Marginal Changes To The Bottom Line

Like the internal combustion engine, the profitability model for law firms has been refined and sophisticated over the years, but has not undergone any dramatic structural change to the basic financial recipe (Profits per Partner = Hours x Rates x Leverage x Margin). Now, however, a number of competitive pressures are combining which threaten to bring about challenges to the whole economic model – and even perhaps its displacement in its current form – both in strategic terms and in the way firms are structured and organised to make profit. Nick’s March 2010 newsletter sets out three of the main issues and suggests a few answers.

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