Wishing all the best for the New Year
2017 is likely to emerge as a year in which negotiations will have a disproportionate impact on our lives and on PSF firms.
This will include the negotiations and positioning around Brexit, the approaches a Trump Administration will take to a number of key policy areas such as environment, international trade and relations with key global players such as China and Russia, not to mention geopolitical hotspots such as the Middle East and Iran.
In the PSF sector we will see even greater pressures on fees and margins driven by a combination of competition, an increasing use of technology including Artificial Intelligence and further involvement by procurement departments or at least greater use of procurement techniques. This will make assignment profitability management skills including pricing, negotiation and fee management even more critical to the long-term success or survival of firms.
2016 saw the demise or merger of a number of major law firms due in part, if not entirely, due to insufficient profitability. We will never know to what extend good fee management or assignment profitability management could have prevented any of these but it is worth remember one of Peter Drucker’s sayings: “Profit for a company is like oxygen for a person. If you don’t have enough of it, you’re out of the game.” We should remember however that he concluded this thought by adding: “But if you think your life is about breathing, you’re really missing something.”