Welcome to The One Minute Manager. Our goal is to provide you with quick tips that will enhance the success of your practice. Within 60 seconds you will gain an idea that will increase your profitability or simply ease the burden of a difficult management issue. We hope you will find this a valuable resource.

The One Minute Manager . . . . .

For many years the advice of consultants to law firms was to focus on revenue to build the future. The intent was to create a client-focused practice and avoid being distracted by inconsequential cost paranoia. At the time, there was ample evidence of poorly conceived cost reductions impacting client service. However, most firms have become very adept at client relations and are strongly revenue driven. The revenue war is mostly won but rising costs have been the outcome. Perhaps it is time to rethink your cost structures as your next strategic opportunity.

KPMG recently released an in-depth report entitled Rethinking Cost Structures: Creating a Sustainable Cost Advantage. This brilliantly prepared survey and research paper attempts to redirect management thinking towards the competitive advantage that can be gained by seeking a cost advantage in your marketplace. Admittedly the subject is not associated with dynamic change and seldom viewed with enthusiasm, thereby, making it a difficult management initiative.

Law firms face major structural and cultural hurdles in achieving success with overhead control. The reasons include:

• Cost reduction attempts will be too cautious since partners are highly critical of failed attempts and provide few accolades to achievers.
• Unwillingness to hold practice areas accountable for their costs. There is a reluctance to measure profitability by departments for fear of the divisiveness caused by recognizing the varying margins by practice.
• Cost control at both the firm level and the partner's individual practice is seldom a reward factor in compensation.
• Major rainmakers seldom have patience for cost control and will push back any attempts of restraint. Management is unwilling to reign in these important contributors, thereby, undermining the leadership.

Despite its challenges, I suspect that your clients will drive cost control initiatives. All businesses have lived within the demands of cost efficiency for a decade and will seek a similar commitment from their law firm. The period of wildly escalating billing rates to cover up your inefficient operation is quickly coming to a close. The last opportunity for sustainable profits may only be from rethinking your cost structures.