Revenue increase may not be for everyone in legal industry
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Want more revenue? None of the basic options is easy.
In the old days, the market for legal services grew quickly and the legal industry was one where many firms were doing well and other firms doing even better, said Chicago-based Joseph Altonji of consulting firm LawVision Group. "Now it's some people are doing very well at the expense of others ... and that's the way it's going to work for a while."
That has some firms looking for ways to increase profitability without expecting to raise revenue.
Fox Rothschild has bucked the trend in Pennsylvania by showing revenue increases each year since the recession hit in 2007. Managing partner Mark L. Silow said most of Fox Rothschild's growth in the last few years has come from expanding its offices outside of the Delaware Valley because the firm's home market is stagnant in terms of both attorney movement and client growth.
Firms can either organically get new clients or grow by laterals -- attorneys already employed by other firms -- and both are flat in the Philadelphia market, he said.
"So you have to focus on how [you can] be more profitable with the same top line of revenue," Mr. Silow said.
He said his focus is increasingly on growing profits based on the same revenue, not just through general cost control but also through alternative hiring. Mr. Silow said the firm might look to use more nonpartner-track associates.
The other way to manage profits is to work on the firm's project management skills, he said, and look at how it can handle matters more efficiently and cost effectively.
David Gaulin, co-chairman of PricewaterhouseCoopers' law firm services practice, said firms have to create deeper relationships with their clients that go beyond just providing legal services and include business advisory roles.
He said firms also have to better connect with the client. "Right now the clients are very connected with the individual partner and not the firm as a whole," he said.
Dechert CEO Dan O'Donnell said his top picks for busy industry sectors are energy, health care, life sciences and international arbitration.
"You're [creating overseas branches] because it will open up opportunities across markets and across offices that otherwise would not be available to you," he said.
First Published March 12, 2012 12:00 am