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Hildebrandt Watch

Hildebrandt Expands Presence in Asia

Hildebrandt, the leading management consulting firm to the legal market, today announced the global expansion of Hildebrandt services in Beijing, Hong Kong and Sydney effective January 1, 2010.

The potential growth of the legal profession in Asia is impressive. Global firms continue to invest in the region although many lack a strategic business plan for their offices. Local and regional firms are also growing and we envision some potential consolidation of the market. The biggest challenge for local and regional firms is to put in place a structure and systems that will allow them to compete effectively in this changing market. We would not be surprised if there were consolidation between the growing Chinese firms and a major US or UK firm.

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Who Broke the Two-Tier Model?

The 1990’s and early years of this decade saw a dramatic trend away from the traditional single tier of partnership among large law firms toward a new model where most larger firms today operate with both a traditional tier of equity partners (owners) and a second tier of non-equity partners whose status is somewhat different. These trends were driven by the twin assumptions that a second tier of “partners” would increase profitability by boosting leverage with highly productive and trained lawyers, and improve long-term performance by assuring that the owners/decision makers were those partners who were truly crucial to the firm’s success while giving these rising stars an extended period of time to prove themselves. Based on the evidence of the early 1990’s, these assumptions seemed reasonable. At that time, the dominant version of the two-tier structure, sometimes called the Chicago Model, was focused on using the non-equity tier as a stepping stone to equity.
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The Evolving Economy and Four Resulting Trends for the Legal Profession

Economic problems impacting law firms are prompting a wealth of predictions about the future. What structural changes may result from the current economic downturn for law firms and the practice of law? The following is an updated version of an article first published by Blane Prescott, Vice President with Hildebrandt, in the closing months of 2008.
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Unprecedented

I think the word "unprecedented" may be the best way to sum up the past 10 years in the legal profession. It applies to every major trend and development that has affected law firms during this period: unprecedented demand for legal services; unprecedented law firm growth and increase in profitability; unprecedented competition for top talent; unprecedented compensation for first-year associates; and, finally, an unprecedented rapid decline in demand for what we commonly think of as "recession-resistant" legal services.
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Alternative Pricing: A Lasting Change in How Clients Buy Legal Services

Legal services pricing is the hottest topic in law firms today. Many companies are experiencing significant cost pressures and legal services, which for years have been excluded from corporate scrutiny, are now expected to find efficiencies and cost savings. Moreover, the conversation has gone beyond simply pricing to actually delivering services on a different, and more cost effective, basis. Some lawyers, remembering the host of articles over the last 25 years calling for “alternative pricing” and predicting the death of the billable hour, question whether law firms will ever bill significant amounts of work on a non-hourly basis. Others see pricing and service delivery as a way to partner with key clients and enhance their market position.
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Hildebrandt Baker Robbins Introduces Process Improvement and Project Management Training

HILDEBRANDT BAKER ROBBINS has teamed up with Legal Sales and Service Organization (LSSO) and faculty from George Washington University to offer a program on process improvement and project management developed specifically for the legal industry. This training is offered by leading experts who have led process improvement and project management in law firms and who have industry experience from organizations who embraced these concepts long before law firms. The most valuable approaches for law firms have been chosen, language has been customized, and exercises and case studies have been developed based on real-life situations facing law firm leaders and managers, to make the program relevant for participants in law firms. In addition, we will discuss and demonstrate the tools that project managers use to successfully track progress from start to finish. The links between project management and process improvement will be discussed and clarified throughout the training.
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Law Firm Mergers Continued Strong in 2009 but Likely to Slow in 2010

According to Hildebrandt Baker Robbins, leading consultants to the legal industry, law firm merger activity continued at an active pace in 2009, with a total of 57 completed mergers and acquisitions involving U.S. law firms, up slightly from 55 in 2008. The level of completed mergers in 2009 is consistent with the number over the past 5 years, with 54 completed mergers in 2007, 59 in 2006 and 52 in 2005. As has been the case in each of the last 5 years, the busiest quarter in 2009 was the first quarter with 33 mergers, [compared with 22 in the first quarter of 2008] followed by 9 in the second quarter, 7 in the third quarter and 8 in the fourth quarter.
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2009 Hildebrandt/Citigroup Annual Report to the Legal Profession

