A Survival Guide for Legal Practice Managers

A Survival Guide for Legal Practice Managers

The 6 rules to getting your law firm's fees right

Monday, March 26, 2018

By Sue-Ella Prodonovich, Principal, Prodonovich Advisory

In my blog “6 things law firms need to accept”, I mentioned that law firms needed to accept that this was a buyer’s market. Now I’m here to tell you that this doesn’t apply just to lawyers; it’s the same for all professional services.

That means, you could well be told in 2018 that your prices are too high. It also means that getting your pricing right will be one of the keys to building a successful practice over the next 12 months. So, if you’re feeling powerless and confused about what to do, try following these 6 rules.

1. Understand the emotional side of buying

While professionals may deal in the analytical and rational, it’s always worth remembering that buyers are seldom analytical and never rational. Why else would people fork out hundreds of thousands of dollars for a different badge on a handbag or a motorcar? It’s because they see these as denoting higher status than other goods.

The same principles apply to professional services as they do to retail. People, including the hard nosed management teams of serious corporates, will pay a premium for services that they perceive as premium. Similarly, if they see something as run-of-the mill, they’ll expect to get it for the best price they can.

To make sure you fall on the right side of the equation, you need to understand the emotional side of buying. If you want help doing that, there are a lot of good books that can point you in the right direction.

You also need to understand what will make a client pay top dollar. And, whether that’s through specialising in a niche, providing a personalised service, or innovating, one thing is certain: clients always pay more for professionals who understand them.

If you’re being told your prices are too high, perhaps you’re simply not getting this right.

2. Don’t dive straight into fixed fees

In the current climate a lot of professional services think that all they need to do is move to fixed fees and the pricing problem will take care of itself. Anyone who has read any of my blogs in the past knows that I have very strong views on this. While fixed fees may be part of the solution, they’re not the solution every time.

Fixed fees tend to work brilliantly when the scope of work is known and its commoditised - for instance, a conveyance or a simple contract for a lawyer, or a basic end of year tax return for an accountant. In my view, fixed fees don’t work at all where the scope of work is unknowable and the work you’re doing is bespoke and highly skilled.

And, for most types of work, they’ll fall somewhere in between - effective sometimes and not others. 

So, instead of going straight for an “alternative fee” model, I always encourage people to go straight for an “appropriate fee model”. Analyse what’s going to work out best for both you and the client and stick to that, rather than being rigid. If you're not sure what to charge, here's what i think should influence your pricing.

3. Start with the client

In my experience, a lot of professional services firms get their pricing the wrong way around. What I mean by that is that they have no pricing strategy, so instead the starting point for what they’ll charge will be their remuneration policy.

If they pay a staff member $100,000 a year, they’ll use this figure to calculate how much they should charge to pay their employee, cover their overheads and take a bit of profit. That sounds logical, but doing it in isolation can lead to a raft of pricing problems, the effect of which can lead to a short change for both your practice and your client.

A better place to start is with the client. Figure out how you can bring them value, by delivering what they want and making their experience with you pain free. Once you’ve put some thought into that, you can then work backwards, figuring out how to utilise technology and your fee earners to deliver it in the best possible way.

By putting things in this order, you may uncover more profit than you could ever dream about rather than using salary as your starting point.

4. Work out where your value lies

Good law firm pricing always comes by knowing the value you bring. In other words, what is your client really paying you for?

To work this out, you’ll need to engage in a bit of good old fashioned soul searching and problem solving. So what is it that your client wants from you? And what could they just as easily get anywhere else and at a cheaper price?

When you look at things this way, chances are you could take something off the table to bring your prices down without compromising your profitability.

For instance, are you spending too much time of admin? Could you push some of this back onto the client? Could you deconstruct the service you offer, breaking it up into many parts so that you retain the high value stuff and outsource the other parts somewhere else?

If you do have this option, I’d suggest you try taking it because it’s likely to lead you into building a network of referrers who pass you work in return - that is the stuff you really want to be doing. And that will help protect your fees and your profits, while still keeping your clients happy.

A new tool that can help law firms with pricing dilemmas or decisions is Price High or Low. Designed by Joel Barolsky for professional service firms, this is a very clever and timely application.

5. Look for the real motivation of clients

If a client thinks your pricing is too high or they start going to a cheaper provider, it’s easy to look within. But sometimes, it’s not you, it’s them. So look beyond the rejection to find out why they don’t want to pay.

Chances are they simply may not have the budget. Perhaps there’s been a restructure. Perhaps they have a new CFO who’s stepped in and is slashing costs. Otherwise, perhaps they’re really just not the client for you because they’re simply not prepared to pay for the value you provide. 

I liken it to the petrol pump selling High Octane 98 fuel. To me, this makes no difference; I’ll just buy the cheapest fuel on offer. But a motoring enthusiast will probably really notice, and care about. The 1% difference it’s making to their performance. If people don’t value what you have, you need to find your own enthusiasts; the ones who really do get it.

6. Talk about pricing with your clients

Finally, I always think the best way to find out what a client thinks about your pricing is simply to ask them. I know, I know. Our mothers told us it was rude to talk about money. But sometimes, when you’re in business, you’ve just gotta. 

Ask your clients what they think about your pricing. Are you cheaper or more expensive than your competitors? There is no winning formula. It really often is sometimes about sitting down and talking about what is fair from both ends.

After all, in my experience clients price shop a lot less than most people think.

So if someone does say you’re too expensive, maybe they’re really trying to tell you something else…

About our Guest Blogger

Sue-Ella Prodonovich
Sue-Ella has more than 20 years senior level experience in winning and growing business in the complex business-to-business services and professional services sector. Over that time she has helped many of the Asia Pacific’s most recognised legal and professional services firms sharpen their business development practices, attract and retain clients, and become more profitable. Sue-Ella is the principal of Prodonovich Advisory, which she founded in 2012.

Four steps to creating a culture of service excellence

Tuesday, March 28, 2017

By Carl White, Director, CXINLAW

Law firms’ websites all promise client service excellence. Yet their perceptions of client service and how that might manifest at every client touchpoint at their firm is rarely objectively assessed or addressed.

