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 . . . . .
Miguel R. Rivera, Sr. may have shot the bullet memo
that will be heard throughout the legal world. Miguel is
the Associate General Counsel of Wal*Mart and sent
a memo to "Relationship Partners" on November 1,
2007 regarding a moratorium on across-the-board
law firm rate increases.
His issue is that law firms are dramatically increasing
junior associate lawyer rates in order to recover their
sizable increases in salaries. With this large rate
increase at the benchmark first year associate level,
the laddering effect has rippled throughout remaining
billing rate structure. The result is greatly increased
rates without adding substantial value.
Undoubtedly the pushback from other General
Counsel, as well as most other law firm clients, will
impact the distributable income of partners. With
clients resisting rate increases and talent wars
pushing up salaries, the only flexible point of a finite
revenue pool is the partner pie.
The split of a diminishing pie, however, will become
increasingly difficult since the talent war is also being
waged at the partner level. Significant rainmakers are
being continually raided by aggressive firms. Junior
partners that are rising stars need to be protected to
grow the firm and succeed retiring baby boomers.
There is little room in the partner ranks for
the "coasters" of the past with modest client bases
and average work effort or talent.
The culling of partners and the higher threshold to
achieve partner status is the new reality of law firms.
Those firms that accept new partners on a tenure
basis only; and do not deal with the "coaster partners"
will face challenges. Sadly, this is the case for most
law firms. They are evidenced by marginal incomes
and rancorous partner meetings. Well managed
firms are vibrant with superior income to attract top
talent. Effective management is the determining factor.
Robert Hardie, Managing Director
Management Counsel Group
phone:
(416) 402-0759