A blog by Joel Barolsky of Barolsky Advisors

Archive for the ‘Articles’ Category

, , , ,

Where was Minters’ chairman during the Kimmitt crisis?

In Articles, Commentary on 26 March 2021 at 7:28 pm

The full text of my opinion piece first published in the Australian Financial Review on 26 March 2021

“The Minter’s chairman went missing in action. One of the most important jobs of a chair is to resolve major disputes within the partnership without it spilling out to the rest of the firm, and even worse, into client land.”

This quote reflects a sentiment expressed by many law firm leaders I spoke to about the recent saga at MinterEllison.

While I’m not privy to the internal machinations at Minters to say whether this is a fair judgement or not about the firm’s chairman, David O’Brien, it does raise the question as to what should be expected of a chair?

 In my view, the answer lies in the confluence of governance, guidance, and glue.

Governance

The chair of partners usually has an active leadership role in firm governance. As such, his or her job is to ensure that management’s direction is broadly aligned with the interests of equity partners and other stakeholders.

Unlike company structures, partnership governance roles and responsibilities are not stipulated in any statute and are largely ambiguous. All partners are assumed take on all responsibilities concurrently. In this context, the chair and managing partner are expected to carve out a tailored governance framework that balances stewardship, operational efficiency, risk-taking, control, transparency, partner autonomy and accountability.

The chair of partners would usually be expected to facilitate the effective functioning of board and partner meetings, ensure accurate timely and relevant information flow, oversee risk and compliance, manage board composition, and lead the process of reviewing the managing partner’s performance and succession.

In some firms, the chair is actively involved in deciding profit allocation and progression. In other firms, their role is more of an independent arbiter in profit allocation appeals. 

Guidance

While most medium and large firms have adopted a more ‘corporate’ governance model, partners as owner-operators still often want a say when it comes to critical decisions around firm purpose, values, capital allocation and broad strategic direction.

The chair plays a critical role in helping the firm’s executives navigate this decision-making minefield.

Their guidance is critical in deciding which fights to pick, what options are on or off the table, what’s the best approach and forum to raise issues, and where power really lies in and around the partnership.

Chairs often act as cultural barometers – forecasting the mood, energy, and tone of the partnership. Their predictions of an imminent storm, or conversely, a period of calm and confidence can be hugely beneficial.

At a more micro level, firm chairs often act as a sounding board or mentor for the managing partner. In this role, they help talk through tricky issues, provide honest feedback, and offer comfort when exasperation overwhelms.

This mentoring role is particularly important for the induction of new managing partners or an external appointment. In the latter case, the chair needs to lend some of their social capital until the new leader’s position is firmly established. 

Glue

The third role of the chair is to foster partnership cohesion and stability. This doesn’t mean leading the firm cheer squad, but rather putting out spot fires and addressing corrosive politicking.

Spot fires may include a major fallout between two senior partners or where an individual partner has displayed behaviour incongruent with the firm’s values or there is a case of systemic underperformance.

It is quite common for the chair to join the managing partner in having a fireside chat with these problem partners. The chair helps create a sense of deep collective concern. This threat is hoped to be the catalyst necessary to change aberrant behaviour.

Pie-splitting is often a source of ‘corrosive politicking’. For example, in meritocracies choosing a side when there’s a commercial or legal conflict could result in a major differential in individual earnings. In these instances, the chair may get involved in dialling-down the emotions and ensuring that trust in the model is maintained.

Coming back to the MinterEllison situation, I don’t have any first-hand information as to assess whether the firm’s chair did an effective job in governing, guiding, and gluing? As with so many tricky issues in law firm partnerships, that’s ultimately for Mr O’Brien’s partners to decide.

, , ,

How law firms can do more with less

In Articles, Commentary, Legal Technology on 5 March 2021 at 6:22 pm

The full text of my opinion piece first published in the Australian Financial Review on 4 March 2021.

