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w w w . C A N A D I A N L a w y e r m a g . c o m M a y 2 0 1 4 23 law offiCE ManagEMEnt Keep your eye on the prize A shifting legal landscape is testing the resilience of large and small firms alike as they face the chal- lenges of a post-recession world. The dissolution of Canadian legal giant Heenan Blaikie is a dramatic example of how things can quickly go wrong when partners losing confidence pull out in droves, taking their capi- tal investment with them. Across North America and into the United Kingdom, there is increasing concern over the flow of money as large and mid-sized law firms report sharp revenue decreases as a result of increased competition for a shrinking pool of high-end work. Ed Waitzer observes the legal profes- sion is indeed undergoing change. "The market for major law firms is shrinking, certainly in Canada," he says. More firms are employing in-house lawyers, global firms are competing with national ones, and there is a repurposing of functions. Law firms are reacting by being more strategic and moving beyond traditional work and approaches. Heenan Blaikie's foray into Africa, anchored in its Paris office, is perhaps an example of the new order. The result of treading into new ter- ritory, however, could mean more chal- lenges for the management of the firm as well as a less harmonious culture within it. It could also prove more risky. "It's a different world," says Waitzer, a professor at Osgoode Hall Law School and senior partner at Stikeman Elliott LLP, where he was once managing partner. The bottom line is an increasing need to focus on the bottom line. That has become more important when the overall collected realization rate — the percentage collected of the standard value of the work billed — has dropped to 83.49 per cent, according to the Georgetown University Law Center and Thomson Reuters Peer Monitor in the 2014 Report on the State of the Legal Market. A reduced realiza- tion rate could have a major impact on the working capital available. No longer should getting work be the main focal point of the firm. Ensuring the bill is paid in full and in a timely manner can be critical to a firm's survival. In order to avoid nasty surprises, partners should be demanding frequent reports on the financial health of their law firms. by Marg. bruineMan Jeremy bruneel