So, how does your law firm look and sound to prospects and clients? Findings revealed by a joint ALPMA/CXINLAW survey, No Second Chances, found that ”78% of firms failed the ‘first impression test’ ie only one in five firms gained an instruction or recommendation from their new enquiries.

Is it any wonder that firms find their enquiry conversion rate languishing below 10%? This low rate highlights that there are serious opportunities for growth slipping away at first contact. Even more concerning, many firms don’t even measure their new enquiry conversion rates, yet continue to spend significant amounts monthly to generate new leads.

ALPMA president Andrew Barnes said “We exist in very competitive times. Law firm differentiators are not easy to identify, let alone leverage. Firms who rely on the personal element of relationships will do well to introduce client experience excellence into their thinking.”

Successful firms treat new enquiries as the start of the relationship and an opportunity to ‘be there’ for someone who has made the time to call them. A good client experience continues through every interaction to build rapport and gain an understanding of your client’s needs. Get it wrong and the result is the unnecessary loss of new opportunities and ‘promotors’ of your firm.

In a world of competing priorities, the commercial imperative to invest in client service excellence can seem elusive. The reality is that for those investing in a strong service culture (as part of their marketing spend, not in addition to) have seen month on month gains in new matters between 20% to 135% with boosts to revenue of between 20% to 35%.

Developing a culture of client service excellence requires a F.I.I.Tness program:

1. Focus

Compare your firm to the world of service providers, not just other law firms. Every one of us has experienced great, mediocre and bad customer service, and so have your clients. Their experience of great service is the benchmark they will hold you to.

Don’t rely on your own view of the firm’s service levels or on end of matter client surveys.

Invest in an objective assessment and evidence of your firm’s client experience before embarking on any change program. This evidence should cover:

  • first impressions (will we work together?);
  • heart of the matter (how are we working together?); as well as
  • end of the matter (will we work together again?)

The assessment should analyse not only your team’s people skills but also look at your processes, systems and documentation. For example, how often is the language used too familiar or too technical.

2. Inspire

Next, share these results with your team in a way that engages and inspires them so that change is driven from within teams rather than from above. Identify leaders of client service excellence and empower them to activate and inspire their colleagues. A well-developed, proven change program will see individual staff members’ be drawn to take on distinct roles in the change program.

These staff become the firm’s champions of client service and potentially, future leaders. A change program that engages the team, rather than be driven from the top, is one that will endure.

3. Innovate

Client service excellence isn’t just about how to greet clients at your reception, nor your fee earners’ tone and manner. It extends to every touchpoint, including correspondence (formal, informal and regulatory) and processes and then assessing if these touchpoints show ease, empathy and effectiveness.

Everyone has a role to play in identifying how to improve your firm’s client service as staff are often very aware of ‘nuisances’ to client interactions. These nuisances can range from how clients ‘find’ the office once in the building to the length of and delays in client correspondence. Staff tend to ‘work around’ these rather than raise ideas for change for any number of reasons eg too busy, prefer not to rock the status quo, is it not their role etc.

Empowering staff to identify areas for improved client service delivers innovation to differentiate your firm as well as productivity improvements to your staff.

4. Train

Client experience excellence requires new skills and smarts, so train your teams to boost and sustain performance. The starting point is often being clear about the clients you want to work with.

Training should be part of a program rather than a one off training session and include team lead templates and documented service standards to improve client interactions. These become part of your new staff induction program.

But don’t let dust settle on these documents. Allow your internal champions to review and revise them in line with changing client expectations and improved insight into client service experience.

Client expectations change over time as do your staff, so to stay F.I.I.T. test your firm’s client service experience annually.

About our Guest Blogger 

Carl WhitePassionate about the impact of Client Experience Excellence in professional services, Carl White entered the legal sector with Ashurst (UK and Europe) in 2002. He co-authored the highly-regarded ‘Customer Experience in Law’ report in 2012 and led the market-leading Australian research in 2015 that examines the Client Experience Advantage for law firms, in association with ALPMA.

In 2015 Carl was invited to become a Faculty Member of the Queensland Law Society tutoring client service. He has also taught and presented at Leo Cussen Centre for Law, New South Wales Law Society, LIV, NZLS, the 2015 ALPMA Summit and regional forums.

In 2017, Carl was elected as Vice President of the Continuing Legal Education Association of Australasia for CPD Professionals.

As a founding director of CXINLAW in the UK and Australasia, Carl has a background in employee engagement, customer experience management, organisational development and training within law and 15 years’ experience in retail operations.

To find out more about client experience training programs or our free monthly webinars on Client Experience Excellence, contact Carl White at carl.white@cxinlaw.com

3 tips to implement outsourcing for your firm

Tuesday, February 21, 2017

Compu-stor advert

By Robin Carter, Managing Director, Add Capacity

Outsourcing was definitely one of the buzzwords heard during the  ALPMA Summit 2016 “A Blueprint for Change” as one of the strategies for change to move a firm into the future. However in my experience, outsourcing legal work (offshoring) still remains a new concept to most firms, with partners and practice managers struggling to know where to begin and how to go about implementing it.

As one principal told me, he loved the idea but the biggest barrier remained “fitting this new jigsaw piece into the existing puzzle that is running a legal practice”. If this sounds like you, here are my top 3 things to consider to help make legal process outsourcing work successfully for your firm.

1. Know your 'Why'

The 3 most common problems our legal clients are looking for a solution to are:

  • Dealing with fluctuations in volumes
  • Productivity due to staff absence
  • Service level variation during busy periods and staff re-allocation
  • Costs of running the back office

Which of these is the main driver for you? While outsourcing offers clear cost advantages in replacing high fixed costs with lower variable costs, my belief is that outsourcing really benefits the firm when the overall objective is a commitment to move activities up the value chain toward higher levels of client service delivery.

Whatever your reasons, once you have this clarity on your why, you will make better informed decisions and be more committed to achieving the outcome.

