Law Firm Profits Increase with Strategic Legal Management

By Rickerson, Stuart E. | Defense Counsel Journal, April 2001 | Go to article overview

Law Firm Profits Increase with Strategic Legal Management


Rickerson, Stuart E., Defense Counsel Journal


As corporate clients move to apply strategic management principles to legal service, law firms must move in the same direction

MUCH is being written about the new ways in which corporate clients are managing their outside counsel to achieve better outcomes. For instance, there were two feature articles in the January 2001 issue of ACCA Docket, the publication of the American Corporate Counsel Association, an organization of nearly 20,000 members.(1)

While the focus of this attention has been on the client side of the lawyer-client relationship, there has been less attention paid to what these new developments will do to or for law firms that furnish legal services to corporations.

Law firms that adopt the approaches known as "strategic legal management" (SLM) will be on track with their corporate clients and should be able to increase their profits or draw from $20,000 to $100,000 per partner per year. These law firms can gain a significant marketing advantage with current and prospective clients because their SLM approaches provide what clients have been seeking for years: better, more predictable and measurable legal services.

Interested? Read on.

MANAGEMENT REVOLUTION

A management revolution is transforming business around the world as thousands of companies strategically retool and improve their human resources, manufacturing, sales and accounting departments. In the past few years, corporate America has invested more than $50 billion in such efforts as enterprise resource planning, customer relationship management, and the so-called Six Sigma systems.(2)

A similar management revolution can streamline and improve the work law firms are asked to perform for corporate legal departments. Those departments spend a median of $11.7 million on outside counsel annually, which over-all amounts to 0.3 to 0.6 percent of sales, or well more than $100 billion spent on outside counsel per year.(3) For nearly a decade, law departments have been looking for better ways to manage outside counsel, but they have been slow to embrace proven strategic management principles, primarily because there were few tools available and fewer consultants with experience applying these techniques to real legal matters.(4)

This is changing. Leading companies are beginning to invest in strategic approaches to improve their legal results. Leading law firms need to know what is happening and be ready for the changes they will bring.

Strategic management in the corporate legal department improves the quality of legal services, produces better legal outcomes, reduces legal costs, improves law firm profits, restructures relationships and delivers other benefits. It starts with the tools of task-based billing, but then goes far beyond that into process analysis and the application of newly available technology to bring about dramatic improvement in the quality of legal matter management.

As more companies apply strategic management ideas to their legal functions, they begin to identify best-practice approaches to optimize results and make legal expenditures more predictable.(5) As they do, the invisible walls that separate law department management from business-side management principles begin to crumble.

TASK-BASED BILLING

Six years ago, the American Corporate Counsel Association and the American Bar Association endorsed the breakthrough uniform task-based management system (UTBMS) code list for litigation. More than 50 major corporations and outside law firms developed the code sets, which now have been expanded to cover bankruptcy, intellectual property, workers' compensation and general counseling. Made available on a royalty-free basis, these task codes give the legal profession a common dictionary to describe the work that lawyers perform for their corporate clients.(6)

Now organizations that pay more than half of all legal fees in the United States have declared their commitment to task-based billing. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

Law Firm Profits Increase with Strategic Legal Management
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.