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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. Specifically, firms should set higher percentage increases for senior lawyers and lower increases for junior lawyers. Why? Because, over the next 10 years, hours leverage (i.e., the number of associate hours per partner hour) at elite law firms will decline as more of the lower value-added work is handled not by junior lawyers but by enhanced technologies, in-house counsel, and alternative service providers. To maintain profitability, the margin that was earned on the displaced junior lawyer time has to be recouped through higher margins on senior lawyer time. Failure to increase senior billing rates differentially, and thus to rebalance the source of margin from junior to senior lawyer time, will result in a calamitous decline in profitability. It can be avoided if firms start now to gradually change their billing rate structures.
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By Mark Beese
The problem with giving feedback is that it often comes across as criticism. Human beings tend to react defensively, resulting in a denial of the feedback or worse, entrenchment in the behavior or attitude that may be derailing them in the first place. How can we give feedback in a way that minimizes defensiveness?
By Alex Geisler
Why do some people sail through the entire budgeting, billing and collection process, while for others collection always means trepidation?
By Alaa Pasha
This is a time of innovation, and one way law firms can prepare for a future we can’t yet see is through leveraging two key levers: the need for empathy and iteration.
By Jennifer Johnson and Haley Revel
Firm leadership must think about their talent (and that means all their talent) differently than they do today: as a core business asset whose managed value can make or break the firm’s success.