Over the past year, we have watched as the growing economic crisis has spread across the legal market. Although signs of an economic slowdown were evident in the second half of 2007 - as demand in real estate, structured finance, and transactional practices turned sharply downward - the full financial impact of the recession was not felt by most firms until 2008 and, even then, the impact was not uniform across the market.
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Hildebrandt Introduces LawVision Services

Hildebrandt, the leading management consulting firm to the legal market, today announced the introduction of LawVision™, a new consulting service that helps law firms adapt their business models to changing market conditions.

The current economic downturn has focused attention of the legal profession on the basic structural, economic, and work process models that have dominated law firms for many years. Some of the key aspects of currently prevailing models include hourly pricing, lockstep progression and compensation for associates and a profit model based on growth and expansion.

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Lockstep-to-Levels:

Having long recognized the flaws inherent in lockstep systems, a growing number of law firms are now transitioning to performance-based compensation and advancement systems. The downturn in the economy has certainly accelerated the pace of these transitions, but other factors contributed to the change in the way firms are hiring and managing associates. These developments include changing expectations from clients, who question paying high rates for attorneys that are still developing their skills, as well as different expectations from young associates, who want more work-life balance and are not as concerned about the path to partnership as older generations. Law firms are also starting to design their talent management systems so that they better align compensation with actual performance.
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The Challenge of Strategy Implementation: Tools for Turning Your Firm’s Strategic Plan into Action

Does your firm have a strategic plan? Do you know where that strategic plan is currently located? Is it tucked away in a dusty folder, hidden among a pile of abandoned firm initiatives? Or is your plan integrated into the fabric of your firm - indoctrinated into your firm’s practices, people, and culture?
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Hildebrandt Baker Robbins Peer Monitor Index Rises Again in Q4, '09

The Hildebrandt Baker Robbins Peer Monitor Economic Index (PMI) rose nine points to 55 for the fourth quarter of 2009. This is the third consecutive quarterly increase for the index, even though demand is light compared to historical levels, and pricing remains weak. For the full year, revenues for Peer Monitor participants fell slightly, down one percent. And profits per partner were flat for the year, due to aggressive cost controls and improved productivity.
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Hildebrandt and Baker Robbins & Company to Merge

Hildebrandt and Baker Robbins & Company, the two leading consultancies serving the legal market, announced that they will merge into a single company, effective January 1, 2010. Both are part of the Business of Law group of Thomson Reuters.

Hildebrandt is the premier management consulting firm serving law firms and corporate and governmental law departments throughout the world. Baker Robbins & Company is the leading technology and business process consulting firm for the same market. Together, the new firm – which will be known as Hildebrandt Baker Robbins – will be the largest and most diversified consultancy serving the legal market, with more than 120 consultants working around the world in a broad range of practice areas. 
 

To read the press release in its entirety, click here >>

Hildebrandt Institute

Upcoming events from Hildebrandt

Hildebrandt Baker Robbins Insight

February 5, 2010:

 

As more clients push for alternative fee arrangements, many law firms are starting to rethink the way legal work is conducted. In a recent survey we conducted of managing partners last fall, 55% indicated that the "management of legal matters" is one of the top areas where they expect to see the most change in the next 3 to 5 years and 34% indicated that they had undertaken formal initiatives to improve work processes. Law firms are relatively new to project management, process design and engineering (at least as they apply to legal matters), but these concepts have been tested and refined over time in other industries. Applied effectively, these tools can bring down the overall cost of legal work, enabling firms to be more responsive to clients and therefore more competitive in the legal market.

 

For more information about learning and applying these disciplines to your firm, click here. 

 

 

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