2. Be prepared to invest

It might sound clichéd, but outsourcing really is a journey not a destination. Even with an experienced team who knows the process, every firm has their own way of doing things or slight variations. A great outsourcing service is an incredibly valuable asset that will keep paying dividends once set up, so it will require someone in the firm to oversee to get it right and keep it on track. Assign someone with great client relationship skills who has the patience and persistence to work through operational issues towards achieving the outcome.

Start with a trial period and review performance. One instance is not sufficient, you want to establish that you will be able to rely on your supplier to work together over a longer period, and this will require an assessment of a variety of factors from technical competence, price, communication and problem solving.

Focus on outsourcing one task or job, then systemising this and only when this is successfully running as you want, replicate the process across other tasks. The initial job will provide you with invaluable knowledge about both the team you are working with and your own internal process required to achieve a successful outcome, that will speed up implementing subsequent processes later on.

3. Get internal buy-in

Managing internal resistance to change may be the biggest hurdle you face in getting your outsourcing project off the ground. The most common unspoken (and sometimes spoken) fear that arises with staff when the word “outsourcing” is mentioned is fear that they are going to lose their jobs. Communicate your 'Why', get the buy-in of your staff with what it means for them, and have a plan for what they will do if part of their work is going to be outsourced.

The clearer these are articulated, the more likely that staff will come on board with the project and see outsourcing as part of a bigger picture towards positioning the firm for future growth, and therefore the security of their jobs. Look at your wishlist for improvement projects and have a plan for staff who will be affected for how their time will be re-assigned to new tasks. Actively involve staff in the process to get their ideas for activities which add value and ultimately add to productive revenue generation rather than just the busyness of getting the task done.

About our Guest Blogger

Robin Carter
Robin Carter is the founder and Managing Director of Add Capacity, an outsourcing company specialising in legal process outsourcing for small to medium sized solicitor firms. Add Capacity is also a LEAP certified bookkeeper.

Robin holds an LLB and is a qualified accountant, and has been involved in outsourcing for the last 3 years. He is passionate about enabling professional service firms to grow by releasing routine work and focusing more on value added client service tasks.  

ALPMA Member Q and A with Jane Ritchard, Finance Director - Wotton+Kearney

Tuesday, November 29, 2016

In this ALPMA Member Q&A, we interview Jane Ritchard, the Finance Director at Wotton + Kearney, ALPMA NSW Chair and recently appointed ALPMA Board Member about her inspiration, career development and experience as a leader in the NSW legal industry.

1.       What has inspired you this year?

Fortunately there have been a few things that have inspired me both professionally and personally this year.  It actually feels like it's been a particularly tough year for many; I've heard quite a few people saying they are looking forward to this year finishing and hoping 2017 will be a better one.  

Professionally, my biggest inspiration this year has been watching the firm continue to grow and mature.  It's been great to be part of a management team that is helping guide the firm through its journey of development and change.  We turn fifteen early next year, which is a great milestone.   The firm is always looking for ways to improve and innovate.

The corporate social responsibility programme at Wotton + Kearney is a real source of inspiration for me.  We choose a new charity to support and partner with every year.  This year it's been So They Can.  They do amazing work in Africa; providing education and housing to try to break the poverty cycle.  There were some great fund raising events during the year, including some of the team going to Kenya to see the programmes on the ground and to run a half marathon in the Masai Mara.  We're partnering with OzHarvest in 2017 which I'm very much looking forward to.  The concept of reusing perfectly good food (that would otherwise have found itself in landfill) for people in need, is so elegantly simple and effective.

On a somewhat micro level and specifically in my area of the business, I'm excited about going paperless in our accounts payable process.  It might not sound like a big thing, but will make a huge difference both to my team and the wider business.  We'll be able to process accounts payable invoices more quickly - without printing anything out and have approval done through online workflows.  That means there won't be any more lost bits of paper, we won't have to file paper invoices and we won't have to archive them and pay for storage for seven years.  

Personally, I've been inspired by the amazing Australian track cyclist Anna Meares.  She announced her retirement a little while ago, after an extraordinary career as our most successful cyclist.  Anna came back from a potentially life threatening accident in a race in 2008.  She went on to win more medals and set more records.  What an awesome role model.

 2.       How did you become the Finance Director at Wotton+Kearney?

Interestingly it was through ALPMA!  I was approached about the position by a colleague that I knew through the NSW committee.  So many roles at this level are filled through network contacts, rather than through more traditional recruitment channels.  

3.       What do you think is the biggest issue facing senior finance professionals in law 

I think the biggest issue we face is keeping up with the pace of technological change.  We need to make sure that we have the best technology; to ensure our finance teams can give fast, reliable and relevant information to the business.  That includes practice management, business intelligence and other ancillary systems (such as expense management, budgeting and accounts payable systems).  We have to make sure that our systems allow everyone in the business to perform the financial aspects of their roles with the least amount of effort.   It can be challenging to build the business case that asks for the commitment of time and resources to implement new or upgraded software.  We are all competing with our IT, HR and BD colleagues for finite funds allocated to technological investment.

It can also be interesting trying to work out what is best for our firms.  We all have subtly different businesses, so what may work really well for one firm, might not be the best for our firms.   Then, once we've worked out what we need, it's important to set up the best resourcing for the project team.  It's very rare to find anyone with much excess capacity in a finance team; so it becomes a juggling act to keep the wheels turning on normal operations whilst an implementation is underway.

4.       What do you think the big challenge for law firms will be in 2017?

For a long time we've been hearing that the ball is firmly in our clients' court when it comes to the provision of legal services.  I think that's certainly the case and I can't see that changing in the short term.  Our clients are becoming more sophisticated in the way they  run their procurement processes and are demanding more for less.  Coming up with appropriate fee arrangements continues to challenge our ingenuity. It's also difficult trying to work out where the next possible disruption may come from.  Sometimes we won't know what it looks like until it's here, so it's tricky to plan for that kind of eventuality.  The challenge is to stay nimble; to be able to respond quickly to threats to our business models.

