Document Assembly Can Improve Law Firm Profits
In this week’s Wall Street Journal, Vanessa O’Connell writes that, “More than half of the country’s top 50 law firms may have overstated a key measure of profitability in a closely watched ranking.” The ranking of “profits per partner,” published annually by the American Lawyer magazine in May, is the most commonly used gauge of health in the $100 billion global corporate-law-firm industry.
The findings— which were shared with The Wall Street Journal by a person briefed on the report— raise questions about which law firms are making the most profit as the legal industry slowly recovers from a prolonged downturn.
An analysis by Citi Private Bank Law Firm Group reportedly found that 22 percent of the top 50 firms overstated profits per partner by more than 20 percent in 2010.
Part of the problem may be differences in definitions of equity partners, according to Robin Sparkman, editor in chief of the American Lawyer. “As best we can tell, the majority of our numbers about law firm profits—then and now—are identical to, or within 10 percent, of Citi’s,” she told the Wall Street Journal. Calculations of overall changes in year-to-year revenue have been very close, she added.
Regardless of which numbers are correct, Document Assembly is one way for law firms to increase their efficiency and profitability. Many of these top law firms are using Exari to automate documents ranging from trust and estate documents to technology licensing agreements to new partner agreements.
Exari Document Assembly serves as both an intelligent precedents system and a platform for online delivery of Do-It-Yourself documents direct to clients. It provides the tools to create smart precedents, clause libraries and packages of documents, using the firm’s intellectual property and best practices. You can see how the software works here.