Law Firm Profitability

Raising Costs and Declining Demand are Sapping Profits

The “New Normal” of today is one in which raising operating costs, associate salary increases, and reduced realization rates coupled with AFAs and demands from corporate counsel for reduced rates are sapping firm profits and there is no relief on the horizon. Law firm leaders, seeing current conditions, should be asking if there is a better way.

Law Firms Should Double Down on Their Existing Clients By Focusing on Client Satisfaction and Retention Rates Rather Than Billable Hours and Origination Credits

New client acquisition can cost 15 times more than retaining an existing client, and yet most lawyers spend their limited and valuable time chasing new clients.

Most of the time, delayed payments are a result of actions by the law firms themselves. Let's take a look at 11 factors impacting the collection of attorney fees on a timely basis and how to avoid these mistakes.

With an Eye on Efficiency, Firms Are Ditching Old Methods for a More Corporate Form of Governance

A growing number of firms in the United States and the United Kingdom are eschewing historical partnership norms in favor of more centralized management, and with that comes fewer and fewer partnership votes.

Financial stability within a law firm practice does not guarantee harmony within the partnership itself — far from it. Law firm management that does not acknowledge or reflect the importance of firm leadership and the contributions and needs of its members endangers a firm's cohesiveness and its very existence, no matter how many clients come through the front door.

It's now been 10 years since the economic crisis of 2008, and just under 10 years since we saw the greatest dip in demand for services experienced by the legal market. The market has stabilized since then, but growth has remained, year-over-year, flat. The Thomson Reuters 2018 Report on the State of the Legal Market shows this trend will continue as we see a market characterized by flat to sluggish growth, a continued decline in productivity, modest rate increases and the continued downward pressure on realization.

The new law offers two obvious potential benefits: a 20% deduction for pass-through entities such as partnerships, and a 21% tax on corporations.

This article describes the provisions of the Act most likely to impact law firms.