Jordan Furlong 2014-02-25 10:29:46
Why associates and partners need to think about law firm efficiency. I recently hosted a webinar for a group of associates as part of their firm’s internal continuing professional development and training program. Among the advice I gave the associates was to start looking for opportunities to streamline their work, increase their efficiency, and reduce their own “cost of doing business” to make themselves and their practice groups more competitive and effective. This led one associate to send a follow-up question, which I will paraphrase: “Is this my responsibility? What role should I realistically be expected to play in finding enhanced efficiencies in my practice? Do I wait to be directed by the partners or by the IT staff?” It is a good question, with an important subtext: “Come on—you seriously expect me to make my practice more efficient, billing fewer hours, without the direct approval of the partner who controls my career?” Here’s my reply: My advice about efficiencies is primarily addressed to associates in the role of future law firm owners. Whether that is as partners with current firms or in different capacities (maybe running a solo practice someday), associates need to look for efficiencies and process improvements to begin reducing their cost footprint, in order to maximize the profit derived from revenue. Now, if a business is run on a cost-plus pricing model (i.e., you multiply your rate by the hours worked, trying to maximize both in every situation), then efficiency is the enemy of revenue and profitability, and you should try to avoid it. This would be a sensible strategy if the year were 1993. But because it is not, I do not recommend this approach. By the time you become an experienced law firm owner (regardless of the firm), you will be confronted with a market that rejects cost-plus pricing for all but the most specialized, demanding, high-stakes work (and with all respect, the odds simply do not favor the idea that such work will constitute the bulk of your practice). So I believe you should start thinking today—even as associates—about ways in which you can reduce the cost generating friction of inefficient work practices. If you can produce a flowchart or checklist that will allow you (and your colleagues) to carry out routine and repetitive matters more rapidly (and, by the way, likely at higher quality), you should do so. If you can identify free legal research resources rather than paying Lexis or Westlaw to look up cases, you should do so. If you can build and contribute to even a modest knowledge management database so that wheels do not need to be reinvented every day, you should do so. Fundamentally, associates should develop the habit of asking themselves before embarking on any legal task: “What if this were my money? Would I consider it wisely and justifiably spent? Would I be asking about alternatives?” Thinking like a client is an invaluable skill to develop, and the best way to start honing it is to think about the client, all the time. Now, this all comes with a giant caveat, and that is: you are not yet the owners of your own law firms. You are employees, and your bosses are the owners who decide how work is done at the firm and how it is priced. Associates cannot independently give themselves the authority to decide how the firm’s work should be carried out. That is the firm’s call, not yours. Nonetheless, I also believe that you owe it to your employers, to your clients, and to yourselves to investigate efficiencies and process improvements at a ground level that could reduce costs and/or improve quality and—after having investigated and identified such steps—to bring them to the attention of either your immediate reporting partner or the firm’s managing partner. That is a formidable challenge for any associate, especially in this legal environment. So to relieve you of the burden of deciding when and where to report—as well as the intimidation factor of potentially bringing efficiencies to the attention of a partner— I think the managing partner should require you to identify such steps and bring them to his or her attention on a quarterly basis. The upside of adopting this practice is that you learn, as associates, to start identifying improvements in how you do your work, enhancing your own ability to someday be a profitable law firm owner, without potentially incurring the wrath of some, because the option to not look for and report such improvements has been taken out of your hands. Everyone would benefit from this. The associates improve their productivity, build their confidence, increase their profitability, and become easier to retain. The firm, if it implements these innovations, can lower its prices in a tough marketplace while remaining profitable, make its prices more predictable in a market in which demands for fixed prices become louder every day, and differentiate itself from competitors. Clients get lower prices, more predictable prices, or higher quality—and maybe even all three. And all of this starts with one simple proposition: associates should be empowered to increase the efficiency, effectiveness, and productivity of the firm. You bet I expect associates to assert themselves, and to seek and receive the firm’s support in doing so, when it comes to improving efficiency and effectiveness. Neither the associates nor the firm will have much of a future in this new legal market unless they do. JORDAN FURLONG speaks to law firms and legal organizations throughout North America about how to survive and profit from the extraordinary changes underway in the legal services marketplace. He is a partner with Edge International (edge.ai) and a senior consultant with Stem Legal Web Enterprises (stemlegal.com). This article originally appeared on Furlong’s blog, Law21 (law21.ca), and is republished here with his permission. TECHGEAR The Sony Alpha a6000 DSLR (from $649) is a compact mirrorless camera about half the size and weight of a typical DSLR but with an image sensor usually found on larger cameras (24.3 million pixels). It includes an autofocus capable of tracking moving subjects and also allows for interchangeable lenses. WEBLINKS Working as a paralegal in California and Texas, HALEY ODOM has focused on technology, efficiency, and streamlining processes to encourage and increase the retention of firm knowledge. Currently, she is a law firm consultant with Stacey E. Burke and can be reached at firstname.lastname@example.org. techcrunch.com As a tech geek, I am constantly on the lookout for the latest software, apps, and other digital resources. This site helps law firms stay ahead of the technological wave, making them better positioned for success. flowingdata.com This site is just plain cool! FlowingData provides innovative ways to display information through interactive charts, graphs, infographics, and more. I often recommend this site to lawyers to show that information communication does not have to be boring. blogs.findlaw.com/technologist/ Reading this site is a good way to stay up to date on legal technology that helps make law firms run more efficiently, such as a recent post explaining how to use Google Hangouts to create another phone line for your office. legaltalknetwork.com If you love podcasts like I do, bookmark this site now. Topics range from case law updates and social media ethical rules to advances in e-discovery and creative structured settlements. Many of the podcasts can be counted toward self-study CLE requirements.
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