The Law Blog's Washington Bureau Chief, Jason Levin, shares some observations on this morning's Legal Bisnow event "Law Firm Economics: What’s Really Happening Inside Law Firms Today."
According to Jason, "The diverse panel did a great job on defining how a law firm makes money, associate/partner compensation and thoughts on the future of law firms. Here are some top takeaways:
o Law Firms are responding to a poor economy. It is that simple. Fortune 500 GCs are demanding more efficient use of their legal spend. Thus, AmLaw 200 law firms need to respond with greater efficiency and flexibility. With a greater focus on efficiency, there could be (this is a trend to watch) a relook on what makes associates succeed. If, and this is a big if, billable hour agreements evolve towards accounting & consulting firm models, then associates will need to be faster and smarter in how they complete their work.
o In 2009, there was a dip in the collection rate for every $1 that was billed: from $.94 to $.91. This reflected an increasing use of discounting and forgiveness on law firm bills.
o To ensure a continuous stream of revenue, AmLaw 200 law firms are keenly interested in hiring lateral partners hiring with diverse client bases
o Not surprisingly, it now generally accepted that the equity partner track in the AmLaw 200 has evolved from 6-7 years to 8-10+ years now.
o One of the panelists divided associates and partners into 3 classes: 1) "Finders," 2) "Minders" & 3) "Grinders." Finders make the rain. Minders supervise the work. Grinders execute the work. In this economy, finders have won out and their need to generate revenue has seen a premium in the legal market place."
-posted by brian
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