Building Stronger playbook
This report presents a playbook for Building Stronger, offering a strategic roadmap for law firms not only to improve their profit margins but also position themselves for enduring success. The playbook emphasizes playing offense: improving performance, resetting cost structures, and building capabilities for the future.
While executing a playbook to build stronger, it is critical for firms to focus on client value and experience—deepening client relationships at every key touchpoint, from initial contact and onboarding through service delivery, matter conclusion, and client feedback. The firms that execute the Building Stronger playbook with this “client first” focus in mind will position themselves for enduring success.
Play #1: Practice Group Profitability
The first play focuses on improving practice group profitability by taking a people-focused, hands-on approach. Law firms are advised to conduct a practice-specific, delivery-based financial analysis to identify areas of profitability within each practice. By identifying "bright spots" and key learnings, firms can apply these learnings to less profitable practices or types of work, implementing process improvements and measuring key performance indicators consistently to benchmark profitability improvement. This approach allows firms to improve margins without sacrificing the fabric of the organization.
Play #2: Revenue Cycle Management
Maximizing realized revenue becomes crucial in the face of a potential economic downturn. Law firms are recommended to evaluate their billing and collections processes, standardize and streamline them using technology tools and analytics, enforce firm policies, and optimize resource utilization. By tightening revenue cycle management, firms can minimize write-off leakage, improve financial performance, and enhance client and attorney satisfaction.
Firms that deploy a strategic offense that positions them for growth will be best equipped to excel as we emerge from economic slowdown.
Play #3: Alternative service delivery
The third play emphasizes shifting from traditional siloed approaches to alternative service delivery models. Law firms are encouraged to leverage virtual delivery, shared services, and third-party providers to enhance capabilities, drive efficiencies, and substantially lower costs. By centralizing and standardizing support services such as IT, office operations, procurement, finance and accounting, library and research, and HR, firms can realize cost savings while maintaining or improving service quality.
Play #4: Legal administrative assistant model modernization
Modernizing the legal administrative assistant (LAA) model is the focus of the fourth play. Law firms are advised to reimagine the LAA role and move away from the historical "jack of all trades" expectation. By disaggregating tasks, up-skilling existing staff, implementing shared resources, and introducing technology, firms can optimize the LAA support structure. This allows for leaner staff ratios, freeing up attorney time spent on administrative tasks, and redirecting it towards revenue-generating work.
Play #5: Real estate optimization
The fifth play centers on real estate optimization, acknowledging the hybrid work model's permanence. Law firms are urged to rethink ways of work, reduce overall real estate footprint, and leverage favorable real estate markets. By aligning workplace practices and design with the firm's strategy, firms can improve employee retention, increase productivity, enhance collaboration, and significantly reduce real estate costs. Workplace flexibility can be achieved by embracing remote work and implementing efficient office spaces.
Leveraging new ways of working creates a tremendous opportunity for law firms to improve employee retention and increase productivity, while simultaneously enhancing collaboration and culture.
Play #6: Vendor governance
The final play focuses on establishing strong vendor governance as a standard business function. Effective vendor governance allows firms to control costs, improve margins, and reduce vendor risk. This involves setting goals, designing a strategy, understanding vendor spending and contractual obligations, creating a governance plan, and executing it with clear alignment to the firm's business goals. A well-managed vendor governance program can lead to substantial cost savings and improved profitability.
Law firms should be prudent in the countermeasures they plan for 2023, leveraging this playbook to choose calculated, “offensive” moves that not only can substantially reduce costs, but also position them to accelerate into a new cycle of economic growth.
Conclusion
In summary, this Building Stronger playbook provides law firms with a strategic roadmap to navigate economic challenges and position themselves for future growth. By executing these plays, firms can improve profitability, enhance client value and experience, optimize resource utilization, and reduce costs. While caution is advised in uncertain times, the report emphasizes a calculated offensive approach that fosters long-term success and avoids damaging reputation, client relationships, talent retention, and firm culture. By embracing change, leveraging technology, and prioritizing client-centric approaches, law firms can emerge stronger from the economic slowdown and thrive in the years to come.
To read the full report, download the PDF.
- Workplace strategy
- Financial management
- Operational performance
- Show all 8
