RESTRUCTURING PLAN PREVENTS CRISIS
A large western law firm with multiple offices was in a perilous state when Altman Weil was retained. Over a period of three or four years things had gone from bad to worse at the firm causing profitability to decline and many big rainmakers to leave with their books of business. Profitability plummeted as partners left and overhead expenses increased.
When Altman Weil was engaged, we found a serious lack of confidence in the firm’s leadership. The firm had excessive overhead due to management’s tepid response to the departure of about a hundred lawyers over a two year period. Senior management had unwisely focused its attention on morale building activities rather than addressing the fundamental, underlying problems.
The situation was dire with a majority of the remaining partners confidentially informing us that they intended to leave the firm with their clients within two weeks if a practical plan was not proposed and approved by the partnership. Two weeks! It took several years for the crisis to develop but the situation appeared so hopeless to many of the partners that they had given up and were ready to accept offers from other firms.
Altman Weil Brought In
A highly-experienced Altman Weil consultant assumed the role of Interim Chief Operating Officer of the firm and immediately began a comprehensive process designed to identify the firm’s core strengths as well as areas that were a drag on profitability. All aspects of the firm’s operations were evaluated in tremendous detail. We worked around the clock seeking input primarily from partners, but also from the firm’s executive management team, mid-level managers, and selected secretaries and administrative support personnel. There were many opinions about the cause of the current crisis and what should be done to correct it.
Altman Weil crafted a detailed Restructuring Plan that identified a number of serious problems that needed to be addressed immediately, as well as problems that would require management’s attention in the long term. The Restructuring Plan was presented to the firm’s partners for approval and then to all support personnel. The plan was overwhelmingly approved.
Leadership of the firm was changed, and the newly invigorated Chairman, Managing Partner and Executive Committee provided extensive input into the firm’s bold transformation. Changes included: dramatic cuts to expenses, a reduction in force, the closing of an unprofitable branch office and plans to reduce the firm’s unfunded partner retirement obligation. Some administrative operations were re-engineered, while others were eliminated or substantially reduced.
Only a few lawyers left the firm after Altman Weil was retained — a major accomplishment and a sign of renewed confidence in the firm. The firm survived a near-death crisis. Profitability was restored and partner attrition was halted. The firm’s managing partner subsequently said “We could not have done it without Altman Weil’s help. This is a success story Altman Weil should tell to all prospective new clients.”