Commercial law firms face constant pressure from clients to do more for less.

They can respond in three ways: say it can’t be done and risk losing out to competitors, drop their prices, or make a step change to improve productivity.

Most are pursuing option 3 and are looking to legal operations to make it happen.

What are legal operations?

Legal operations usually include some or all of these disciplines:

  • Business Management – commercial managers focused on improving profitability, increasing revenues and optimising efficiency.
  • Service Design – workflow and client experience specialists that evaluate, accelerate and support legal process improvement projects. They also often assist with new product development and act as incubators for new business ideas.
  • Legal Project Management – project professionals that make legal work tractable, trackable and transparent, for both lawyers and clients.
  • Pricing – pricing experts that help partners to have better client conversations, align price with value, protect margins, and where appropriate, use alternative fee arrangements.
  • Alternative Legal Services – a team of paralegals, legal technologist and lawyers focused on high-volume process work including e-discovery, transactional and dispute support, language editing, document review and IP management.

Australian experience

In Australia, some very large national firms have embraced a centralised approach to legal operations. Others have adopted a more decentralised model with each major practice group acquiring the resources specific to their needs. 

Over time, I would expect most firms will move to a model of centralised governance to avoid duplication and facilitate the sharing of knowledge and applications. At the same time, operational specialists need to work right at the coalface to find smarter ways to deliver more for less.

Innovation roles will be also subsumed into legal operations. Legal secretaries and assistants will still work directly with local lawyers but will be more connected with and directed by legal operations.

In medium-sized and smaller law firms, a new business service function will likely emerge with the status of HR, marketing and finance. It will often start with outsourcing basic IT services – hardware, software and helpdesk – and the insourcing of specialist tech-savvy resources to help lift productivity and client connection in key practice areas. Once this is established, other roles involved in supporting legal service delivery will enter the legal operations orbit.

New career pathways

This emerging area of legal operations is also creating an alternative – and attractive – career path for lawyers.

They benefit from a deep knowledge of the intrinsic needs within a legal workflow, but also enjoy the respect of the various stakeholders involved in migrating to a new way of working.

MinterEllison offers new lawyers the option of entering its Legal Operations Graduate Program. The program gives candidates exposure to lean six sigma, design thinking, change management and agile methodologies. The firm recently graduated its first cohort and is reported to be delighted with the outcomes so far.

The growth of legal operations is not just confined to law firms.

Stuart Fuller, the global head of KPMG Legal Services, recently predicted that “half of the [in-house] legal team will not be lawyers by 2025”.

Fuller says the use of automated solutions, chatbots and other forms of productised legal services will rise, and these will need support from lawyers as well as a more multidisciplinary workforce with different skill sets. As a result, the proportion of legal work done by paralegals, data analysts, operational experts and other specialists might rise to the point where legal professionals become a minority.

The key message is that the path to improved productivity is not pressuring lawyers to bill more time, but rather working smarter with the evolving disciplines of legal operations.

, , ,

How law firms can avoid 2021 burnout

In Articles, Commentary on 5 February 2021 at 3:51 pm

The full text of my opinion piece first published in the Australian Financial Review on 4 February 2021.

‘Exhausted.’

That’s how many managing partners described their firm in the last quarter of 2020. The reasons given for this sense of collective fatigue ranged from heavy workloads, endless screen time, social disconnection and pandemic-induced stresses. 

A key 2021 objective in many law firms is to build business resilience and to avoid burnout. Resilient organisations can ride out uncertainty instead of being overpowered by it.

The sense of exhaustion is mostly an indicator of sustained depleted energy. To cope better, firms must get better at understanding and managing energy levels.

Many law firms are rushing toward a flexible hybrid workforce with people working two or three days from home. While this makes sense, a potential trap is having a binary view that that sees work at the office as an energy drainer and home life an energy restorer. The opposite may also be true – activities at home like juggling parenting and family duties may deplete energy, where work-based tasks such as solving a complex client problem may be energising.

