Law Firms Face a Triple Management Threat
Robert C. Mattern of Mattern & Associates LLC has an excellent piece on Law.com about how well-managed firms can survive and thrive in the current climate. In his article, entitled How to Face a Triple Threat: The impact of economy, cost recovery and alternative billing on Big Law, Mr. Mattern outlines the three threats facing firms today, and how a nimble management structure can allow a firm to take advantage of these challenges:
While everyone is talking about the current economic situation and the impact it has had on attorneys, it is only one facet of a three-pronged attack on the operational side of law firms and how they manage the practice of law. The other issues law firms are facing are the changes in the cost recovery landscape, and the increase of alternative fee arrangements. As with the current economic situation, both of these areas represent opportunities for the firms that embrace and adapt to the changes that are occurring in the marketplace.
Mr. Mattern notes that in the current economic climate, firms must gear their services and use of technology to respond effectively to the ups and downs of turbulent financial conditions. He also points out that while many firms have moved to scanning and printing documents rather than copying them, most firms have failed to institute new cost recovery programs to recover the cost of scanning and printing. Finally, he discusses the challenges in dealing with cost recovery under flat fee and performance-based billing arrangements.
Mr. Mattern's article captures three of the serious challenges being faced by law firms today. Add to these burdens inflated associate compensation structures, ever increasing outside vendor costs and decreased matter volume, and it is clear that law firms have their management hands full.
Imagine you need to hire a courier service for your law firm. A business associate gives you a name, and you call the courier in for a meeting. He tells you he is the best courier in the business. You ask how much to deliver a package across town. This is where is gets weird. He says he can't tell you. It's too unpredictable. He could get caught in traffic. The recipient office could be closed, and he may have to go back twice. He might have other jobs that day. But, he says, if you agree in advance to pay him whatever it ends up costing, he'll send you an invoice after he does the job. You, of course, are outraged. Does he not know his business? Does he not know his overhead so he can calculate a fair price? You throw him out of your office and call someone else. 
