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Gail J. Cohen

Time to embrace those disruptions

It was the best of times, and it was the worst of times. 2013 was most definitely one of the weirdest times, for law firms in Canada anyway. While I’m not drawing from any formal studies or reports, conversations with law firm leaders over the past couple of months yielded a wide variety of responses to the question, “How was your year?” The answers ranged from “our best year ever” to, as you can imagine, the exact opposite. And it’s not just Big Law showing that wide range of experience but boutiques and mid-sized firms as well. It’s across practice areas and geographic locations. All that is to say, I think law firm management is obviously starting to play a much greater role in ongoing success than it ever has before.

No one would characterize the economy in 2013 as spectacular, so it was actually fairly shocking to hear from a few firms that it had been their best year ever.

While there are predictions the economy in the United States will pick up a bit in 2014, on this side of the border, the sense I’m getting is not wholly positive.

Economists are, of course, mixed in their predictions with some saying the country will have a two-per-cent growth rate this year but others opining those predictions are far too rosy. Even those law firm leaders who say they’ve had their best, or at least very good, years, are not sure how to carry that through.

What I can say is success appears to involve more than just economic factors. Sure there were some big deals out there last year, but the bread-and-butter mid-market work was pretty flat. The Canadian legal market is not growing and therefore getting more business doesn’t often involve bringing in new clients, but more likely simply getting clients that are moving from one firm to another. So what does that mean? As one American law blogger recently wrote, law firms are going to have to change their genetic makeup.

There has been much discussion about the future of law and what that really means but how many law firms are actually changing the way they do things, shaking up traditional models, and looking at the practice and business of law in a completely different way? Not too many. And that can be seen in the fact there are a number of law firms out there struggling — and not just the little guys. Big firms, with multiple offices across the country, and hundreds of staff.

We’ve written about the struggles at Heenan Blaikie LLP, but there are others. In Ontario, there was also the demise of Heydary Hamilton PC and the mystery surrounding missing trust funds and the death of principal Javad Heydary, who some saw as a visionary and others did not.

In her Tech Support column this month, Danielle Olofsson discusses the tricky issue of figuring out the right way to price legal services. Our online practice management columnist Stephen Mabey wrote last month about the importance of legal process mapping — really knowing and understanding how each and every legal process in the firm works. Then taking that knowledge to make the processes more efficient but also in order to price them properly. Many law firms are looking at altering their partner-to-associate ratio (fewer of the one and more of the other). We’ve written in these pages before about those changing structures: fewer equity partners, more counsel, more non-equity partners, more paralegals, and better use of technology. Everything is fair game in the new world order.

Firms that have embraced these “disruptions” are doing well, having their “best years ever.” Those who are loath to change their ways are going to find they are up against it in 2014. The time for hand-wringing about change is past. The time for actual change is now. The future of your law career depends on it.


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