Equity Partner Profitability: Making Your Partnership Count
Whether you’re a fully vested equity partner, are putting in your years, or aspiring to get there, opportunities exist for you to make a significant impact at your firm.
Your skills got you to the party
Your rise through the ranks no doubt aligns with your legal skills. Perhaps your expertise in a niche like bankruptcy results in high billable hours, or maybe you’re known for your stellar contract negotiation skills. Regardless of the reason, success now looks different as you join the ranks of the vaunted equity partner.
“What got you here won’t get you there.” – Marshall Goldsmith
You’ll need to evolve to grow
Once you add the word “equity” to your title, things change. It means you’re now a core part of the firm. You’ve now got skin in the game. The entirety of how your organization operates now matters; no longer is your focus just on specific cases or clients. You must realign to work “on the business,” not just “in the business.” Profitability reigns supreme.
Beyond clever strategies and success rates
You will soon realize that the pathways to profitability are wide open. The obvious approach that you’re undoubtedly most familiar with is to close clients with higher billable hours. That is, make more money by billing more. However, by simply focusing on bringing in more business, your firm may overlook the immediate opportunity to increase profits without adding a single new client.
Finding lost profits
If your firm has not fully embraced a digital transformation, then you’re throwing away profits every single day. On the upside, you now have a chance to make a significant mark as an equity partner by embracing a surefire pathway to profits. Unlike your peers who may be chasing business or trying to enter a hot new niche, you can look internally to bring more profits to yourself and your partners.
Understanding your processes
You know how things run at the firm, at least within the scope of your area of expertise. But perhaps you’re not entirely sure what happens behind the scenes: how contracts are shared, the billing process, or even client communication management.
Sow how do you find out? No worries—insights are closer than you think.
Enlist staff insights
Your paralegals are the efficiency masters. Efficiency is one of the three top skills your best paralegal should possess, along with being detail-oriented and organized. They’re the ones in the trenches who can help you identify the bottlenecks in your organization. Tap into their skills to determine where the firm’s profits are leaking out, and prepare your case for your partners on plugging the holes.
Look for proven industry expertise
You don’t need to reinvent the wheel. Efficiency is about improving existing processes already proven in the marketplace. The legal case management space is filled with choices, many of which were designed for use in other industries, without considering the specific needs of legal firms. On the other hand, AbacusNext offers legal solutions built by lawyers for lawyers.
LegalTech and Above the Law put together this guide to help firms choose the right technology solution. Download the free, LegalTech Practice Management Buyer’s Guide today.
Digital transformation drives success
Digital transformation is no longer a nicety. The pandemic accelerated the timing, and as noted in this Forbes article, “The industry’s accelerating metamorphosis is catalyzed by and focused on customers. Digital transformation has become an existential imperative of corporate viability. Only a handful of legal functions have joined in those journeys, but that’s changing. The C-Suite is mandating it.”
Change is now
According to this 2021 Gartner Report, corporate legal departments will have automated 50% of their significant corporate transactions by 2024. By 2025, legal technology spending will have tripled. If your firm isn’t regularly investing in technology upgrades, you’re risking your future, and your equity stake won’t fund your aspirational retirement.
Follow the leaders
By taking note of legal trends and seeing what legal leaders like Baker McKenzie and DLA Piper are doing, you can carve out a viable path for your firm. One that you can share with your partners. You don’t have to build a whole division focused on legal technology, but you can keep an eye on their progress and emulate their processes. Doing so will help your firm build a competitive advantage over laggards and position your firm toward the future.
All about the Benjamins
Never forget that your priority as an equity partner is to build equity in the firm. Being the partner who increases profitability by acting as the change agent will set up your firm for success now and in the future. Efficiency and improved processes will continue to drive profits no matter what direction your firm takes regarding clients, cases, or niches. Your legacy can be your efficiency, and the best time to start is today.