Sustainable Profitability in a Disrupted Legal Market

Seismic shifts in the legal services industry 1. Introduction 7 2. Will the law firm of the future be a computer? 7 3. A diagnostic approach 11 The six classic drivers 1. Introduction 13 2. Old questions turned upside down 13 3. Diagnostic tools in a change-ready professional culture 20 Pricing – classic driver #1 1. A thought experiment: £10 per hour 21 2. Are your fees low enough to be competitive and high enough to be profitable? 22 3. Low pricing: an unsustainable strategy 23 4. Are your fees high enough? 25 5. Value, not price 27 6. An agenda for a value conversation 29 7. Escaping the squeeze 32 Productivity – classic driver #2 1. A thought experiment: the 80-hour day 33 2. Are you working too hard? 33 3. Is the billable hour obsolete? 34 4. What is the magic number? 36 5. Variation in productivity 38 6. The over-productive partner 39 7. Moving beyond the billable hour 43 8. Disruptive productivity 44 Realisation – classic driver #3 1. A thought experiment: collecting every penny 47 2. Leaving money in the street 47 3. Realisation as a diagnostic indicator 53 4. Better profits through better realisation 55 Cost management – classic driver #4 1. A thought experiment: operating a law firm for £50 per hour 57 2. Cost management in context 58 3. The temptation to slash costs 59 4. Pitfall number 1: not knowing what it costs to produce a legal service 60 5. Pitfall number 2: over-investment in multiple offices 63 6. Pitfall number 3: not keeping up with the technology 65 7. Pitfall number 4: ignoring partner performance issues 65 8. Pitfall number 5: slashing costs without managing risks 66 Staff compensation – classic driver #5 1. A thought experiment: associate compensation in 2030? 69 2. Are associates becoming inherently unprofitable? 69 3. Looking through the wrong end of the telescope 71 4. It’s not about the money 72 5. Improving associate profitability now 73 6. Money into the bottomless pit 75 Leverage – classic driver #6 1. A thought experiment: 40-to-1 leverage? 77 2. Finding the fulcrum 78 3. Technology, workflow leverage and the future of the law firm 82 Being the change 1. Introduction 83 2. Change-challenged or change-ready? 84 3. Paradigm shifts in the legal services industry 95 4. Is your law firm trudging silently towards oblivion? 99 5. Playing a poor hand well 100 Notes 101 About the authors 103