Chairman, Bradley Arant Boult Cummings LLP...Beau Grenier, Chairman, Bradley Arant Boult Cummings...
Transcript of Chairman, Bradley Arant Boult Cummings LLP...Beau Grenier, Chairman, Bradley Arant Boult Cummings...
A Comprehensive Update on Law Firm Financial Performance & Metrics
Moderator:
Beau Grenier, Chairman, Bradley Arant Boult Cummings LLP
Panelists:
David Gaulin, Partner, Law Firm Services Leader, PricewaterhouseCoopers LLP
William Josten, Senior Analyst, Client Relations & Thought Leadership, Thomson Reuters
Elizabeth A. Sharrer, Partner & Firm Chair, Holland & Hart LLP
Ted Tinson, Chief Operating Officer, Sheppard, Mullin, Richter & Hampton LLP
Comprehensive Update on Law Firm Financial
Performance & Metrics
21st Annual Law Firm Leaders Forum
October 6, 2016
REUTERS / Jason Lee
-2%
0%
2%
4%
Demand Worked Rates
Fees Worked
Productivity Lawyer Growth
Y/Y Change
Q4'15 v Q4'14 YTD Dec: '15 v '14
ALL SEGMENTS
Key Performance Measures
All timekeepers
Billable time type; non-contingent matters
Dec ‘15 and ’14 had equal working days 3 2016 Law Firm Leaders Forum - October 6, 2016
-40%
-30%
-20%
-10%
0%
10%
20% Y/Y Change
YTD Dec: '15 v '14 YTD Dec: '14 v '13
Firms with positive growth are experiencing average of 4.5% during this period in contrast to
those in negative territory experiencing -6.0%
ALL SEGMENTS
Demand Growth by Firm, YTD Dec.
All timekeepers
Billable time type; non-contingent matters 4 2016 Law Firm Leaders Forum - October 6, 2016
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80% Y/Y Change
YTD Dec: '15 v '14 YTD Dec: '14 v '13
Firms with positive growth are experiencing average of 10.6% during this period in contrast to
those in negative territory experiencing -10.1%
ALL SEGMENTS
Profit Growth by Firm, YTD Dec.
G/L Revenue 5 2016 Law Firm Leaders Forum - October 6, 2016
-80%
-60%
-40%
-20%
0%
20%
40%
60%
80% Y/Y Change
YTD Dec: '15 v '14 YTD Dec: '14 v '13
“Haves”
+10% 3-year Profit
“Have Nots”
0% or negative 3-year
Profit CAGR
Firms with positive growth are experiencing average of 10.6% during this period in contrast to
those in negative territory experiencing -10.1%
ALL SEGMENTS
Profit Growth by Firm, YTD Dec.
G/L Revenue 6 2016 Law Firm Leaders Forum - October 6, 2016
-6%
-4%
-2%
0%
2%
4%
6%
8%
Demand Worked Rates
Fees Worked
Productivity Lawyer Growth
2015 v 2014 Y/Y Change
"Haves" "Have Nots"
“Haves” v. “Have Nots”
Key Performance Measures
All timekeepers
Billable time type; non-contingent matters 7 2016 Law Firm Leaders Forum - October 6, 2016
8 2016 Law Firm Leaders Forum - October 6, 2016
“Haves” and “Have Nots”
What Didn’t Matter
Rates
– Worked rate growth the same for both
groups
Geography
– Among the “Haves”
• 7 Northeast
• 7 Southeast
• 9 Midwest
• 3 Sourthwest
• 6 West
– Among the “Have Nots”
• 9 Northeast
• 5 Southeast
• 13 Midwest
• 2 Southwest
• 5 West
Segment
– Among the “Haves”
• 12 Am Law 100
• 8 Am Law Second 100
• 12 Midsize
• 16 Global
• 8 National
• 8 Regional
– Among the “Have Nots”
• 9 Am Law 100
• 9 Am Law Second 100
• 16 Midsize
• 12 Global
• 3 National
• 18 Regional
86.9%
83.3%
85.0%
81.4%
80%
81%
82%
83%
84%
85%
86%
87%
88%
89%
Q4 '12
Q1 '13
2 3 4 Q1 '14
2 3 4 Q1 '15
2 3 4
"Haves" Billing "Haves" Collection "Have Nots" Billing "Have Nots" Collection
Realization against Standard
Lawyers
Billable time type; non-contingent matters 9 2016 Law Firm Leaders Forum - October 6, 2016
18.2% 15.8%
32.2% 39.1%
39.4% 35.0%
5.1% 5.6% 5.2% 4.5%
0%
20%
40%
60%
80%
100%
"Haves" "Have Nots"
Of Counsel
Sr. Counsel
Associates
Equity Partner
Income Partner
“Haves” v. “Have Nots”
Timekeepers – 2015
Lawyers
Billable time type; non-contingent matters 10 2016 Law Firm Leaders Forum - October 6, 2016
Only 2 “Haves” reported no Income Partners, compared to 3 “Have Nots.” There were also 3 “Haves” with no Of Counsel and 9 with no
Sr. Counsel. Compare that to 8 “Have Nots” with no Of Counsel and 5 with no Sr. Counsel.
