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Top 20 Strategies in a Slowdown by Michael J

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Top 20 Strategies in a Slowdown by Michael J A $25 Chevron gift card!! ‘You be the judge’ scenario – See page 14 for details! 2009: 25th Anniversary of TOPICS! Enter to Win: Provide a response to our latest BC Legal Management Association A newsletter to help our members and partners stay current with the business of law Spring 2009Topics Topics THERE’S MORE THAN ONE WAY TO KEEP FROM BEING SKINNED Top 20 strategies in a slowdown by Michael J. Anderson President, Innovative Consulting so we are just at the point now that longer to bounce back when the shift fi- many other businesses encountered a nally happens, so many firms have not s pragmatists, we prefer to talk year ago. Accordingly, we will take Top 20 strategies ª to Page 2 Aabout solutions rather than the causes of the current recession. Every- New BCLMA Board, elected at AGM, begins one knows what is happening: bank - ruptcies, tight cred- organizing upcoming events and projects it, foreclosures, industry consolida- ore than 20 Representatives and and four general Director roles, in addi- tion, the collapse of MAffiliates attended the BCLMA An- tion to two Officers: Secretary and major financial nual General Meeting on Thursday, April Treasurer. The motion was passed. markets, fewer 2 at Fasken Martineau in Vancouver. The 2008/09 Executive Board deals of any kind, Highlights included an oral report of Members stepped down as required and more litigation and the past year’s accomplishments from the new 2009/10 Executive Board was bankruptcy work, President Stephanie Marsh, a review of voted in, with the Past President posi- Michael J. far fewer real-estate the financial statements by Doug Aus- tion vacant. Anderson transactions-both man, who was filling in for Angela The new Executive Board’s first personal and commercial, US bank fail- Zarowny, and a motion to keep Execu- meeting on April 11 immediately began ures, and so on. The questions are not, tive Board Director positions limited to discussing plans and events for the up- “What went wrong?” and “Who can we seven, to ensure maximum proficiency coming year. blame?” Rather, “What are we going to and controlled costs. Some of those include the Canadian- do about it?” A seven-director board includes ization of the Certified Legal Manage- Law firms tend to be a lagging indi- three presidential roles – President- ment Program, joint webinars with cator of the general economic picture, Elect, President and Past-President – New BCLMA Board ª to Page 8 Wise whys and wherefores of Generation Y over inaction, and – more than any- by Mike Bowerbank Canadian statistics, there are 5.3 mil- thing else – they ith Generation Y workers slowly lion people in Canada who fit into this value what’s cool. Wbut steadily filling the ranks of age group, making them three times The latter part our organizations, it is important to un- more populous than Generation X. of the generation derstand what makes them tick. People who are part of Generation seems like it’s al- It’s easy to just let them be, as they Y are generally less cynical about social ways had the Inter- generally work hard and seem content, issues, but are also much more influ- net and cell Mike but if you work on that assumption, enced by brands and peers than previ- phones, and today Bowerbank you will later wonder why these work- ous generations. At home, according to are texting abbre- ers don’t stick around, and why the Business Week, three out of four have viated language (“c u l8r”) while turnover rates are higher than you two working parents, and one in four plugged into their iPods. But they’re think they should be. live in single-parent households. actually a crossover generation from For clarification, Generation Y is People in Generation Y always feel analogue. The Internet began in the generally considered to be people born crunched for time, they prefer direct- mid-’90s, the iPods in 2002. Their old- between 1978 and 2000. According to ness to beating around the bush, action Wise whys of Gen Y ª to Page 6 Spring 2009 BC Legal Management Association www.BCLMA.org Member Services: [email protected] Topics 2 Top 20 strategies ª from Page 1 partners who are underperforming, and work levels as an alternative to layoffs. yet had the meaningful discussions that showing no signs of changing the way They would need to agree to work fewer need to occur if we are to develop a strat- they practice. hours, and accept less remuneration until egy to deal with this downturn. Every firm has expenses that they the work levels pick up. The following 20 strategies are offered could eliminate but we would suggest In this scenario, three associates might for your