5.       How has your ALPMA membership contributed to your professional development?

Being an ALPMA member has made my life as a finance professional in the legal industry so much easier.  It has contributed to my professional development in so many ways.  Initially, it provided me with great networking opportunities; giving me access to people who could answer the questions I had about how things worked in law from a financial perspective.  Once I was settled in, I went to the regular lunch time practice management seminars and the annual Summit which helped me learn more about the legal industry as a whole.  I've developed a deeper understanding about the HR, IT and BD aspects of our industry along the way.  It's been great to be able to give back to the ALPMA community by being involved with both the NSW committee and more recently the ALPMA Board.

Editor's Note

Watch the video learn more about Jane's experiences as an ALPMA member.  

If you are inspired by Jane's story and are considering joining the ALPMA community, now is a great time to get on-board.  From 1 December, membership until 30 June, 2017 is just $250 (ex GST) if are a law firm leader or manager working in an Australian capital city - even less if you are based in a region, live in New Zealand or your firm supports multiple members.  

Learn more about becoming a member.  

About our Guest Blogger

Jane RitchardJane Ritchard has nearly 30 years’ experience as an accounting professional. Jane is the Finance Director at Wotton + Kearney, a specialist insurance law firm.  She has also worked in senior finance roles at Curwood Lawyers and Clayton Utz. 

Prior to this, when not travelling, working in the UK or doing contract work, Jane spent 12 years working on and off at Deloitte, progressing from office junior to auditor, to small business practitioner and then to internal finance manager and consultant. 

She is member of the ALPMA Board and Chair of the ALPMA NSW Committee. 

Business development for our changing times

Tuesday, October 11, 2016

By Ryan Smyth, Business Development Manager, Coffey Group

“Looking forward, 69% of firm partners expect to see negative legal fees pressure, 38% a downturn in investment and 46% disruption from low cost law firms.”  - Macquarie 2015 Legal Benchmarking

Makes grim reading.

However, as the saying goes, "every cloud has a silver lining". In that respect, I look at changing market conditions as a huge opportunity - no matter if you are a bull or a bear. 

Change presents opportunity…period!

So how can we access this opportunity? How can we be ready? What steps should we take? When should we take them?

Hopefully your practice is performing well and there are no clouds on the horizon. 

Even if this is the case, my experience across multiple businesses and geographies is that the following basic steps provide a platform for growth (and the start of a journey), either against a declining market or to significantly outperform a bull market - if you are lucky enough to be playing in one.

Set your vision

“Vision must remain constant.” Sally Carbon - Australian Olympian

What is the collective vision for your firm that will remain constant in the face of any market, no matter how difficult or dynamic? 

Your firm must have a vision. Every staff member should know it and it should resonate with them. Your vision should give staff the confidence that, as a collective, they are working toward something bigger, something better, something more exciting than just profits! 

Investigate and baseline your firm

‘Every battle is won before it is fought.’ – Sun Tzu, Art of War

In order to get where you want to be, you need to first understand where you are and where you’ve been.

Develop a set of baseline metrics and measures to understand exactly where your business is and where it is heading. Develop specifics objectives around your future desired state for 12, 24 and 48 months from now. This forms your starting point from which all progress will be measured.

With respect to business development, baseline your sales effort. Some of the key elements you may wish to understand are:

  • Win rate
  • Cost of sale
  • Client retention
  • Forward order book, weighted, unweighted, actual, book risk
  • Run rate
  • Commission size breakdown
  • Sales governance: Are you doing account planning, territory plans, sale call summaries, do you have a CRM, are you using it? What’s working for you, what’s not?
  • What does your business development team look like? Do you have one? Do you need one?

Strategy and tactics

‘Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.’ – Sun Tzu, Art of War

Strategically, where will you get the revenue you need to meet or exceed your desired state, over the next prescribed period?

spheres of strategy
One of the challenges of a changing market is that by the time we have a considered view,  the market has changed, our revenue has most likely suffered and we are looking at 3-6 months before we can successfully and sustainable acquire new clients. Three to six months of low billables is always going to be tough to swallow. 

You can mitigate this risk by undertaking a robust strategic planning process, including scenario planning at the start of each financial year.

You should also consider also how much time you are spending on strategy. 

A few years ago I met with Gary Stockport, Professor of Strategy at UWA, who challenged me about the amount of time I had allocated to strategic planning for our business.  As a key part of my role, I was reviewing our strategy each quarter, with the inevitable push at the end of Q3 to set up for the next financial year. I did the maths and I was spending less than 40 hours per year setting the direction for the businesses I led. I now spend three hours per week, every week, off site reviewing trends and strategy planning. It is absolutely at the top of my agenda.

Equip your firm with the tools for success

"If you know the enemy and know yourself you need not fear the results of a hundred battles." – Sun Tzu, Art of War

In the same way you would equip your team with IT, a technical library, a company car etc, you must give your firm the tools, the systems and the processes to undertake effective business development. 

This will not only give your team the ability to go and engage clients effectively but importantly it will give them the confidence to go to market, and when they have confidence, they’ll do it more and they’ll do it better. Some of the tools you may wish to think about include:

  • Account plans
  • Annual sales plans
  • Proposal capture plans
  • Sales call summaries
  • Zipper plans
  • Pursuit capture plans
  • Annual survey quality 

The nature of the tools you adopt should be uniquely bespoke to the clients you have, wish to retain and the clients you wish to acquire.

Execute with the right team

It takes 20 years to build a reputation and five minutes to ruin it. If you think about that you’ll do things differently.” – Warren Buffet

It’s all in the deal, period.

At the risk of showing any prejudice at this point, I suggest you take a good look at your sales team or the team currently conducting your business development. 

Are they the right team to deliver on the framework you have set out, do they have the necessary, experience, capability expertise, do they have the necessary time? 

If not, now is the time to make the tough calls. In terms of business development, at the sharp end of the sales cycle what we ultimately do is binary - we either win or we lose - there is no second place. With that in mind, make sure that from the outset your team is up to the task and equipped to sell effectively. 

It takes decades to hone your legal skill, experience capability, intuition etc., and building business development and strategic capability is exactly the same. However, if you adopt perhaps some of the approaches above, your business should be in better shape and better placed to take advantage of the inevitable change that could be just around the corner.

