I am a partner in an 8 attorney firm in the Chicago suburbs. Our firm has started having discussions about what we need to be doing differently. This is huge for us - one meeting a year is our typical meeting frequency and then only to discuss how we are going to cut the pie. How have other firms done during the recession? What are you seeing?
In general small firms in the midwest have fared pretty well during the recession. Last year some firms had the best year ever while others experienced flat or 10% revenue declines. Small firms that had the biggest problems were those that had issues before the recession or were in problem practice areas. Big law firms have had to face unique challenges.
Small firms that have weathered the storm and fared the best were those that:
- Were focused
- Had a sense of where they were and where they were heading
- Had a vision and a strategy
- Had business and financial plans
- Had goals and measured attainment
- Fostered accountability from self and others
- Were proactive
- Worked the books and managed the RULES (Rate, Utilization, Leverage, Expense Control, Collection Speed)
I believe that law firms that fail to focus their practices, set goals, measure accomplishments, and foster accountability will fall short and not meet their financial objectives. Law firms that fail to plan are planning to fail.
Law firms as well as solo practices need to begin focusing their firms and practices, setting firm and individual production goals, measure accomplishment and implementing systems to instill accountability from all members of the team - attorneys and staff alike.
Consider using budgeting which is a tool that can be used to measure goal attainment and how well the firm is doing.
What gets measured is what gets done.
John W. Olmstead, MBA, Ph.D, CMC