consideration. Some of them will that firms be selective. Do not weaken the share two full-time positions. As for staff, be helpful for you, and some will not, strategies that will get the firm back on some of them might actually embrace a but, if you give them all some thought track. An example might be some of the three– or four-day work week. and implement those that will work for marketing expenses. Some of those ex- your firm, the net effect will be the devel- penses can be eliminated, but to just stop ASSOCIATE COMPENSATION Con- opment of a strategy that will help you all spending on marketing could be 4sider changing associate increases survive the current economic crisis. catastrophic. from a lock-step system to one based on merit. This encourages your best young SLASH AND BURN Often, the knee- FREEZE SALARIES Rather than lay people to excel. 1jerk reaction of many firms is to lay 2off associates or staff, first consider off associates and staff to drastically re- whether you might be able to get by PARTNER COMPENSATION Con- duce expenses. Sometimes, it is even the through freezing current salary levels. If 5sider reviewing your partner-com- right strategy. you choose this course of action, you pensation criteria to put more emphasis Most often, however, it only serves to should be prepared to undertake to all on those areas that are most critical in a impair the firm’s future performance, employees that the partners will not in- recession. and may take many years to overcome. crease their own income until the freeze For example, you may wish to put Layoffs must be related to underperfor- can be lifted for everyone. more emphasis on client-generation suc- mance, or lack of current and potential cesses or receipts, and less emphasis on work. Layoffs should also not be limited WORK SHARE Associates might well hours recorded or fees billed. to associates and staff ; you may have 3be interested in sharing the reduced Top 20 strategies ª to Page 3 Domain Experts in cost recovery solutions #2400 1066 West Pender Street, Vancouver BC V6E 3X1 Phone: 604.685.1078 Toll free: 800.667.0332 www.sai.ca Spring 2009 BC Legal Management Association www.BCLMA.org Member Services: [email protected] Topics 3 Top 20 strategies ª from Page 2 often meets with a loyalty that will last with your clients. long beyond the current downturn. Almost all great rainmakers will tell FOCUSED PRACTICE AREAS Firms you that this is the best marketing you 6must constantly review those practice MARKETING 1 Use your newly- can do. areas in which they are best suited. Even 11 found free time to do more market- in boom times, there are practice areas ing or receive marketing training. MARKETING 3 Develop the song that a prosperous firm may well wish they 13 sheet. Make sure that everbody is didn’t have. This may be due to prof- MARKETING 2 Now, more than on the same page. Make sure they are itability, manpower available to do good 12 ever, get out of the office and visit Top 20 strategies ª to Page 4 work, client demand, or commoditization of the work. In tough times, it may well be mandatory to eliminate those under- performing practice areas. Partners, asso- ciates and staff in these areas can be re- trained and re-assigned to another area, or offered the opportunity to seek other employment. RE-TRAINING & RE-ASSIGNING 7Are there partners, associates or staff who could still be used if they were pre- pared to re-train in another, but perhaps related, practice area at least on a part-time basis, so that they are more fully employed? For example, could a real estate asso- ciate, partner or paralegal be used to help in the busier foreclosure practice? Find- ing ways to keep people will pay benefits for years to come. RECEIVABLES Credit will be difficult 8to obtain for both the firm and its clients. By focusing on your receivables, you lessen your need to borrow, and you will more quickly identify, and hopefully remedy, client situations that will be a problem. Reducing your WIP through billings may be just as important as collections. FEES PLUS Yes, there are firms out Trusted 9there who do not charge enough for Cost-Savings their work. Be sure that your rates are Specialists competitive from a below-the-market Specialists in Excelera Consulting Group will: perspective. If you are $20 per hour be- Overhead Cost • Identify significant, measurable low your market, you may be able to Reduction cost savings raise your rates, and have a positive im- • • implement best-in-class purchasing pact on profits. Advisors to Western processes Canada’s Top Legal • negotiate premium contract terms FEES MINUS Freeze or reduce Firms • monitor invoice pricing to ensure accuracy 10 your hourly rates, and let your & savings clients know that you are sharing their pain.
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