70
80
90
100
110
120
130
140
150
Q4 '12
Q1 '13
2 3 4 Q1 '14
2 3 4 Q1 '15
2 3 4
Ho
urs
pe
r M
on
th
"Haves" "Have Nots"
“Haves” v. “Have Nots”
Hours Worked per Lawyer
Lawyers
Billable time type; non-contingent matters 11 2016 Law Firm Leaders Forum - October 6, 2016
0%
1%
2%
3%
4%
5%
6%
7%
8%
Q3 '14
4 Q1 '15
2 3 4
Rolling 12-Month Y/Y Change
Direct Overhead
“Haves”
Expense Growth
12 2016 Law Firm Leaders Forum - October 6, 2016
2.8% 2.4%
1.8%
0.2%
-0.8%
-1.4%
2.3%
1.3% 1.2%
0.8%
0.2%
-0.7%
-2%
-1%
0%
1%
2%
3%
4%
Q3 '14
4 Q1 '15
2 3 4
Rolling 12-Month Y/Y Change
Direct Overhead
“Have Nots”
Expense Growth
13 2016 Law Firm Leaders Forum - October 6, 2016
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
Sta
ff C
om
p
Occu
pa
ncy
Te
ch
no
log
y
Off
ice
Be
ne
fits
(p
rofe
ssio
nal
sta
ff)
Ma
rke
tin
g
& B
iz D
ev
Lib
rary
Re
cru
itin
g
$ per Lawyer FTE (Last 12) Y/Y Change (per Lawyer)
“Haves”
Overhead Detail
14 2016 Law Firm Leaders Forum - October 6, 2016
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
Sta
ff C
om
p
Occu
pa
ncy
Te
chn
olo
gy
Off
ice
Be
ne
fits
(p
rofe
ssio
na
l sta
ff)
Ma
rke
ting
&
Biz
Dev
Lib
rary
Re
cru
itin
g
$ per Lawyer FTE (Last 12) Y/Y Change (per Lawyer)
23.7%
“Have Nots”
Overhead Detail
15 2016 Law Firm Leaders Forum - October 6, 2016
16 2016 Law Firm Leaders Forum - October 6, 2016
How will 2016 impact us all?
-4%
-2%
0%
2%
4%
Demand Worked Rates
Fees Worked
Productivity Lawyer Growth
Y/Y Change
Q2 '15 v Q2 '14 YTD June: '16 v '15
ALL SEGMENTS
Key Performance Measures
All timekeepers
Billable time type; non-contingent matters
June ‘16 and ’15 had equal working days 17 2016 Law Firm Leaders Forum - October 6, 2016
YTD Worked Rate Growth: 3-Year Analysis
0%
2%
4%
6%
Am Law 100 Am Law Second 100 Midsize YTD '14 YTD '15 YTD '16
All timekeepers
Billable time type
18 2016 Law Firm Leaders Forum - October 6, 2016
YTD Fees Worked Growth: 3-Year Analysis
0%
2%
4%
6%
Am Law 100 Am Law Second 100 Midsize YTD '14 YTD '15 YTD '16
All timekeepers
Billable time type
19 2016 Law Firm Leaders Forum - October 6, 2016
20 2016 Law Firm Leaders Forum - October 6, 2016
Panel Discussion