Editor's Note

If you are interested in learning more about this critical topic, then register for ALPMA's upcoming livestream broadcast "Business Development for our Changing Times" presented by Ryan Smyth on Thursday Oct 20. You can attend the live event in Perth, or watch the livestream broadcast online.  Register now.

About our Guest Blogger

Ryan SmythRyan is a leading and highly respected consultant, with over 15 years’ international experience in senior business development roles with professional service firms. He recently held the most senior sales role with an ASX listed firm with revenues in excess of $500m and has closed deals in Australia, the Middle East, Myanmar, China, Kazakhstan and the United Kingdom.

Ryan studied strategy at the Manchester school of Business, is a frequent blogger of business development approaches and tactics, and retains an advisory capacity with a number of tech start-ups.

Ryan is passionate about the ‘right type’ of business development, from tier one giants to start-ups, with a particular interest in supporting firms through a turn around or those in recession markets.”

The firm of the future is in fact the firm of now

Tuesday, June 28, 2016

By Matthew Burgess, Director, View Legal

The evidence has been collected.

The submissions have been heard.

Judgment has been handed down - the incumbent law firm business model is broken.

The great lawyer bubble

One of the first people to starkly address the fundamental problems at the heart of the legal profession was Stephen Harper and his book 'The Lawyer Bubble'.

The book details why the legal profession, similar to most other professions, will struggle in the short term to reinvent core aspects of their business model, particularly in relation to time billing, in the short term.

While a myriad of reasons are provided, perhaps the most compelling is the fact that universities across the western world have become factories for producing professional service firm graduates, who specialise in the areas rewarded by time billing such as:

  • long hours;
  • rote learning;
  • technology adverse; and
  • engrained arrogance, particularly in relation to solutions that undermine the traditional personalised bespoke service offering (such as alternative business models, offshoring, outsourcing and automation).

Catalysts for change

Harper argues that any change to the 'BigLaw' business model from within the profession will require the university system to start rewarding students who are able to demonstrate more innovative attributes than those outlined above.

Just as importantly, the owners of the incumbent firms must themselves create a demand for this style of graduate.

Another leading thinker, Clayton Christensen (in The Innovator's Dilemma), predicts that the prospect of the incumbent firms having the vision to truly cannibalise their existing business model is at best remote.

Maister still matters

While much of Harper’s work was ground-breaking at the time, the framework for many of the answers to what law firms should be doing right now to re-engineer their businesses was provided a generation ago by another US consultant, David Maister.

Maister categorised the delivery of all professional services, including the law, into four broad categories, each of which has the prospect of being highly profitable.

The price is right

The price sensitivity goes from least to most through the following four components:

  • unique services (or as Maister describes them ‘brain surgery’);
  • experiential services (or as Maister describes them ‘physiotherapy’);
  • brand name services (or as Maister describes them ‘nursing’); and
  • commodity services (or as Maister describes them ‘chemist’).

Arguably, due to the internet, there are two further categories further down the value chain:

  • wholesale; and
  • online, with product produced only on demand.

Ultimately, the internet has increased the rate at which all technology disruption has historically taken place.

What the winners do

Winning firms understand that success ultimately depends on being:

  • differentiated or unique;
  • of demonstrable value; and
  • delivered in a way that is difficult to replicate.
Sustaining innovation is ultimately just as important as any disruptive one; the challenge is that both types require different visions, metrics and practices.

The disruptive business model requires funding, resource allocation and working environments that are significantly different from those of the traditional firm.

History doesn’t repeat; although it does rhyme

History shows the vast majority of traditional firms are unable to allocate resources away from the primary revenue source, because of their focus on short-term profitability and the need to avoid any perception that there is a 'cannibalising' of the core business model.

The key to a sustainable and successful business model is being self aware enough to know that unless they cannibalise their existing lines of revenue, competitors certainly will. Further, those competitors will have complete disregard for the ongoing profitability of the incumbent firms.

Primarily due to the embedded restraints of being a start up, innovative firms find ways to:

  • monetise ideas quickly;
  • minimise upfront cash expenses;
  • understand that a product in market is always better than a delay to launch in order to ensure the quality is better - in other words, if you are not embarrassed by version 1 of the solution, you have launched too late;
  • recycle and reuse what they have immediate access to; and
  • understand that everything can look like a failure during the 'middle part'.

What will the changes look like?

To give some insight to what we believe a ‘firm of the future now' looks like, 10 examples from our business are listed below – five that we have abandoned and five that we have embraced.

Five things abandoned

  • Timesheets – with timesheets, all we ever focused on was what was chargeable – without timesheets, we now focus on what is valuable.
  • No leave policies – leave policies are a hangover from the industrial age – it is time to move on.
  • No individual budgets – while we certainly have team goals, these are never broken down into individual monetary targets. Our targets are aligned around our performance in the eyes of customers. If we get those right, everything else flows (including money).
  • No performance reviews – again, a very poor hangover from the industrial age.
  • No diversity goals – seeking to mandate minimum percentages of certain genders, cultures, religious beliefs or sexuality disguise much bigger problems with the underlying business model.

Five features embraced

  • Guaranteed fixed pricing – the definition of a competent service provider is someone who can devise a scope of work and provide an upfront fixed price that they are willing to refund in full if the customer is not satisfied with the performance.
  • ROWE – if you do not know what this is, Google it or click here and join the movement.
  • Solution choreographed teams – we work with whomever and on whatever terms are best to achieve the client’s objectives.

  • AAR – again, if you do not know what it is, Google it or click here, and embed it into your business today.

  • Diversity of thought – when two people in business are constantly of the same opinion, one is irrelevant. Raise diversity in every sense of the word and arbitrary politically correct percentages become irrelevant.

Editor's Note

Interested in learning more? Matthew Burgess is a keynote speaker at the 2016 ALPMA Summit, 'A Blueprint for Change' which will be held at Etihad Stadium, Melbourne from 7 - 9 September.  Matthew's presentation will deconstruct why the 'Firm of the Future' concept is gaining such traction and provide an insiders account of how to create a true firm of the future someone who has twice in the last 5 years re-written the professional services firm rule book. 

