Cost-Cutting Law Firms Are ‘Lean and Mean and Ready to Profit,’ Consultant Says
A survey of South Florida law firms shows a year of retrenchment, but 2010 could be better, according to one legal consultant.
Altman Weil principal Bill Brennan told the Daily Business Review that law firms have cut costs and are now looking for ways to increase revenue, a good sign for next year. “Firms are much more efficient,” he said. “They’re lean and mean and ready to profit.”
Brennan commented in response to the Daily Business Review survey of 76 South Florida managing partners or other law firm leaders.
Almost 90 percent of the firm leaders said they took steps to cut costs in the last year. At firms with more than 100 lawyers, 60 percent laid off staffers and one-quarter laid off lawyers. Forty percent of the large firms cut pay, up from just 4 percent in 2008.
The story cited the example of Broad and Cassel. The law firm cut costs by leaving some positions vacant, limiting travel, installing switches that automatically turn off the lights when there is no movement, and planning to scale back its holiday party to a luncheon. “You focus in on every place you can save money,” managing partner Mark Raymond told the Daily Business Review.
The survey found that law firms are also responding to the economic crisis by monitoring collections, responding to client demands for lower costs, and refocusing on countercyclical practice areas.
The survey also found:
• 48 percent of the firms reported that revenue per lawyer declined or remained flat last year.
• 34 percent of managing partners expect increased partner profits this year, compared to 70 percent last year.
• 54 percent of the firms increased billing rates, down from 84 percent last year.
