Why for so many employed lawyers in private practice 5.5 chargeable hours daily average is such a "sick" level of productivity...

1. Sadly I hear the ubiquitous 5.5 as a goal in firms, from lawyers at my seminars and in new firms I'm consulting with, every business week...

2. This goal is appallingly low even from an 8-hour day, and yet, surprisingly to some, this level is more often than not not even achieved!

3. By contrast, in firms running KMSWorkPlans™ averages above 6.5 are considered normal, and where the working day is longer...9 hours for example, actual production and recovery over 7 hours is commonplace...

4. This important difference produces an average around $100,000 per lawyer per annum...dramatically improving principals' true profit returns and allowing much improved salaries for those who deserve to earn them...

5. So where does it all go so wrong?

5.1 There is usually simply too much unsophisticated planning, too much guesswork involved...

5.2 Too much "allowance" is made for what we at KMS call FirmTime for the average lawyer...

5.3 Simply put, if a firm targets 5.5 ClientTime hours invested on a daily average from an 8 hour day it is in effect "planning" for that average employed lawyer to "invest" 2.5 hours either in "necessary and unavoidable" FirmTime, or  in "useful" FirmTime in pursuance of the firm's business plan, and from my long and wide experience that's simply a nonsense!

5.4  Firms don't organise their Business Development and work allocation so that employed lawyers have a healthy backlog of Client work at all times...

5.5 The vast majority of employed lawyers, despite being willing, nice, people, are simply ineffective for large slabs of every working day...they may be contributing to covering your expenses but they're doing next to nothing for your profit...

They purport to be doing "necessary" FirmTime when it would not be necessary at all in a well-run firm...they do not actually do elective FirmTime like focussed Business Development when they should do, or not to a sufficient level...and often they do FirmTime that is superficially "useful" but is not actually effective at all...

5.6 The result is well under 5.5 billed and collected Client hours per day on average, and very poor profits in by far the majority of law firms...

5.7 Firms with generally good principal returns are the exception rather than the rule...make no mistake...and even in the firms that look quite good there are huge gaps in productivity you can drive a truck and trailer through...

Real-life example...Today I was asked to look at a KMSFeedBack Report™ for April 2012 for a young litigator in a suburban Sydney firm.

I noted that the annual projection of productivity for him after 10 months is down $100,000 on his KMSWorkPlan™.

I noted not a single hour of Business Development recorded as FirmTime in April on the 18 days worked...despite 2 hours a day being allowed for FirmTime on average...total activity recorded was below target substantially...

I noted an average Realisation Rate on absorbed Work In Progress after 10 months of this Financial year at 80%...

The Bottom Line...This firm has acquired the planning and reporting tools BUT has not reacted early enough and properly to the absence of enough Client file work of the right type...

There isn't enough work, and what is there is not sustaining recovery at around 95% of the recorded file work...

While the lights are on no-one is home...as far as Business Development goes both the young fellow and his team leader are fully asleep at the wheel...

KMSACTIONPLAN...
A re-focussed, re-invigorated, KMS One Page Marketing Plan needs to be put in place immediately, using the obvious spare capacity to urgently begin the recovery to a healthy backlog of work, which can then revert to a vigorous maintenance program to sustain the position, month in month out.

We may be still in a post-GFC economic environment, but that is no excuse for dropping the ball entirely on Business Development...

Clients and prospective clients out there, and our business contacts, still need information and assistance, and the firms that supply that consistently will undoubtedly get additional work...

Being busy in otherwise wasted time is a sure-fire way to drive profitability up fast...