Related to this idea, the commute to and from work could be viewed as a restorative activity. If this time is merely replaced with demanding home or client work, the energy bank account stays overdrawn.

Taking a holistic view, working in a hybrid model might be wonderful for a few, but a net energy drain for many. If this is the case in your firm, then you’re on the road (again) to exhaustion.

There are two practical steps that law firms can take to manage energy levels better.

#1 Track the ebb and flow

‘What gets measured gets managed’, is an oft-cited quote from leadership guru Peter Drucker.

 Following his advice, law firms would benefit from developing better indicators or sensors around energy levels. This might range from a few scripted queries in regular staff check-ins to new questions in employee engagement and pulse surveys.

Tel Aviv-based McKinsey partner Gila Vadnai-Tolub defines four types of energy worth measuring: physical, mental, emotional and spiritual.

  • Physical energy defines how tired we feel and how well we feel in our bodies.
  • Mental energy is what we get from analytical and thinking tasks. Long periods of focused concentration are often mentally tiring. We each have mental tasks that seem to drain us or lift us.  
  • Emotional energy derives from connecting with others—from giving and receiving appreciation, or helping a friend or colleague discuss their troubles. In turn, negative emotions such as fear, frustration or anger drain energy and cripple performance. 
  • Spiritual energy is what we get from doing something meaningful to us, something that speaks to our inner core or sense of purpose. We each have experienced working hard and becoming physically and mentally tired, but somehow, we gain the energy to continue because it has fundamental meaning. 

Tracking energy levels over time can help to identify the ‘normal’ range within which energy ebbs and flows in your firm. It can signal the period just before people start running on empty.

Tracking also enables individuals to learn something of their own natural energy rhythms learning to readjust before fatigue sets in. 

#2 Build in replenishment

Elite athletes alternate between high-energy periods of performing and training with resourcing and recovery activities.

Time off on weekends, public holidays and annual leave is often as far as some law firms go in helping their people re-energise.

In recent years, many firms have expanded their health and wellness programs to address this issue. Things like paid gym memberships, cycling clubs, yoga, pilates, guided meditation classes, counselling and nutrition education are becoming more common. The biggest challenge is often to encourage those who are most in need to take advantage of the support that’s offered. 

With the rollout of the hybrid operating model, I suggest firms will need to redouble their efforts to find workable solutions. This will most likely involve conversations with each person to fully understand how they expend and restore energy over a typical day, week, month, and year. Together a tailored program can be developed to keep people productive, energised and, most importantly, resilient.

, , ,

Partners or owners: the law firm divide

In Articles, Commentary on 14 December 2020 at 9:40 am

The full text of my opinion piece first published in the Australian Financial Review on 11 December 2020.

One of the most striking statistics from The Australian Financial Review Law Partnership Survey is the wide variation in the ratio of equity to non-equity partners across Australia’s top 50 law firms.

In some firms, like Colin Biggers & Paisley and McCabe Curwood, only 20 per cent of partners have an equity stake.

At the other end of the spectrum, nine firms report that 100 per cent of their partners have equity. However, partners in these firms are often not on an equal footing. Newly minted partners in these firms can earn as little as 25 per cent of a full share. In other firms, individual partner earnings are based more on an assessment of their annual contribution instead of the level of their shareholding.

Further analysis of the survey data suggests there is no discernible factor that determines the equity ratio. Variations can occur within and across tiers, service range and practice area.

The role of non-equity partner was first introduced as a form of trial period to assess whether a candidate should be made an equity partner. The “partner” title would allow the candidate to command the respect of clients, peers and staff necessary to build a successful practice and prove their worth. Being extra cautious in the final step to equity was prudent given the complexities in dealing with bad choices or established equity partners leaving.

In a similar vein, firms used the non-equity partner role as an entry point for new lateral hires on their way to equity partnership.

