Year-end growth results for the legal industry are the best Wells Fargo has reported since 2008, according to Jeff Grossman, head of the bank’s legal specialty group, reported by Thomson Reuters.
The bank confidentially surveyed 100 law firms, which reported a five-percent increase in gross revenue in 2012. In addition, net income rose by six percent. For managers, the good news continues as profits per partner rose five percent, reports Thomson Reuters.
What changed in our downturn economy? Policy.
“Grossman cited the fiscal cliff negotiations between the Obama administration and the U.S. Congress over automatic tax hikes scheduled for Jan. 1, as one possible driver of the revenue growth,” says Thomson Reuters.
In late 2012 and early 2013, some law firm said their mergers and acquisition, tax and trust and estates practices received extra work in the fourth quarter as their clients prepared for tax hikes, according to the Wells Fargo report.
Nevertheless, don’t stop penny-pinching quite yet
“Top law firms are getting what little premium business there is,” Grossman said to Thomason Reuters in an email.
Luckily, with a new year comes new ideas for revenue generating. The following tools will help your firm keep up the good growth, without growing in numbers.
Don’t hire new associates when you can just make better use of the ones already hired. Here’s how.
Firm Competency Database
If you were a baseball coach, you would be sure of the home-run and strike-out averages of a player before putting him up to bat.
Likewise, as a law firm manager, you should be aware of the capabilities and experience—both pre-hire and post-hire—of all your employees. This is not just a list of cases won or lost, however.
When hired, associates bring in a certain set of skills. But, once working, these same employees develop new ones. CVs may be updated, but current employers are often left in the dark.
Develop a sophisticated model for tracking employee competencies. For example, include number of years experience both at the firm and outside, create a rating system for computer skills (and provide a standardized test for it, if necessary), and record area-specific knowledge, from patents to accounting to foreign languages (and if they worked on cases requiring these skills).
Most importantly, keep this list standardized, up to date, and eyes-only. There’s no need to circulate this database outside managing powers-that-be. Nevertheless, when assigning projects or cases, you’ll have a better idea of who among you is best suited for the job.
A competency database will increase your efficieny in assigning cases and the productivity of those assigned to them.
You were already wondering how lawyers use Excel. Consider this your first chance to try out new technology. You’re at bat!
Career Leadership Opportunities
You don’t need to hire another administrator to balance the budget, write internal policies, or manage social media for your law firm. Why? It’s likely your firm already has these competencies, but just doesn’t know it yet.
Chris Smith, partner and co-founder at the management consulting firm ARRYVE, helped develop career leadership opportunities or CLOs at his company. He explains in the Harvard Business Review Blog that CLOs are mini-projects given to employees.
The projects address a specific need of the business while allowing employees to develop new skills and competencies.
“Similar to 3M’s or Google’s innovation time, CLOs give employees a way to try out their ideas in a less risky environment—but in the context of the company’s needs, as well. Some of our marketing-oriented consultants, for instance, jumped at the chance to develop our firm’s social media strategy,” explains Smith.
“This helped them build new skills, reduced the cost we incurred on outside agencies, and created a great case study for the strategy work we sell as a service.”
Lawyers have diverse backgrounds—whether it be in technology or accounting—so it’s natural that a firm would exploit these talents. In turn, it provides a little variety what can be a monotonous workday for lawyers and fodder for annual bonuses at the firm.
Furthermore, lawyers can seize this chance to build their arsenal of competencies. For example, a senior associate can learn the ins and outs of social media by taking charge of a CLO project aimed to increase a firm’s online presence.
CLOs don’t have to be assigned. In fact, they will be more effective if the projects are voluntary. So, create a list of your various firm needs: Twitter account, website content editing, social media policy, short-term strategic plan, year-end budget goals, fantasy football organizer, pro-bono work, etc.
Create a “catchy” pitch for the task, and watch employees sign up!
With the right incentives, every associate can exploit his or her creativity and satisfy his or her secret entrepreneurship ambitions. Associates are waiting for an opportunity to impress their superiors, break up a stagnant workday, and increase their chances for promotion by being a team-player. Put me in coach!
Public Awareness Committee
If you don’t already have an in-house public relations representative, consider creating a “public awareness committee” at your firm. This group should be responsible for proofreading press-releases, organizing benefits, and generally ensuring a positive image on the world-wide-web.
In this economy, it’s never enough to trust word-of-mouth referrals or equity partners to bring in new clients. Even the legendary Babe Ruth needed a publicist.
Proactive firms are also aware of their public image. Do you know yours?