I spoke Friday at the ABA Techshow on profitability and the key drivers of partner income. At the end, I posed some questions to the audience to facilitate discussion on the findings of the 2007 Law Firm Economic Survey. One of the questions I asked was "why would firms have low associate utilization?" A partner in the audience responded, "Partners don't trust them to do the work."
That is a common answer I hear from partners. However, without fully utilized associates, firms can't leverage. Leverage affects the growth of the firm and there was a strong correlation between leverage and income by respondents of the 2007 Survey. The challenge for small to mid-size law firms is finding ways to increase associate utilization so that the firm positions itself to leverage. If trust is an issue, then confront it. Mentor associates so that you can trust them to do the work as you would.
An article written by Allison Wolf in her Lawyer Coach Blog titled The Fine Art Of Delegating was the basis of a post by Tom Collins in August, 2007 called Spinning Increases Law Firm Income. Both Wolf and Collins stress that partners who aren't "spinning" work to associates need to face the reasons that prevent them from delegating - don't let the reasons be an obstacle.
Wolf writes:
Delegation is one of the lawyer behaviors that need to be rewarded by compensation committees. For a law firm to be most profitable partners are required to spin work down to juniors. Savvy compensation committees look at the combination of billable hours and spin earnings when allocating partner income.
Collins adds:
[A] firm’s compensation plan is often the reason Why Partners Hoard Work. That, in turn, leads to poor leverage, underutilization of associates and high turnover.
On the issue of trust, Wolf writes:
Successful people surround themselves with talent. Your challenge is to help develop the juniors so that they do the work as well if not better than you do.
Formal mentoring programs are still rare in small and mid-size firms, yet the need is apparent based on the findings of the 2007 Survey and from what I hear from partners. In a year where inflation may very well end up over 4% (over 1% higher than the annual average the past 10 years), firms can't rely on rate increases alone to maintain income. Develop programs to help associates manage more caseload. Give partners an incentive to delegate and mentor. Those who do will create the circumstances necessary to leverage and grow the firm, ultimately leading to sustainable increases to income.
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Met Kevin O'Keefe today and he had Rob La Gatta interview me - it is posted here.
Also went to a session hosted by Debbie Foster and Steve Best. The session was about Document Management. I'll admit, document management has always been a component to me. It was really just the process of profiling documents electronically. Today, though, Foster and Best explained what differentiates document profiling systems from document management systems: forced compliance. A true document management system will force you to use their profiling system when you save a document.
Why is this important? If you are shopping for technology that will help move you more towards a paperless office, knowing the difference between a profiling system (which is predominant in the "all-in-one" case management systems), and document management (which is reserved for the "best of breed" packages), will help you avoid making a long-term investment error. You don't want to dedicate your office to a profiling system that requires them to store documents in a standardized way and then find that the system you deploy doesn't require compliance.
At the same time, if forced compliance is not what you need, then you may be wasting dollars on a product you could have had elsewhere for less.
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Filed under 2008 Tech Shows, ABA Techshow by Brian J. Ritchey
Wrapping up the first major law-related technology show of the year (and my first live blogging event), I have taken some good and bad things with me.
The good:
- It's always good to stay in touch with the trends each vendor is promoting. Based on the sessions, I think vendors may have been more reactive than trailblazing - or it could have been that the vendors that were more relevant to the topics in the sessions were prominent. Either way, I think the tone is set for a year of vendors promoting themselves as having the best E-Discovery solution.
- If you are an attorney who wants to knock out CLE credits as well as get your head spinning around the hundreds of technology solutions available to meet nearly any need your firm could require, this ain't a bad place to be.
- Live blogging is possible in a large tech show with the right amount of focus and determination and hopefully gives readers some value for the toil.
- This show is a great place to network if you are any way affiliated with the legal profession.
The bad:
- Live blogging without consistent internet connectivity is difficult. I spent my time in sessions sitting with my laptop writing the blog entries in Windows Live Writer (my current experimental desktop blogging tool), then doing a mass post when I got back to the suite where I had reliable wireless access. This is a challenge I can't believe will be remedied without more demand for live blogging and will be dictated by the luck of whether there is good wireless access at the location of the show.
- There was precious little focus on financial management in the show (qualification - I am biased). One session on firm profitability (hosted by Thomson West) but that was it. On the other hand, there were 6 sessions with the word E-Discovery in the title alone! I think some wanted to make sure we understood the theme of the show - the beast in the jungle was no ordinary gorilla - it was the many faces of e-discovery.
I hope my fractured writing wasn't too much of an irritant. Please feel free to give me feedback on what you liked, disliked, or would like to see me focus more on in the future.
Morepartnerincome.com is sponsored by Juris®. For information about Juris products and services for increasing law firm performance and partner income contact Juris National Sales Center:
877/377-3740, e-mail info@juris.com or go to www.Juris.com.
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Filed under LegalTech 2008 by Brian J. Ritchey
Traffic is much lower this morning. Mostly consultants and other vendors running around the exhibit hall.
I asked some of those walking through about the e-discovery choices they are seeing - it seems that different vendors tackle different things under the banner of "E-Discovery". For some it is as limited as getting headers from a Lotus Notes email so you can track the origination of the email thread.
