As a legal service provider, rethinking the structural setup of a law firm can be a key element in ensuring continued success. The traditional model rewards attorneys for bringing business, but compensation doesn’t correlate with the value of the business. Attorneys who generate large volumes of business rarely retain the majority of their fees. Conversely, attorneys who produce less business often make more money. This uncertainty and inconsistency in compensation creates a disincentive to develop business. The Rimon solution eliminates this problem by compensating attorneys directly for bringing in new clients. Because attorneys are compensated directly for bringing in new business, they are not pressured to generate large volumes of business.
Large law firms also have equity cores reserved for partners who have access to important clients. By preserving the equity core for partners, cross-subsidies between lawyers are minimized and lateral defection is reduced. Additionally, individual lawyers may find it harder to adhere to professional ethics, as zealous advocacy becomes the touchstone for ethical lawyering. Finally, large firms tend to have limited autonomy to pursue noneconomic objectives.
In assessing the value of work, law firms should also consider profitability. Law firms that value volume will end up with substantial amounts of unprofitable business. As a result, many rainmakers are marginally or unprofitable. As revenues increase, profitability suffers. However, few firms take this into account when calculating partner compensation. As a result, profitability will decline over time. So, rethinking the structural setup for law firm success is critical.
Before hiring associates and other employees, law firms should consider creating an organizational chart. An organizational chart helps streamline communication and defines responsibility. It also helps in hiring future employees. Finally, a firm should consider the future. A good organizational chart can help a law firm achieve success. The following are some tips for structuring a law firm. Take the time to consider these tips and you will be on your way to building a successful law firm.
Rethinking the structural setup for law firm growth requires a holistic approach. Traditional law firm partnership structures exclude non-lawyer staff. However, the modern law firm model is breaking away from this mentality. A firm that embraces a two-tier partnership model has specialist support roles that increase fee earner productivity. The PwC report on the issue showed that the number of law firm employees who were involved in legal project management has increased by 19 percent.
Clearly define the roles of each person in the law firm. While paying lip service to client care is important, a firm should develop a protocol that manages client expectations. This should include the timing of information delivery, price, and any warnings of delays. An accountability chart is a critical tool for any law firm, and can make all the difference in the world. In addition to providing clear direction for the firm, an accountability chart will also help you identify the roles of various people.
