What Are The Signs That Your Law Firm Is In Trouble?

How would you even know if you were about to lose your job or if your law firm would soon be struggling to meet payroll?  Hourly billing attorneys live by a math formula which calculates the number of people times their hourly rate and compares it to overhead.  The rest is profits.  Firms will soon be worrying more about payroll than they will profits. 

What are the signs that a law firm is headed for trouble?  Please post your thoughts as comments below as we try and build a list of signals which might tip you off that it is time to start considering options.  I’ll start the list off here and look forward to your thoughts and observations.

• The managing partner starts spreading word that bonuses will be light at Christmas, despite the fact that the talk has been “we’re doing well”, until now.
• The managing partner’s door is shut way more often than it used to be.  When the managing partner is out in the halls, he/she is nicer than usual.
• You’re having trouble getting your guest added to the Christmas party guest list.  They’re blaming the outdated list on administrative error, but the invitations went out ten days ago.
• The partners are now talking openly about finding ways to push their clients into litigation and the amount of “make work” tasks seem to be dominating your time.

When we get a compiled list in and a sense of which signals are the contenders, we’ll drop it into a poll and see if we can figure out what is the number one thing partners, associates, secretaries, paralegals, and staff ought be looking for around the office in order to figure out whether their firm may be moving toward financial trouble.

Comments

[Andrew Magwood]

Coffee. When the firm starts buying generic coffee or stops stocking the fridge with bottled water, etc. you should begin to think that there might be somthing going on. As irrational as it is, rather than re-think the revenue model firm management often looks at meager cost-cutting as the answer. Also, look for terse email messages about Post-it notes and paperclips. I am serious.

[Joseph Dang]

You beat me to it Andrew. When non-coffee drinking partners say at a meeting, "why should I have to pay for Coffee, I don't drink it," something is amiss. it may be an extra frugal partner, or more.

Any bad news, no matter what the firm PR spin is, is a sign.

Or when a firm does something unprecedented. Such as DLA Piper asking income partners to contribute capital.
http://www.legalweek.com/Articles/1182845/Article.html

[GAL]

Coffee.... Hilarious. Only fat yellow highlighters from here on out.

many firms have can celled their Christmas parties. That is definitely a bad sign for the firm and a great opportunity to start thinking about what comes next...