In life, there are no single solutions that solve all problems, though we might wish there were! But there are solutions so straightforward and so powerful that it seems impossible that they’re not widely recognized and used. Dustin Cole has done a masterful job of describing a systemic problem in legal services and put forward a solution that will not only solve the specific problem but help bring the entire industry into the post-digital world.
The typical business model of the American law firm was invented in 1756 and is no more useful in a 21st century practice than quill pens and parchment. It’s a wonder that senior lawyers remain confident that it will last through their retirement payout and even more of a mystery how long new lawyers will sign up for a generational transfer scheme even more skewed than Social Security.
In his post on Res Ipsa Lawyer, Cole writes,
“Frankly, the biggest obstacle to an attorney developing a larger book is their ability – let me restate that – their skills and willingness – to manage work effectively. Most lawyers are either good technicians or good salespeople, but rarely good managers. This problem is exacerbated by the general trend of law firms to decrease leverage, which drives work that should be done at lower levels up to the attorney, and thus decreases their capacity to handle more matters. And an attorney who is already overwhelmed is not keen to increase their marketing.”
“Rather, I suggest a simpler version (of a solution). First, I completely agree with his (Jordan Furlong in Partner Compensation: Start Making Sense) declining compensation concept. But second, a simpler structure – one which is more easily calculable – is in order here: 15% of first-year revenues, 10% of second-year, 5% of third year, and at the fourth-year the client becomes a “house” account with no origination paid. The firm should also delineate the qualified practice areas of all attorneys, and require that work outside the originating attorneys practice areas be moved to a supervising attorney with the appropriate skills, and out of the hands of the originating attorney. This serves the firm’s purposes in diversifying the firm’s contact with the client, and frankly, keeps the unqualified originating attorney from billing inappropriate hours for “supervision” of work outside their expertise.”
I urge you to read the whole article to capture the fulness of this concept and to learn of his other, complimentary thoughts. The best lawyers will adapt, adopt new ways, and succeed. The others will, at best, only survive.