Over the past decade, the non-equity partner role has evolved into a de facto career position in some firms with the candidate having little chance of being offered an equity stake.

A large non-equity partner cohort can improve profitability – by lifting leverage and average billing rates – help share some risks and distribute the management load.

Challenges

While there are these benefits, a tightly held partnership does come with potential challenges:

  • An “us and them” schism emerging between the two classes of partner;
  • Flight risk of those non-equities who feel they can get a better deal elsewhere;
  • A lack of drive among non-equities who feel their careers have capped out;
  • A perception of inequity when the firm records super-normal profits that accrue only to a select few;
  • A cynicism that the non-equity role allows the firm to achieve its partner diversity targets without the need to share power;
  • A narrower base of internal funders and underwriters;
  • Duplication of partner communications and meetings; and,
  • A smaller pool of partners to select from for senior leadership roles.

A widely held partnership, on the other hand, faces the risk of being too conservative and too slow to promote top talent. A burgeoning bottleneck at the senior associate level can set the scene for a feeding frenzy for aggressive competitors.

To create a sustainable business and a positive culture, it is critical to make all partners, regardless of stake, feel and behave like business owners. They should be guardians of the firm’s assets and values, while embracing the agreed principles and disciplines of partnership.

Financial gain or pain

With senior equity partners, the money does a fair bit of the talking. The prospect of immediate financial gain or pain can help facilitate a proprietorial mindset.

For those with a little or no equity, their voice is often a bit softer, the risk is a bit higher and the task is that much harder.

The determining factor is the quality of leadership.

It means working with each partner to align firm and individual purpose, communicate what’s expected, provide the requisite support, give and get feedback – and hold them to account.

, , , ,

Firms face danger if they stray too far from the core

In Articles, Commentary on 10 October 2020 at 12:24 pm

Full text of my opinion piece first published in the Australian Financial Review on 9 October 2020.

Establishing non-legal businesses seems to be back in favour among Australia’s larger law firms.

Minter Ellison was an early mover with acquisitions of an IT consultancy firm and an executive remuneration practice in 2017. Others include Corrs Cyber (data breach and crisis management), G+T (Gilbert + Tobin) Innovate (in-house legal transformation), Ashurst Consulting (board risk and governance), TG (Thomson Geer) Endeavour (public affairs), McCullough Robertson’s Allegiant (insurance broking) and Hall & Wilcox’s Global Mobility Services (migration, tax and relocation).

The rationale for these new non-law ventures is mostly centred on strengthening or defending the core business and making significant client relationships stickier. Some firms pursue these adjacencies to deliver new sources of profitable growth or to provide a hedge in the event of industry disruption.

Original AFR article

To increase the chances of success of these new ventures and others seeking adjacent opportunities, there are four key strategies to consider.

#Reinforce the core

Many adjacency failures can be put down to firms straying too far from their core business.

Woolworths’ foray into the retail hardware sector via its Masters business was an unmitigated failure. Masters did not reinforce Woolworths’ core grocery business or leverage existing customer and supplier relationships. While its retailing and property management capabilities were strong, they couldn’t outmuscle a formidable incumbent (Bunnings).

Success comes from investing in areas where there are substantial, measurable and mutually reinforcing economies between the current and the new.

#2 Align financial expectations

One of the main reasons law firms have not persisted with non-law businesses in the past is that they have simply not made enough money.

Well-run premium law firms are very profitable. Despite intense competition, the market price for specialised legal advice has increased significantly over the past 20 years.

Many of the new ventures compete in market segments where the price point for partner-level advice is 30 per cent to 40 per cent lower than law firms. Others are pitched at the ‘brain-surgery’ end of the market with relatively low leverage and utilisation.

The upshot is there is a significant risk regarding profit expectations. My advice is to ensure everyone is 100 per cent on the same page early on – and if there are irreconcilable gaps, walk away!

