New Survey Reports on Law Firm Management Techniques
A recent Altman Weil Flash Survey of AmLaw 200 Law Firm Management Techniques reports that lateral growth, strategic planning and benchmarking/best practices are the most effective management techniques implemented in major law firms in the last five years.
The survey, inspired by Bain & Co.’s annual survey of top management techniques employed in major corporations, asked Chairs and Managing Partners of AmLaw 200 firms to identify which of 24 law-firm specific management techniques they had used and to rate their experience with those employed. Effectiveness ratings were computed as a function of each technique’s popularity (frequency of employment) and assessment of its success (‘very successful’ or ‘successful’).
“There are parallels between major law firm experience and that of major corporations with respect to certain management techniques,” notes Altman Weil principal Ward Bower. “For example, strategic planning is one of the top rated management tools in both environments.”
“Likewise, there are differences. Predictably, we see a time lag between the adoption of management tools and techniques in business and industry and the subsequent adoption in law firms. It is also predictable that as more firms attempt to use some of the more newly developed and currently least utilized techniques, some will get it right and we will see those techniques move up in terms of frequency, experience and effectiveness.”
Most Popular Management Techniques
When asked which management techniques had been utilized in the last five years, the most frequent responses were Alternative Pricing and Lateral Growth, each used by 100% of law firms participating in the survey. 97% of respondents reported using Strategic Planning in the last five years.
The least frequently employed management technique was Offshoring (the relocation of operations to another country to reduce labor costs, serve foreign clients, etc.), with only 3% reporting such an initiative in the last five years. Other most infrequently used techniques included Six Sigma (the use of statistical methodology to achieve near perfection in operations) at 5% and Personality/Psychological Testing at 15%.
Success ratings
Participants were asked to rate their experience with each of the techniques they employed. The most highly ranked technique, rated by 89% of participants as either “very successful” or “successful” was Merger/Acquisition. Lateral Growth ranked second with 87% positive results. Strategic Planning rated third with 85% positive scores.
By a dramatic margin, the technique rated least successful by those employing it was Offshoring, with 0% indicating a ‘very successful’ or ‘successful’ experience. Strategic Alliance/Joint Venture/Networks was rated positively by only 40% of respondents and Knowledge Management received positive remarks from 42% of those firms using it.
Effectiveness of Management Techniques
Effectiveness ratings were determined by multiplying popularity and success scores. Lateral Growth ranked as the most effective management technique with an overall effectiveness score of 87%. Strategic Planning was second with an 82% score, followed by Benchmarking/Best Practices with a 71% effectiveness rating.
The least effective management techniques were Offshoring (0% effectiveness), Six Sigma (3% effectiveness) and Personality/Psychological testing (9% effectiveness).
About the Survey
Survey data was collected in July 2005 from AmLaw 200 law firms, with 30% participating (60 of the 200 firms solicited). The full report of the tabulated data for all 24 management techniques appears on the Altman Weil website at www.altmanweil.com/LFMTSurvey.
About Altman Weil
Founded in 1970, Altman Weil, Inc. provides management consulting services to law firms, law departments and legal vendors throughout North America, Latin America, the U.K. and Europe. Altman Weil is known for the many legal economic and management surveys it conducts and publishes, including the annual Survey of Law Firm Economics.
Download a copy of the survey results: www.altmanweil.com/LFMTSurvey
