revenues are lower relative to competitor firms than are the sum of the predecessor firms' revenues, and costs per lawyer increase markedly.

    January 01, 2018Hugh A. Simons and Nicholas Bruch

  • Teaching an Old Dog New Tricks: Business Process Management and Law Firms

    Though traditionally considered laggards when adopting new technology, law firms have recently started to explore new tricks to fortify performance across their organizations. While this evolution is critical to a firm's survival, it's important that firm administrators understand that substantive improvements are only possible through multi-directional change.

    December 01, 2017Zachary Beauchemin and Alisha DiGiandomenico

  • How Many Excess Partners Does Your Firm Have?

    It is widely recognized that Big Law has surplus partner capacity. What is less well recognized is just how massive this surplus has become, how unevenly it is spread across firms in different profitability cohorts, and what it portends for when the next downturn hits.

    December 01, 2017Hugh A. Simons

  • Getting 'Gig'gy with It: The New 'Gig Economy'

    For the most part, law firms continue to structure themselves in a traditional operating and employment models with a dedicated workforce of talent arranged in an organizational hierarchy. In today's Gig Economy, this will unlikely hold.

    December 01, 2017Michael DeCosta

  • Read This Before You Set Your 2018 Billing Rates

    Setting the next year's billing rates follows a simple formula at most firms: last year's rate plus a common percentage increase across all lawyer cohorts. A more disaggregated approach is needed -- firms should set higher percentage increases for senior lawyers and lower increases for junior lawyers.

    November 02, 2017Hugh A. Simons

  • Are Law Firms Charging Less or Just Making Less?

    In a market where clients are struggling to deliver more legal services for less cost (the challenge), RichardSusskind says a law firm may be tempted to undercut its competition on price in hopes of winning more work. But is it actually happening?

    November 02, 2017Roy Strom

  • Alternative Fee Arrangements in Complex Litigation

    The Case for Value Billing

    Alternative fee arrangements (AFAs) are about value, a benefit legal departments are increasingly pressured to bring to their companies. When hiring an outside lawyer, clients are not looking for "hours," and they certainly are not looking for tenths of hours. They seek value.

    October 02, 2017Overton Thompson III and David Rue

  • How Firms Should Be Measuring the Profitability of Matters

    Matter profitability matters. Yet most firms struggle to measure it in a manner that is accurate, focused on the levers partners control, and inclines partners to take action. Using margin per-partner-hour (MPH) to measure profitability delivers on these objectives.

    October 02, 2017Hugh A. Simons