Efficiency, productivity and profitability: Insights from Vantage 2013
This post was written by Mark Medice, national program director, Peer Monitor
I’ve talked with and met a lot of great people here at Vantage 2013. And I keep seeing and hearing one common theme: everyone is looking for ways to manage their firms more efficiently.
The reasons are clear. The law firm market has had a very rough start to the year. Our PMI data shows that law firm demand has been flat-to-slightly-negative so far this year. Firms are still struggling against client pricing pressure. Combined with a sluggish economy that’s wrestling with problems such as the impact of federal budget sequesters, and firm profitability is definitely being challenged this year.
At the same time, in my conversations with firm leaders and analysis of PMI data, it’s also becoming clear that amidst all of these factors, some firms are finding ways to achieve consistent growth and profitability. Some of the key common factors among these firms include their willingness to make investments in areas of the firm that promote growth and efficiency, such as marketing and technology. They are also “reprocessing” the practice of law in ways that manages internal processes more efficiently, examines new business models, identifies growth opportunities, and enables new, innovative ways of engaging with clients.
They are also not afraid to tackle bold, wholesale restructuring of back office functions, including relocation and outsourcing. Taken in total, these types of moves are enabling some firms to grow their topline, restrain costs, and more effectively manage margins.
So while I’m hearing a lot of discussion about challenges and difficult market conditions, I’m also hearing optimism and willingness to embrace change in order to pave a stronger path towards more sustained profitability.