Todd Baisch. Steve Falkin. Principal. Managing Director. Gensler. Hildebrandt Baker Robbins

Transcription

1

2 Todd Baisch Principal Gensler Steve Falkin Managing Director Hildebrandt Baker Robbins

3 A shift in the Legal Profession?

4 The Changing Landscape What s going on in the legal profession? 6-7% drop in billable hours 25-30% reduction of profit Expenses cut as much as possible Reduced demand for legal services. Buyers market. 50% of 2009/2010

5 The Changing Landscape Reduced revenue demanding cost control, personnel changes, and expense management Cost: Salary, Space, then Technology New attorney categories: staff, contract, nonequity Expenses per lawyer Seyfarth Shaw New York

6 The Changing Landscape Focus on effectiveness demanding need to build social capital and leverage interactions. Billable hours more important than ever Who does what type of legal work is changing Management needs to be constantly connected Increase learning opportunities Allen & Overy London

7 The Changing Landscape Shift to technology-based work process demanding new elements. Files on network-access via web Godwin Proctor New York Workrooms for people and technology, NOT files Servers, not boxes of files Video-conference; basic to high end Jones Day Los Angeles

8 Summary of Time Line Strong seller s market Early trouble indicators emerged Mixed legal market 1 st Half End of the World mentality by year end Caution and fear dominated/complete buyer s market Cut our way to profitability was only strategy Return to some stability, but not growth Continuing buyer s market. Where do we go from here?

9 Key Market Change: Buyer/Client Power Symptoms of Client Power/Buyers Market: Clients view many types of work as commoditized, or at least, not worthy of their historic price Compounded by frustrations over the lack of predictability for total legal spend, rapidly rising billing rates, and high rates for just average lawyers Almost no tolerance for increasing legal costs In the past ten years, operating costs to U.S. companies went up 20%... except legal costs, which went up 75% Expectation for lower costs each year, not higher as in the past. But is that lower net cost, or lower rates? Determination to bring the economic interests of the client and the law firm into better alignment

10 Key Market Change: Buyer/Client Power Symptoms of Client Power/Buyers Market: Excess supply of lawyers > increased competition More aggressive discounting, even by the most profitable firms Realization declines at most profitable firms more significant than elsewhere Emergence of, and increased client willingness to consider, alternative providers both law firms and unconventional sources Increased client willingness to do it themselves Increased client ability to manage disaggregated work, leads to increased granularity of competition and work division Improving data management for clients and firms reduce risk associated with more precise pricing, while increasing client s consumer savvy

11 Materialization of Client Power Pricing Buyers market: Clients have more leverage Deliver what you promise for same or lower price Increasing emphasis on alternative fee arrangements More rapid commoditization Further segmentation of legal work/legal providers Outsourcing Convergence of outside counsel Partnering with outside counsel Expectation of more efficiency without loss of quality RFPs asking about approach to project management and process improvement Drive for LPM coming from clients and competitors

12 Driving Change in Key Parts of the Business Model ownership & comp. talent model practice mgmt work process model legal business model overhead model strategy client model governance Culture

13 What are the real estate impacts?

14 IMPACT PROCESS & SOLUTIONS MEASURING Work Performanc e EXPRESSING Brand & Culture MAXIMIZING Occupancy LOWERING COST INTEGRATING Technology

15 Measuring Workplace Performance 2010 Law Firm Research Findings: (Top ranked firms) 1. Their workplace supports and drives higher employee satisfaction 2. Their lawyers spend less than ½ their time in an office. Focus time is coveted. (Gensler trademarked tool) 3. They have built social capital with

16 Top Ranked Law Firms Overall Workplace

17 Top Ranked vs Average Law Firms Work Mode Rankings

18 Top Ranked vs Average Law Firms Work Mode Rankings

19 MAXIMIZING OCCUPANCY OCCUPANCY Models MOBILITY Emerging ALTERNATIVE Workspace

20 Corporate America is way ahead Distributed Organizations Formal Mobility Programs Walls are down -Flattening the organization Focus on generations in the workplace Density- Space savings focus Social & Collaboration Spaces the drives brand

21 US Benchmarking (Current) Traditional Traditional with Doubling Universal One size Headquarters % space savings Regional Non-HQ Large % space savings Regional Non-HQ Medium % space savings <650 RSF/Attorney, or less, is a new benchmark Corporate America is below 200 RSF/Employee

22 4 Occupancy Planning Models 1>TRADITIONAL 2>UNIVERSAL 2 sized offices (Partner & Associate) Minimal or No interior offices. (Common to double 1 st /2 nd year Associates in NYC and London) 1 size office for all attorneys. Moderate use of interior offices. ALTERNATIVE WORK STRATEGIES 3>SEMI-OPEN PLAN 4>ATTORNEY SUITES 1 size open workspace for all attorneys. (Emerging model) Cluster of attorney workspaces in a room. Use open plan furniture to create individual workspace. (Emerging London model)

23 Model 1: Traditional Flexible internal plan

24 Model 2: Universal 20%+ more offices Flexible internal plan

25 Schottenstein, Zox & Dunn, Columbus, OH

26 Seyfarth Shaw, Chicago IL 300+ attorneys in universal office

27 Model 3: Open Plan Allen & Overy London 2006

28 Model 3: Semi-Open Plan Barlow Lyde & Gilbert, London 2010

29 Model 3: Semi-Open Plan Barlow Lyde & Gilbert, London 2010

30 Model 3: Semi-Open Plan Eversheds, London 2010

31 Model 3: Semi-Open Plan Eversheds, London 2010 Open above glass wall

32 Model 4: Attorney Suites Clifford Chance, London

33 Model 4: Attorney Suites Clifford Chance, London

34 Model 4: Attorney Suites Brown Rudnick, London 2010

35 Mobility Why? 1. Cost Reduction 2. Recruit & Retain 3. Expectations of younger generations 4. Drive space utilization 5. Reduce carbon footprint CBRE 2010

36 Mobility

37 Expressing Brand & Culture through Space Creating First Impressions Building Social Capital Providing Client Hospitality Planning for Efficient Work Processes

38 The New LAW FIRM LEANER ENGAGED STAFF HIGH PERFORMING Space as a tool, not status FLEXIBLE Ready for Change

39 What are the Technology Impacts?

40 Cloud Computing Infrastructure as a service Platform as a service Software as a service

41 Attorney Efficiency + Productivity Time Management + Billing Transparency Predictable cost Project Management Alternative Fee Arrangements

42 Collaboration IT/AV Convergence Telepresence Cost Containment

43 Information Lifecycle Management Paper (less) Enterprise Search Electronic Filing E-Discovery

44 Data Center Strategy Centralization Virtualization Colocation Disaster Recovery

45 Remote Access Mobility Virtual Desktop Infrastructure Online Services

46 Questions?

47 Knowledge Library Want even more Content? Checklist How-To Video Podcast Scope of Work Since you re already a user, you know that IFMA s Knowledge Library offers all FM content in one place. But did you also know that by signing up via to become a registered user, you can unlock even more resources? Signing up via for registered access within the Knowledge Library brings more content and functionality to your fingertips. Expect to grow your facility management knowledge, career and network faster than ever before. REGISTER TODAY