#3 Pre-empt cultural clashes

While great strides have been made in recent years on using the talents of those without legal qualifications, the lawyers still market – and see – themselves as the smartest people in the room.

So, it is vital that your cultural due diligence cover over things like common aspirations, values and standards. When it comes to adding advisors from non-law disciplines, there is an added risk of professional arrogance.

One of the keys to success is to pre-empt and address any cultural differences between the lawyers and those other idiots. Only joking!

#4 Ensure a founder’s mentality

Why is profitable growth so hard to achieve and sustain?

Chris Zook from Bain & Company researched this question and found that when firms fail to achieve their growth targets, 90 per cent of the time the root causes are internal and not market related.

He also found that firms experience a set of predictable internal crises, at predictable stages, as they grow.

Zook suggests that managing these choke points requires a “founder’s mentality”— someone with fire in the belly who is relentless in pursuing the business’ mission, adept at leading others through change and imbuing the firm with a strong client focus.

So, in summary, all it takes to succeed is to have a driven intrapreneur leading a new venture that is deeply connected to the core business – from a market, financial and cultural perspective.

It sounds easy. Until you try.

, , ,

Will law firms be more productive but less human?

In Articles, Commentary on 7 October 2020 at 9:00 pm

Full text of my Australian Financial Review opinion piece first published on 11 September 2020.

In April, I made three predictions about a post-Covid19 legal world – there would be deeper relationships between staff and clients, less paper and more flexible work arrangements. Five months on, it’s worth revisiting these predictions and to ask what else might change?

The argument for deeper relationships was based on the notion that people going through acute stress together come out at the other end with greater trust, understanding and connection. Given that we’re still living through the pandemic, it’s probably too soon to tell for sure whether this prediction will come true or not.

It appears the sense of a life-threatening emergency is being replaced by a collective consciousness of fatigue and despair. In Victoria, tempers seem to be a bit shorter and patience a little thinner. This trend doesn’t augur well for a future of more kindness and mutual support.

The predictions around less paper and more flexible work arrangements are looking rock solid. Many firms have eased into hybrid operating models and have hardly skipped a beat. Some have already publicly stated that this model is permanent.

But there are some emerging trends that justify three new predictions.

#1 Fewer legal secretaries and assistants

Over the past few months, some firms have reported increases in overall production but lower productivity amongst legal secretaries and assistants. Lawyer self-sufficiency and the move to working from home have been the primary reasons cited for this shift.

It’s not too much of a leap to suggest many firms will look to reduce secretarial support ratios by a combination of redundancies and retraining of some assistants as paralegals.

One of the possible consequences of reducing secretarial numbers is a more fragmented work culture. Secretaries often provide a bridge between people and practices by sharing news and gossip, fostering relationships and retelling stories.

They offer a valuable pastoral care role, especially when the senior legal practitioners are EQ-deprived. Without this cultural glue, firms run the risk of being more productive but less human.

#2 Renewed respect for HR

In many firms, the HR team has kept the ship sailing. This is no mean feat given the speed, scale and scope of change required, and the fact they operate with little formal authority within a partnership structure.

There is always extreme sensitivity around changes in people’s pay, promotions, leave entitlements, workloads and future job prospects. HR practitioners have advised on these issues as well as resource strategy, communication, mental health, resilience and fostering a strong team vibe.

Pre-Covid19, it was not uncommon for firms to suffer from the “HR standoff’. In one corner, the HR team members would complain about the firm’s partners being disrespectful and disempowering. In the opposite corner, the firm’s partners would regard HR as being process, not outcome-driven and uncommercial.

I think this standoff will be mostly a thing of the past, especially in firms where HR has risen to the challenge.

#3 Reset in decision-making

To deal with the government-imposed lockdown in March 2020, firms needed to make big decisions quickly. Managing partners were given the authority by the broader partnership to address the crisis. It appears many of these senior leaders accepted this mandate and blossomed with their increased power and autonomy.

