At the beginning of my career, I never heard of profits per partner. For most of my career I didn’t know what the profits per partner were in other law firms. The American Lawyer was founded in 1979. I’m not sure what was the first year they started publishing the PPP Top 100.
As I was writing this I found: Early Reports: The 2020 Am Law 100/200 Firm Financials.
In 2020, is your firm focused on “profits per partner?” If so, I bet you cut costs by laying people off and increase profits per partner by reducing the number of equity partners. My old firm did both, leaving many associates with no jobs and many former equity partners feeling they were no longer wanted.
Years ago, I told my partners that focusing on increasing profits per partner is like a basketball player looking at the scoreboard and not the basket.
I have often wondered why firms are so focused on profits per partner rather than on what produces profits per partner. What produces greater profits per partner? Here is what I would put on my list.
- Focus on hiring the right people, training and motivating them
- Be responsive and timely
- Under promise and over deliver
- Use technology to provide extraordinary service to clients.
- Create industry and client based service teams
- Learn to add value and find creative billing that is not based on hours. Value will be based on results first and efficiency in obtaining the results. (Clients do not value services as law firms do (hours x rate = value). Most clients do not have “cost plus” arrangements with their customers and they resent having to pay their law firm on that basis.
- Adapt to ever changing environments and client needs, including new practice areas and new ways to provide service to clients.
- Develop web sites, blogs, podcasts and webinars in niche practices and targeted markets that provide valuable information to clients in those markets.
- Most importantly, provide reliable service at competitive prices delivered efficiently
- What would you have as number 10? Let me know your thoughts.