While the importance of strategy in law firms is increasing, this does not answer the question of who is steering strategy—and how. The complex dynamic between partners and the collective means that enough of the general partnership needs to be onboard with any strategy to be effective. In other words, we accept the fact that the general partnership is a key—and complicated—piece of law firm strategy. Regardless, lawyers are no longer the only ones driving law firm strategy. An increased voice is being given to executives and professionals from outside the legal profession. To be successful in this role, you must have a managing partner or chair who is committed to making strategy work and you must develop relationships with those who can influence others to get onboard and provide leadership. Struggling with these issues? Please reach out to me for some guidance regarding what’s worked for our law firm clients.
Plaintiffs’ Law Firm Accelerates Its Performance For the Next Generation of Client Advocacy
Opaque, antiquated business processes combined with legacy technology and significant investments in under-performing practices were causing financial results to stagnate at this leading plaintiffs’ bar law firm.
P&C helped develop and implement an aggressive transformation program to increase revenues, reduce costs, manage risks, and ensure sustainable growth.
A Strong Reputation Is Not Enough When Performance Lags
Our client had a strong reputation for legal excellence and zealous representation of their clients in pursuit of equitable outcomes. Despite professional success, the firm lacked visibility into which business segments created value and was hampered by outdated processes and systems that eroded revenue, increased cost, elevated risk, and distracted attorneys from client service.
At the recommendation of their bankers, they turned to P&C to help pivot the firm, accelerate its performance, and thereby ensure its legacy of outstanding legal advocacy.
P&C Calls for a Rigorous Transformation Program to Address Multiple Issues
P&C designed and implemented a comprehensive transformation program with these goals in mind:
Optimize Business Mix: Shifting resources to the most profitable and highest future growth segments of the firm
Increase Revenues: Growing both legal fees and effective, appropriate expense recovery
Reduce Costs: Optimizing outlays related to technology, procured goods and services, and effective tax planning
Manage Risk: Revamping the insurance portfolio including professional liability, property and casualty, employee health and wellness, addressing cybersecurity, and responding to pandemic impacts
Build Capabilities: Developing processes, systems, and human capital
P&C Recommends and Implements Key Programs for Each Improvement Lever
P&C drove each of these workstreams on an agile basis, using mechanisms such as daily stand-up calls and remote collaboration tools to coordinate work and ensure progress across multiple organizations and functions. To ensure sustainable impact and continuous improvement, we upgraded the capabilities of the client’s leadership team by developing the skills non-attorneys who had potential but lacked requisite training, and identifying and replacing other staff members where required.
Optimize Business Mix
Increase the ratio of junior to senior attorneys given their higher margins
Shift legal staff towards practices with consistent track records and outlook for profitability
Drive growth in focus practices through targeted marketing, business development, and potential openings in new strategic markets
Use proven, effective technologies to streamline and maximize the recovery of client-related expenses including legal research, eDiscovery, and printing
Consolidate and streamline eDiscovery solutions and processes to reduce hosting expenses while improving the effectiveness of case teams
Redesign employee benefits plan and negotiate with carriers based on analysis of multi-year health claims and other actuarial data to develop a better plan at significantly less cost
Reduce technology and other procurement spend categories by focusing on the total cost of ownership across the lifespan of agreements, identify and retire costly legacy systems, and consolidate spend across vendors to obtain better services at less cost
Identify retroactive tax credits missed by legacy accountants and work with them to file amended tax returns to claim retroactive tax credits rightfully due to the client
Streamline travel and expense management through a new integrated system including a new corporate credit card and IT solution to enable straight-through transaction processing to their financial system
Perform comprehensive review of the insurance portfolio including Professional Liability, Property & Casualty, and Cyber Security policies, consolidating and replacing brokers and carriers as necessary to address coverage gaps while simultaneously reducing costs
Harden IT infrastructure to mitigate the threat of network intrusion and data breach by locking down devices, replacing firewalls, cleansing account access permissions, updating password protocols, implementing multi-factor authentication, developing mobile device policies, purging obsolete data, and responding to incidents
Develop and deploy standard compliance policies and procedures including Grants of Authority, Procurement, and Conflict Check workflows to reduce waste, duplicative spend, and missed expense recovery opportunities
Respond to the COVID-19 pandemic by deploying a comprehensive suite of technologies to modernize document management and workforce collaboration systems while funding the program via available pandemic-related grants
Develop a bespoke business analytics solution to enable equity partners to gain real time visibility into firm performance, as well as drill down into specific practices, cases, and timekeepers
Implement modern Document Management System (DMS) to consolidate firm information onto a single, secure, accessible platform
Create and deploy a revenue forecasting process to provide a systematic view of expected cash inflows by practice and case
Restructure General Ledger and recompile historical results to provide a clear view of financial performance and trends by segment
Deploy IT helpdesk case management system to maximize responsiveness and improve support to legal teams and staff
Develop human capital by recruiting for critical staff positions and establishing customized learning and development agendas for select current employees
Transformation Program Results in $25M Annual Profit Increase
Taken together, these programs yielded an enormous benefit to the firm, generating $25 million in annual profitability improvements. The impacts were balanced, with roughly three-quarters stemming from revenue increases and the remainder from cost savings.
