Law Firm Business Services
We Advise & Support Law Firms In Five Key Areas:
Strategic Planning • Succession Planning • Compensation Systems • Mergers/Acquisitions • Profitability & Financial Management
Our strategy and planning assistance can help your firm decide where it is going and develop a realistic plan for getting there.
Our recommendations utilize firm-specific research and analysis plus an in-depth understanding of the market economics and competitive landscape to provide as much insight as possible.
- Strategic Planning
- Succession Planning
- Partner Compensation
- Profitability and Financial Management
Strategic Planning Services
Why hire us? Because as Yogi Berra said, “If you don’t know where you’re going you might not get there.” We know where the market is going; so do your clients.
The realities of the legal marketplace include changing client expectations, convergence, larger, more powerful law firms entering new markets, and decreased client and partner loyalty. These forces make it difficult to not only develop but also execute a successful business strategy for your law firm.
Many law firms report that traditional strategic planning methods no longer work well. They often produce, at best, disappointing results. In some instances, a firm's three-year strategic plan is obsolete after a year. Other firms develop what appear to be solid strategic plans, but they do not implement them.
Strategic planning is the process whereby a firm determines, commemorates, and ultimately commits to a specific overall direction for the future. First and foremost, the strategic plan addresses the unambiguous actions which must be taken to achieve the desired direction.
Key to successful strategic planning is building a consensus regarding the direction of the firm based on shared values. In order to approach this process, a firm must be well-organized internally to allow the partners to focus their efforts externally. The external view looks at the firm’s competitive position in the marketplace rather than grappling with internal issues.
Maxfield Peterson incorporates a tried and true process in assisting a firm in developing strategic initiatives that include personal and confidential interviews, client interviews, analysis of the competitive landscape, financial and economic analysis, developing strategy retreats, and working with your firm’s strategic planning committee during each step of the process.
Why hire us? We know the complexities of law firm cultures, building the business case, partner compensation methodologies, financial analyses, integration efforts, and more.
As the legal industry matures, law firms are considering structural options to increase the depth and breadth of their practices, pursue new practice opportunities, and to help insure their stability. Organic growth may be insufficient to achieve firm goals. Mergers may offer a viable means of increasing a firm’s competitiveness and accomplishing its strategy. Our clients benefit from our broad industry knowledge and depth of experience with mergers and acquisitions.
Among the merger services Maxfield Peterson has been called upon to provide are:
- Advice and Counsel. Law firm mergers and affiliations are substantially different from corporate mergers and acquisitions. We provide firms with objective insights and experience as they consider consolidations and affiliations.
- Merger Partner Search and Analysis. We work with firms to understand their growth objectives and then systematically assist them in seeking and evaluating potential merger partners. We help identify appropriate prospective firms, developing an approach to candidate firms, and making the initial contacts.
- Building the Business Case and Financial Analysis. Preparation is vital and both firms’ partners must be presented from the very start with a positive and compelling rationale for a combination.
Succession Planning Services
Why hire us? Because we, together with the Beatles and Rolling Stones know this subject matter better than you:
“When you still feed me, will you still need me, when I’m 64?”
“What a drag it is getting old.”
For law firms, a significant part of their future occurred in 1946. That was the first year the baby boomers were born. Baby boomers are the demographic group born during the post-World War II baby boom, approximately between the years 1946 and 1964. This includes people who are between 53 and 71 years old in 2017, according to the U.S. Census Bureau.
On October 21, 1989, The Economist featured an article penned by Peter Drucker: "The Futures That Have Already Happened". Peter Drucker wrote about the areas that would bring far-reaching changes in social and economic environment and, in the strategies, structure, and management of business. Mr. Drucker ended his article with this paragraph: “The trends that I have described above are not forecasts (for which I have little use and scant respect); they are, if you will, conclusions.
Everything discussed here has already happened; it is only the full impacts that are still to come. I expect most readers to nod and to say, “Of course”. But few, I suspect, have yet asked themselves: “What do these futures mean for my own work and my own organization?” Indeed, what does this mean for your legal practice and law firm?
Like strategic planning, succession planning is not a one-time event. Succession planning is simply a part of a firm’s lifecycle. The concept of succession planning is something that law firm leaders discuss regularly. These leaders often say “We really should develop a succession plan.” And then months and years go by with nothing happening. Law firms seem to be particularly bad, and in some cases exceptionally bad, about embracing succession planning. Sometimes this is due to the unique nature of law firms.
Like many things not suited for repetition here, we recognize it when we see it, and we working with firms by:
- Developing a demographic analysis
- Reviewing client relationships
- Creating client retention strategies
- Identifying up and comers
- Developing compensation strategies
- Developing plans for younger attorneys
- Creating a path for leadership succession
Failing to embrace succession will lead to many lost opportunities, clients, and a leadership gap. Let Maxfield Peterson help you resolve succession planning issues before they escalate to a business crisis.
Partner Compensation Planning
Why hire us? Because we structure effective compensation systems. Partner compensation is one of the most controversial topics in law firm management. Our vast experience shows that partner compensation affects culture, working relationships among partners, and often sets the "tone" of the firm.
We work with firms to develop and implement effective models of compensation. Where appropriate, we assist firms in integrating their performance management and compensation systems. Our experience across different professions and jurisdictions provides us with a detailed knowledge of the various approaches to rewarding partners and other professionals. Our independence provides our clients with an objective perspective, both during the development of a new system and in its operation, and reassures partners that the system is fair in both principle and application.
Our partner compensation reviews include:
- Assessing your current methodology
- Aligning compensation decisions with firm strategy
- Comparing your firm's compensation practices with peer firms
- Assessing effectiveness of your compensation committee
- Reviewing associate compensation and bonus programs
- Compensating the unique partner (firm leaders, Uber business generators, laterals)
- Following the money
- Compensation programs for retiring partners
Developing a fair and competitive compensation program with Maxfield Peterson allows you to attract and retain the right lawyers. You will resolve compensation issues quickly and effectively before they develop into major problems that could destabilize your law firm.
Why hire us? We thoroughly understand law firm finance and economics. Find out where you stand against comparable firms and what can be done to enhance profits.
Strong and superior financial performance is the result of hard work and dedication to all aspects of a firm’s operations and strategy. For over 30 years, we have studied and researched law firm economics, advised firms on their individual financial performance and in making recommendations to enhance firm profitability.
In strategy, merger, and partner compensation engagements, we invariably carry out an overview financial analysis focusing on the issues that impact on profitability: competitive billing rates, utilization (working hard or hardly working), leverage (the firm’s ability to push work to the lowest cost level), overhead and staffing (effectiveness of managing firm resources), and profits (income available for partner compensation).
Such analysis is needed to enable us to advise firms on their financial planning and improvements to their economic performance. Maxfield Peterson is called upon to:
- Help firms to identify the financial issues that must be addressed and resolved to achieve increased profitability.
- Suggest improvements to enhance cash flow.
- Review budgeting techniques to manage partner income expectations.
- Assist firms to review or develop appropriate pricing strategies.
- Advise on best practices for financial management reporting, KPIs, and benchmarking.
- Assist and advice on profitability reporting by client, partners, and a partner’s book.
- Review partner capital structures to address a firm’s future capital needs, partner admissions, and partner retirements.
- Review unfunded retirement programs and assess the efficacy of your current program and work through changes as appropriate.
1203 North First Street
Montrose, CO 81401
640 Sherman St. Suite D
Ridgway, CO 81432