We’re seeing a record number of law firm mergers these days. Primarily this is because so many firms fail to recognize and adapt to the big changes in the profession — and then, ultimately, they realize they can’t survive on their own. Attorney at Work invited me to give my best advice to law firms that want to thrive in the changing legal marketplace. So I’ll give it to you straight, in five basic steps.
Firms that want to survive — even prosper — should do the following as soon as possible.
1. Start with firm governance. Draft a job description that gives the managing partner or CEO certain defined responsibilities and decision-making authority, then elect a partner who will fill the role. Make sure part of their salary is for performing the non-billable responsibilities. You need to allow productive non-billable time for the managing partner.
If you have more than 15 or so equity partners, elect an Executive Committee, including the managing partner, with decision-making authority on all matters, except those few that should be reserved for a vote of all partners. These exceptions usually include:
- Change in the name of the firm
- Change in the structure of the firm
- Election of new equity partners including laterals
- Approval of major leases
- Approval of a merger
- Approval of the annual budget
- Adoption of a strategic plan
Have three-year terms for the managing partner and members of the Executive Committee. Do not create term limits.
2. Spend on new technology. Invest in and utilize technology to provide maximum efficiency in practice management and firm operations.
3. Make security a firm priority. Initiate systems to prevent data breaches.
4. Put clients first.
- Minimize hourly fee arrangements.
- Keep in touch with clients between matters and cases.
- Always ask for feedback.
- Bill regularly and promptly while the glow of appreciation still shines in the client’s eyes.
5. Collect receivables. Unlike fine wine, invoices do not improve with age.