As our firm evolved, we began to strategically examine the type of work that was coming our way, why that work was coming to us, which type of work was most profitable and what type of work attracted quality attorneys to join us. We tracked and analyzed data to help us identify how to regularly attract the type of work that made the most sense for our firm.
The expense side of the equation likewise required significant attention. It’s easy to let budgets accelerate with no positive impact on revenue. We created a process in which we routinely reviewed and re-evaluated each and every expense: personnel, technology, supplies, rent and marketing. We developed significant skills at managing our expenses. We required every expense request to be accompanied by how the payment would add value.
Early on, we sought to limit the cost of personnel—and we still do—but one thing we learned was that good personnel makes all the difference in our ability to function in accordance with our core values of cutting-edge legal services delivered with efficient and effective technology and client service. We completely restructured our personnel budget and compensation system in a way that has resulted in revenue increases that have outpaced our personnel cost increases.
The articles in this Finance issue address subjects that impact firm financial management. Timothy Corcoran, in “Optimizing the Law Firm Ecosystem,” explains why many law firms have been able to succeed historically despite not always having experienced financial leaders. He offers insight into the business drivers that are available to law firms to improve performance and modernize. Do you have nightmares about walking in one day to find that your firm administrator has just quit? Cynthia Thomas’ article, “Succession Planning for Your Next Firm Administrator,” offers guidance on the planning necessary for smooth succession for firm administrators. Ronny Loew follows up with “Remain on Firm Servers, or Leap into the Cloud?” in which he elaborates on the various ways that firms can move to the cloud and reduce the cost and frustration of having a server in their offices. In “Are Your Biggest Clients Really Your Best Clients?” Jeff Schwarz assists lawyers in rethinking how to go about recognizing (and optimizing) the clients that are best for a firm’s business. Corey Veneziano and Stephen Fuller, in “TCJA Tips for Law Firms,” summarize the key effects the new Tax Cuts and Jobs Act will have on law firms. Finally, Christopher Anderson discusses how a firm can rethink the meaning of profit and prioritize it in accordance with its collective wishes in “Putting Profit First in Your Firm and for Your Clients.”