Register now for fantastic early bird savings!

About our Guest Blogger

Matthew BurgessMatthew Burgess founded what is regarded as Australia’s first virtual law firm and more recently arguably Australia’s most innovative legal solutions platform (the law firm named View Legal).

Having been a partner and lawyer of one of Australia’s leading independent law firms for over 17 years, View was established in mid 2014 and has from this time been actively disrupting the traditional law firm model.

Matthew regularly consults to other professional service providers on business model innovation, with his business book ‘The Dream Enabler’ a key foundation to this offering.

Characteristics of a profitable firm

Tuesday, March 08, 2016

by Andrew Chen, Partner, Crowe Horwath

This year, law firm participants in the 2015 Financial Performance Benchmarking Study of Australian Law Firms were provided the opportunity  to rank, assess and rate their financial performance against peers using Crowe Horwath’s online proprietary tool, Open Measures. 

The study, which was conducted by Crowe Horwath in conjunction with the Australasian Legal Practice Management Association (ALPMA), demonstrates the way in which law firms can both improve their financial position through revenue growth and ensure a profitable, sustainable future.

Based on the findings, it is apparent that there are several key and comparable characteristics of profitable firms.

Here’s what the top 10 performing firms are doing:

  • Hiring for growth: One in two firms are hiring for growth -not for replacement of staff - being the predominant reason for hiring new full time fee earners across all participants. 

  • Retaining staff: Top performing firms recognise that success is achieved through having the right staff and retaining them.

  • Hourly-based pricing: Top performing firms implemented a pricing method primarily being based on hourly rates, with most intending not to change.

  • Debtor management: Debtor management was exceptional in top performing firms, with debtors over 90+ days accounting for only 17% of total debtors; the average across the study being 30%.

  • Low interest expense: Top performing firms demonstrated low interest expense, with the average in the top 10 being lower than the rest of the firms. 

  • Internal appointments: Five of the 10 top performing firms appointed partners internally, with three of the five appointing female partners. 

Additionally, and moving forward, here’s what profitable firms are looking out for: 

  • Talented lawyers to attract and retain.

  • Marketing opportunities through social media.

  • Under-performing fee earners.

  • Having excess office space.

The results of the study also revealed that of the top 10 most profitable firms, six held a traditional partnership structure, while the remaining four were incorporated. 

Recurring participants of the study will be able to visually track how they rank against the most profitable firms and how they have improved over the years, proving to be an invaluable tool to examine trends and revise their business strategy for future financial success. 

Editor's Note:

For further insight into the characteristics of profitable law firms and how they may apply to you, download the results summary from 2015 ALPMA/Crowe Horwath Financial Performance Benchmarking Study of Australian Law Firms. 

ALPMA members and research participants are invited to attend the results webinar "Anticipate your Financial Tomorrow" on Thursday March 10 at 1pm AEDT for free. Register here.

About our Guest Blogger

Andrew Chen leads Crowe Horwath’s Professional Practice Advisory team and has significant experience providing advisory and tax accounting services to businesses of all sizes. 

He specialises in advising legal and professional service firms on establishing business structures, financial management in areas of internal accounting, tax administration, financial reporting and KPI performance measurement; budget and cash flow forecasting; tax planning; salary packaging and preparing tax returns.

The 2015 Marketing and Business Development Report Card for Australasian Law Firms

Tuesday, November 10, 2015

By Amy Burton-Bradley, Partner at Julian Midwinter & Associates

Click here to download research

The newly-released 2015 ALPMA/JMA Winning Work in a Digital World research reveals that not a lot has changed for firms on the marketing and BD front since our 2014 study.

Firms are still grappling with the same big external and internal challenges:
  • competition for clients in a mature and saturated market – rated the single biggest challenge (21% of respondents)
  • firm differentiation (17%)
  • finding new sources of work (16%)
  • keeping up with online, digital, and social media (11%).
When asked about other challenges their firm faces, respondents reported a mix of internal issues around culture, strategy, and lack of resources, as well as external factors.

So where should firms focus to meet these challenges and thrive in a digital world?

Firm report card

The 2015 Marketing & Business Development Report Card for Australasian Law Firms (below), based on research results, highlights several critical success areas firms can focus on to improve results - and I have put together an action plan and some homework to help you address these issues at your firm.

1. Translate aspiration into action

“The major challenge is getting it all humming along in one meaningful, strategic direction. Saying no. Not being waylaid by Partner demands. Having enough hands on deck.” 

With competition for new work fierce in a mature and saturated legal market, it’s reassuring that 84% of respondents say marketing and BD is important to their firm. However, only 50% of firms have an overarching marketing and BD plan and only 32% agree their firm is strategic and disciplined in its approach to marketing and BD activities.

“[Our challenge is] coming up with a firm strategy and ensuring we adhere to it.”


Firms need to develop – and communicate – a clear marketing and BD plan. Communicating the plan will help with staff engagement and motivation. Remember to monitor the plan for effectiveness, and don’t be afraid to stop activities that are not working. For some simple tips on getting a plan together and sticking to it, click here.

2. Capitalise on client satisfaction

Clearly, a law firm can’t exist without clients, so it is encouraging that 77% of respondents agree their firm is focussed on client satisfaction. However, 64% do not obtain client satisfaction feedback in any systematic or formal way. 
This is a huge missed opportunity for firms. Collecting client data through a formal process can help you to:
  • keep your clients happy and make them feel special by asking for their opinion and feedback
  • give clients what they actually value (hint: it’s unlikely to be a 'latest news' section on your website)
  • head-off any grumbles before they become serious issues (like a bill dispute)
  • uncover what your clients’ changing needs are – giving you opportunities to design new services or refine your offerings
  • reward your lawyers and staff for a job well done, and to performance manage others
  • promote your firm using client data statistics and evaluations.


Set up a simple client feedback survey to ask your clients what they want and value. With a regular process in place, not only will you improve your attractiveness as provider of legal services, but you may also see improvements in client retention and satisfaction over time.  Learn more about the benefits of measuring client satisfaction. 

