Redwood Analytics

In earlier posts I have emphasized the need for establishing a process around alternative fee pricing, tracking, and execution.  To do this you have to understand your culture and have the right people in place and the right partners on board. 

I want to re-iterate that this is a time for action.  It is not a time to hold back, especially when it comes to discovering the right process and having the right people in place.   Throughout this month, I had the pleasure of meeting with several managing partners I know well.  These are individuals I admire and have worked with on creating their alternative arrangement initiatives.  That said several of these conversations quickly became debates over investment and the cost of hiring the right people for the process.  Many budgets have been, or are in the process of being finalized for 2010.  As these budgets are being discussed I find a few firms getting "gun shy" when it comes to hiring/reallocating the right people to run their alternative arrangement process.  To give you an idea, here are few things I have heard.

"We have found the perfect hire.  Only problem is that they are asking for just a little more than we were expecting and committee members are re-considering."

"Instead of promoting (person x) how about we just reallocate (person y).  It is not as good of a fit but it would cost less."

"We just don't want to bring in resources and frankly we just don't have the budget to hire outside consultants."

"The committee knows that (person x) is not right for the job but he/she has been with the firm a long time and...well you know politics."

Here is my problem with almost all of these comments.  They come from heads of firms who have routinely allowed inefficient project management, which could be remedied with this precise investment.  Clients are not going to stop asking for alternative arrangements, and last time I checked if you don't have clients, you are not going to be in business.  On top of that if you allow the same inefficiencies to run rampant, firms will lose their shirt.  Finally, firms have given away hundreds of thousands to millions of dollars simply by bad decisions, poor management, and inefficient allocation of resources.  For some firms that is on a monthly basis.   Compare that to say the debate over a $30k difference in budget for the "right person" to run their alternative arrangement program, and it is laughable.  Bad decisions in the amount of 30K happen on the hour at many large firms.

I understand the idea of budgeting properly and that this year has been difficult for the legal industry.  Lawyers and staff alike have lost their jobs across the world.  Still the investment in setting up the structure with the right people will create a return without boundaries.  That original investment could be returned in mere days. 

There will always be politics and partners who do not want to change but firms have to deal with the here and now and put forth the investment.  Two quotes illustrate this properly:

"Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while."  - Jack Welch

"Most people spend more time and energy going around problems than in trying to solve them." - Henry Ford

For your clients' and your firms' sake, don't let fear and penny pinching get in the way of progress that will set you up for larger returns in the future.