The improvements ensured that the transformation remained cash flow positive across our entire 18-month engagement. From the standpoint of our client’s leadership team, these benefits represent a near doubling of typical annual profits per equity partner.
Beyond these tangible impacts, the firm is now positioned for strong growth with a focused strategy, solid infrastructure of business processes and systems, optimized risk profile, and robust pool of talent. Their legacy of client service can continue to flourish.
*We take our clients’ confidentiality seriously. While we’ve changed their names, the results are real.
We believe Diversity and Inclusion is an essential element for any large organization to really succeed in this ever changing world. Here, a global law firm client highlights example leaders within their firm who are spearheading this mission.
P&C recognizes that employees are the lifeblood of professional services organizations. Here, we present one of our legal services clients as a large global team, attracting candidates for both traditional legal and complementary business services positions.
Success in legal services hinges upon talent. Here, we present a compelling value proposition to a client’s legal staff candidates, as well as recruits for extended lines of business comprising business services and expert hubs.
Achieving results requires not just the right approach but concrete implementation; here, for example, the quest to achieve gender equality involves a variety of measures from reverse mentoring to work-from-home policies.
Preeminent LLP*, a leading U.S. class action law firm ranking nationally, in nine practice areas, sought P&C’s guidance to streamline their operations and prepare for the next phase of expansion. Building upon decades of landmark legal victories and unrelenting advocacy for their clients, they asked P&C to refine their practice mix, improve the usefulness and clarity of financial reporting, and assess key leaders of core business functions across the Firm.
At a Glance
The Firm’s Executive Committee sought P&C’s insights and recommendations on the following topics:
Is the Firm optimally allocating resources across its current practices and offices?
Could the Firm optimize its costs to become more profitable?
Are there attractive opportunities in new practice areas yet untapped by the Firm?
Is the Firm consistently and effectively projecting its brand image to key target audiences?
How can we improve current financial processes to streamline effort, reduce manual labor, and provide timely and transparent visibility and controls across both revenues and expenses?
How do our compensation and benefit programs compare to local and national peer groups; specifically, are our compensation and benefit programs competitive to attract and retain the best talent in the nation?
What tangible near-term opportunities are available to reduce costs and maximize revenues?
P&C proposed an integrated approach to address the Firm’s questions and goals:
Responding to Preeminent LLP’s ambition to rapidly transform their business and prepare for the next phase of growth, P&C designed and executed a series of three initiatives spanning the full spectrum from strategy through implementation:
Strategic repositioning. Assessed each practice and office based upon their historical financial performance and strategic fit – in terms of reinforcing or conflicting brand perceptions and relationships with key decision-makers – developed corresponding staffing plans to grow or triage the practice, launched new offices, and prepared for future mergers and acquisitions.
Capability development. Dramatically strengthened core functions, establishing the infrastructure to drive and support subsequent expansion:
Marketing and Public Relations: articulated the organization’s brand, refined key target business development and other stakeholder audiences, selected a best-in-class public relations firm, and developed critical platforms to generate prospects and to develop successful, enduring client relationships.
Finance: streamlined the incumbent accounting system to inform key decisions by transforming the general ledger structure, implemented revenue and expense forecasting processes and controls, automated low-value transaction processing by digitally transforming the accounts payable processes, and implemented an aggressive procurement program to optimize non-labor expenses.
