Wharton Profs Analyze Law Firm Business Practices

Will the billable hour business model wither in the economic downturn?

This is one of many law firm business practices scrutinized by Wharton professors in a FORBES article today titled "New Fee Structure for Law Firms."

Referring to the ACC Value Challenge, the article notes that now is a time when clients clearly are pressing law firms for alternative billing arrangements like retainers or even success fees.

The traditional partnership structure, where multitudes of associates generate highly profitable billing leverage, is falling victim to staff cuts as large transactions disappear.

What is the answer to survival in the short run? What will law firms look like in the long run? The Wharton profs suggest the following:

1. Law firms should think strategically, rather than taking a problem-based approach. In part, this means "articulating the firm's competitive advantage and value proposition." (This Rainmaking Lady notes that any law firm not already doing basic planning is destined for deep trouble in any market.)

2. Develop deeper client relationships to strengthen ties between the law firm and corporate client. This will involve the active support of law firm partners, associates and support staff working in concert.

3. Diligently assess talent within the firm, and align skill sets to best solve challenges faced by both clients and the firm.

Good advice, but not necessarily profound. These are "best practices" that should be included in any law firm's approach to business development in good times or bad. Now is a good time to get back to the basics!