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Recent article for Surrey Lawyer (Official Journal of The Surrey Law Society)

A recent Annual Law Firm Survey highlighted that 75% of UK firms have increased their fee income this year, but profit per equity partner remained flat or reduced. It highlighted:

  • Deterioration in net profit margin, given an increase in volume, has been driven by higher fixed costs. Additional headcount (more equity partners, fee earners, paralegals and business support), as well as greater spend on IT and operational infrastructure
  • A growing trend for fixed and contingent fee arrangements along with downward pressure on fees through competition
  • Lower average utilisation of fee earners and paralegal staff has eroded productivity.

So, are we working harder instead of smarter?

The use of productivity improvement techniques in the service sector has found significant traction over the last decade as practitioners grounded in engineering backgrounds have applied the same rigorous and scientific thinking found in lean operations to office processes, shared service centres and professional service environments. Adoption across many sectors has been rapid and forward planning organisations are readying themselves for the future by adapting ahead of their competitive environment as per Darwinian evolutionary principles. And with events like the Jackson reforms, Brexit and increased competition in the legal sector along with the trend of customers  demanding fixed fee quotations it is sometimes hard to demonstrate the value a firm adds upfront during the client engagement process. Are clients picking the cheapest instead of the best? After all, what price is worth the wrong legal outcome?

Productivity improvement, getting more output per hour worked without increased human effort, can be achieved through:

  • Better work design and resource organisation
  • Process redesign, quality control and standardisation
  • Staff training in wider skills, increasing employee engagement and motivation
  • Higher staff utilisation through elimination of non-value-adding activities
  • Automation, improved use of technology and software supporting the operational design

Combined, they lead to better customer experience, reduced operational costs and increased profit.

ChangeWise has experience in all aspects of service productivity improvement and has developed a comprehensive operational assessment approach that quickly identifies the key factors that enable an efficient and effective operation. By examining critical business and support functions, processes, company policies, organisational structure, culture and key performance metrics we can identify your company’s strengths and weaknesses, provide insight, pinpoint priority areas and make recommendations for improvement. Call Mike Williams on 07866 537 580 to find out more.

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