“Better isn’t necessarily always better; different is better.”

Published May 11, 2012 By Jess

leftA perfectly competitive market is generally defined as one in which at least all of the following conditions exist together:

  • zero entry or exit costs (there are no/low startup costs),
  • zero transaction costs (customers are free to go where they please)
  • firms have a relatively small market share (no single firm dominates the market),
  • ‘factors of production’ are mobile in the long run (labour and capital can be modified easily), and
  • an homogenous product (an easily substitutable product, characteristics do not vary across suppliers).

In such a market there are only two conditions which can be altered by the firm itself; one is modifying labour and/or capital, the other is defining their product so it is perceived to be ‘less substitutable’ or to use plain English – different. The latter is also the only way a firm can command a price premium above that of ‘the market’.

The perfectly competitive market is mostly a theoretical concept; this specific set of conditions do not generally occur together, although some industries have notable similarities and are what you could call “near-perfect”. Utilities are one example; how many times have you been asked to change electricity companies and not really understood (or cared about) the difference?

Firm Of The Future Tour Ends….. Firms Of The Future Begin

Published April 3, 2012 By John

leftRon Baker’s Firm Of The Future Australian eastcoast tour wrapped up in Sydney on Friday 16 March with approximately 300 professionals attending Forums and MasterClasses in Hobart, Melbourne, Brisbane & Sydney.

Ron & I also got to have discussions with ACLA in house counsel in Melbourne & Sydney on “Obtaining Value & Price Certainty from Your Law Firm” and with some firms. We were also fortunate to meet with the respective Legal Services Commissioners of New South Wales, Queensland & Victoria, speak to several APSMA members over dinner on value based pricing and Ron was interviewed by various business, legal and accounting press who reported on the tour and the principles behind Firm Of The Future.

If you were one of those who attended any of these events- a big thank-you to you for making the whole tour such a success. I not only wish you all the best in your ongoing journey to be a Firm of the Future but again remind you that there are numerous sources where you can seek assistance and guidance at any time. These include the Firm Of The Future Facebook page and LinkedIn Group, the Verasage website, or by contacting Ron Baker and I direct as well as any of the other organisers of this tour. These organisers included Matthew Tol from mta optima, Matthew Burgess from McCullough Robertson, Michael Stewart from Integrity Accountants, Michael Bradley from Marque Lawyers, Steve Major from The Trusted Authority and of course my Associate Jess Hadley.

Putting the Plan into Succession Planning

Published March 30, 2012 By Jess

The below article appeared in the March 2012 edition of the Australasian Law Management Journal and can be found on their website here or downloaded in PDF format.

Putting the plan into succession planning

The failure to groom successors in a law firm is a recipe for disaster for both the firm and the founding partner who one day hopes to successfully exit the business, writes John Chisholm.

There is little doubt that succession is one of the most significant issues facing professional firms of all sizes and from all regions in Australia. I suspect this may be the case in the United States and the United Kingdom, too.

Recently I gave a talk entitled Succession Planning: Why Most Firms Should But Don’t outlining some of the reasons that Baby Boomers are still hanging in there and failing to consider the need to plan for the inevitable. These reasons are complex, but often include:

  • Financial position: Anecdotally some partners who might have before the global financial crisis considered retiring ‘shortly’ feel they are no longer in a financial position to do so. Equally, there are other partners who have seen their incomes increase substantially over the last few years, in particular, and even the mere thought of them leaving that income behind gives them the cold sweats.

The Benefits of Fixed Fee Pricing – David Vilenksy

Published March 19, 2012 By Jess

“For most of my professional life I have billed my clients in six-minute units. From the time I started out as a solicitor in the early 1980s, time billing was such an assumed part of the landscape that it barely merited discussion. Expressing reservations about it were regarded, if not as heretical, then certainly as futile.

Time billing was the way it had always been. If the system was to be abandoned, what possible alternative was there?”

David Vilensky discusses his firms transition to fixed fee pricing in his article which was published in the Law Society of Western Australia’s February edition of Brief.

The Benefits of Fixed Fee Pricing

 

Lessons learned from History…for our Future

Published March 1, 2012 By Jess

In the 1850‘s, despite unquestionable empirical evidence in support, the proponents of germ theory were viciously attacked by the medical establishment of the time who were largely in favor of the theory of spontaneous generation. They continued treating symptoms (sometimes successfully) rather than the cause. It was not until 1900 that this theory was recognised by its own profession as having merit – it then formed the foundation of modern medicine.

OK, so in most professions we do not deal with issues that are life threatening or can cause physical harm or disease  like germ theory , but we do often deal with the symptoms of problems in our professions rather than looking at root causes.

It is no longer breaking news that the time based cost accounting and time based billing models are less than optimum and are increasingly being criticized both by those within our professions and those we seek to serve-our clients.

Like Germ Theory in the 1800′s, value based pricing and management without timesheets is not yet practiced by the majority of professionals. However overwhelming empirical evidence is out there and more and more innovative professional firms around the world successfully operate in a timeless environment. These firms are fully aligned with their client’s interests, their knowledge workers enjoy an atmosphere of collaboration and creativity, and firms profits are no longer capped by the physical hours their people can work.