Time To Boost the Top Line in Law Firms
2008 will be law firms’ worst year since early 1990s, according to the gloomy Dan DiPietro, who oversees law firm client relations at Citigroup Inc.'s Citi Private Bank. A difficult economy has cut partner profits and associate attrition, while increasing expenses for major U.S. law firms, creating "a dramatically different economic environment from the previous seven years," DiPetro wrote in an article.
Law firms saw average profit per equity partner drop some 9 percent in the first half of 2008, "Dr. Doom" writes. Meanwhile, expenses rose by about 10 percent, pushed up, in large part, by increases in associate pay.
The second half of 2008 won't be any better than the first half, DiPietro predicts. And it could be worse—"the common wisdom is that this economic slump is more akin to the downturn of 1991."
Being a banker, he naturally suggests cost-cutting, including demoralizing steps like firing unproductive partners and reducing associate bonuses. He is looking at the wrong part of a law firm balance sheet.
Law firms should focus on the top line -- new revenue, new income and new clients. Rather than cut costs, law firms should create more rainmakers with the entrepreneurial mindset, business development discipline and sales skills to convert business.
The Apollo Business Development Program, named after the space program that put the first man on the moon, envisions a revenue increase into seven figures. The goal is to maximize the results of up to 10-25 partners who have demonstrated initial success in generating business. My colleague Michael G. Cummings and I are running this money-making program now in several law firms. Give me a call at 630.942.0977 if you’d like to find out more.
