Archive for the ‘Altman Weil news’ Category

Will law firms be forced to give up their best lever to enhanced profits?

November 23rd, 2009 by Jim Cotterman

Law firms generate profits pushing chargeable hours, billing rates, realization, leverage and margin.  Since 1985 (as shown in this table) law firm profits have been driven upwards largely because of increasing billing rates.  Rate increases are comprised of three elements — experience, inflation and value.  The experience curve of billing rates in the profession is how lawyers increase their productivity over a career when chargeable hours decline after about six to seven years of experience.  These graphs illustrate the profession’s billing rate and chargeable hour profiles across a career.
 
We observed that the market struggled with rate increases (compared to historical patterns), realization (adjustments to pricing for discounts, inefficiencies and the like) and turnover (speed of collections) during the recession.  And all of those were to the detriment of the law firm.  This began in late 2007 and carried its way in varying degrees through 2009.  In early 2009 Altman Weil surveyed law firms on a host of topics law firms were grappling with in response to the unprecedented economic conditions.  In Law Firms in Transition we learned that a majority of the law firms participating (which included 32% of the NLJ 250) had made smaller than normal billing increases for 2009.  This puts pressure on revenues.  Missing a year in rate increases is not so bad in isolation, but when the cumulative effect is considered out into the future the compounded lost increase in pricing is significant. 
 
It will be interesting to see if the law firms hold to the GC expectation of law firms holding the line on billing rates for 2010.  In a recent ACC survey, general counsel identified reducing expenditures on outside counsel as their primary concern.  They also predicted that law firm billing rates would not increase in 2010.  Altman Weil has recently conducted a study on law firm billing rate intentions.  With 40% of the NLJ250 participating we will soon know how law firms intend to respond.

And on December 3rd my partners Ward Bower, Tom Clay and Dan DiLucchio will present their thoughts on the changing legal market and what’s in store for law firms in 2010 in a special Altman Weil Advisory webinar.  They will discuss pricing and a range of other issues such as service delivery models, staffing structures and balancing value and profitability.

The Changing Associate Model

October 16th, 2009 by Jim Cotterman

The recession has challenged businesses everywhere.  Law firms have been more profoundly affected by these extraordinary times then any I can remember.  Unfortunately these changes have disrupted lives and livelihoods — significant associate layoffs, associate pay reductions, reductions in first-year class size and starting salaries, and deferrals of employment start dates, among others.  However, the news is not all bad.  Law firms are also making changes that actually make associate careers better, such as moves away from traditional lockstep compensation and a return to real apprenticeship programs.  How well these changes take hold depends on many variables.

Join us on Tuesday October 27  at 1:00 ET for a 90 minute webinar to explore the strategic and financial implications of these changes.  For more information, visit Leverage, Lockstep and the Changing Associate Model.

Webinar on Law Firms In Transition

May 15th, 2009 by Jim Cotterman

Altman Weil has announced a very interesting new survey on the state of the current legal market.  The survey was designed to measure how law firms are responding to the economic downturn in terms of pricing, staffing, strategy, growth plans and business development.  We were particularly keen to better appreciate the balance between the short-term operational reactions in response to the extraordinary recessionary environment and the longer-term structural changes to the basic business model.  We also sought information regarding short, medium and long term opportunities and threats as they are perceived by firm leadership.

 The results of this effort will be discussed in an upcoming webinar.  This webinar will discuss the results, implications and take-aways of Altman Weil’s study on Law Firms in Transition.  It is based on the input of 208 respondents (30% of the 687 US law firms with 50 or more lawyers, including 32% of the NLJ 250) to an inquiry conducted during March and April of this year.  The complete, 100-page survey, with detailed breakouts of law firms in five size categories from over 1,000 lawyers to under 100, will be available exclusively to those who register for the upcoming Altman Weil webinar, The Real Legal Market 2009, scheduled for June 11, 2009.

Webinar: Financial Strategies for the Current Economy

April 16th, 2009 by Jim Cotterman

A quick time out for a bit of promotion.  My partner Alan Olson and I are presenting this 90 minute webinar, Financial Strategies for the New Economy, next Tuesday, April 21st. .  Further information is available here.

Research Time

January 7th, 2009 by Jim Cotterman

Research on compensation programs is something we pioneered at Altman Weil.  Every three years since 1993 we formally reached out to US private law firms to gather information on what law firms were doing on a range of compensation issues.  That research continues today.  That’s why I’d like to encourage participation in the 2009 Survey of Compensation Systems in Law Firms, a product of Incisive Legal Intelligence (formerly Altman Weil Publications).  The Survey will provide relevant and timely data to help benchmark compensation programs.  The survey can be completed and submitted online.  The deadline is February 13, 2009.  To participate, simply go to:
 
www.incisivesurveys.com/CSYSParticipate

Welcome!

October 16th, 2007 by Jim Cotterman

Welcome!  This is a new communication venture for Altman Weil and for me.  We plan to cover the area of partner compensation most heavily.  Other partner issues and other compensation issues will also be covered based on the questions and issues our clients are raising.  We hope you find it thought provoking and useful.