22 May 2013

Quick fixes stifling law firm development

Leaders of top US law firms are failing to make the sweeping changes needed to adapt to today's economic conditions, preferring quick fixes rather than long-term plans, a survey has today revealed.

By James Barnes

'Incremental changes' not working at US firms

Law firm consultant firm Altman Weil’s ‘Law Firms in Transition’ survey took the opinion of 238 leaders and found that while problems such as pricing pressure and efficiency are recognised, not enough action is being taken to combat them.

Business model

In its analysis, Altman Weil said: ‘Most firms appear to be reacting to external forces and making incremental changes within the framework of the existing business model, rather than pursuing opportunities to meaningfully differentiate their firms in the eyes of clients.’
BusinessWeek reports that in the survey, 96 per cent of leaders said the need for greater efficiency is a permanent change in the law firm landscape. However just 45 per cent reported having made changes to provide services with enhanced efficiency.

Margin killer

Similarly, while 80 per cent recognised that price competition and non-hourly billing are permanent changes, only 29 per cent had actually changed the approach to pricing.
Tom Clay, an Altman Weil principal and author of the survey, said that discounting does not equal a strategy, ‘in fact. It undermines the idea of value and it’s a margin killer’, he added
The survey also revealed that increasing revenue was the top challenge on leaders’ lists, while delivering value to clients was eighth on the list and improving efficiency ranked eleventh.

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