December 13, 2005
Best Law Firm Practices for Increasing Utilization
The approach to raising per-partner income should be done with long-range considerations. First, determine how the firm stacks up against benchmarks such as those available from Altman Weil surveys, http://www.altmanweil.com. Fix the areas where you fall short.
The number one item to consider is improved marketing, especially to existing clients. The second item is adjusting leverage to fit the nature of the practice. Third is to engage in structured planning to identify the main things the firm should concentrate on to improve the business over the long term. Fourth is to improve management with focus on the law firm business model - leverage, utilization, rate, realization and margin. That requires a sound business system that provides the business intelligence and tools to keep the firm in line or ahead of its peers at all times.
The list below is a reminder of steps that you can take, among others, to increase utilization and productivity of fee earners improving per-partner income.
Steps for Increasing the Firm’s Timekeeper Productivity—Utilization
- Provide fee earners with better tools for tracking and reporting billable time as worked, including use of Blackberrys and other PDAs
- Measurement improves performance - set individual fee earner targets and/or goals, then track actual billable hours against the fee earner’s target
- Negotiate fee agreements providing for billing in minimal time increments
- Generate more business to fully utilize existing fee earners and to support increasing the number of fee earners
- Modify compensation plans to increase rainmaking and handing off work
- Reallocate workloads to “even out” utilization and to avoid client hoarding at the partner level
- Intensify training of young lawyers to shorten learning curves and improve productivity earlier in their careers
- Substitute lateral hiring for law school recruiting
- Add laterals with an established book of business
- Employ professional administrative staff to reduce opportunity costs (lost billable hours) of partners involved in management
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Filed under Law Firm Bus Model by Tom Collins