Law Firm Profitability

The two major challenges now facing lawyer management in many of these mid-size firms are: 1) how to motivate the non-entrepreneurial attorneys to achieve and to perform; and 2) how to retain the "over-achiever" attorneys so they will remain with the firm.

The role of chief strategy officer (CSO) — increasingly common in corporate America — has been adopted by relatively few law firms. Consultants say perceptions of what the position entails and whether it's necessary vary widely throughout the legal industry.

No longer are law firms the only option for clients with legal work; they now have a wider menu of providers from which to choose. But what are the contours of that Alternative Legal Services (ALS) market? How are these new providers being used by corporate clients and law firms? What's driving that usage? And what does it mean for traditional law firms?

The nature of legal work today and the need to consume vast amounts of unstructured text make our profession a ripe target for the promise of machine learning and artificial intelligence.

Not too many years ago, good decisions made by smart lawyers were sufficient. Law firms were raising their fees substantially every year and attorney incomes were soaring. Now, corporate buyers are largely calling the shots, and excellent decision-making by law firm leaders is required as firms work to maintain their profitability.

Marketing and business development in law firms is no longer the exclusive domain of marketing and business development executives. Many more executives are pursuing revenue in one form or another, and those dedicated to the function should welcome this development rather than feel threatened by it.

Anyone following the news headlines of late is aware that artificial intelligence (AI) is being heralded as the technology that will transform industries far and wide — including the legal profession. The evolution of technology in the practice of law today has already led to significant advances in data analytics and data visualization, each of which are having a significant impact on legal work.

The legal profession has never been more cutthroat. As the race for revenue intensifies, firms are putting more pressure on their partners to perform in a number of criteria. If they don't, it will be reflected in their compensation, title and possibly their place in the firm.