The interesting thing the Citi Private Bank's Law Firm Group found about that is this: Many law firm managing partners had predicted those six months would have been a period of growth for their particular firm.
Here is the report from Bloomberg Law. Call it a time of magical thinking.
For example, there had been a .03% drop in demand. Yet, 80% had predicted growth.
As for realization rates, only 22% anticipated a decline of what was billed versus what was collected. The reality is that 55% of firms experienced a drop in realization rates.
Yes, it might be human nature to be optimistic about how one's own business will do in times of flat or declining growth. But that is a dangerous state of being. It could have triggered so many firms' going along with the Cravath $180K bump.
In business, turnarounds often happen when the leadership is appropriately downbeat.
During the Chrysler turnaround by the Lee Iacocca team, realism about the threat of bankruptcy caused a slashing of expenses. As part of that process, the breakeven point was lowered. Not only did the company dodge the bankruptcy bullet. It flipped into a high-growth mode.
Instead of optimism, law firms might have confidence that they can increase demand for their services if they try X, Y and Z. Some of that might pan out.
Recently I turned around my own communications boutique through applying the Pareto Rule. That is, focusing on the 20% of accounts which yield 80% of revenue. My winning strategy was focusing exclusively on the high end. No more bottom-fishing.
Place your sponsored content and links on Jane Genova's syndicated sites.
Inbound links range from Bloomberg to Bing to AOL.
High rankings on Google.
Complimentary Consultation firstname.lastname@example.org.