Five months on and many firms have not shifted significantly away from the March model. With relentless partner workloads and no in-person partner meetings, the firm’s executives have largely kept their decision rights.

I expect that post-corona the pendulum will swing back slightly, but this recent experience reveals that the firm can still prosper without every partner having a say on everything.

, , , , , , , , ,

Is HWL Ebsworth Limited a buy?

In Articles, Commentary on 30 August 2020 at 12:35 pm

Full text of my opinion piece first published in the Australian Financial Review on 27 August 2020.

Earlier this week, the Australian Financial Review reported that HWL Ebsworth (HWLE) was preparing to list the firm on the ASX with a $1 Billion-plus valuation.

While details are scant at this stage, it is worth asking whether stockbrokers will recommend a BUY when the HWLE Limited prospectus is issued?

My prediction is they will give this IPO a thumbs down for five main reasons.

#1 Insufficient surplus

As a listed entity, HWLE partners will have to share a portion of the firm’s profits with external shareholders. For the sake of argument assume the current partners enjoy average earnings of $1.5 million per annum. In the future, partner earnings – salary plus bonus minus profit share – might reduce to say $1 million. The incumbent partners will most likely accept a reduced annual income given their significant capital gain upon listing.

This business case seems logical but misses one key point – there is a fiercely competitive market for top talent. Many of the best HWLE partners are proven rainmakers will still be able to command incomes around $1.5 million or more at other non-listed law firms or by setting up their own practice when their employment and escrow handcuffs come off.

At $1 million – the maximum the firm can pay and still maintain dividend payments – HWLE Limited will be way off the mark in attracting any new ‘$1.5 million’ partners.

Over the long term, there’s insufficient surplus to keep both partners and external shareholders happy.

Screen Shot 2020-08-30 at 12.18.35 pm

#2 Clients don’t buy the firm

When Shine Justice Limited first listed on the ASX, they presented strong evidence that their personal injury clients chose them because they trusted the firm’s brand and were largely lawyer agnostic.  When IPH listed, investors were enticed by a large proportion of annuity income from patent and TM renewals and an ambitious plan to scale.

When it comes to HWLE’s mostly business-to-business relationships, research shows that clients are much more discerning around who does their work.

HWLE external shareholders will not be buying a company with a strong brand with sticky institutional client relationships. They will be buying a collection of individual portable practices, each with their own reputation and client following.

#3 Vague growth story

External shareholders examining the IPO prospectus will be looking for a compelling growth story. They will want to see how a fresh capital injection will drive shareholder value.

Under Juan Martinez’s leadership, HWLE has a solid track record of acquiring legal practices without the need to splash much cash. Economies of scale work well in mining but less so in premium legal where even boutique firms can generate supernormal profits. Despite all the hype, there’s no legal technology yet available that will create a sustainable cost or client service advantage. Creating a multi-disciplinary practice or moving offshore is fraught with risk.

So, unless I’m missing something, the growth plan beyond more of the same seems less than convincing.

#4 Key person risk

From interviews with former staff, it appears that Juan Martinez has a robust directed leadership style. Overheads are kept to a minimum and all lawyers are encouraged to be on the tools all the time to compensate for below-market pricing.

This is the operating model that has been the bedrock of HWLE’s success to date.

Given Mr Martinez’s tenure and track record, the market will have many questions over the strength of HWLE’s bench. If the proverbial bus had to arrive who will keep the firm together and herd the cats? I’d imagine the firm’s value will be discounted heavily because of this key person risk.

#5 More losses than wins

Future investors in HWLE will have a good look at the investment category and proceed with caution. A 20-year analysis of law and accounting firm IPOs in Australia reveals far more losses than wins, especially for external investors. This includes firms like Stockfords, Harts and Slater & Gordon.

