A law firm, also known as a corporation, is an entity legally created by one or more attorneys to engage in the profession of law. The primary function of a law firm is to counsel clients about their individual legal rights and obligations, including what laws apply to them, and when those rights must be exercised. It is the firm’s responsibility to carry out the representation of their clients. If the attorney loses the case, his client retains the firm. Otherwise, the attorney can choose to work on a retainer basis.
Most law firms have a principal partner and a number of associates. The partners are usually responsible for planning the firm’s strategies and planning its day-to-day operations. Attorneys who participate in the firm’s strategy and planning may also be called partners. There are also some law firms that have no partners and maintain separate offices. In this type of arrangement, there would be a single attorney who acts as the principal and several associates, who are referred to as associates. All of these terms, although somewhat technical, are used interchangeably.
Managing partners and associates play a key role in the operation of most law firms. Their roles include planning strategy and functioning as the firm’s leader. In many large law firms, the managing partner reports directly to the attorney general. Managing partners are typically responsible for supervising the firm’s attorneys and for ensuring the firm’s compliance with local, regional, and national rules and regulations.
Apart from the attorney general, other top leaders of law firms usually report to the managing partner. The managing partners typically control the firm’s budget, hire and fire employees, manage the firm’s litigation activities, hire and manage its marketing campaigns, and manage the firm’s reputation. In contrast to the attorney general, who is responsible for the policies and programs that govern how the law firm operates, the managing partner is responsible for the firm’s day-to-day operations. This makes the position extremely important, since the law firm’s failure could mean a loss of business, clients, and cabinet avocat.
Because managing partners have so much responsibility for the overall success of the law practice, they need regular feedback about how their policies and practices are affecting the business. Since many lawyers choose not to communicate much with their clients, it is unusual for them to give much thought to their interaction with clients. However, even if they do provide regular feedback, they may fail to provide it in a timely manner or in an effective way. This may result in poor client relationships and much time lost.
Some law firms employ a cost structure whereby some portion of the law firm’s monthly overhead is borne by the attorneys who perform the services. These overhead costs are a function of the number of clients the law firms serve, the quality of the service provided, and the experience of the attorneys who provide them. Many law firms also charge hourly rates for some services (e.g., oral presentations, answering questions, preparing cases, etc.). Attorneys can increase these hourly rates in response to their increasing overhead, but in most cases, it would be difficult to reduce these rates without reducing the quality of the service provided.
Some law firm partners strive to maintain a high overhead because this tends to attract more associates. For example, many law firm partners will work long hours, and few take the time to have lunch regularly. Others may prefer to have meetings after work instead of before it. The temptation to extend the work day by several hours in order to meet the deadlines of ongoing legal projects can be very strong. Law firms should be careful to avoid this problem lest it damage their reputations as reputable, quality service providers.
Although some law partners may work to try to reduce the costs associated with overhead, few can do so successfully. Law offices can minimize their legal costs by reducing their clientele. Many law offices are aware of potential clients who want quick legal services and would therefore pay a lot for them. Many law offices can find ways to attract these clients by working pro Bono for free with these same types of clients. Other ways to lower overhead include having more associates, training their associates adequately, offering introductory discounts to new associates, providing financial incentives for associate referral sales, and spending a reasonable amount of time interacting with their current associates.