Redwood Analytics

To find success in a fixed fee alternative arrangement for both the firm and a client there has to be a solid knowledge base of what the matter entails.  This statement really can apply to any alternative arrangement.  Therefore with that in mind before I dive into the specifics of succeeding with the fixed fee arrangement in my next blog I feel it is appropriate to write a quick post about starting from square one. 

There are many times when I speak about alternative arrangements and planning that I get a response from firms of, "Where do I start?"  It is a fair question.  For years the billable hour has ruled the industry and there was not the demand for alternative ways of thinking.  Many partners find themselves in a world they never knew nor can ignore as other firms take the initiative. 

I recently spoke about the key things that every firm should focus in on; client service, driving revenue, and managing processes.  When I speak of client service I am not focusing solely on the work.  Firms should be going to clients to proactively seek what they are looking for and what they need from their outside counsels.  Driving revenue has always been a focus, but now with the added need for project management you have many partners lacking the skills to accomplish the task. 

To combat this void, firms must focus on 4 key initiatives on establishing a process to manage alternative arrangements and profitability for that matter.  

The first is training for their partners on pricing and project management.  The depth of the training can be debated and I will dive into details of these initiatives on another post but the training should be strong enough to build the basic skills of managing a matter for mutual client and firm benefit.  This will not only assist partners with their expertise but also build buy in. 

The second initiative is people.  The reality for most large law firms is that their partnership does not have the desire or time to focus on managing to an alternative arrangement.  That means you have to have the right people with proper authority to work with the partners to achieve success.   This could be outside counsels or in house support.  Chances are your finance staff is swamped already so I do not suggest inundating them with additional duties but instead look to invest in this process with a more dedicated resource.

The third initiative is technology.  Granted I have a natural bias to this as I work for a software company, but the reality is that technology is the ultimate form of leverage.  Having the right tools in place that can plan, track, and provide alerts for matters is the ultimate need to provide real time analysis.  This analysis will be essential to create change in the management of a matter to perhaps get it back on track to a profitable scenario. 

The final and most important initiative is a conceptual one.  This shift in the industry is not cyclical.   It is structural.  Therefore firms need to grasp onto the idea that you need a conceptual change in the way you approach your business.  You need collaboration between partners, clients, and staff members to make this work.  That means a willingness to take on new alternative arrangements and way to incentivize proper behavior.  This usually means addressing the partner compensation model.  Firms must start thinking differently.  This shift in the industry is not going away and all hands need to be on deck.

If you have the right people to plan, track and analyze the process, the right training to build buy in from the partnership, a strong message from leadership, and the right tools in place, collaboration should come naturally.  The sooner firms dive completely into this new way of doing business the better it will be.