One of the reasons for these failures is the loss of the partnership culture that underpins their initial success. This culture comes from the incumbent partners’ sense of proprietorship, stewardship, collegiality and identity. Shifting from partner to employee is a big shock to many. Financial transparency, share price volatility and an added compliance burden all often have a negative cultural impact.

In conclusion

I have drawn strong conclusions about the potential float of HWLE without access to any specific details. I look forward to reviewing their IPO prospectus and seeing how wrong I am. But if I’m not, buyer beware!

, , , , , , , ,

How your law firm can limit virus hit to bottom line

In Articles, Commentary on 7 August 2020 at 3:42 pm

The full text of my 7 August 2020 opinion piece first published in the Australian Financial Review.

There is every chance that COVID-19 will mean a big hit to your firm’s revenue for the 2020-21 financial year. So, what levers are you using to limit the downside impact on profitability?

Greg Keith, the chief executive of accounting firm Grant Thornton, recently indicated he was anticipating a decline of 8.5 per cent in revenue and 33 per cent in profit.

It means that for every 1 per cent drop in income, they are forecasting a fall of nearly 4 per cent in profits.

Accounting firms, like law firms, are mostly high fixed-cost businesses that are super-sensitive to changes in revenue – both on the downside and the upside.

To limit the profit impact, firms tend to first cut non-essential spending like travel and entertainment. After these “easy” savings are exhausted, reducing staff numbers comes into the frame.

While there are obvious short-term benefits – staffing can comprise 60 per cent of all expenses – there’s a significant risk of not having enough of the right resources on hand when demand picks up. So, the 2020-21 saving needs to be weighed up against the full cost of re-hiring and training in the future.

In my view, there are two areas where firms could do a lot better to enhance profitability without letting people go – pricing and the sharing of resources.

Pricing for profit

Over the last few years, most mid-sized and large firms have worked on their pricing practices.

With a significant market downturn and price war on the cards, one firm recently redoubled its support for partners to preserve and capture value through price. This included video training modules on value articulation, gamified programs around price negotiation, improved analytics, new pricing tools [like Price High or Low 😀] and more direct hand-holding for new business pitches.

Some firms are adopting a range of creative strategies to meet client needs rather than merely dropping price. They include:

  • Adjusting payment terms and conditions so strapped clients are more willing to brief the firm rather than others;
  • Offering non-time-based pricing structures such as subscriptions, contingency fees or amortising fees;
  • Special promotions in ‘ring-fenced’ service areas to avoid across-the-board rate cuts and safeguard the firm’s brand position; and
  • Offering options at different price points.

One law firm offers its clients three pricing options on every new matter. They’ve adapted Qantas’ pricing approach by offering the equivalent of the airline’s Red e-Deal, Flex and Business Class options.  As with Qantas, each option has the same core benefits around quality and reliability but differ in terms of the format of the deliverables, roles, timing and scope.

Another firm analysed their top 100 clients to determine how each was being affected so they could tailor messages and offers. In one instance, this led to a new digital service offering as some clients moved to virtual selling and distributed operations. In another case, they shifted to a self-service model for a client going through a major cost-cutting exercise.

Screen Shot 2020-08-07 at 6.43.54 am

Resource sharing

I was recently advising a law firm where analysis of time records revealed that some individuals and teams were extremely busy while others were well below capacity.

When I asked why resources were not shared to even out workloads, the most common response was that lawyers could not easily work outside their area of specialisation.

Not satisfied with that objection, I delved a bit deeper. My enquiries revealed a range of constraints – cultural, structural and personality – to collaboration. For some partners, “letting my people go” was a sign of failure. For others, they didn’t see any direct financial incentive to share resources, so they didn’t bother. In one office, each practice team saw itself as a self-contained business, and the prevailing mindset was more competitive rather than co-operative.

In good times, there’s often enough fat in the system to ignore these problems, But if your firm is looking at an equation that means every 1 per cent drop in revenue leads to a 4 per cent drop in profits, then you might need to change your thinking.

<span>%d</span> bloggers like this: