Urgent Opportunities for Law Firm Leaders
Disruption always brings opportunities and the sudden economic slowdown related to the coronavirus threat is no exception. Following is a list of actions available to law firm leadership teams during the next 30 to 60 days. Many of these are not “new” opportunities, but the current economic climate may give cover for hard decisions that have met with resistance in the past or can help create urgency to make selective improvements in the firm’s finances and performance.
1. Talk to clients
Clients don’t want another “Coronavirus Client Alert!” unless it’s specific to their needs—and it’s bad form to hit them up for business in this environment. But people are feeling isolated and disconnected and may welcome an opportunity just to talk about work and life. Lend a listening ear and you’re bound to note some opportunities for later while investing in the relationship today.
2. Refine your profitability tools
Now is the time to assess or reassess your portfolio of service offerings and providers. Which practice areas offer the highest margins and the most upside potential? Which clients absolutely must be retained? Which offices cannot be carried any longer? If your firm still cannot generate reliable data to help management answer questions like these, remedy that deficiency as an urgent priority.
3. Reduce occupancy costs
Most firms are already looking at the obvious ways to reduce expenses and manage cash flow—staffing cuts, pay cuts, reduced draws, suspension of 401(k) contributions and the like. Reducing occupancy costs should be a huge focus going forward, and the current experience of remote working can be used to reduce your Boomer partners’ long-held objections.
4. Audit your firm’s expenses
Professionals are available who specialize in auditing law firms’ major contracts (telecom, utilities and legal research, for example) to identify overpayments, inequities and unused services. Such advisors are paid on a percentage-of-savings basis, making this a timely, low-risk initiative.
5. Align compensation with contributions
Compensation schemes have migrated in recent years toward valuing business origination more heavily and rewarding the profitability of a partner’s book rather than the mere size of the book without regard to margins. Continued movement in this direction is advised.
6. Fix chronic underperformers
The legal profession went into the last recession heavily overstaffed at all levels—lawyers, paralegals and staff. Despite widespread personnel cuts and generally slow hiring over the last dozen years, the profession remains significantly overstaffed. Separations are never easy, but now is the time to develop humane exit strategies for your remaining underperformers. The long-term health of your firm depends on it.
7. Improve legal and support processes
Client demands will accelerate the need to improve process efficiencies to reduce costs while maintaining high-quality service and outcomes. Idle timekeepers can be put to work now on special projects to deconstruct, evaluate and improve how the firm’s work gets done. It can be helpful to enlist assistance from unbiased team members to take a fresh look at stale workflows.
8. Conduct small, focused experiments
Design and execute projects that will accelerate learning. Potential topics for study might include innovations in pricing, staffing, technology utilization, knowledge management, onboarding, associate training, matter management, lateral recruitment, personnel evaluations and the like. Audit and improve core functions.
9. Pursue laterals and small acquisitions
The current economic climate has shocked the lateral hiring and law firm merger markets to a near standstill. But, as was true during the last recession, there will be distressed firms looking for rescue strategies and partners looking for new and different opportunities. Firms in relatively strong financial positions with well-defined talent gaps should take advantage of the chilled environment to approach high-value targets and begin negotiations.
10. Upgrade your administrative team
During times of uncertainty, many firms will be inclined to maintain stability wherever possible. However, a period of unsettledness can be used to shake things up by clarifying and redefining roles, rethinking reporting lines and increasing capabilities on the operational side. A lot of capable administrators in languishing firms are eager to upgrade their situations and contribute to yours.
11. Assess talent in new ways
Remote working puts a new emphasis on communication, collaboration, delegation, team play and other soft skills. With everybody physically disconnected at this time, it’s an opportunity to learn who stands out in terms of dedication, availability, reliability, creativity and other factors that will mark certain individuals as keepers.
12. Improve planning and implementation at all levels
While attention is distracted and attention spans are limited, you have an opportunity to set aside overly-complicated practice group plans and individual lawyer plans and focus people instead on achieving a few important, personal goals. Ask every lawyer in the firm to commit to a 30-day plan, line up support where needed to facilitate implementation, hold people accountable and get a thousand useful things accomplished while your competitors are bogged down.
13. Train for on-camera performance
Desktop video conferencing will be the norm even when business travel resumes. Lawyers who excel at analysis, writing and deep thought may find themselves disoriented and ill-equipped to excel within this new communication format. Firms have done well to teach their lawyers video conferencing basics in terms of using the technology successfully—next comes helping them connect with audiences and perform effectively on camera.
14. Get healthier personally
Theoretically, everybody just increased their discretionary time by eliminating the daily commute. This presents opportunities to take long walks, do some reading, get more sleep or create new habits and systems to reduce anxiety and improve personal health and wellness. Developing or maintaining good habits of sleep, diet and exercise will improve everything else.