The volatile market has caused staffing and the talent pool in the legal profession to be viewed differently. In this video, Deborah Epstein Henry offers tips on how to respond to these demands in today’s competitive market.
Pressure Drives Change
CEO’s are pressuring general counsel to have predictable legal department budgets. As a result, general counsel are looking for ways to cut staffing, reduce outside counsel spending, and do more work internally with less staff.
“There is a lot of pressure from in-house legal departments to have lawyers work differently,” says Henry. “They are pushing work to nonlawyer professionals at lower rates, increasing their use of temporary attorneys, and having more lawyers work on nonpartnership tracks because they can then be billed out at lower rates. Using your talent pool at a small firm is really important in terms of responding to these market demands.”
Henry says, as a result of these demands, general counsel are asking outside counsel for more efficiency to demonstrate more value in providing legal services and to not charge for junior lawyers who may not know what they are doing so they do not absorb that cost.
Tip # 1 — Be Smarter About Costs
Fixed overhead drives your rates and your business and adds additional pressure to your bottom line. Increasingly, clients don’t want to be charged for office space as an overhead, particularly expensive office space overhead.
• Henry recommends looking at your office space. Is it really necessary? Would it be better to work remotely from home?
Tip # 2 — Bill Creatively — Align Your Interests with Your Clients
There is increased interest in alternative fee arrangements. Rather than focusing on discounts and blended rates, which some clients are pressuring lawyers to do, demonstrate your value by aligning your interests with your clients’ interests. ”
• Offer a flat fee with an accompanying success fee or bonus.
Tip # 3 — Use Your Talent Pool Wisely
Because volatile market has caused staffing and the talent pool in the legal profession to be viewed differently, there is a lot of pressure from in-house legal departments to have lawyers work differently. They are pushing work to nonlawyer professionals at lower rates, increasing their use of temporary attorneys, and placing more lawyers on nonpartnership tracks because they can then be billed out at lower rates.”
• Hire a part time lawyer who expands and constricts his or her workload based on the work demand of the client
• Hire lawyers for predictable work that can grow and shrink depending on the demands of the client
• Use your nonlawyer professionals to their maximum capacity.
“A lot of this is about being competitive with other firms and being as responsive as possible to the changing legal market, and, more specifically, the changing demands of in-house counsel,” says Henry. “Thus, using your talent pool at a small firm is really important in terms of responding to these market demands.”
Henry presented How to Capitalize on the Tumultuous Legal Market at the State Bar of Wisconsin PINNACLE® Wisconsin Solo & Small Firm Conference in Wisconsin Dells last November.
Henry is the author of Law & Reorder: Legal Industry Solutions of Restructure, Retention Promotion & Work/Life Balance, a bestselling ABA Flagship Publishing book for 2011. A former practicing litigator, Henry is president of Flex-Time Lawyers LLC, an international consulting firm she founded in the late 1990s. A former litigator in Philadelphia and New York, Henry earned her J.D. cum laude from Brooklyn Law School.