Author: RWS_01

Over 20 years’ experience developing and implementing effective business development strategies in law firms across Australia and Asia.

5 steps to take when your client becomes your biggest competitor

One of the more interesting take-outs from an article (‘The Rise of in-house counsel: What does this mean for law firms?‘) published on the Australasian Lawyer website today – on the rise of in-house counsel numbers in #Auslaw – is the following comment by Katherine Sampson – managing director of Mahlab Recruitment:

“It’s not necessarily that they’re [in-house] going to a competitor firm, but they are going in house…”

To me this statement rings alarm bells and reads:

“your client has just become your biggest competitor!”

So, what steps should you be taking when your client has also just become your biggest competitor for that work?

Here are 5 things you should be putting in place immediately:

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Celebrate “Values Day” – now isn’t that a great idea!

Anyone who knows me can tell you that I’m an avid follower of all things to do with business development, especially as it relates to Asia / Australasia. It’s with this hat on that I recently decided to follow Gordon Orr, Chairman, Asia at McKinsey & Company, as an Influencer on LinkedIn.

One of Gordon’s more recent posts was titled “Team Building In China”. While I found Gordon’s post interesting, what stopped me in my tracks was the reason behind Gordon’s post – his attendance at the Shanghai office “Values Day”.

Now don’t get me wrong, I’ve obviously heard of law firms having values – after all, nearly every law firm includes these on their website these days. But what I have never heard of before is of a law firm who holds its values so close to its core business strategy that it is willing to celebrate this in such a way (and if you are a law firm that does have a Values Day, please forgive me).

According to Gordon, McKinsey & Co.’s Values Day is:

“an annual event for everyone in the office (and in McKinsey offices worldwide) at which we celebrate and discuss our core values.”

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The hidden dangers of discounting your fees

Today’s post is a short rant about the practice and dangers of discounting your legal fees, followed by a useful collection of 20 questions I found earlier that you should be asking yourself if you are discounting your fees.

I’ll start off by disclosing that I hate it when lawyers discount their fees. I especially hate it when this is done without any request by the client – a far more prevalent practice than is perhaps admitted – or consultation with others in the firm (including the practice of discounting on other lawyers’ rates in your firm without even asking them if this is OK!).

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That’s another fine mess we’ve gotten into!

“That’s another fine mess you’ve gotten me into!” – Oliver Hardy

A lot has been written in the past few weeks on Dentons* decision to no longer publish ‘meaningless‘ (their word, not mine) annual Profits Per Equity Partner (PEP) figures, the latest of which “Partners divided on reliability of PEP and need for transparency” was published on the legalweek.com website last Friday.

While I have a level of sympathy with Dentons argument – and the reality is that PEP figures really are meaningless to all but those who work in the firm, at the same time I do feel that the makings of this situation are those of the law firms themselves.

To expand, in the days prior to LLP status, law firms avoided the press – both legal and non-legal – like the plague. Then publications such as Martindale-Hubbell, Chambers and Asia Pacific Legal 500 started to gain traction and firms started to disclose the business/deals they had undertaken in the past 12 months in the hopes of getting good listings/rankings. In most cases this was done without firms asking their clients if they put any credit in these rankings and their feedback on the benefits of such a strategy.

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Demand for legal services in Australia is flat – so what can I do about it?

Yesterday’s [4 July 2014] Australian newspaper Legal Affairs section published an article – “Top-tier firms axe hundreds of jobs” (subscription required if you wish to read the full article) – that opened with the following paragraph:

THE nation’s biggest law firms are in the midst of an employment shake-out with hundreds of jobs disappearing as the firms slash costs in the face of flat demand and intense competition.

The point of this post is not to opine on whether or not demand for legal services in Australia is truly flat, nor whether indeed demand among, so-called, ‘top-tier’ firms is intense, which I’ll leave for another day, but rather to comment on whether or not such flat demand, and indeed intense competition, should lead to the loss of hundred of jobs.

First off, anyone who has a memory even slightly longer than a gold fish, will recall that most (if not all) international firms (of whom most make up this so-called ‘top-tier’ level here in Australia) who entered the Australian market post the GFC cited “flat demand” in their domestic jurisdictions, and the need to grow revenue from other jurisdictions, as a strategic reason for doing such.

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Leverage and the 10-20-30-40 Rule

Today’s Australian Financial Review Legal Affairs section has an interested article – ‘Junior lawyers bring in the money‘ – reporting what we all already essentially know: that law firms make their money from their junior lawyers.

What spiked my interest in the article was despite reporting the fact that “the conventional profit-driven pyramid model is still the dominant method adopted by most of Australia’s top-tier law firms” the percentages where the work is done has changed over time.

Early in my career we followed what was known as the 10-20-30-40 Rule, whereby [roughly]:

10% of a matter’s work was done at partner level,
20% of a matter’s work was done at senior associate level (there was no special counsel level in those days, but they would be included today),
30% of a matter’s work was done at associate and senior lawyer level (in times when there was a difference between an ‘associate’ and ‘lawyer’), and
40% of a matter’s work was done by the junior lawyers / trainees / graduates / paralegals (i.e., everyone else).

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