The Case for Tracking Originations on Both Sides of the Atlantic

 The success of business development activities continues to be highly prized in partner profit sharing systems all over the world.   The tracking of originations is, however, mainly carried out in North America and not much elsewhere.   Historically, this practice used to be an essential part of formulaic compensation systems but originations are now being used in systems where an overall subjective or discretionary assessment  is made of partners’ contributions.   Tracking originations should therefore be considered by all firms Within the last couple of years surveys from Edge Internatio...
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Four Ways to Channel Creative Tension in Firms and Teams

I am often asked how it is possible to manage a group of awkward, antagonistic and difficult people in firms where clashes of personalities and style have in the past led to bitter disputes and epic conflagrations. It is of course a joy to see firms, and top management teams within them, where cooperation and cohesiveness are valued and where the members are united by the desire to maintain good relationships between everybody. The problem however is not just that such firms are in a minority, but that on the whole firms that place a high premium on conformity and consensus often do worse than...
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Lessons from NewLaw: Three ways to flex your operating structure

Many NewLaw firms have a competitive advantage over traditional firms due to their variable costs structures, use of technology, external funding, alternative fee arrangements and alternative career paths. While it is difficult for traditional law firms to abandon their existing structures and start again with a blank sheet of paper, there are plenty of lessons that can be learned from how NewLaw firms operate, of which I provide three examples. 1. Dispersed law firms One problem with the traditional law firm model is its large and unwieldy cost base, often resulting in thin profit margins t...
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Five rules to avoid the overuse of hyperbole and marketing speak

There is a terrible temptation for firm leaders and their spokespersons to get carried away by the organisation’s own self publicity and to make assertions that cannot be evidenced by facts or backed up by empirical data. Some expressions of course are readily seen as hyperbole – intended to create a strong impression, but not meant to be taken literally. Phrases such as ‘leading firm’, ‘pre-eminent’ and even ‘client focused’ are in wide use, but can very rarely be proved evidentially, nor is anybody ever taken in by them. What is worse, the sophisticated client or external observer may at ti...
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Partner Profit Sharing – the New Pressures

Law firms are experiencing big pressure from their stars for their profit shares to be more heavily weighted to their revenue production successes and this often requires rather more than a minor tweak to the firm’s compensation model We are all used to hearing and reading about growing competitive pressures from existing law firm rivals, from new entrants, and from the increase in efficiency led process improvements, as well as steadily increasing demands from clients to do more for less.  These pressures are putting strains on the profitability models of most law firms but are also causin...
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Communicating with your Partners to Build Trust

A "them and us"' tradition can lead to grapevines, rumour-mongering, suspicion, cynicism and muddled goals There are some significant structural and emotional barriers to good communication in law firms. Teams, practice groups and offices can easily lapse into functional silos, with poor communications even between people on different floors in the same building. In addition, the concentration on maximising the billable hour and the drive to prioritise time generally, combine to reduce interaction between staff. The use (or misuse) of email and stilted discussion at formal team meetings bec...
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The Achievability of an Organisational Culture Change Project

In this post I consider two linked but quite difficult questions: Do law firms have any sort of organisational culture and, if so, how easy, possible or desirable is it to change it? Culture is a notoriously difficult area for any professional service firm and is a tricky area to write about. For a start, culture is intangible and somewhat hard to define; there are apparently more than 150 definitions of it extant today, and many of these lean on a confusing array of frameworks, matrices, overlapping circles and pyramids, accompanied by vocabulary and phrases that at times appear either dow...
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Why your Partners need to have Skin in the Game

Capital Introductions Driven by tax efficiency fail to address ownership issues Recent UK partnership taxes have apparently forced many firms to ask second tier partners to introduce some capital to the firm essentially in order to preserve self-employed status.  The problem is that capital introductions that are entirely driven by tax tend to obscure the real debate over ownership of law firms.  There are two sides of the ownership equation. The firm’s assessment of how much partner capital it needs to run smoothly and The more interesting question of how much capital a partner needs t...
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Comparisons need not be Odious – Assessing and Rating Lawyers

Model Three – Moderating the Scoring
Most lawyers are reluctant to score, grade or rate their people. They perceive that if you score low, it can result in an argument; if you mark high, it can make the rated individual complacent or arrogant.  Most raters tend to play it safe and mark somewhere in the middle, an averaging issue that can make the entire scoring process rather pointless.  There are also other difficulties to be overcome in the rating process Lawyers generally expect to see full details of the evidence presented and assessed – lack of trust usually means that a rating process can be long drawn out and compl...
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