Wednesday, May 12, 2010

Profit per Partner Sends Wrong Message

So says international law firm Orrick, Herrington & Sutcliffe, LLP, which issued a press release today titled "Orrick to Emphasize Alternative Success Measures."

"Today, more than ever, the Profit Per Equity Partner metric simply does not tell the market how profitable a firm is, how efficiently it is run, how well it serves its clients, how well it treats its people, or how committed a firm is to pro bono work, its community, and diversity," said Ralph Baxter, Orrick's Chairman and CEO.

Given the cost pressures facing many corporate clients in today's tough economic climate, this move diverts attention from an emphasis on money to a more client-friendly focus on service and results. Orrick is wise to take a leadership position on this topic, which is bound to be well-received by clients and prospects.

The ACC value challenge encourages Big Law to innovate in regard to alternative fee arrangements, and a move away from widely publicizing monetary measures is a positive step.

Now other firms are likely to feel pressured to take a similar stance.