The New Normal
Posted by Biz Yeti on January 22, 2014 1:41 pm
The New Normal
One of the best visits I had during my time in Washington, DC was with Elizabeth who is a firm administrator for the local office of a major national law firm. Although she was very humble about her vast experience in the legal marketplace, she shared some insights that really resonated with me.
As you may expect, the legal marketplace has been significantly impacted by the downturn in the economy. Firms are increasing staff to attorney ratios, moving to fee models that don’t include ancillary expenses such as conferencing and copies, and relying on technology to improve their productivity. Elizabeth, as well as other professionals that I have met who help drive the business operations of law firms, all echo the themes of increased productivity and cost management.
However, Elizabeth put a twist on the conversation that got me thinking. She said that the term “the new normal” just doesn’t make sense to her. The reality is that what we are experiencing is a natural evolution in how businesses (including firms) should function. I think Elizabeth is on to something here and may become one of my leading candidates for the “Secretary of Common Sense.”
Elizabeth shared that her firm has recognized market and economic trends and the changing needs of their clients and has evolved themselves without the economy forcing them to do so. They can run with less staff because they use technology to make their administrative staff much more efficient. As an example, instead of typing every word a lawyer speaks, they use digital dictation that converts the spoken word into a computer file. Imagine the time savings!
They have focused on simplifying how they charge their customers and have found ways to reduce cost for all of their overhead expenses. It is no longer acceptable to go to AT&T, pay a high rate per minute for a conference call, then mark it up and charge the customer well above the market rate. This firm focuses on segmenting their clients to understand which industries, clients and practice groups are the most profitable.
Elizabeth, I think we need to consider that you are absolutely right. The current economy is not the “new normal”. It’s the marketplace telling us that we need to evolve, change, become more productive and more cost efficient. And we need to do this before we become indifferent to the business philosophy that led us to borrow too much, spend too much, hire more people than we needed, not run efficiently and charge more for our services than the market would bear.