November 9, 2020
The Covid-19/PPP Coma is lifting for Law Firms – Now What?
Posted by David Roberts, CPA
Many Law Firms had “issues” way before we knew anything about Covid-19, and if we can say anything for sure about this pandemic, it’s become the great “accelerator.” The great accelerator of many issues we could only lightly discuss before – issues that were on our checklist before this all happened such as:
- Should we allow employees to work remotely? (Done)
- How do we cut our discretionary expenses, such as our travel and entertainment budgets? (Done)
- Space is getting so expensive – can we/should we reduce our real estate footprint? (Done)
- Can we somehow reduce our administrative staffing and still get by? (Done)
- How do we get our partners to focus on collections? (Done)
So, we can thank this pandemic for helping us to make some long-overdue changes. But what about all the other issues that are still on our punch lists?
- Dealing with under-productive partners
- Managing partner retirements
- Succession and leadership transition issues
- Addressing partner compensation methodology
- Defining a firmwide strategy
- Assessing current use/future investments in technology
- Becoming more data and analysis-driven to advance the business
- Developing organic and inorganic growth strategies
- Developing market-based pricing strategies
This pandemic is not like the 2008/2009 financial market crash. It is deeper and longer-lasting, affecting various sectors of our economy in very significant ways. Law Firms typically lag behind the industry when it comes to change, but they can’t afford to sit and wait for this one out.
We can’t entirely predict the future, but it almost certainly will involve a rapid evolution of how law firms do business – both on the operational side and the delivery side. This type of wholesale change is unsettling and can create fear, uncertainly, and doubt (FUD) – but along with it, tremendous opportunities for those firms who are ready to seize the moment.
The key to moving from the paralysis of FUD towards a successful evolution will be Leadership. Leadership that can see the opportunities, set a vision, make the tough decisions, get their people on board, and keep it all glued together through the uncertainties that lie ahead.
Of course, it is a lot easier to do nothing or to “wait and see” what happens. In today’s world, I would be very concerned about relying on hope. Hope is not a strategy. This will not conveniently “go away” just by virtue of ignoring it. The longer you wait, the tougher and more critical the issues will become. Take the necessary steps now, and you’ll be setting the course for an exciting new vision of your firm.
David has more than 30 years of experience working with law firms of all sizes. He and his group have consulted with more than 1,200 law firms regarding strategic planning, partner compensation arrangements, succession planning, partner withdrawal and retirement, organizational reviews, profitability improvement, partner retreats, dissolutions, and mergers and acquisitions. David has authored numerous articles for the American Bar Association Journal and California Lawyer, and he co-authored “Financing the Start Up Law Firm,” published by the American Bar Association’s Law Practice Management section. David holds a Bachelor of Science degree from California State University, Northridge.
Co Authors :
Kendra is a Manager in Armanino’s Law Firm Services group and has worked with law firms exclusively for more than 13 years. Whether a law firm has 10 attorneys or 200, she works in close partnership with the management team to develop and implement practical solutions to the financial, operational and strategic issues that threaten the long-term sustainability of the organization.