There has been quite a bit of talk about this very topic in 2022 and actually, my colleague Eugene McCormick had the pleasure of discussing how 550 attorney law firm Mintz, uses content effectively to punch above their weight. Caroline Manning, the CMO at Mintz, took the time with Eugene at the recent LMA event in Vegas, to talk about how this can be difficult from budget constraints all the way through to the impact it has on recruiting the best people. A quick summary can be found here.
What though, are firms actually measuring to judge success. A recent article in the American Lawyer approached the subject and establishes that profit per equity partner is an obvious metric but not always the best one to use. Some mid-sized firms actually recorded huge increases in PEP with others receiving a mixed bag as other factors like 'right sizing' (shedding of less profitable practices) and lateral higher distorted figures. Mary K Young a consultant at the Zeughauser Group puts it nicely when she says “It’s not all about money, but people say it’s life’s report card. It’s how you know you’re getting better.” She argues that culture is talked about a lot but a big part of the culture is earning more money year on year.
Mark Frazer, the Managing Partner of 140 attorney law firm Rutan & Tucker, suggests that it should be quality of work over quantity and that money will follow success as a result. He knows what he is talking about with revenue projections having been hit in 2020 and 2021 but he is keen to stress the point that there are other things that are important beyond the numbers. He cites effective client service, how resources are deployed and the level of attorney satisfaction and advancement as being integral. Staying close to the attorneys and getting to actually know them counts for a lot and is an advantage of being a smaller firm.
Brian Hennigan runs an even smaller (72 attorney firm in California) litigation boutique and doesn't disclose the financial information of the firm. Brian suggests that “A measure of the success of the firm is being in a position where we can aggressively and intelligently represent clients, and we have the resources and the people to do it” They have managed to keep a vast proportion of their fee earners with competitive salaries but also because they are given the opportunities to improve and work with clients to get them the best results.
Smaller and mid-sized firms are more agile and their people can really make a big difference. The 'Great Resignation' has however left scars across the land.