It is apparent that vendors are trying to find the right formula for selling e-discovery tools to lawyers. And at LegalTech, you will have lots from which to choose.
Morepartnerincome.com is sponsored by Juris®. For information about Juris products and services for increasing law firm performance and partner income contact Juris National Sales Center:
877/377-3740, e-mail info@juris.com or go to www.Juris.com.
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Filed under LegalTech 2008 by Brian J. Ritchey
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Filed under Blog, LegalTech 2008, Subscriber Content by Brian J. Ritchey
Sat in on Thomson West's presentation on Firm Profitability. The attendance was relatively light, which from the perspective of someone who writes a blog on financial management was disappointing. It was later in the day so it may have been a bad time to talk money.
The panelists discussed the importance of leverage to profitability, except one noted that clients demand the most skilled to run the trials which typically fall to the equity shareholders.
They talked about the use of client satisfaction surveys as a way to ensure clients were happy with their work.
When it came to how they determined profitability, the discussion immediately went to cost allocation. There were some interesting ways the panelists allocated costs to timekeepers in their firms, but it came down to allocating the direct and indirect costs and determining a cost per hour from which to compare to the timekeeper rate. One panelist went into detail, explaining the 150 line items tracked per timekeeper to determine costs. Another panelist didn't track timekeeper cost at all (part of a smaller firm) but rather determined profitability on a matter-by-matter basis.
The panelists also talked about FTE analysis - (full time equivalency) - One uses historical average to project into future, another tracked in two ways: if the timekeeper was only there for part of the year, they credited for length of service. For part timers, they allocated for the entire year since the office, secretary and liability insurance among other costs remain throughout the year even though when the part timer isn't there.
I sat in for about 30 minutes, which was longer than the other ones today, but I couldn't sit any longer. I am not a big fan of the panel discussion for a CLE track. It isn't focused enough and goes in many directions, sometimes leaving the audience confused (could have just been me - it is hard for me to sit still too long).
No surprises in this discussion - except I would have focused more on the metrics to increase profitability - which they might have done in another format.
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Filed under LegalTech 2008 by Brian J. Ritchey
Came in during panel discussion. Sparsely attended (at least at this point).
Talked about selection, expectations, financial considerations, technology, enterprise content management and metrics.
Regarding metrics, in-house corporate counsel are looking at many factors when choosing and retaining outside counsel. Price is obviously a large concern, but it isn't primary. Track record, efficiency and personality are other factors that are considered and, in the panel's opinion, should be tracked.
One interesting thing that was discussed by the panel - they like to find out the method by which a law firm compensates people internally. How is your firm ensuring collaborative effort? Do you get the same level of service with those who are delegated work as the ones who you were sold on to do the work?
Across the board, "you get what you pay for" - if you have to re-do things over and over because of bad service, it isn't worth it. One of the panelists admitted that he would be willing to pay extra if he is confident that the work will be done right the first time. Apparently bitten many times by poor work product.
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Filed under LegalTech 2008 by Brian J. Ritchey
I think I have found the predominant theme this year: E-Discovery. From what people tell me, this was a focus last year at LegalTech as well. I sat in on a E-discovery session hosted by Kroll. It was well attended.
I came in late - they were talking about IM programs. If you are looking at getting IM logs, don't just look at the server logs. Make sure to look at the local machine, which also logs instant messages.
Identifying and preserving voicemail: in the past you had to use stand alone recorder to record voice mails. Now with the unified messaging systems it is easy to have them made into wav files for preserving them. However, not easy to search these files. Tools exist to do it, but they didn't go into any of them.
Talked with one of the LexisNexis reps regarding LAW Prediscovery tools that can help search things like wav files, and he showed me how easy it can be to search for things either by extension, filter by selection, or just a regular search. So there are tools out there that can search for any electronic discovery, you just need to look at the ones that will work for your firm.
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Filed under LegalTech 2008 by Brian J. Ritchey
Just finished interviewing Rick Borstein, Business Development Manager with Adobe. He specializes in legal markets and took some time to discuss ways to use Adobe Acrobat that attorneys may not currently utilize. I recorded it and hope to have it posted later this afternoon.
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Filed under LegalTech 2008 by Brian J. Ritchey
Lots of vendors, lots of people. The show is targeted to litigation attorneys, and within that, mostly defense litigators. I did talk to a few who were corporate counsel and there may have been tracks that attracted those in transactional practice, but I didn't see it.
It won't be until tomorrow afternoon til we'll see the first session on financial management. You can bet I will be attending the session "Firm Profitability: Best Industry Practices".
I wish I had more insight on today's events, but there wasn't really much about which to write from my perspective. I think it may have to do with my placement (standing in a booth for most of the day didn't help) so tomorrow I will plan better to get around and see more sessions.
Morepartnerincome.com is sponsored by Juris®. For information about Juris products and services for increasing law firm performance and partner income contact Juris National Sales Center:
877/377-3740, e-mail info@juris.com or go to www.Juris.com.
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Filed under LegalTech 2008 by Brian J. Ritchey
Rick Borstein (Adobe Systems) Podcast
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