凯捷安永 - An Insight into Legal Market Profitability.pptVIP

An Insight into Legal Market ProfitabilityReport Extract Key Research Findings UK legal firms are switching their concentration from growth to profitability. This mean there is a need to focus on cost structure and pyramid. Market share comparison of the UK and US legal market Excluding the largest five, US law firms are typically larger in revenues and more profitable than UK firms However, there is weak correlation between the size of a US firm and its profitability Firms are experimenting with emerging partnership models driven by legislation changes and recent events UK firms are adopting corporate board structures and appointing non-lawyers to senior management positions UK law firms are seeing the globalisation of clients, are adopting new corporate structures and are struggling to attain ROI from IT Understanding Opportunities for Sustainable Growth During 1997–2001, the UK legal services markets grew in line with inflation and firms are predicting steady growth From 1998 to 2001, large UK and US firms grew quicklyby mergers and acquisition rather than organic growth Opportunities for growth will be challenging Challenges: Growth through MA will decline as the number of independent players reduces and the economics of acquisition become less attractive. Growth through alliances will decline as networks reach an optimum size. Rapid organic growth is limited with the legal services market growing slowly. New opportunities will emerge: An example being Legal Business Process Outsourcing (BPO) opportunities, which have yet to be fully tried and need to be understood. The future challenge is how to combine increasing PEP as well as size Understanding Opportunities for Improving Performance Focus on Key Levers By pulling appropriate key performance levers, law firms can ultimately increase their profitability or Revenue Although hourly rates are comparable, US firmstypically bill more hours than UK firms In order to generate high fees per equity partner,