Measurements of Market Sentiment Russell Schmidt Consultant +1 - - PowerPoint PPT Presentation

Peer Reporting: Measurements of Market Sentiment

November 2013

Russell Schmidt Consultant +1 651-848-3646 russell.schmidt@thomsonreuters.com

Overview

• Open Forum
• Executive Reporting
• Rates
• Productivity & Expenses
• Staffing
• Conclusions

2

Recovering or in a slump? High Level Reporting

Economic State

Q1 The AU legal market is currently experiencing an economic down turn. Do you feel this is a permanent change or not? How long do you believe this will last?

The economy will revive from the recent economic downturn eventually, but will the client revert to historical ways?

4

54% 46%

Expectation of Downturn as Permanent Change

Yes No

0% 39% 8% 0% 54%

Already recovering 1 year 2 years 3 years Entering a new normal

Expectation of Extent of Economic Downturn

Survey Commentary:

“I actually don't think it's an economic down turn but clients getting smarter in how they will engage in legal services in the future. It's now the norm! “The days of super profits for law firms are over! Sophisticated clients… are aware of law firm profitability… Clients who are more willing to accept an 80% solution (or less) rather than the traditional 100% water-tight solution “

(n=13) (n=13)

5

Website Add On Feature: Dashboard Reporting

Key Performance Measures: By Segment

• 8%
• 6%
• 4%
• 2%

0% 2% 4%

Demand Billed Rates Fees Billed Leverage Hours per Lawyer Y/Y % Change

My Firm Q1'14 v Q1'13 Last 12 Months

• 8%
• 6%
• 4%
• 2%

0% 2% 4%

Demand Billed Rates Fees Billed Leverage Hours per Lawyer Y/Y % Change

Peers Q1'14 v Q1'13 Last 12 Months

Flat All fee earners; AU offices only

Rates Rate Analysis and Planning Tools

Rate Progression for Top 10% of Partners

$475 $500 $525 $550 $575 $600 $625 $650 $675 Q2 '10 Q3 Q4 Q1 '11 Q2 Q3 Q4 Q1 '12 Q2 Q3 Q4 Q1 '13 Q2 Q3

Billed

My Firm Peers

10%

$525 $550 $575 $600 $625 $650 $675 $700 $725 Q2 '10 Q3 Q4 Q1 '11 Q2 Q3 Q4 Q1 '12 Q2 Q3 Q4 Q1 '13 Q2 Q3

Standard

Billed Rate by Title and Tenure

200 250 300 350 400 450 500 550 600 650 700 750

YTD’14

My Firm Peers Partner Experience in Years Sr Associate Class in Years

Website Add On Feature: Heat Maps

10

Productivity Costs and Efficiency

Firm Strategic Objectives

12

64.1% 65.0% 72.5% 80.8% 82.5% 83.3% 84.1% 88.3%

Enhance our reputation among global corporations Invest in our infrastructure Make changes to our lawyer/partner structure Be considered the best of the best Focus on and grow select practices Enhance our reputation among domestic corporations Win new business based on our firm's value Focus on becoming more efficient

% Agree - Top 3 Box on an 8 Point Scale

Firms tend to put more focus

• n domestic objectives than

global/international

Q3 What is your strategy for dealing with the current market? Please rate how much you agree or disagree whether each of the following statements is a strategic objective of your firm.

(n=15)

Indirect Expenses per Lawyer

• 15%
• 10%
• 5%

0% 5% 10% $0 $2,500 $5,000 $7,500 $10,000 $12,500 $15,000 $17,500

Staff Comp Occupancy Office Tech Taxes Marketing Library Benefits Outside Services Recruiting

Peers YTD y/y % change

• 28%
• 15%
• 10%
• 5%

0% 5% 10% $0 $2,500 $5,000 $7,500 $10,000 $12,500 $15,000 $17,500

Staff Comp Occupancy Office Tech Taxes Marketing Library Benefits Outside Services Recruiting

My Firm

• 40%

Growth Expenses

19%

• 51%

U.S. Replenishment Ratio: All Segments

0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 Q1 '08 Q2 Q3 Q4 Q1 '09 Q2 Q3 Q4 Q1 '10 Q2 Q3 Q4 Q1 '11 Q2 Q3 Q4 Q1 '12 Q2 Q3 Q4 Q1 '13 Q2 Q3 Associate Equity Partner Non-Equity Partner Of Counsel Staff Attorney

Website Exports for Granularity

800 850 900 950 1,000 1,050 1,100 1,150 1,200 1,250 1,300 1,350 1,400 My Firm Peers Partner Experience in Years Sr Associate Class in Years

Sydney – Dispute Resolution

Hours Worked

Practice Group Dashboards: Corporate M&A

• 8.0%
• 4.0%

0.0% 4.0% 8.0% Demand Worked Rates Fees Worked Productivity Lawyer Growth Growth Rate

YTD’14 v YTD’13

$385 $400 $415 $430 $445 $460 $475 $490 Q2 ' 10 Q3 Q4 Q1 '11 Q2 Q3 Q4 Q1 '12 Q2 Q3 Q4 Q1 '13 Q2

Billed Rates

My Firm Regional Peers National Peers

Custom Revenue Reporting For My Peers

• 12%
• 10%
• 8%
• 6%
• 4%
• 2%

0% 2% 4% 6% $0 $10 $20 $30 $40 $50

Millions YTD y/y % Chg REVENUE

My Firm

GROWTH

Are you Prepared?

Conclusions

“Greatness is not a function of

• circumstance. Greatness, it turns out, is

largely a matter of conscious choice and discipline.”

• Source: Jim Collins

Questions?