Another reason why law firms will never be considered innovative

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Almost four years ago (5 March 2013), when I was blogging on a different platform (Australian law firm business development), I blogged that ‘Australian law firm offices to face foreign currency exchange woes?‘. In that post I stated that:

The importance of this [currency exchange fluctuations] becomes clear when you realise that Australian law offices who report back to an overseas head office could, in effect, have a numerical “loss” or “fall in revenue” of 10 to 20 per cent or more, without there being any real decrease in their domestic revenue/profit.

Worse, in order to keep their fellow partners happy in London, New York or Chicago, Australian-based partners will need to drastically increase their local revenue and profit without having the pleasure of their being credited with this on an international level! And keep in mind that all of this is taking place at a time when the market is becoming more competitive on a daily basis.

All I can say to that is – “best of luck”. Alternatively, maybe now is the time to call your bankers and to start getting involved in foreign exchange currency swap arrangements.

Bold and underline by me for emphasis.

Now why would I bring up a post I made almost 4 years ago?

Because, last week The American Lawyer reported: ‘As Currencies Suffer, Law Firms Try Hedging to Safeguard Revenues‘ in which they state:

To mitigate the uncertainty that comes with earning revenue in varied currencies, some law firms have started hedging currency, a practice that is more common among big multinational companies.

Overall revenue suffers when one or more of the currencies that make a firm’s revenue declines against the dollar, while pay discrepancies between partners in different countries widen if the foreign based-partners are paid in local currency.

So almost four years to the day after I suggested this, I’d now like to ask these same firms to read a post of mine from three years ago. It offers up some advice on another tactic they may want to consider.

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