3. Win with in-person activities

Firms rated face-to-face marketing and BD activities as the most effective for generating new business enquiries. Research results showed that the top three most effective activities are: referral networks; events (such as seminars hosted by your firm); and client relationship management programs.

Strikingly, though, 56% of firms do not train their lawyers in critical marketing and BD skills, and we can see in the report card that more than half of firms do not have individual marketing and BD plans for their lawyers. As one respondent noted, their firm tends to rely on ‘passive’ marketing and BD activities, like referrals, to generate new business; ‘our staff are not comfortable with actively trying to market the business in more direct ways.’


Some ideas for developing younger lawyers’ skills and confidence include offering partner mentoring and opportunities to accompany partners to client meetings; encouraging attendance at client social and networking events; or engaging external BD coaches. Download JMA’s simple 10 minutes a day BD plan for lawyers (PDF) to help you get started.

4. Do more with digital

While a few firms indicate they do not use social media yet (‘fear of the unknown’), it is positive to learn 58% of respondents agree that their firm is prepared to be innovative and adopt new approaches to marketing and BD. 
The most popular activities firms are hoping to try in the coming 12 months include:
  • making use, or better use, of social media
  • upgrading website features and content
  • increasing client-focussed activities 
  • producing online video content. 
With few firms doing digital really well, there’s real scope for firms to extend their online presence and make smarter use of digital tools to differentiate and amplify messages in support of their in-person activities. Nearly all firms surveyed have a website, but only 13% of respondents rated their firm’s website as highly effective.


You can’t afford to ignore it any longer: 2015 is a digital world, and you must engage with it. Figure out where your audiences are, and investigate the right platforms and content to deploy in the battle to win new clients and more work in a digital world.  If you’re not sure where to start, our earlier blog post will give you some ideas.

You should also download the 2015 ALPMA/JMA Winning Work in A Digital World research report for free to see how your firm's approach to marketing and business development compares to other law firms in the competition for new business. 

Editor's note 

Interested readers can also register to attend for the Winning Work in a Digital World webinar on Tuesday 8  December at 1pm (AEDST), where Alistair Marshall, Julian Midwinter and Associates' resident business development expert, will talk more about the most fruitful areas for firms to concentrate their marketing and BD efforts on and share ideas and practical tips to help you get positive behavior change and results for your firm.  Register now.

If you have a particular question you would like addressed at the webinar, you can submit your question here, and we will endeavour to answer as many as possible.

About our Guest Blogger

Amy Burton-Bradley
Amy Burton-Bradley is an experienced business developer, marketer, and copy-writer, who has worked with more law firm clients than she cares to remember!

She is a partner at Julian Midwinter & Associates, a business development consultancy that has helped law firms attract, win, grow, and retain new clients and business since 1993.

How practice managers can thrive in this new era of smart technology

Tuesday, September 29, 2015

by James Boocock, General Manager - Legal Solutions and Small Law, Thomson Reuters

For professions that have been reluctant to stray from convention, the era of smart technology has been a game changer. Commoditisation of services and the availability of smart software to enable it has meant law firms have become businesses in the truest sense of the word and must compete for their market share. So what do these shifts mean for practice managers, and how can they evolve their firm to ensure it thrives in this new era?
As the age of smart technology has fallen squarely upon us, commoditisation of services across all industries has created certain expectations as to how services are priced, packaged and delivered. Consumers are becoming increasingly accustomed to acquiring inexpensive, fixed-price, pre-packaged, DIY or instant products and services online, and they are transferring these same expectations to legal services.
To ensure they develop a successful business strategy for growth in coming years, practice managers need to understand how smart technology is shaping prevailing consumer demands, and how they can use technology to meet those demands. 

Here are four tips to survive in the smart tech age:


1. Commoditise

Clients want legal services that match what they're receiving from other industries – instantaneous, fixed-fee, pre-packaged services with little to no commitment.
Rolling legal services into a click-and-purchase bundle is definitely a challenge, but it's not impossible, and innovative firms are finding ways to satisfy this demand. Practice managers should keep their minds open to novel business models that are enabled by smart technology, and find ways to integrate them into their firm's offerings.
Could you deliver some of your offerings as ‘virtual services’ or even create a DIY legal product?

2. Reduce costs to offer lower prices

The consumer demand for faster, cheaper legal services can only be met with increased efficiency at the firm level, which requires quality practice management and workflow technology. The level of efficiency achieved by integrated practice management software solutions is simply unattainable for firms that are still working off paper-based processes.
Technological intervention can also be increased to reduce the fee earner spend on routine legal tasks. Could you deconstruct each legal service and approach it with a tiered taskforce, allocating specific tasks to technology and non-legal staff?

3. Smarten up your marketing

Position your firm where clients expect to find you. For smart technology users, this means online. A large percentage of consumers now prefer to research products and services online before purchasing and will go straight to a company's website or Facebook page.
A brilliant website is the heart and soul of any smart tech marketing campaign. It should be interactive, informative, up to date and allow your clients to learn as much about your products and services as possible before starting a conversation.
Could you increase your online exposure through social media, RSS feeds and blog posts?

4. Be an innovator

The best way to stay at the front of the smart tech crowd is to be one of the innovators. Law firms are in the best position to conceptualise new practical legal technologies. Consider enlisting the help of a pro to develop a firm-specific app or software that sets your practice apart.
Could your firm develop an app to make it easier for clients to log into portals to view their legal matters and check their progress?
As technology advances, no doubt the role of lawyers will change and traditional methods of business will become obsolete. Practice managers who can continue to integrate smart technologies into their firms will be able to offer clients better service, affordable prices and the latest in legal innovation.

Editor's Note:

Interested readers can learn more about investing in technology to stay ahead at the ALPMA Leading Your Firm livestreamed "Technology for Law Firms - Expert Panel" on Wednesday 28 October from 12.30pm (AEDT). 

This livestreamed event brings together legal sector technology experts to talk through the key issues firms face when looking to invest in and upgrade IT systems and infrastructure. Facilitated by Warrick McLean, CEO, Coleman Greig Lawyers and ALPMA National Board member, our expert panel comprising James Boocock from Thomson Reuters, Nicholas Carr from BOABIT and Richard Chew from Sparke Helmore Lawyers will talk through the stumbling blocks firms face and how to resolve these to invest in the right IT with the right contracts in place to move the business forward. 

