Edward Poll, The Daily Record Newswire
What should firms expect from young lawyers to justify keeping them? The answer lies in another fundamental question: Is there enough work to make a lawyer worth keeping?
In analyzing worth, there is no formulaic expression that specifically depends on origination, billing or collection. To say that an attorney is worth the amount of profit due to billing or business generated does not take into account the equally important subjective factors.
For example, does the lawyer’s combination of skill and attitude demonstrate potential for career growth beyond the immediate? Does the lawyer’s skill set encompass not only knowledge of the law, but insight into how the law is applied?
Such questions illustrate what too many lawyers — of all ages — too often do not grasp: Success in the law takes looking beyond the borders of the law. A firm’s vision should extend in two different directions: knowing the economics of the practice and attorneys’ roles in that financial equation; and having insight into the broader trends of society and how those trends impact the firm and its clients.
Regarding financial needs and operation, today’s law-firm leaders require increased access to financial information and better training in using it. That means having the business competency to understand the traditional key measures of law firm performance: realization, utilization, leverage and expenses. More significantly, it means being able to compute one’s own contribution to the firm’s performance.
The calculation is a fundamental one: billings - [lawyer’s total compensation + direct and indirect expenses] = net profit. Doing billable work in a way that produces net profit for the firm is essential for a young lawyer who wants a long-term career.
The art of looking beyond the law’s borders is more complex and involves an understanding of the basic changes in society that are transforming the role of the law firm. There is plenty of evidence to back up those who assert that the law-firm world of the future will be figuratively flat; that is, lawyers the world over have the same aspirations and capabilities and can achieve them anywhere in the world through digital and electronic technology that makes the playing field flat and level for everyone.
In the U.S., too many lawyers continue to resist the way that global technology flattens the cost of legal service, and do so at their peril — because it ignores the reality of the future law-firm world dominated by globalization and technological efficiencies.
In that emerging landscape, all firms and attorneys may have to deal with global matters and issues. As long as people need lawyers, the sheer volume and fundamental nature of those matters ensure their continued existence. Whether matters are a commodity or not, having the vision to address them, reduce the cost of legal services, and pass the savings on to the client will be the formula for a lawyer’s survival.
Lawyers cannot afford to isolate themselves and ignore the changing landscape and its financial impact on individual effort. To do otherwise is to ignore reality, and that is the path to self-imposed obsolescence.
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Edward Poll is the principal of LawBiz Management. He coaches lawyers to greater profits with less stress and is the creator of the new “Life After Law” coaching program, which enables lawyers to plan for profitable exits. He can be contacted at edpoll@lawbiz.com. Also visit www.lawbiz.com.