Technology: overhauled the practice and financial management systems, implemented an enterprise document management solution – shifting from a legacy platform to an industry leading enterprise software platform – and implementing a best-in-class digital workflow which integrated firm-wide business processes to eliminate duplicative, manual work. Integrated all enterprise systems together for seamless straight-through transaction processing and reporting. Identified and addressed an array of IT infrastructure needs including optimizing networks, improving cyber protection, deploying state-of-the-art communications and content archival solution, and desktop virtualization to reduce costs and improve availability and fault-tolerance of critical new infrastructure.
Illuminated financial insights by developing comprehensive analytics dashboards providing real-time access to key financial and operational results, supported by a robust data quality remediation program.
Developed the organization by benchmarking professional staff compensation against local and national peer groups, designed a performance management system that formalized roles and responsibilities of key positions, assessed functional leadership against available candidate pools, and conducted targeted executive recruiting to address key gaps in expertise.
Value capture. Implemented a variety of tactical projects to reduce costs and drive consistency and compliance including maximizing the recovery of client-related expenses, optimizing insurance coverage, consolidating and reducing travel expenses, automating workflows such as expense management, and standardizing processes such as conducting conflict of interest checks.
What appeared as a large undertaking became a very successful rejuvenation that will continue to yield benefits for the Firm and their clients. Preeminent LLP identified clear priorities for investment in practices and offices, and shifted staff and other resources accordingly. A new office was launched to expand the Firm’s reach to all key markets nationwide while also enhancing brand image and industry position. The Firm also embarked upon a public relations campaign to highlight its successes and capabilities with target audiences.
P&C led vendor selection, build-out, implementation, and training for three new platforms that transformed how the firm manages all expenses including vendors, employees, and client cost recovery – savings millions of dollars of annual costs and gaining millions of dollars of additional recoveries. These integrated platforms will reduce manual labor and waste and increase profitability for every practice. It also launched replacement efforts for document management and eDiscovery, and articulated a longer-term roadmap to upgrade the core practice management and financial system.
Additionally, P&C created and implemented a dashboard analytics platform that provides key decision makers with clear, actionable financial insights.
Preeminent LLP’s transformation rapidly accomplished all goals, delivering an impressive 515% return on investment in multiple of P&C fees over 11 months.
*We take our clients’ confidentiality seriously. While we’ve changed their names, the results are real.
P&C helped Clifford Chance effectively communicate their culture and strength as a global employer of choice to attract the premier talent that will drive the next generation of growth and development.
Firm culture, like organizational success, is the summation of many individual inputs and decisions; this global law firm client’s retrospective highlights several crucial aspects including thorough recruiting, merit-based advancement, collaboration, and an enduring focus upon client results.
The lifeblood of all organizations, but especially professional services clients, is the quality and passion of their employees; this client video illustrates their highly effective recruiting and training programs from the applicant’s perspective.
We believe in the power of brands. As a capstone of a comprehensive, firm-wide digital transformation initiative for one of the world’s leading law firms, this campaign introduces and reinforces the client’s brand as an agile, dynamic, bold, and sophisticated global market leader.
Our work with legal services clients includes disruptive innovation; here, Clifford Chance describes a much broader approach to service delivery including not just legal work but other functions such as legal technology, project management, finance, and HR.
Negotiating successful outcomes requires understanding what is important to your counterparty. Here, a Freshfields partner articulates the Firm’s ability to help resolve issues spanning multiples geographies and jurisdictions.
Through this communication, our client explains to the leaders of major organizations in crisis how they can productively co-operate with investigations, establishing their value and credibility at such a crucial moment.
Faced with existential choices, our client highlights how large enterprises can turn to them for help to navigate mutually acceptable resolutions with enforcement authorities, setting the stage for ongoing collaboration.
Relationships are crucial. Here, a Freshfields partner describes the value of strong relationships between companies and their enforcement authorities, and in the process opens the door to trusted relationships between those companies and Freshfields.
Cementing their reputation at the forefront of legal issues surrounding emerging technologies, this innovative content series explains the promise and implications of artificial intelligence for their external stakeholders worldwide.
Recruitment of the very best talent for a market leading global law firm requires effective, comprehensive strategies and a communications campaign that captures the imagination and compels the audience to action. P&C partner with the client to redesign their talent acquisition, onboarding, development, and retention strategies and developed a multi-channel communications campaign which – together —delivered transformative results.