You can watch the panel discussion live in Sydney, at one of our regional hubs across Australia and New Zealand or online.  Participation is free for ALPMA members or $99 (including GST) for eligible non-members.  Register now!

About our Guest Blogger

James Boocock is General Manager - Legal Solutions and Small Firms at Thomson Reuters. He has been serving the legal community in the UK, Belgium and Australia over the last 14 years, across traditional legal and trade mark practice areas. 

James understands the challenges, the novel ways the market has adapted to commoditisation and other competitive pressures. He has a wealth of knowledge across product development, technology operations and creating innovative environments to drive change within legal firms through practice management solutions. James is intimately familiar with traditional information business models and has significant experience in the changing landscape of the global legal profession in particular in the UK and USA as well as Australia. 

Interview with Rhonda Ready, CEO of law firm Tomorrow, Tomorrow & Associates

Tuesday, August 25, 2015

By Tim Elliot, Solutions Specialist, LexisNexis

I didn’t recognise the number that flashed up on my phone – and small wonder, it was a call from the future! Using an app called TimeCall, Rhonda Ready called to make sure that we, in the present day,were on the right track to ensure the law firm of tomorrow had the right thinking and the right tools to survive and flourish.

Rhonda had to hand the results of the 2015 ALMPA/LexisNexis Survey Report titled Preparing Australasian Law Firms for a Digital, Divergent, Differentiated Future. She took me through some of the questions it asked and told me some of the steps that her firm had taken in 2015, to be prepared for the future.

TE: Tell me about your firm and how it got to where it is today?

RR: Survey Results like this helped our management to understand what the industry as a whole is thinking, to define the best way to respond to the key challenges facing law firms and to find out what strategies we needed to adopt in order to flourish. Then we used the survey as an opportunity to really assess where we were at, and where we had to get to. We’d known for some time that technology was changing the way law was practised and having the analysis to hand helped us clarify the issues and identify our blind spots. 
Did we have a strategy in place to ensure we were moving with the times? Were we investing enough in our employee’s skills? How would we stand out from our competitors? Did we really understand the capabilities of our technology, or what technologies we were going to need, in order to achieve long-term growth for the firm? 
TE: Can you talk about some of your strategic goals?

We knew that there were opportunities out there to expand our reach into additional markets, as well as do more with our existing clients. Our strategy had to focus on how we were going to leverage our investment in technology to win more business. We looked for ways our practice management software could do the heavy lifting of the day to day practice of law so we could spend more time with clients. Investing in workflow development to keep the teams on task and on time was a great launch pad. It led to a renewed focus on the automation of our precedents and processes.

Having a great system in place to centrally manage all aspects of the firm’s day to day conduct was an immense boost to our productivity and morale. We wanted to share our improvements with our clients by delivering the best service. This came in two shapes: happier, client-focussed staff and being able to open up direct access for our clients.

Our system’s ability to share clients’ data and documents via a web portal on our site was vital. Clients reported they were more confident in our handling of their matters. Matter and billing information was kept up to date and made available to them on demand. Documents were downloaded and uploaded as required by all parties – and could be kept as an online archive, which has been especially useful for our corporate clients, who don’t always have good systems of their own for this sort of thing. In effect our office was never closed and our clients had all the access they needed. 
TE: It’s great your clients have access to their matters on demand. How about your staff?

We realised that in order to win new business, we had to give our lawyers the tools to do their job in a flexible manner. Clients can’t always make it into the office and prospects aren’t going to knock our doors down. With the ability to work on their smart devices, connecting directly and securely with the practice management system, our staff had the chance to adopt some sales skills and methods into their roles and contribute to the development of our business. 
Mobile staff with access to digital content were a few button clicks away from their matters and online research libraries at all times. Clients and other contacts stored in our system were likewise available from anywhere, any time. Nothing was missed nor time wasted after we enabled them to update their matters in real time while on the road. 
Increased efficiency and better service sound like mutually exclusive goals but we achieved it. We broadened and deepened our online presence, raising our profile with new potential clients and re-assuring our existing clients that they had made the right choice in selecting us.
Combining the right technologies, with a sound management strategy, helped us deliver better, more efficient services and built our reputation for quality and client-focussed service. 
Any final words of advice?

Firms need to adapt or perish. In your near future is a tipping point that will divide the prepared from the unprepared. Consumers, clients and prospects caught the digital wave a lot earlier than law practitioners did. Those who don’t catch the wave will be left behind.

Firms don’t necessarily have to have the latest and greatest technology but they have to have a clear policy to find what efficiency and productivity gains they can reasonably achieve in the digital age. Set clear goals for the firm and ensure that your management team get behind the changes you will need to make in order to achieve those goals. Use technology to differentiate yourself and make the services you already offer even better.

Editor's Note

The 2015 ALPMA/LexisNexis "Preparing Australasian Law Firms for a Digital, Divergent and Differentiated Future" research will be launched at the 2015 ALPMA Summit, with a results overview available from the LexisNexis booth.   It is not too late to register to attend ALPMA Summit from 9 - 11 September at the Gold Coast Convention & Exhibition Centre, or watch Summit presentations via the livestream broadcast

Interested readers can read the preliminary results media release which highlights the eight key strategies firms are adopting to prepare for the future, and download the report for free from 12 August.  Readers who participated in the research will receive the report via email. 

About our Guest Blogger

Tim Elliot
Tim Elliott has spent his entire 20 year career in the legal industry.  From office junior to paralegal, to precedents developer and IT manager, Tim knows what it takes to make a firm run efficiently from many vantage points. 

Having worked with several practice management and document management systems, Tim leverages his experience when advising clients on law firm technology.

LexisNexis are the Principal Partner for the 2015 ALPMA Legal Management Summit & Trade Exhibition,  the largest legal management conference and trade exhibition in the Southern Hemisphere. Visit them on booth 37 in the centre of the exhibition hall. 

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