In late 2008, the news broke that a prominent law firm was planning to lay off staff and younger timekeepers. As the economy was heading into the great recession, it was no surprise that this firm and others were assessing their situation and making tough choices.
Shortly after that, I was speaking a conference surrounded by leaders of major law firms. These visionaries who had achieved enviable success fell into a common refrain about their plans to deal with economic upheaval: “We’re addressing overhead expenses, looking at under-performing associates, and considering other actions.”
Are you making the right decisions? Or the easiest?
Despite many questions from the audience about how they planned to make tough decisions, when the actions would take place, and in some cases, why they were taking action, there were no substantive responses. Over the next few months, many firms cut costs in an all-too-familiar manner. While the change was appropriate and needed, I wonder how many of those cuts were made based on hard data or an in-depth analysis? If not, did the changes reach the most impactful areas? Or were the decisions the easiest and least controversial?
Fast forward to 2020, and we’re facing another potential recession due to the COVID-19 pandemic. Although there have been advancements in thinking and practices, today’s news clippings seem to be repeating the past. Overhead, younger timekeepers, and potentially other actions. Tough decisions for sure.
The groundwork is laid – now take action
With the very real consequences these types of decisions make on people’s lives, the marketplace for legal services becoming increasingly competitive, and the client base potentially changing – firms can’t afford to make missteps right now.
This is the time when a data-backed strategy with advanced metrics can shine. Any investments made into business intelligence, pricing specialists, business development experts, and other change initiatives should pay off here and now. Many have the groundwork in place; it’s time to act.
For the firms that have not made much headway in these areas, there’s still time. The impact of the pandemic will likely extend into the future, and the data needed to make important decisions now is within reach.
Where to get started
Take the time to do a proper review of your business and identify impactful areas that need to be addressed. Some of the questions are easy to answer; some are not. Consider:
- Do you need as much physical office space, or can more business be conducted remotely?
- Do you have an aging partnership that has become increasingly unprofitable?
- Are there consistently underperforming partners that are not improving?
- Has the firm tried to break into new areas of law and is not seeing proper returns?
- Is the firm staffed appropriately, or is there an imbalance in certain areas?
- Has the firm targeted the right clients to align with its strategic vision?
Finding the answers to these questions is often not easy or convenient, but doing so is potentially far more impactful. The tools, operational intelligence, and personnel you need to make better and more informed decisions are readily available. By making use of them now, you can apply lessons from the past to inform future decisions.
If you’d like to learn more about how Wilson Allen can help you modernize your analytics framework and gain the insights you need to support strategic business decisions, please contact us. Also, plan to attend our Legal Business Analytics webinar series beginning July 8, 2020.